Since 2009, over 900,000 Americans haven’t filed a tax return. With April 15 right around the corner, taxpayers only have a few weeks to file for their returns this year and claim the $917 million in unpaid tax returns. The IRS announced that with nearly $1 billion in unclaimed refunds, many taxpayers have the opportunity to claim an extra bonus that they can utilize any way they want.
What to Do with Your Tax Refund
According to the IRS, most refunds will total more than $500, with many reaching four or five figures. The IRS is strictly enforcing the April 15 deadline by which taxpayers have to file for their tax refund. Fortunately, however, there is no penalty for those who apply for a refund after the deadline.
When receiving a tax refund from the IRS, handling the money wisely is a decision taxpayers won’t regret. Instead of treating the refund as free spending money, consider it a bonus that can be used to pay off existing debts or help buffer your current budget. Money management options for an IRS refund include:
· Paying off debt. Whether it’s credit card debt, student loan debt, or your mortgage, consider using the refund to accelerate one of those bills. After all, you’ll see the money again in the form of interest saved!
· Contributing to savings. Since most Americans don’t have enough funds in their savings account or even have an emergency savings account, consider a refund the opportunity to begin better saving habits!
· Saving for retirement. Consider adding the tax refund as a deductible contribution to your IRA. You can even become eligible for a $1000 tax credit with a $2000 deposit. IRA contributions are also deductible, which would bring the total tax refund to $1300.
In order to have these options, however, you must claim your tax refund with the IRS. With millions applying for a tax refund