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How to Spend Your Tax Refund?

Tax return refund

Sometimes there are two good things about tax season.  One is that it comes to an end once your file for another year at least.  The second is you might be getting a tax refund.  The fun part is deciding what you are going to do with that extra money.

While it is always nice to get a tax refund it can often mean it is as a result of something not so nice like your taxable income being cut back.   You may have lost your higher paying job and been forced to take a lower paying one, or may not even have been able to find another job as yet.   In this case you may be in a position where you are going to need that tax refund to catch up on some overdue bills, or at the very least put it away for future needs.

If there are more pleasant circumstances surrounding your tax refund then you may want to further capitalize on this. If you have children you might want to think about using it for the enrollment of some of the kids programs that will qualify for a tax credit for your next year’s taxes. When you do this it’s like you are really getting something back of value from the CRA besides the money they took from you in taxes.

One good example of a program that may be eligible for a maximum credit of $1,000 is the children’s fitness tax credit. Just be sure that the program you are utilizing qualifies for the tax credit. There is certain criteria the program must meet in order to do this.

Another way that you can really stretch the benefits of the tax refund is to apply it to your credit card balance. While this is no fun you can perk yourself up a bit. Take a look at the interest you are saving by applying your tax return to the balance owed on your card. That ought to make you feel good, as often is pretty substantial.

If your tax return is small then it might just serve well for providing a nice family night out.   Then another alternative is to purchase something that can be used by the entire family.  If this is some type of entertainment component, it can save you some additional money by not having to go out for some fun when instead you can stay home and enjoy your new purchase.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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The information provided here and throughout the site of TorontoAccountant.CA is intended for general tax information only, and should not be misconstrued as a legal source of information regarding your tax situation, or be used for any other purposes other than for general information.
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