July 15 Is the Last Day to File Taxes. Use This Formula to Make the Most of Your 2020 Refund
Though it may feel like your attention is being pulled in a million directions, you can’t procrastinate on your taxes much longer. The 2020 deadline for individuals to file is July 15.
Sean Weissbart, tax guru and partner at Blank Rome LLP, says that although it may feel great to get a huge check back from the government, it’s not actually good for your wallet. A large refund means you’ve withheld too much from your paychecks. This amounts to “giving the IRS an interest-free loan,” as he puts it.
Unfortunately, a lot of people rely on their refunds for a financial boost. But even if your personal refund is only a couple bucks, you still need to be smart about how you use it.
“When you get a refund, my advice is to use the money to make more money or to achieve long-term goals rather than use it for frivolous or unneeded items,” Weissbart adds.
Weissbart says you should not put your refund directly into Cash App or an Amazon gift card, even though it’s tempting. Having a balance languishing in your account won’t do you any good, because you’ll inevitably fritter it away on things you don’t technically need.
Another mistake would be to dump the refund into a low-interest-bearing checking account. That’s just wasteful.
“As tempting as it can be to have a little bit of ‘mad money’ sitting around, think long-term,” Weissbart says. “That $100 could be $110 next year … growth can be tremendous if you’re smart about it.”
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“July 15 Is the Last Day to File Taxes. Use This Formula to Make the Most of Your 2020 Refund,” by Julia Glum was published in Money on June 18, 2020.