7 Ways to Get More From Your Income Tax Refund

May 2, 2017

The deadline for filing your 2021 personal income tax return will pass on May 1 and hopefully, you will be one of the people who is fortunate enough to be getting a refund.

While it may be tempting to spend your refund at the mall or splurge on some other consumer goods or a trip, we have 7 suggestions that will provide you with more bang for your buck.

  1. Re-invest the money into an RRSP or TFSA. This will allow you to earn interest and help fund your retirement years. The contribution will also provide you with a deduction on the following year’s tax return.

  2. Pay off/down high-interest credit cards/loans. The money you save on interest and payments can be used towards other debt.

  3. Make a lump sum payment on your mortgage (if allowed). This could save you thousands in interest over the life of your mortgage and allow you to pay it off sooner.

  4. Set the money aside in an emergency fund account that is not accessible online or through your bank card. This money can be used for expenses and avoids the use of your credit card which in turn saves you money on interest.

  5. Put the funds into an RESP (registered education savings plan) or Canada Learning Bond to help fund your children’s education.

  6. Make improvements to your house, such as replacing drafty windows or an inefficient furnace which will save you money in the long run.

  7. Pay off your property taxes. If your bank does not automatically take out your property taxes as part of your mortgage payments then paying off your property taxes in full will save you on interest plus free up cash flow.

There are no doubt other ways to put your income tax refund to good use so we encourage you to think it through before spending the money.  Remember, this is not money that you should be counting on so try to avoid the temptation to spend it all on things that may not have any lasting value.

Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses.  We offer free consultations to review your personal financial situation and practical debt resolution options.  Contact us to discuss your situation over the phone or book an appointment to meet us face-to-face in Saint John, Moncton, Fredericton, Charlottetown or Dartmouth – it’s your choice.

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