Here’s How You Should Use Your Tax Refund

It’s tax time! I know I’m probably one of the only people who gets excited about filing their taxes, but I can’t help it. I like to file as soon as I receive my W-2 (which your company is required to send to you by January 31st). It’s nice to know right away if I’m getting a refund and how much it will be. From there, I can start planning what I’m going to do with that money.

Don’t wait until April 14th to file your taxes. Give yourself plenty of time in order to avoid stress and plan ahead.

Wondering where to do your taxes? There are several free tax preparation programs, like Turbo Tax, H&R Block, and a brand new program from Credit Karma. Do you feel like you need help doing your taxes? If you make under $54,000 a year, you qualify for free tax preparation support.

Now, if you’re one of the lucky Americans who receives a tax return, you’re probably wondering what you should do with it.

1. Treat Yourself

It’s recommended that from any financial windfall, you should use 10% of it on yourself. It’s easier to use your money on responsible things if you’re also allowing yourself a treat. Just like it’s easier to eat healthy overall if you give yourself “cheat” days. So set 10% of that tax return aside and do something fun – buy yourself a gift, go out to eat, buy tickets to a concert… Just make sure you put the rest towards your financial goals.

2. Pay down debt

Do you have credit card, medical, or other debt? Throw your money at it!

You have a few options for how to do this:

  • If you have any bills that are in collections, pay them first. This way, the debt collectors will leave you alone, and your credit score can start to repair. Make sure you get confirmation in writing that you have paid off the items in collections. They like to keep harassing you – don’t make it easy for them. Get proof!
  • If you don’t have bills in collections, or you have money left over after paying them off, pay towards your credit card debt. You can either try to pay off your smallest balance first, or pay towards your highest interest card first. It’s really up to you and what might make you feel better.
  • If you have student loan debt, I wouldn’t recommend using your tax refund on that. Student debt is considered “good” debt, so you want to focus on “bad” debt (credit cards, medical debt, etc.) first.

3. Pad your savings

If you don’t have debt, or you want to use a portion of your tax return for savings, you can do that too! If you don’t already have an emergency savings account, this is a great time to start building one. This account can protect you in the event of a job loss, illness or injury, car repairs, etc. It can prevent you from going into debt in these scenarios, and will give you peace of mind. If you already have an emergency fund, you can put money aside to save for other goals. Perhaps you want to save for travel, or a downpayment on a house. Start now!

What will you do with your tax refund? Share with me on Twitter or below in the comments!

This post originally appeared on Maggie Germano Financial Coaching. Want to read more? Check out

How to Do Your Taxes on the Cheap

Tax season is upon us! You have until Tuesday, April 18th to file your taxes. If you’re living or working outside of the US, you have until Thursday, June 15th to file. I recommend getting an early start so you can avoid the stress of rushing against a deadline. However, if you think you’ll need to file for an extension, you need to postmark the extension request by April 18th.

Now that you’re ready to file your taxes (early!), you shouldn’t spend a bunch of money doing so. Here are some ways to do your taxes for free (or cheaply).

1. Turbo Tax

Turbo Tax is the program that I usually use. The user experience is good (except for them trying to upsell you the whole time), and the process isn’t confusing. You can file your federal and state taxes for free (using Turbo Tax Absolute Zero). There are several other paid options, where you can get more support and advice while filing. I found out this year that it costs $89.99 to file business taxes using Turbo Tax, which makes me sad.

2. H&R Block

H&R Block is very similar to Turbo Tax. In fact, sometimes I fill in my information in both programs to see if one will get me a better refund. (That happened once, but usually the numbers are the same.) There is a free federal and state filing option (H&R Block More Zero), but they can also charge you for more premium features. According to their website, you can also meet with a tax pro in person and file your federal taxes, for free.

3. Credit Karma Tax

Credit Karma is known for providing your credit score for free. And if you’re not already using it for that, you should! (Credit Sesame is another option.) This year, Credit Karma unveiled its brand new tax filing program. Credit Karma Tax has free federal and state e-filing. According to them, there is no paid option – it is all free, and there’s no annoying upselling! I’m excited to try it out.

4. The Volunteer Income Tax Assistance Program

This program is offered through the IRS. You qualify if you earn under $54,000, are disabled, or aren’t a fluent English speaker. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. So not only can you file for free, but you also get free support and guidance while completing your taxes.

5. Free File Alliance

This software is available to taxpayers who earn under $64,000 (which is 70% of us). The IRS has partnered with more than a dozen tax software companies to offer this program. You can search through the participating companies and choose which will work the best for you.

6. My Free Taxes

United Way has partnered with H&R Block to offer My Free Taxes. This program is also available to those who earn under $64,000 a year. According to their website, 80% of taxpayers who used this program finished filing their taxes in under an hour.

For even more options, visit here. Happy filing!

This post originally appeared on Maggie Germano Financial Coaching. Want to read more? Check out