It’s almost that time of year when many people start receiving their tax refunds.
If you get one, what will you do with it?
Here are a few suggestions:
First, you could contribute to your traditional or Roth IRA.
You’ve got until April 15 to fully fund your IRA for the 2023 tax year, but if you’ve already done that, you can use the refund for 2024.
Another possibility is to use the refund to start or build an emergency fund.
It’s a good idea to keep up to six months’ worth of living expenses in this fund, with the money placed in a liquid, low-risk account.
You might also consider investing in a 529 education savings plan for a child or grandchild.
A 529 plan offers tax benefits and can be used for college, qualified trade school expenses, and some K-12 costs.
Finally, you could use your refund to pay down some debts.
You might want to eliminate the smallest ones first or try to whittle down those with the highest interest rates.
Your tax refund can be a valuable asset — so use it wisely.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
