- my iParenting
- quick clicks
- article archive
- expert q & a
- community & groups
- research baby names
- prepare a birth plan
- content channels
- ip channel rss feeds
- read birth stories
- read parenting stories
- recommended books
- e-newsletters
- safety recalls
- ip diaries
- ip store
- mom of the month
- dad of the month
- editor's letter
- letters to the editor
From Our Sponsors
- e-newsletters
- Sign up to receive our free weekly e-newsletters
- award-winning products
The iParenting Media Awards program helps parents find the best products for their families.
It's a Refund!
Deciding What to Do with Your Tax Check
By Mark Stackpole
Getting a really big refund? Rosenberg recommends making a down payment on a vacation home or time-share. Interest on the home can be deductible and the time-share can either be used or rented out. "Rental income can be used to cover the payments until it's all paid off," she says. "Then you can use it, keep the income or sell it at a profit (paying only capital gains taxes on the sale)."
For smaller checks, how about a hybrid car (owners get a tax break) or new household appliances? Rosenberg supports these types of purchases, especially because they will continue to provide financial benefits, from potential rebates to lower monthly bills.
Chris Green is a university instructor from Cupertino, Calif. His approach to taxes has changed a little bit with the recent end of his marriage. "My divorce changed things for me," Green says. "We usually owed money at tax time, and we would be nervous about paying and scrambling to make ends meet." However, bachelorhood lowered his tax bracket and rather than having to pay, recent tax filings have ended up bringing him a small refund. "It's a nice, but small, cushion that I usually spend on fun stuff, like golf," Green says. "I usually deposit the money and use it as a buffer until it runs out."
Green, who regularly contributes portions of his paycheck to his 401k and savings ccounts, knows he wants to be smarter about how he uses future refunds. "I can't really say that I have a plan, per se," he says. "The thought of putting more into savings is appealing. Ideally, I would like to save the money for a down payment on a house rather than rent an apartment for the rest of my life."