In order to increase your retirement savings, you can use your tax refund.

What would you do if you had more than $3,000 in the bank? How much do you think? It's possible that you'll get a little more than $3,000 in your tax refund if your refund is similar to the average direct deposit tax refund from last year. The question is, what will you do with it when it arrives?

Contributing to a retirement account is the wisest course of action because it will have the greatest long-term impact. With time, the money grows tax-deferred or tax-free, making it a wise investment option for those who are younger.

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Doing so, here are a few pointers:

A temporary increase in monthly contributions to your retirement account can be requested from your employer if you have a 401(k) or 403(b) plan through your employer that allows you to make contributions and you haven't been contributing the maximum. Your paychecks will be smaller because of the additional contributions, but your tax refund will make up for it because they will be automatically deducted and put toward your retirement account. It's a win-win situation: You'll lower your taxable income by contributing to your 401(k) or 403(b). Once your tax refund is depleted, you can continue using this strategy for the rest of the year, and your retirement account will grow. It's even better if your employer matches your contributions. What a clever strategy, isn't it? In 2019, you can contribute up to $19,000 to an employer-provided retirement account like a 401(k) or 403(b).

If you've already maxed out your 401(k) contributions or don't have access to one through your employer, you may be able to contribute to an IRA if you have earned income. You may be able to contribute up to $6,000 ($7,000 over the age of 50) to a traditional IRA, and if you do so, you may be able to claim a tax deduction. Even though you can't deduct contributions to a Roth IRA, it still makes sense to invest in one because the money grows tax-free forever and you won't be taxed on your distributions at retirement.

It's possible to save for retirement even if you don't have a regular source of income, such as from a pension or unemployment benefits. Don't forget about them when you're thinking about spending money right now. Repeat after me: these retirement funds are not available to me at this time.

The Saver's Credit, which allows you to deduct up to $1,000 for single filers and $2,000 for married couples filing jointly, can be claimed at tax time just for making retirement savings.

Set aside a portion of your tax refund to spend as you see fit if my advice is making you feel like you're being told to save all the time. In order to maintain a positive outlook while increasing your retirement savings, you should only spend 10% of the refund while saving the rest. What a wonderful combination! As you can see, there are a number of ways that your tax refund can help you save for the future.

You don't have to be an expert on tax law to get by. To get the deductions and credits that apply to you, you'll only have to answer a few simple questions about yourself. Cheap accountant in London  CPA or Enrolled Agents are available via one-way video connection to answer your tax questions. In both English and Spanish, Tax refund CPAs and Enrolled Agents are available to assist you with your tax return preparation, including reviewing, signing, and filing it.


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