Maximizing This Year's Tax Refund

Give Yourself a Raise. Wouldn't it be better to have a bigger paycheck instead of lending Uncle all that money interest-free every year? Adjust your withholding tax. There are two ways to do this. You can decrease any additional amount (Form W-4, line 6) you are having withheld or increase the number of allowances you claim on Form W-4, line 5. For additional information, visit and download Publication 919 - How Do I Adjust My Tax Withholding?

Tackle Late Obligations. Protect your credit rating by bringing any/all overdue accounts up to date to eliminate late-payment penalties and also ensure future availability of credit at sensible rates.

Expect the Unexpected. Set money aside for starting or building an existing emergency fund. This is more important than ever especially considering recent reductions to credit limits.

Reduce Debt. Start by paying down debt on the highest rate credit card(s) to minimize interest charges. Then turn toward eliminating other short-term installment debt to instantly boost your monthly cash flow.

Think Retirement. Start by fully funding a 401K and matching funds. Afterwards, look to opening or funding any IRAs. For more information and guidance on IRAs see Publication 590, Individual Retirement Arrangements at

Consider Education. With a child 10 years or more from entering college, your best shot at keeping up with tuition inflation is to begin investing in a tax-advantaged state 529 plan. For a comprehensive listing of 529 plans, visit

Healthy Investments. Update or purchase a life insurance policy. Also consider membership in a health club. And save by running these type expenses through a flexible spending at work, if offered.

Buy a Home. Apply the refund to start or add to a down payment on a first home. Incentives have been extended while mortgage interest rates, inventories, and home prices remain historically low.

Copyright © 2023 WLS-TV. All Rights Reserved.