Congratulations! You are getting a tax refund! While it is tempting to start planning your next vacation, putting those funds back in to your business is a better way to grow your business long term. An IRS check offers a chance to do something financially meaningful. Here are a few ways to get the most out of your refund.
Pay off high interest debt:
Remember that potentially risky loan you took out to get your business off the ground? Or that ‘for emergency only’ credit card you opened? High interest payments can be a thorn in your side and is literally throwing money away. Start with your highest interest rates to save money in the long run.
Increase a real estate down payment or improvement plan:
If you’ve been saving for an office building or 2nd location, use your refund to increase your down payment to avoid costly fees.
If you are in a place that you already own your office, but have been waiting to begin a much needed improvement project, getting a tax refund might be good time to invent in your future resale value.
Open a credit card with benefits:
As long as you are debt free and pay off your credit card balance every month, you might want to invest in a card with perks, like travel miles or cash back, especially if your current cards don’t offer any benefits. The right card should save you move than the cost of maintaining account.
Give a tax-free annual gift:
If your financial portfolio is well-established, or you are near retirement age, you may want to consider gifting excess funds every year. Starting a scholarship fund for your local high school, gifting money to your place of worship, or participating in a fundraiser for a non-profit is also a great way to get your name out in the community. It never hurts to buy some good will and good karma.
Splurge on some new equipment:
Could your printer stand to be replaced? Is that trusty laptop not starting up as quickly as it used to? Do you need to invigorate your marketing campaign? Now is the time? Pour money in your day to day routine or in to equipment you use every day can help your motivation and productivity.
Invest in your ‘human capital’:
Investing in yourself and your employees will see an almost immediate ROI. The expertise, talent, experience, and work ethic of your staff all add value to your business. Using your tax refund to pay for additional training, a work-related conference, or membership in a professional organization can pay off for years to come.
Soon the checks will start rolling in. Think carefully about what you will do with your refund. Coming up with a smart strategy before the check arrives will benefit your business, and your peace of mind, in 2017 and years to come.