Not everyone gets a tax refund but, if you do, why not make it work for you? There are many ways that you can make you refund work for you. Here are a few suggestions to get you started.
* Education investments. There are a couple tuitions plan that qualify. You could open a Section 529 plan or a Coverdell Education Savings Account(CESA). Although your contributions to these accounts are not tax-deductible, your account earnings will grow tax-free. Also, distributions that are used for educational expenses generally are also tax free.
Does your employer require work-related continuing education? If so, any courses that relate to job related improvement or maintaining skills for your current job, may qualify for a tax deduction.
* IRA contributions. Dependent upon your income, contributions to a traditional IRA could result in a deduction on your next year’s tax return and the possibility of a credit up to $2,000. In 2016, you can contribute a maximum of $5,500 to your IRA. If you are age 50 or older, you can contribute an additional $1,000, or a total of $6,500.
At Summit CPA we offer multiple resources to assist you with all of your tax and financial planning needs. Contact our office at 866-497-9761 to schedule an appointment with our advisors.