By JOHN CONROE, CFP, AFIM
If you’re like most working Americans, you’ve already seen the signs–your W2 has come in the mail, you’re seeing pop-up accounting shops, and advertisements for DIY tax software is ubiquitous. There’s no denying it: It’s tax season.
Whether you love it or hate it, taxes, for many people, translate to a refund. But before you go spending your hard-earned and returned cash, consider having a plan that can help you in the long run, and even increase its value over time.
Here are a few ideas on how to better use your tax refund, straight from our Adirondack Trust Investments experts:
â€¢ Double your tax benefit with a Roth IRA. If you qualify for a Roth IRA, tax season is an excellent time to take advantage. By funneling your tax return into a Roth IRA, you will enjoy doubled tax benefits with tax-free growth and tax-free withdrawal. Win-win.
â€¢ Triple your tax efficiency with an HSA. In our last issue of e-Insight, we discussed the basics of a health savings account. If your healthcare plan allows you to contribute to an HSA, you can really get more bang for your buck if you use your tax refund to help fund this account. Not only are your contributions to your HSA tax deductible, but they grow and can be withdrawn tax-free. That’s what we call win-win-win.