We do not usually receive tax refunds – at all. While that’s an ideal scenario for us, this year we are received one from both federal & state returns (within one week of filing!)…and hefty ones at that. A tax refund usually means that one overpaid in taxes…basically, that you gave the U.S. government a tax-free loan of your earned money during the year…no thanks. So we do our best to break even each year. Techniques we use include:
- Updating our W-4 form with our employers as often as needed
- Having a charitable giving threshold
- Getting reimbursed for expenses during the year by whatever party/organization so that we don’t have to claim it on our taxes
- Realizing that we’ve never gotten an extra dime for having children on our tax returns…so adding the children is optional for us
- Find ways at increasing our income as to move us to another tax bracket with more leverage
- Educate ourselves on the annual changes of tax laws (to include the most recent tax reform)
So how did we get a refund this time? 2017 was our first full year abroad, and other than a God-granted summer break to regroup and restore our energy and visions, we were abroad for the year. And with some recent expenses and deductions/credits we now qualify for, we actually received a refund large enough to allow us to pay off a chunk of debt. It’s a blessing.
Babe did use $15 to buy me this teddy bear…the same one that would be purchased for $1 back home in the USA. It’s very expensive where we live since everything is imported…we’ll be sharing more on that topic soon…
We will continue to tackle the rest of our consumer debt and our student loans (lowest interest rate of all debt). What will you do with your refund, if you receive one?