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Here's What Happens When You Invest Your Tax Refund

The Motley Fool

16, 2024, the IRS had issued 20,883,000 tax refunds totaling $66.980 billion. These refunds are for taxes overpaid in 2023. RELATED: The Ascent's Complete Guide to Taxes Read more: we researched free tax software and put together a list of the best options here That is a lot of money to get in a lump sum.

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Getting a Tax Refund This Year? 5 Smart Ways to Use the Money

The Motley Fool

16, the average tax refund so far is $3,207. RELATED: Best Tax Software Read more: we researched free tax software and put together a list of the best options here Here are a few ideas for what to do with your tax refund this year. Consider investing it in a brokerage account , be it taxable or retirement (like an IRA).

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Top 8 Ways You Could Be Missing Out on Free Money

The Motley Fool

Not investing in IRA accounts Along with a 401(k) or other workplace retirement plan, many people can qualify to put money into another tax-advantaged retirement account called an individual retirement arrangement, or IRA. There are some income limits for who can qualify for this traditional IRA tax break.)

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7 Reasons Buying $1,000 of This 7.8%-Yielding Dividend Stock Could Be a Brilliant Move

The Motley Fool

For example, Enterprise delivered a double-digit return on invested capital (ROIC) in every year since 2005. One drawback to keep in mind There's one drawback with investing in Enterprise Products Partners to keep in mind. That means it issues K-1 tax forms, which make tax preparation more complicated.

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You Won't Get Rich by Putting Money in Savings. Do This Instead

The Motley Fool

Because savings accounts typically don't provide a very generous return on investment, it's really difficult to get rich just by sticking your money in savings. When you invest, you don't pay taxes on the money you put into your account, so each contribution doesn't reduce taxable income by as much.

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10 Brilliant Money Moves to Make in 2024 (No. 3 Is a Must)

The Motley Fool

It's very unlikely you'll find anywhere else to put your money that would provide the return on investment (ROI) that comes from avoiding such expensive interest. You also get tax breaks for a 401(k) contribution, as you won't pay taxes on the money you invest in this account. A 401(k) match is free money.

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Here's the Net Worth That Puts You in the Top 5% of American Households

The Motley Fool

Paying off credit card debt has one of the highest guaranteed returns on investment you can find. Another high return on investment opportunity is your employer's 401(k) match , if they offer one. You could receive an immediate return between 50% and 100% just by saving for retirement.