How We Used Our 2013 Tax Refund

Tax Refund 2014
Tax Refund 2014

Ah, the tax refund... seems like such a good thing right? We lend the government our money throughout the year, they over-spend it, then send it back to us the following Spring. While taxes are a certainty in our culture, we try to reduce our refund as much as possible by adjusting our withholdings at work, but that can be tricky too.

Having a baby kind of through things off in 2012 (in a good way), but I think we've settled into a sweet spot for now when it comes to filing our taxes. In 2013 we pretty much broke even. We had been socking away a good portion of money that our online efforts were bringing in, knowing we'd have to pay taxes on those dollars, which left us with a good bit in set aside.

That process was based on our tax situation from 2012 and our friend Mary (CPA) gave us some guidance on how to approach saving to pay for taxes on that extra non-taxed income. So we simply took a cut off the top of whatever came in each month and set it aside to pay for taxes when the time came.

In February this year we sat down with Turbo-tax (makes it easy, but seriously, like, the most Debbie Downer night of the entire year for us). Neither of us really like doing it, but we slug through it. The only thing that keeps us going is the hope of breaking even, or getting a little refund at the end. When it was all said and done we pretty much broke even in 2013.

The difference between what we owed the IRS and our State refund was positive $33. But the bonus came in the way of the money we had saved for taxes through our side income. That totaled to $974.12.

How we spent $974.12 from our 2013 Tax Refund

It sort of feels like a stuck record, but we used that extra money to finish funding a few items on our 2014 financial forecast list. The two categories that we had left were Christmas and Christmas cards. We had been saving a total of $81 per month for those two categories and by finishing off the funding of them, we'll have an extra $81 every month for the rest of the year to put toward other financial goals.

And in case you are wondering, we've not made much progress on our basement. Splitting up the blogs and focusing on some other things (more details on that in the coming months) have sucked up nearly all of our free time.

Did you get a refund this year? How did you spend/save it?