How To Spend Your Tax Refund

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Truth be told, you’re better off not receiving a tax refund. Those funds going back to you means that the us government took an excessive amount of from your paycheck, eliminating your opportunity to spend, invest, or earn interest on that extra cash. So you need to adjust your withholding. Calculate the proper amount of witholding making use of the IRS’ withholding calculator.

Still, since a tax refund is commonly seen as a windfall, we provide you with our tips for what to do with a refund. The average federal refund this year will exceed $3,000, but our refund recommendations range from liberated to pricey.

For your residence

Paint your interior. Use one of the high-scoring paints inside our Ratings-some of the best finishes cost only $20 a gallon.

Create the right mood. Top-rated LEDs consistently come down in price, plus some top models we tested cost only $10.

Update your landscape. Pruning an overgrown landscape with a selective removal of plants can make a yard feel more organized, and clear the way for new plantings. Perennials are typically less expensive than annuals and fill the yard with seasonal blooms and color. Read more about how to fix the 5 most common lawn problems, and other lawn care tips.

Get a new refrigerator. If you love seltzer as well as your current fridge is around the fritz, you may consider putting your tax refund toward the Samsung RF31FMESBSR French-door refrigerator ($2,900), which has a built-in SodaStream sparkling-water-dispenser. Check our refrigerator buying guide and Ratings.

Set up a brand new gas grill. It’s the proper time of year to get your grill on with an all new gas grill that comes with handy features. We’ve also sized up the worst and finest grills that you can make the decision so much easier.

To your car

Improve your tires. New tires can easily make a measurable improvement in your car’s safety and performance. When evaluating new tires, focus on tires that do well in our tests for braking, handling, and resistance to hydroplaning.

Find a GPS navigator. You can get many of the same functions that the infotainment systems in new cars have by picking up a portable GPS navigator. Basic units priced at $100 and up from Garmin, Magellan, and TomTom provide helpful turn-by-turn directions. For a bit more, you obtain free traffic information. In the high end, you’ll find devices that add features such as a trip computer, Bluetooth capability, an MP3 player, and an FM transmitter.

Go with a GoPro.

For your tech interests

Capture it all. If you’re with your refund on an action-packed vacation, you can immortalize your surfing, diving, and water-skiing adventures with an action camcorder. The GoPro Hero3 Black Edition ($400) is our highest-rated action cam; the Silver Edition ($300) is a close second.

Impress your friends with your bleeding-edge geekiness. Put the latest thing in electronics on your wrist, and get a smart watch. The function-packed Samsung Galaxy Gear watch-it makes calls, takes pictures, and more-is great for people who already own a newer Samsung phone. The sleeker but more basic Pebble, which alerts you to incoming calls and messages, works jointly with any Android or iOS phone.

Buy an Xbox. Even nongamers will appreciate its other home-entertainment features: For example, the Xbox OneGuide shows you your video-watching options in one interface; and you can use voice commands to control it. Now you can have the Xbox One out of a bundle using the much-anticipated game Titanfall, normally $60 alone, for just $450 (marked down from $500).

For your bottom line

Pay down debt. According to surveys by the car-shopping service CarMax and Edward Jones, a great investment house, a large percentage of refund recipients will use their windfalls to spend credit-card bills and other loans. We’ve outlined several strategies to managing the debt. First, order of economic: Negotiate with creditors for additional favorable terms or to reduce what you owe.

Invest in your retirement. It’s too late to contribute to an traditional IRA for a potential tax break for 2013, unless you planned for it beforehand or want to file an amended return. But why not jumpstart your retirement savings for 2014? The maximum you may contribute to a regular IRA for any potential break on your 2014 taxes is $5,500, or $6,500 if you’re 55 or older. Check out IRS Publication 590, Individual Retirement Arrangements for details on your deduction eligibility, if you can stomach reading anything more about taxes.

Invest in a child’s education. Start or give rise to a 529 college savings plan. If it’s used toward qualifying higher-education expenses, the money grows tax-free and stays untaxed. And depending on where you reside and the plan you choose, your contribution could also qualify you for a state income-tax break for 2014. Such plans are only one element in a university-savings strategy; read Parents’ Guide to Saving for College for additional ideas.

Concept 2 Model D

For your health

Go for a row. Rowing provides a great full body workout, working your legs, arms, and core. The Idea 2 Model D (shown, $900) received our highest Rating. Or think about the H20 Seattle Wooden ($1,100) rower. It scored almost as high as the reasoning 2, plus it looks good and, because it uses water for resistance, it re-creates the sound of paddling on a lake or river.

Get a gadget. The Samsung Gear Fit ($200) is a stylish hybrid of smart watch and activity tracker. It appears good which is easy to use, although the apps for keeping track of your workouts are still pretty basic.

Schwinn Free Runner

For your kid and yourself

Buy baby and yourself a new stroller. When you run or walk for exercise, look at the Schwinn Free Runner (shown, $220), which earned a very good score for running and excellent marks for maneuverability. This model is safe, as a result of its top-notch one-touch braking and five-point harness. For those who have two kids to push around, think about the Graco FastAction Fold Duo Click Connect ($280). Check our strollers buying Ratings and guide for more details.

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