Posted on 03/28/22

How To Use Your Tax Refund For A Down Payment On A Car

How To Use Your Tax Refund For A Down Payment On A Car

You may feel the urge to spend your refund on an extravagant celebration if you are one of the more than 70% of tax filers who expect a refund. You may also be anxious about the future and wish to invest or keep it safe.

What would you use your refund for? A survey conducted by the National Refund Federation found that 12 percent of Americans would use their tax refund to fund home improvements and 10 percent would choose to spend it on major purchases, such as a car. Only 8% said that they would spend the refund on vacations or other extravagant purchases.

Let's find out what we know about the tax season of last year. According to IRS cumulative tax filing season statistics updates, 128,000,000 refunds were issued. This is 3.1% more than in the previous year and amounts to $355 billion. This is an 11.2% increase in the average refund to $2,775.

It doesn't matter how much money you have, it's still fun to consider how you can use it. Here are seven ways to spend your tax refund.

To buy a used vehicle, you can use your tax refund

A large downpayment could be a great way to help you pay for a big-ticket item that seems impossible to afford. Although your refund might not cover the full cost of a used or new car, it can be a significant down payment. To get started, check out these top-rated used-car-buying websites. You don't have to limit your search to local areas. Move Car can ship a used car that you have found in a nearby state. Have a car in your mind? Get an instant car shipping estimate or give us a call.

Fund for emergencies

A rainy-day bank account can be very useful if you need to save money for an emergency, a refrigerator break, or your phone is damaged. Experts recommend that you save at least three to six months' worth of your basic living expenses. Although this may seem daunting, you can begin now by saving your tax refund and adding to it each month. Make sure your emergency fund is sufficient to cover all potential expenses for six months.

Fun and fitness

It's a great time of year to renew or pledge your commitment to fitness and well-being. Perhaps it's the chance to try CrossFit for the first time, take a few personal training sessions, or enroll in a cooking class with a friend. Or maybe you can relax in a Hatha Yoga studio, buy new running shoes, and hit the trails. There are many ways to enjoy your health and spend time with friends while also focusing on your health.

Career goals funded

You are the best investment you can make. This is the time to get a certification or endorsement to enhance your professional skills. You could hire a career coach to give you a boost or take courses at your local community college. Or even start your own business, if this is something that has been on your mind.

Financial freedom is possible

Do you have a loan to repay You may also have outstanding high-interest credit card balances. It is worth paying down or eliminating credit card debt. NerdWallet estimates that removing $2,200 credit card debt can save you $3585 in interest if you continue to make the minimum monthly payments. You might consider looking for a card with a lower interest rate if your refund is not sufficient to cover your balances.

Home improvements

You probably have a list of items you want to fix or make improvements to your home if you are a homeowner. You can save money on your energy bills by replacing an old roof or window now. Perhaps you want to buy your kids an outdoor playset, or a new stove in stainless steel. A fresh coat of paint can transform a room. Sherwin-Williams named Evergreen Fog their color of the Year for 2022 if you are into fashion trends. It's worth a try.

Support a charity

Giving back to others is a great way of spending your time and some tax refund. You can make a difference in your local community by donating to a shelter or food bank. You might have a cause you care about that would benefit from your donation. Keep receipts and records of charitable donations as they can reduce your tax burden in the next year.

Are you still not ready to file your tax return? These steps taxpayers may take to make filing your tax return easier in 2022.

Move Car Auto Transport

If you are planning to use your refund to purchase a used or new car, and the seller is out of state consider hiring a professional car shipping service to deliver it to your home. Move Car, the largest car shipping company in America, has shipped nearly 200,000 cars in 2021. We will work with you to determine the best option for your budget and needs. To speak with a Move Car agent, request a no-obligation car shipping quote.