What are you doing with your tax refund this year?
In a somewhat surprising turn of events, I’ll actually be receiving a tax refund this year.
I had originally gone over my taxes myself using TurboTax, but came up with a $700+ refund amount. I didn’t think that could be true, given the fact that I was a freelancer for the majority of 2012, and didn’t pay taxes on the income I earned. So, logically, I thought I’d have to pay a few thousand dollars (I owed about $3,300 in taxes in 2011). I decided to trust a professional, and hired an accountant (who came recommended) to make sure all the paperwork was being done correctly.
Well, not only was I right about getting a refund, but my accountant found me even more tax savings. So I’ll be getting $975 back. AND I’m also eligible to receive the GST credit again. This was a combination of having a ridiculous amount of business expenses this year, and having a few thousand dollars in medical expenses to claim (since I was a freelancer, I didn’t have medical benefits).
What will I do with my tax refund? I normally like to use the 90/10 rule when it comes to tax refunds or any sort of “bonus” money I wasn’t expecting – where 90% of the money goes to something responsible – like my mortgage or saving for retirement. And the leftover 10% will be spent on something fun.
This year, I’ll be spending almost exactly 10% on a winery tour for Nic and I. We’ll be going to Mission Hill in Kelowna to sample my favourite B.C. wine this weekend. He booked us into a hostel for $25 a night, and we’ll likely be doing a bit of hiking in the area as well. :)
As for the rest of the money, since I’m already paying an extra 20% on my mortgage payments, I’m going to put it towards my retirement – likely half into my TFSA account with Questrade, and the other half into my RRSPs.
How are you spending your tax refund this year?
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.