5 smart ways to spend your tax refund

5 smart ways to spend your tax refund

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Curb-appeal fixes could also “help to attract buyers and get a house sold faster,” George says. That may explain why more than 9 out of 10 real estate agents suggest sellers improve their


home’s curb appeal before listing their property for sale, a recent National Association of Realtors survey found. 4. NOURISH YOUR NEST EGG Of course, you could use your tax refund to help


pave the way toward a more financially secure retirement by growing your nest egg. If you have a 401(k) or 403(b) plan, the maximum contribution in 2025 is $31,000 if you’re 50 or older


(that includes a $7,500 catch-up contribution above the standard $23,500 limit for younger people). The SECURE 2.0 Act allows for a “super catch-up” contribution amount of $11,250 for people


ages 60 through 63 who participate in these plans.  Alternatively, if you have earned income from employment, you could put your tax refund in an individual retirement account (IRA) and


potentially deduct the contribution, depending on your income and whether you have a retirement plan through your employer. The maximum contribution for people 50 or older for tax years 2024


and 2025 is $8,000. 5. HELP A GRANDCHILD SAVE FOR COLLEGE You might consider investing your tax refund in a grandchild’s higher education. An annual gift tax exemption allows you to give up


to a certain amount each year to as many people as you’d like, tax-free. The exemption limit for the 2025 tax year is $19,000 per recipient. One way to help fund a grandchild’s college


tuition is to put the money in a 529 college savings plan. You can direct your contributions to one of the plan’s investment portfolios and benefit from the appreciation of the assets over


time. Plus, the money you contribute grows tax-free, and withdrawals for qualified educational expenses are also tax-free. A potential bonus: More than 30 states offer a tax deduction or


credit for 529 contributions for people. In most cases, you must live in the state offering the plan to qualify for the tax breaks, but nine states (Arizona, Arkansas, Kansas, Maine,


Minnesota, Missouri, Montana, Ohio and Pennsylvania) offer residents a tax deduction for contributions to any 529 plans.  Some states allow you to write off the entire amount you put in and


some have limits. Find Your State's Tax Guide Learn more about your state’s tax policies and tax breaks. Check back for updates and new guides. Select Your State