If you are in debt, don't use your tax refund to catch up on other bills. Pay off your debt right away.

This would have saved me so much money, but I didn't think about it til now. <br> <br> <br>tax return#(anticipated amount) 12,000 <br> <br> <br>tax return(anticipated amount) 12,000<br> <br> <br>-6K (pay everything to be caught up on bills)<br> <br> <br>Let's say you owe 6K on all your bills. You might get a tax return for 12K. Now you pay off the 6k owed to your bills, and hope you don't get audited while using the remaining 6k for whatever.<br> <br>Vs<br> <br> <br>tax return(anticipated amount) 12,000<br> <br> <br>-7k (pay 6K towards bills, and 1K towards debt)<br> <br> <br>-5K (pay 5k to debt after a 30 day audit period)<br> <br>If you use any of the 12k on anything other than paying off debt, you are now committing tax fraud if you get audited and that money is gone. Each year you'll have to pay more in debt, get a tax return, hope you don't get audited, repeat and so on. <br> <br> <br>Paying off debt is the only practical use of a tax return. <br> <br> <br>Go ahead and downvote me for my 0 post karma.