It's the most, wonderful time of the year. I can almost hear that song in concert with a Staples school supply/back to school commercial.
We finished doing our taxes over the weekend. I am getting a refund and it is up from last year. I am slated to get just over $1200 back. Last year, it was $700 ish.
Why the increase? I had $500 more in RRSPs which shouldn't make a huge change. The larger difference was in who gets to claim the children. Legally it goes to the parent with the lower income and for the past 10 years or so that has been the boys' father. Now it has changed a bit for reasons I don't understand, and I get to claim part of it. wheeee. More of a refund for me.
For a family who has 100% joint finances it would not matter as the money would all go into one pot. For use though, you long time readers will recall that we operate separately. DH would get to claim then and whatever refund he got was usually frittered away. My refunds would go to debt or necessary expenses for the boys.
I was very curious how much the RRSP contributions affected my return. I wanted to make a relatively informed decision on whether I should just forgo RRSP and put the money into my TFSA. She recalculated my return, hypothetically removing the $1500 RRSP. In this scenario, my refund was cut in half. Without RRSPs I would get back just over $600. So yes, RRSPs are helping me and for now I shall continue them.
The big question is what to do with the refund. The PF blogger in me says to use half of it for a lump sum payment on my loan, and the other half to buy DS1's new hockey skates (which will cost at least $600).
The 'boy I'd like to ENJOY this refund' side of me would love to do something fun with it. I could put it aside and take DS1 to Toronto this summer for a few precious days of mom and son time, while DS2 is gone to BC for Scouts. I could get carpet in my bedroom to replace the 25 year old atrocity that is in there. I could get us each new comforters and sheets as it is well past time to replace them. I could do the painting needed as my walls are starting to show wear and tear after a few years of furniture movement, hockey bags etc. I could put the $ aside towards a trip for the boys and I to Niagara Falls or Victoria, as I only have 2 years left before DS1 is gone.
My default seems to be the practical side - option 1.---- 1 lump sum payment and skates. I do yearn for more fun though.
Tuesday, Nice weekend!
1 day ago
7 comments:
good luck in your decision on what to do with it!!!
I don't even have my taxes done yet and I'm spending the $$ in my head. Usually I pay my trailer rental fee for the season and then pay down debt with the rest, though I usually squeeze a dinner out or something nice, maybe a little trip to Winners:) Shoes perhaps?? The possibilities are endless and we can't have it all, (even though we wanna!)
Congrats on the return!
I hammer away at RRSP's year round and that is the only thing that gets me a tax return. I'm going to continue and eventually I'll use the return to buy TFSA. So someday it will be the best of both.
On a side note... whoo fancy skates!
Good luck with what you decide!
When my return comes in I'm slapping the whole chunk down on my school debt to almost pay it off. To me, above and boyond everything else, it's the thing I want most gone.
I love going on the turbotax site because you can play around and see how much more your return woudl be if you put XX amount more into RRSP's, or alternatively, If I wanted $XX refund how much I would need to put into RRSP's. It's a pretty handy tool :D
lol. I was gonna say... September probably isn't that wonderful time for you since you're a teacher. ;)
Depending on how much you contribute, the RRSP can lower your net income into a different tax bracket completely. I know it's helped me. :)
JP - thanks...the longer it takes for the return to come, the more ways I think of to allocate it.
Jane that's a good idea to take care of that seasonal bill.
Bkat- sadly those are only midpriced skates for the kind DS needs for the level of hockey he plays. I cringe walking in there lol
Kim- that will be so exciting to take care of some of that debt. Those generators are a great way to see how you can make your refund grow.
Pear - Sept is a wonderful time. new class. fresh smelling school supplies. beautiful leaves on the trees. It's my favcourite month. (except for bills LOL)
Hmmm, can you do half practical, half fun? I would think new sheets wouldn't break the bank but would still be a treat and something you can enjoy. I think it's okay to treat yourself once in a while! :)
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