Millennial Money

MM036: Why You Want a SMALL Tax Refund

from Millennial Money | Published 1/27/2021

There's long been an incorrect belief among taxpayers that receiving a refund is a good thing. The problem with this belief is that you (the taxpayer) don’t have access to your own money throughout the year, making it harder to put your money to work for you. If you had more of your own money to spend throughout the year, what would you do with it? Pay off a larger portion of credit card or student loan debt? Would you put it aside to invest in a cash-flowing asset? The point is, instead of waiting until your refund arrives you could use the added income in each of your paychecks now to reduce your principal before interest has an opportunity to build on what you already owe. Plan for Next Year Since you’ll be keeping more of your own money this year, put that money to work for you! Here are three simple things to do now to lower your tax liability next year: Start an investment fund: A tax return is a perfect time to seed-fund your investment account. Spend some time deciding what you want to invest in paper assets, real estate, commodities, or business, and use your tax return as the initial funding for that investment activity. Start a side business: By setting up a side entity, you can realize significant tax benefits by writing off your expenses for the business. This means that if, for instance, you want to get into real estate investing, you can write off all expenses related to that activity-including travel, education, and more. Hire a CPA: A good CPA will be able to sit down and help you plan out the best way to maximize your investment fund and take advantage of your legal business entity. Here’s the secret about taxes that the rich have figured out—a small refund is a good thing. A tax refund isn’t the government giving you “free” money, they’re just giving you back what was yours in the first place. So the next time you hear someone complaining that they got a smaller refund, give them a high-five and tell them congratulations, you kept more of your own money! Read more about how to build massive wealth by lowering your taxes in Tom Wheelright's book:​ #robertkiyosaki​ #richdadpoordad​ #financialeducation​​ Facebook: @RobertKiyosaki​ Twitter: @TheRealKiyosaki​ Instagram: @TheRealKiyosaki​ If you would like to experience this episode in closed caption, it can be found here on the YouTube Rich Dad channel. Learn more about your ad choices. Visit

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