What to Do with Your Tax Refund Check

Tax Refund Check

By Jerry Bazata, “Money Answer Man”

It’s that time of year when Uncle Sam rewards us for all our hard work and sends us back our “Billions” of over payments in federal income tax. For business owners, this is like finding huge amounts of coin in the cushions of the couch or under the seat of our car. The Internal Revenue Service recently reported that the average refund check in 2016 will be approximately $3,000.00 per household.

What to do with your tax refund check; how should you spend or save the money. As the “Money Answer Man” and having worked with hundreds of business owners, it’s appropriate to share some ideas to consider.

  1. Pay down any high interest rate credit card debt. Review the balances you have on your credit cards and determine how much of the refund you can allocated to reducing the principal balance on those credit cards. If you took any “zero interest rate” options for purchasing equipment, determine when the promotional period will end and put aside funds to make the balance payoff in time to avoid finance charges. Home Equity loan that you have been paying interest only, reduce the principal balance if only for a short period of time can save you some interest expense.
  1. Saving and Retirement: Since many of us consider this as “fund money” it would be nice to put some of it away for the future. I would recommend that you consider at least 20% to be put into a savings account or better yet an Individual Retirement Account (IRA). Keep in mind that the sale of your company is not a prudent retirement plan, let me refer you back to my article http://promobiledj.com/2011/11/how-much-is-your-dj-business-worth/
  1. Invest in the Company: The tax refund in part was a result of the revenues you generated from your business. It took more than your good looks and outstanding personality to earn the income, but rather the physical equipment that helped you be the best DJ you possibly can. Now nothing lasts forever and at some point you need to update your equipment or improve your marketing. So you may ask, “What should I spend my money on?” I did a little research for you and after speaking with the industry experts that sell DJ equipment, like my favorite company www.idjnow.com they suggested the following:
    1. Wireless and Battery LED uplighting control – Fixtures Chauvet Freedom Series of Pars and Bars as well as ADJ’s WiFly Bars and Pars. For control Chauvet Obey 40 D- Fi 2.4 gives ability to send wireless signals, also, ADJ coming out with NE1 (any-one) this controller allows you to dial in virtually any manufacturer and begin super easy control of Wireless fixtures along with the WiFly Battery. This is a transceiver that allows you to connect the first fixture in the line without the need for a cable.
    1. DJ Appearance – updating the appearance of your look by utilizing a Front Board to keep a clean, neat and professional look at all times. Some are simple construction; others allow glowing with LED Fixtures. One can start with a simple Façade package from ADJ like an Event Façade.
    1. Use a Hazer NOT a fogger. Guests don’t appreciate a cloud of smoke in the air and many venues won’t allow it. However, if you use a hazer machine you get the best of both worlds. On TV programs like the Voice, Idol, and various other productions that use lighting effects they all do one thing in common, they use a very thin, light, haze to bring out the effects without bothering the crew, performers, etc. You can too. You need to speak to your Maître D and explain how you would use it for permission, but DO TEST FIRST. Show the catering facility or venue exactly what you would do and that it will not affect the audience. If you test ahead you can be sure it won’t affect the fire alarms as well. Provided you are only seeking to get those colorful beams visible and not cloud the floor with smoke it should work like a charm.

Now, what not to do with your tax refund check, spend it all in one place like taking a vacation because you “deserve it”, loan it to a friend or taking a trip to the casino because the number 21 keeps coming up in a reoccurring dream.

Start planning for next year’s even bigger tax refund, by tracking your expenses appropriately, keeping accurate records and taking advantage of any tax breaks such as the 179 Deduction Uncle Sam is willing to offer us.