Rosenthal Wealth Management Top Ten Do's and Don'ts for That Tax Return Check

IRS Says Average Return Checks are 1.3 percent Higher

With April 15 around the corner, many taxpayers across the country are feverishly developing spending plans for that welcome return check from Uncle Sam. To aid in putting those funds to the best use, Rosenthal Wealth Management President Larry Rosenthal offers his “Top Ten” tax return spending do’s and don’ts.

“Replacing or fixing the home air conditioner, the roof overhead or getting the $1,000 car tune up done are not as fun as the Caribbean vacation or the latest high tech TV or gadgetry but by not attending to the ‘must do’ things in a planned and deliberate fashion you run the risk of such expenditures becoming even a bigger budgetary hit should they fail at inopportune times,” says Rosenthal, a Washington, D.C. based money manager often cited by a host of national and local media.

“Spending unplanned money is always a tug-of-war over not-so-fun or ‘must do’ things versus fun or ‘nice to do’ things. Oftentimes, there are opportunities to spend in both areas,” he says.

To help sort out how to divvy up those tax return dollars, Rosenthal offers the following ‘Top Ten List’ of do’s and don’ts for tax return spending:

  1. Don’t make financial decisions -- such as those involving a tax return check -- emotionally. You and your spouse may have worked your fingers to the bone all year but such circumstances should not empower you to take vacations or buy a sports car if those decisions are not supported by a reasonable assessment of ‘the numbers,’ including your tax return check.
  2. Do make a list of the top ‘Must Do’ items. That list will tend to drive most decisionmaking. Repairs to cars (tires/brakes/exhaust, etc) or the home (air conditioner/washer/dryer/refrigerator etc.) will likely dominate.
  3. Don’t ignore possible ‘nice to do’ things. Make a list of a few of them as well,  just in case you are one of the fortunate people who have managed to deal with and plan for all those ‘must do’ things. And make sure that list includes at least a few relatively inexpensive ‘nice to do’ things such as dinner out for two at one of the nicer places you have had on your mind. Perhaps your financially Spartan behavior over the year might even allow you to reward yourself with that long put off cruise.
  4. Do take a look at your regular bills. Are there bills that you are late on, such as phone, utilities, etc.? If there are, then you need to attend to them. You will have to pay them at some point and late penalties can add up quickly as well as damage your credit rating.
  5. Don’t forget the kids. Have you reasonably attended to things that may come up and affect them. For example, are you putting off needed braces or is the timing right for you to start dealing with future educational needs such as college or vocational schooling.
  6. Do take a look at your loans and other financial commitments for high-interest obligations. Most people have numerous credit cards and often times, several of them will have relatively high rates of interest – over 10 percent. Paying down such debts is in effect allowing your money to work double time for you by lowering both your total debt as well as your high-interest debt.
  7. Don’t forget charities. Lots of things to say about this notion. Pay it forward. Give back. Tithe. Help the less fortunate. There but for the grace of God go I. And of course, there is one crass thing to throw in – can you say tax break?
  8. Do think about the breadwinners. You or you and your spouse are the infrastructure that is keeping your family upright or afloat. If there is some shoring up – i.e. professional training/development – that would better enable those breadwinners to survive or perhaps even thrive better in the future workplace years, then perhaps this is the time to set money aside for those activities.
  9. Don’t ignore a retirement account. Is it time to either start or add to a retirement account? When retirement comes, and it always seems to come faster than you think possible, you don’t want to be lamenting, “I thought I had put more aside.” To this very day, in spite of helping scores of people set up such accounts, I have yet to hear anyone say anything like ‘Damn, there is way more money in my retirement account than I need.’ It doesn’t happen. So don’t be afraid of overdoing it on the retirement account.” Rosenthal said.

    “One tip that I have seen work, is to set aside a specific percentage of each year’s tax return, to augment your retirement effort. Over a few decades, even a modest contribution of perhaps $1,000 or so, can add up to a serious nest egg down the road,” Rosenthal added.

    10. Do at least think about talking to a professional money manager to help you better plan for your future financial needs. Many such experts offer a free initial visit so the risk is really minimal. The wealth management world has become far more complex where missteps can cost thousands, tens of thousands or even much more.

As a much sought after financial advisor, Rosenthal has appeared regularly on Fox Business News and has been quoted in The Wall Street Journal, CNNMoney, U.S. News and World Report, CNBC’s The Nightly Business Report, The Washington Post, USA Today, Money, Bloomberg, The Chicago Tribune, The Fiscal Times, Kiplinger’s Retirement Report, Consumer Report’s Money Advisor, The Washington Times, Financial Planning, Financial Advisor and others.

Rosenthal has been providing financial counseling for about three decades. He presently has offices in McLean, Manassas, Stafford Virginia, and Baltimore, Maryland. Additionally, he has co-authored the book “Financial Success in the year 2000 and Beyond.” His next book is expected out in mid-2019.

Rosenthal is also the host of “Making Money Sense,” a radio show that has aired every Saturday morning on DC’s WAVA from 9:00 – 10:00 a.m. since 2004 and is now nationally simulcast via satellite on SiriusXM channel 131.

Investment advisor representative and registered representative of, and securities and investment advisory services offered through Voya Financial Advisors, Inc. (member SPIC). Rosenthal Wealth Management Group is not a subsidiary of, nor controlled by, Voya Financial Advisors, Inc.

Neither Voya Financial Advisors nor its representatives offer tax or legal advice. Please consult with your tax and legal advisors regarding your individual situation.


Contact: Robert Johns

Source: Rosenthal Wealth Management Group


Categories: Personal and Family Finances, Financial News

Tags: financial advising, financial planning, financial tips, Making Money Sense, money management, smart ways to spend tax refund, tax refund, tax refund spending, tax season 2019, taxes, use tax refund