Tax returns and the stock market. Time to get fun!
We already have our tax returns back. A total of ~$6,600. Here’s the breakdown:
- State: $1,750
- Federal: $4,850 (~$4,900 is a federal credit from our solar panels from last year)
Breaking even on your taxes is the goal. A refund means that you gave the government an interest free loan (Nate’s Roth IRA saw a 22% gain last year). And owing money means that the government gave you an interest free loan.
How we plan on spending our tax return:
- A new hot water heater and front faucet
- Dining room table
- Brakes for our car
- Patio set (in the spring)
- Fence repairs
- Everything else goes on the house
Again, a tax return means that you overpaid your taxes. It’s not free money, it’s your money. We are spending it because these were planned expenses. If they weren’t planned, all of the money would be going on the house because that’s where we put all of our extra money.
The stock market has been having an interesting ride this last month. Don’t pay attention to it. Retirement invensting is about the long-term, not daily fluctations.
The real high risk in the stock market is investing in single stocks. Mutal funds lower your risk.