As a small business owner, it is not uncommon to receive a tax refund. Whether you were expecting to receive this money or not, it is important to put it to good use. Below are some tips to help you get the most benefit from your tax refund.
1. Pay down business debts.
Most businesses must take out loans or other forms of credit in order to operate, especially when they are getting started. If your business has unpaid debt, you can use your tax refund to pay some of your debt and save your business money in interest. Paying down debt can also eliminate payments from your monthly budget, freeing up your funds for other purposes. If you have more than one debt outstanding, be sure to pay off the one with the highest interest rate first to maximize your savings.
2. Invest in your business.
If you have been planning on launching a new product line or offering a new service, consider investing your tax refund in these efforts. If done properly, investing your tax refund in your business can increase your profits, effectively multiplying the money you received from the government.
3. Put money toward marketing.
Another excellent way to make your tax refund dollars go further is to invest them in marketing. An effective marketing campaign will help your business draw in more customers, which increases your overall profitability.
4. Put your money in savings.
If you don't have a specific idea of what to do with your tax refund, it may be in your best interest to put it into a savings or other investment account where it can earn a profit. Having the money in savings also provides you with a safety net that you can use if you need extra cash in the future. Otherwise, you would be forced to apply for credit, which requires you to pay interest.
5. Provide better employee benefits.
Another way to stretch your refund dollars and maximize your benefits is to invest it in a better benefits program for your employees. Not only will this improve the morale of your current employees, but it will also give you a better package to present to potential hires if you decide to expand your staff.
Figuring out what to do with your tax refund dollars can be a challenge. If you aren't sure what you should do with your money, or if you have other questions about your taxes, it is best to consult an accounting professional. Padgett Business Services can help you with all of your accounting, tax and financial planning needs. Please contact us today to learn more about our services.