Making the Most of Your Tax Return – Saving and Investing Strategies

Getting a tax return can feel like a financial boost—but how you use it can make a big difference in your future. David Theiss, VP, Senior Wealth Management Advisor & Financial Planner at Croghan Colonial Bank, shares insights on using your return wisely.

Start with the Basics

“Before you spend a dime, make sure your tax return is stored safely,” says David. “You’ll need it for student financial aid, loans, or future financial planning.”

Your return can reveal planning opportunities—such as IRA eligibility or whether tax-advantaged investments make sense for your bracket. “It really is a roadmap for smart decision-making,” David adds.

Building an Emergency Fund

Using your refund to build or grow an emergency fund is a great first step. “The rule of thumb is to have at least six months of expenses in a liquid account like a savings or money market fund,” says David.

Debt vs. Investing—What Comes First?

“Ask yourself: Is the interest on your debt higher than what you’d earn from investing? Are you getting any tax benefits from that debt?” David explains. If not, paying it down may be the smarter option. Otherwise, investing could help build long-term wealth.

Smart Investment Options

“If you’re in a higher tax bracket, look at investments that generate less taxable income—like municipal bonds or tax-efficient funds,” says David. Being mindful of capital gains and other taxes can help maximize your return.

Contributing to Retirement Accounts

“One of the best uses for a refund is contributing to retirement,” David says. “Your return can show whether you qualify for a deductible IRA, Roth IRA, or employer-sponsored plan.”

• Deductible IRA – Pre-tax contributions, tax-deferred growth
• Roth IRA – Post-tax contributions, tax-free growth and withdrawal
• 401(k), SEP, SIMPLE IRA – Employer plans with flexible tax benefits

“These contributions can reduce your tax burden now and set you up for the future,” David notes.

Let’s Talk Strategy

Whether your goal is saving, investing, or reducing debt, Croghan’s Wealth Management team is here to help you put your return to work—aligned with your goals.