This is a collaborative post between me and Will Vanhook- my Entrepreneur friend and Business CPA. Below are Will’s tips to use your tax refund for your business goals, along with my process on how I put his ideas into action.

Refund Check! … Now What?! 

If you are one of the many who have already filed your business and/or personal tax returns and you received money back…congrats!  If you ended up owing the government, well, that is a separate article.

I was lucky enough to get a refund.  

My Process

As much as I wanted to go out and blow all that money, I had to consider my “why” and personal values.  Instead, I had to think about how to make my money work for my business so I began with my usual personal and business budgets. This gave me an overview as to how I’m currently spending and investing in my business.

Next, I wrote a list of free programs I use all the time, new programs I’d like to use but are paid versions,  and supplies I needed. 

Then, I went through each item on the list and rated them by priority of my current situation, short-term goals, and long-term goals. 

No matter how much or little you receive, think about how your money will help you reach your goals in the long run. 

What can or should you do with that refund check that could provide the best returns to you down the road?  Here are four ideas:

Time to adjust your withholding?  

Did you receive several thousand back from the government? If you are an individual or small practice, you may want to consider how many exemptions you are claiming to the federal and state government or how much you are paying in quarterly estimated taxes. Because if you are receiving thousands of dollars back, you are lending the government money that you could be more productively using.

In the Profit First world, now would be the time to adjust your Profit and Tax account percentages, so you are paying closer to your fair share and not too much more in quarterly taxes.

I have not had to file for business taxes yet, but I know Will will keep me on track when the time comes. 

Pay down debt  

Whether you are an individual or practice, if you have outstanding “bad” or consumer debt, now is the time to seek and destroy that debt that could be weighing you or your practice down with stress.  Imagine taking that $5,000 check and using it to pay down those credit card charges at 18.99% APR, amounting to nearly $500-700 in additional interest charges.

I don’t know about you, but keeping down debt is a priority of mine as financial stress is the last thing I need. So far, I’ve done an ok not racking up too much money while working on my business while starting my life over this past few months. But debt is debt, to me, so this was my top priority for my tax refund. 

Growing a business  too fast can be great, but more upfront expenses turn into debt and add up quickly. Bootstrapping and growing as you have the money to invest helps prevent financial stress.

Build up Savings

If you are an individual, with no debt, use that refund check to increase your “rainy day” fund of 6-8 months living expenses.  If you are running a small practice, this is your “Vault” of three months of operating expenses.  Either way, if you are living Profit First, extra cash that is not used to pay down debt is used to go towards savings, because you understand the importance of maintaining that cash flow buffer personally or in your practice.

Although I have some debt left, you better believe I also saved some to my “emergency savings.” You never know when that opportunity comes along or life crises could happen and you’ll be glad you had the buffer to dig into.


Ok, so you have no existing bad debt and your Vaults are both fully funded…now what? Well, now would be the time to contribute that refund check towards your retirement or if you run a small practice to invest in equipment or other asset that could help generate more revenue.  Perhaps you were running a successful marketing campaign to bring in new patients or students on a small scale.  Now you could use that refund check to scale that campaign to get you a step closer to your desired client or student base.

Ah the fun part! I finally invested in a new laptop. This was my “splurge.” My old laptop was great but it was seven years old and not compatible with Windows 10 so I couldn’t use my MS Office 365 programs either. 

I use the free version of Evernote all the time so I went ahead and upgraded to the premium version as well. 

And since I moved and updated my branding, it was time for new business cards.

If you are not currently running a Profit First practice, but interested in learning more about how to do so, Will can help.  He offers a complimentary consultation to assess where your business currently is and how to help you reach your profitability and cash flow goals

Photo Credit: Stuart Miles on

QOTD: I’d love to hear your thoughts in the comments below!

  1. Did these tips and actions help you get ideas for using your money for goals?
  2. How will you invest your tax refund this year?


Will VanHookWill VanHook is a licensed CPA, business finance coach and the owner of CFO-Health. Based just outside Raleigh, NC, CFO – Health’s goal is to serve chiropractors, physical therapists and wellness center owners by collaboratively implementing tailored cash management processes, as well as tax planning and preparation strategies that help ease the pain of insufficient cash flow and time-intensive taxes, while partnering with you to build a practice that meets your vision. Learn more at


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