Your tax refund is not a bonus check: Financial expert

Ramsey Solutions financial expert Chris Hogan on how to utilize your tax refund and parents’ efforts help save for their children’s college education.

The tax deadline has come and gone for most Americans, leaving them free of the hassle and potential annual liability until next April.

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The IRS had processed more than 100 million returns as of April 5 and is expecting another 30 million-plus to flood in through next Friday.

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Whether you ended up with a refund this year, or a bill from the tax agency, do you ever wonder how the government uses the hard-earned cash they collect from you throughout the year?

Here’s a look at where tax dollars are allocated, according to data from fiscal 2017 compiled by the Center on Budget and Policy Priorities:

Total

In fiscal 2017, the government spent $4 trillion – $3.3 trillion of which was paid for via federal revenues. Borrowing accounted for the difference.

Health programs

A number of health programs accounted for the largest share of federal spending. Those programs include Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and Affordable Care Act market subsidies. Together, these insurance programs comprised 26 percent of the federal budget – or $1 trillion.

According to data from the Pew Research Center from the year prior, Medicare accounted for 15 percent of spending, while other health programs made up 13 percent.

Social Security

Social Security accounted for 24 percent of spending, or $945 billion. Benefits for the year averaged $1,404.

In the year prior, the program accounted for the same percentage of federal spending.

As of March 2019, more than 68.3 million people received Social Security, Supplemental Security Income, or both. The average Social Security benefit for 2019 is $1,461.

Defense, international security

Fifteen percent of the budget – equal to $611 billion – was spent on defense and international related security activities.

According to the analysis, the bulk of the money went toward Defense Department costs, while other expenses included support for operations in Afghanistan and other Overseas Contingency Operations.

Defense spending accounted for the same percent of overall spending in fiscal 2016.

Safety net programs

About $357 billion were spent on safety net programs – including parts of the Earned Income Tax Credit and Child Tax Credit, the Supplemental Nutrition Assistance Program (SNAP) and housing assistance, among other programs. These programs designed to support low-income families comprised about 9 percent of federal spending.

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Interest on debt

Interest payments on borrowed money made up 7 percent of the budget, at $263 billion.

Other

The remaining funds were spent on a variety of programs including benefits for retirees and veterans, infrastructure, education and science and medical research.