What Your Tax Refund Could Be Worth If You Saved It

Last year, the average federal income tax refund was $2,741. Tax season 2020 wasn’t exactly a great time for most Americans, and for many, that money immediately went to paying rent or bills, buying necessities or paying down debt. Plenty of others, however, were able to tuck some or all of it away in an investment account.

Find Out: What Are the 2020-2021 Federal Tax Brackets and Tax Rates?

Depending on how that money was invested, those savers might have had a very, very sweet 2020. Even those who put it into a standard index fund that tracks the S&P 500 would have seen a hefty return on their investment. Other stocks, however, delivered much bigger returns — enough to translate into potentially life-changing money in just nine months, in a few cases. 

Here’s a look at what a tax refund can become if invested wisely as proven by some of the year’s top stocks between April 15, 2020, and mid-January 2021. The tax filing deadline was extended to July 15 last year, but refunds began on schedule. The millions of Americans who are once again due a refund this year should consider that potential before they go out and spend it on something shiny.   

SPDR S&P 500 ETF Trust (SPY)

• Stock price on April 15, 2020: $274.27
• Stock price on Jan. 13, 2021: $379.79
• Your $2,741 investment would be worth: $3,795

One of the most basic, most popular ETFs in the world, SPY tracks the benchmark S&P 500 index. That means whoever owns a share of SPY owns a sliver of all 500 of the biggest U.S. corporations. Even this common index fund, which offers immediate diversification among the best-known stocks in the world, delivered an impressive 38.47% return from last Tax Day to now. Other individual securities — many of which are part of SPY — did about as well or even better.

Read More: All the New Numbers You Need To Know for Planning Ahead on Taxes

Amazon (AMZN)

• Stock price on April 15, 2020: $2,307.68
• Stock price on Jan. 13, 2021: $3,165.89
• Your $2,741 investment would be worth: $3,760

Amazon is frequently cited as one of the few companies to come out of the COVID-19 crisis a winner — and its investors certainly have won. The truth, however, is that from Tax Day 2020 through the beginning of the new year, Amazon did only about as well as the S&P 500 — the most common measure of the stock market as a whole — returning 37.19% over that time.

Read More: How Jeff Bezos Built Amazon Into What It Is Today

Zoom Video Communications (ZM)

• Stock price on April 15, 2020: $151.56
• Stock price on Jan. 13, 2021: $364.63
• Your $2,741 investment would be worth: $6,594

Many people who didn’t use video chatting for work or school might have never heard of Zoom before the coronavirus trapped millions of Americans at home. Then, like the virus itself, it seemed like that’s all everyone was talking about. The software app soon became a necessary and ubiquitous quarantining staple for millions and the company’s stock price rose by 140.58%.

Looking Ahead: Will Zoom and These 5 Other Companies Continue Their Incredible Runs in 2021?

Etsy (ETSY)

• Stock price on April 15, 2020: $56.72
• Stock price on Jan. 13, 2021: $211.20
• Your $2,741 investment would be worth: $10,206

The pandemic brought unemployment, underemployment and general financial anxiety to the masses. Many tried to generate cash on the side by making their hobbies pay or by leveraging their talents into side hustles. Etsy is the biggest name in handmade e-commerce, and the company’s stock grew by 272.36%.

Read More: 25 Companies Making the Most Money From Coronavirus

Peloton (PTON)

• Stock price on April 15, 2020: $35.61
• Stock price on Jan. 13, 2021: $167.42
• Your $2,741 investment would be worth: $12,846

Gyms became a flashpoint for debate as America argued over the necessity of America’s fitness clubs during economic shutdowns. Either way, scores of gyms were shuttered and millions of Americans had to adapt to working out alone at home. Peloton, the hottest name in both stationary bikes and fitness as a subscription service, was poised to gain from the crisis, and gain it did — to the tune of 370.15%.

Find Out: 6 Things Worth Investing In To Help You Keep Your Resolutions

Tesla (TSLA)

• Stock price on April 15, 2020: $145.97
• Stock price on Jan. 13, 2021: $854.41
• Your $2,741 investment would be worth: $16,044

Few people in the world had a better year than Elon Musk, the engineer/CEO/mad scientist behind both Tesla and SpaceX. Tesla, the world’s premier electric car company, experienced growth so extraordinary — 485.33% in the nine months examined here alone — that Musk dethroned Amazon’s Jeff Bezos as the richest person in the world in January 2021.

Read: 13 Cars That Are Bad News for Tesla

Fiverr (FVRR)

• Stock price on April 15, 2020: $31.51
• Stock price on Jan. 13, 2021: $254.42
• Your $2,741 investment would be worth: $22,132

Fiverr is to services what Etsy is to products. For those who do things instead of making things for their side hustle, Fiverr is the go-to gig site of choice. As the unemployed, laid off, furloughed and fired scrambled to bring in alternative income streams, the country’s top site for freelancers experienced stunning growth of 707.43%.

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About the Author

Andrew Lisa

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street’s investment community in New York City.

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