Ah yes it is TAX time! This can be a stressful time for most folks but it doesn’t have to be. Here are my top tax tips to help you get the most out of your hard-earned money. After all, we are the boss of our dollars, right?
Take All The Allowances You Can
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We talk a lot about where to find “extra” money when it seems that there is none. One of the places to look is in your own paycheck.
That’s right! Many people fill out their W-4 with their employer when they start working there and NEVER update it. The IRS recommends that you update it once a year with your employer.
When we updated our W-4 forms with our employers and took ALL the allowances possible, we got an extra $100 in each paycheck. That enabled us to use that money towards paying off our debt.
Doing this does decrease your potential refund at tax time. Still I’d rather have more money in my pocket throughout the year than just one big check every spring.
Don’t wait until the last minute!
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As of today, there are 74 days until April 15th. Last year 14 million filed their taxes in the last hours before the deadline.
That stress just isn’t fun but many people still wait. There are a variety of reasons but most are just excuses for avoiding something that isn’t enjoyable.
Gather your papers. Give yourself a deadline (maybe March 30) instead of the government-imposed deadline. For most of us, filing isn’t complicated but we imagine in our heads that it is.
What am I always saying to you guys? You have got this! You can do hard things! Be kind to yourself and don’t wait until the last minute.
File Online For Free
I’ve used several online tax filing tools over the years. Generally it’s not complicated. The beauty of these is that you can fill out whatever sections you have, save it, go back and work on it, chipping away at the return until you’re done and ready to submit.
If you are self-employed or have complicated investments, then you may want to utilize the expertise of a tax consultant. You don’t want to make mistakes in this area. But still most filing services provide a guarantee that they will catch those mistakes for you and help you correct them.
Getting A Refund?
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That’s my favorite part of the return process – seeing how much we’ll get back. Generally it’s not much (because we take all the allowances we can). But still it is nice to see a refund.
The average refund is $3,000. This year 27% of Americans plan on using it to pay off debt, which is down from 36% last year. {This isn’t great news considering the personal debt levels continue to rise}.
So when you see what you are going to get for your refund, PLAN AHEAD. Before that money even hits your bank account, have a plan for how you will spend it.
Need ideas?
- Rebuild your emergency savings
- Pay off any debts (credit cards, car loans, etc)
- (If you have those done) then SAVE it for that vacation, that car, that home purchase, etc.
No, don’t blow it. Please don’t.
So take all those allowances, do your taxes before March 30, file online for free (if you can), and make GOOD USE of your refund. Let me know how these tax tips help you.
Here’s to you and me bossing our dollars!!
