Finance & Insurance

Are You Ready to Submit Your Taxes?

By now your company should have given you all the necessary tax information to file your taxes. And we’re here to remind you that it’s TIME! There are so many options for filing your taxes. You can:

  • Hire an accountant. This can cost you $200 for relatively simple taxes and upwards to $800 if you have a more complicated return to file. For example, if you’re a business owner, it’ll be worth the cash.
  • H&R Block–these are tax specialists–NOT CPAs or accountants. They are read up on tax code and understand how taxes work. They know how to file and are cheaper than taxes.
  • E-filing using Turbo Tax and other product. If your taxes are uncomplicated, and fairly routine, go with this most least expensive option.

Here are a few helpful hints when filing:

  • Remember to deduct donations, including your church and Goodwill, the two most popular.
  • Deduct professional expenses, including union dues. Just be prepared to justify these deductions. You don’t want to red flag yourself.
  • Deduct childcare expenses, including daycare (the biggest expense).
  • Increase IRA contributions for 2016. These are tax deductible.
  • Take an opportunity to refinance your home. When begin a paying a mortgage, you pay out much of the interest up front, which is tax deductible. When you refinance, you go back to that stage of front loading interest, creating a bigger deduction.
  • Use current tax laws. Have there been any changes to energy efficient homes and cars?
  • You may need an accountant to be sure you’re totally up to date and reaping every possible advantage.
  • Withhold more in 2016 if you’re getting a large refund. The government shouldn’t be holding on to your money.

What to do with the refund?

So you made a little money this year. Remember, you shouldn’t be reaping thousands–that’s your money to begin with; not the government’s. What to do with the windfall?

According to cnn.money.com, the first thing you need to do is pay down credit card debt. This the most expensive money you borrow. You don’t need to pay off your entire balance, but you have the opportunity to make your debt more manageable. If you’re able to double or triple your payment because of a tax refund, you should do this first.

If credit card debt is not a problem for you, plan to pay off a big upcoming bill. are you taking a vacation this summer? Do you know that you have an expense coming up? If you get a windfall, you now have a chance to plan for it. Instead of putting your plane tickets on a high interest credit card, pay for it using your tax refund.