Financial Tips for Tax Season

As the tax season quickly approaches, it is imperative that you learn a few financial tips that will ensure that you are able to save money, avoid costly complications, and – perhaps – even make a little money. In this brief guide, you will be presented with a list of these productive tips. If you want to make the most of your money, the following will help you succeed in the endeavor:

1. First and foremost, it is imperative that you safeguard yourself against becoming the next victim of a tax-related scheme or any tax-related fraud. It is common for cybercriminals to send text messages, email messages, and even create elaborate, official-looking websites that appear to be directly from the IRS. The purpose and intent of these types of schemes is to obtain personal and financial information for illegal purposes. In order to get the latest information regarding tax scams, you may visit the IRS website page: https://www.irs.gov/uac/tax-scams-consumer-alerts
2. The next financial step is to make sure that you are highly selective when choosing an individual or professional tax preparation company to handle your taxes. Once you determine that the preparer is legitimate, be certain to provide all information pertaining to your earnings and deductions. Failure to submit properly or failure to submit the proper information could result in a multitude of complications – including incurring fees and penalties from the IRS.
3. When filing your taxes, you will be able to opt on how to receive your refund. You may be presented with loans that will provide you with money until you receive your return and similar offers. It is best to file electronically and to elect to have your refund direct deposited into your bank. Not only will this save you money on fees, but, you will avoid having to pay interest and costly fees just to receive your money more quickly. You waited all year, what’s a few more weeks?
4. If you are anticipating a tax refund, you should avoid the temptation to spend it. Instead, you should opt to save it in a savings account, create an emergency fund, or choose to pay down some of the debt that you have acquired. Common examples of these types of debt include loans, vehicle financing, and credit card debt. Many find themselves quickly spending their refund and discovering new ways of placing themselves in debt. You should consult with a financial advisor at your bank to determine the best means of using your refund dollars.
5. Finally, if you find that you are in a position where you owe into the IRS, you must determine the quickest and most effective means to paying that debt. You may opt for an installment plan with the IRS, using interest from your financial accounts, or simply paying off the debt completely once the bill is issued. You should never resort to taking out loans or paying off IRS debt with your credit cards as that will only multiply your debt – over time.