A fifth season exists, and it's one that isn't defined by the weather. Tax season has arrived, and will hang around until April 17, the (somewhat extended) deadline for filing your 2011 income tax return. It doesn't have to be complicated. Keep these six don'ts in mind as you prepare and file your taxes to make this season as seamless as possible.
Tax season is here again. If you're wondering how to spend your tax return, read these tips from OnSugar blog Beauty and the Budget.
As a newcomer to retail, I have learned that there is a rise in shopping this time of year. Whereas in my pre-retail life, I was completely unaware that shoppers come in droves between January and February (slacking off around March) to spend their tax returns. Of course, it is nothing compared to the holiday season, but tax return season is like a belated Christmas gift from the government. When some people get their tax returns back, they immediately spend it just like you would spend your Christmas money.
Many college students are getting financial aid refund checks in, too, and they're also spending it like crazy! Of course, this works out great for the economy, but is giving the money right back to Uncle Sam the most sensible way to spend it?
Not really. If you're tired of having financial burdens and accumulating more debt, you should consider other ways to utilize your money. I think the hardest thing people seem to realize is that you can't get rich (or even become financially stable) if you blow your money at every opportunity. During college, I blew through money, but now I'm beginning to recognize the value of a dollar and how important saving really is.
Here are five sensible ways to spend a tax return, and these tips also work for school refund checks, too.
Begin an Emergency Fund: When emergencies arise (and they always do), life is so much easier when you have a fund set aside to take care of life's misfortunes. You may not always be able to put an emergency bill on your credit card because several credit card companies are slashing credit limits to lower their financial risks. With an emergency fund, you can take care of all or at least part of the bill without having to charge it.
Create a Savings Account: You should treat an emergency fund and a savings account as two separate entities. You don't always have to save for retirement. Save money for something you really want — like a dream wedding or a vacation.
For more ways on how to spend your tax return, read on.
Reality shows seem to be quite a source for finance tips. I recently talked about some personal finance lessons I learned from Jersey Shore, but apparently The Hills is another unexpected fountain of savvy knowledge. From fitness advice to lessons in dating, she's provided quite a diverse range of wisdom on her website, The Lo Down. Here's a sample of some of the tips she posted today:
- On friends and money: Lo advises not to "lend your friends money." Perhaps she learned from personal experience? Mixing friendship and money can be a narrow tightrope to walk on, so Lo says to instead offer "sage financial advice."
- On Uncle Sam: I love her commentary on this tip. It's important to make sure you're really taking all your tax deductions, and Lo says, "[Uncle Sam] already charges us all enough, thank you very much." Hear, hear! Make sure you're aware of these seven tax deductions that people often overlook.
- On cash: Lo's preferred method of payment is cash these days. That's because "holding your money makes you realize how much you're spending." We're definitely in great agreement over the benefits of carrying cash at SavvySugar! Just make sure you're not carrying too much, because cash is pretty easy to spend as well. I advise taking out a certain amount that works well with your budget, and to make sure you're keeping track of how you're spending it. Whatever you do, don't follow in 50 Cent's footsteps, the rapper carries around $25,000 in cash!
Every year, TurboTax does a little data analysis and announces which cities procrastinated the most in filing the previous year's taxes. In 2008, San Francisco had the most residents electronically filing their taxes from April 14-17, but in 2009 Houston, TX, had the biggest number of tax procrastinators.
Find out if your city has more people who tend to put off filing their taxes than others when you read more
As a lovely, law-abiding citizen, you pay your taxes. But as someone who's savvy, you certainly don't want to part with more money than is necessary. There are a handful of new tax deductions and credits that have been introduced to give you a bigger refund (which the government hopes you'll use to stimulate the economy). Find out four ways to pocket more of your money this tax season.
Couples may benefit from separate filing if one of you had large medical expenses, high business expenses, or if one of you had significant theft losses. It could be beneficial to seek professional help the first time you file after marriage to prevent overpaying your taxes.
Set a date with your taxes to prevent the April 14 panic. I can't promise it will be painless, but you will be productive during your tax appointment. I prefer to schedule my tax time during the weekend to avoid a time crunch and the frustration that follows. When is your tax date?
Taxes are no cup of tea in their simplest form, and the mistakes that complicate your return make taxes even less appealing. As luck would have it, I received an email from payroll the day after filing my tax return letting me know there was a mistake on my original W-2. The type of error means I have to file an amendment to my 2008 tax return. You too? Check out the details for filing an amendment below.
- You're required to submit an amendment if you have to correct your filing status, tax credits or deductions, dependents, or total income.
- If you claimed the original homebuyer credit that included a $7,500 allowance that had to eventually be repaid, you can amend your return to instead claim the $8,000 credit that doesn't have to be repaid.
- Use Form 1040X to file your amended return. It must be printed out and mailed to the IRS; you can't file the amendment electronically.
- Be aware that the corrections you submit may cause you to owe taxes.