May 22, 2013

Posts Comments

Have Questions? Call us:

Get a call back Chat online with a counselor
As Featured In: abclogo cbslogo nbclogo newsweek newyorktimes
You are here: Home / Taxes

7 Tips for Filing Your Taxes

January 29, 2013 By Leave a Comment

http://fairimmigration.files.wordpress.com/2009/04/tax-day.jpg

It’s hard to believe that it’s already the most wonderful time of year again – that’s right, it’s tax time!

…Ok, ok, so most of us aren’t too fond of filing our income tax returns. But it’s really not that bad, especially if you follow our advice below.

  • File early. It’s simple: the earlier you file, the earlier you’ll receive your return.
  • Keep your receipts throughout the year, even for small purchases. You won’t have evidence to claim a deduction if you don’t have a receipt. You’ll be glad you have them in the event of an IRS audit. This applies to receipts for charitable donations as well.
  • File your own taxes. Doing it yourself sounds scary, but programs like TurboTax guide you step-by-step through the filing process. It doesn’t take very long, and you won’t have to pay expensive fees to someone else. Still need convincing? Your information will be submitted to the IRS electronically, and that means you’ll receive your refund quicker.
  • Still not convinced that you should do it yourself? Many tax preparers are seasonal workers who receive basic training on how to do your taxes. They’ll ask you the same questions that the software you’d use to file your own taxes would ask you. Bottom line: there’s not much of an advantage to hiring someone to do it for you when you can do essentially the same thing yourself at home.
  • Check and double-check your math, since many errors often come from miscalculations. Honest taxpayers could end up owing more than expected or not receiving as much as expected simply because of bad math. This is another reason to use electronic software to file – they have built-in calculators. But you still need to make sure you enter the figures correctly.
    Even if the IRS catches an error and fixes it for you, your return could be delayed. Be careful and check over everything before submitting.
  • Don’t overlook filing taxes for any side jobs or investment income. It’s easy to focus on filing for your main job and forget about other forms of income, but overlooking this could result in penalties from the IRS.
  • Put your refund directly into a savings or retirement account before spending it on bills. You can opt to have the money direct-deposited into your account. This is a great way to protect yourself from identity theft, but make sure you enter your account information correctly. After you’ve been dealing with that many numbers, it’s easy to switch a number or two around in your account or routing number. Again – check and double-check to be sure all your information is correct.

None of us actually enjoy filing our taxes, but the process doesn’t have to be quite so bad. And when April rolls around and all your friends are filling out their forms, you’ll be glad you followed our advice and filed early!

Filed Under: Featured, Financial Education, Taxes

Tax Season Uncertainty: How Will It Affect You?

January 3, 2013 By Leave a Comment

http://www.american.com/graphics/2007/november/Featured_taxes.jpg

If you’re looking to get a head start on filing your taxes this year, you may be out of luck. Tax season usually lasts from mid-January to mid-April, and many families file taxes well before the April deadline, hoping to receive their refunds early as well. But this year, due to Congress acting so late on the Fiscal Cliff, the IRS will be behind on updating its forms and systems based on the new laws. So far, no date has been announced for when consumers can start to file their taxes.

So what does this mean for you? Well, it means your refund will probably arrive later than you hoped if you intended to file early. Many families often file early to use their refund to pay off credit card debt incurred around the holidays – if your family was one of those, you may have to find other ways to pay until the return comes through.

The IRS has only announced that they’ll have more information available “soon” but has not given us anything more specific than that. A similar issue happened about two years ago, when lawmakers came to an agreement in mid-December, pushing the date to begin filing back to mid-February. This year, lawmakers didn’t come to an agreement on the issues until January 1, so tax season may be pushed back even further this year.

Stay tuned to CESI and we’ll keep you updated as more information becomes available. In the meantime, you may want to be saving extra money if you had already planned to have your tax return available early this year. Be sure to follow our Twitter account, @cesidebt, and our Facebook page, to stay in the know about the upcoming tax season!

Filed Under: Consumer News, Debt, Featured, Holiday Spending, In The News, Taxes

Best Tax Tips & Help for 2012

February 21, 2012 By Leave a Comment
carrying tax

image: www.taxevasion.org

 

As the calendar itches closer to April, tension is building as we all get ready to do our taxes. The good news is there’s new deductions and other tips that may increase your refund. I’ve spent the last few hours gathering the best tips and help from around the net.  Without further ado, here’s the highlights of what I found.

IRS Help – The official IRS site has great help for many different tax issues, including free tax preparation and filing for the disabled.  Use this site as a starting point to start your tax filing off right.

Find hidden tax refund money - An informative video by CNN reminding everyone to double-check for refunds you may have forgotten.

8 ways to judge a tax professional - It takes a lot of trust to hand over  your financial information to a tax professional. This article by MSN goes into detail on how to tell if a tax professional is credible and trust-worthy.

Tax-Answer – H&R Block’s Q&A system is a good resource to have your questions answered or find information you might have missed.

12 Tempting Tax Tips 2012 – Bankrate supplies very current, detailed tips to get the maximum refund. Don’t know about the American Opportunity deduction? Learn here.

30 Last-Minute Tips - Check this list by SmartMoney before sending your taxes in.  Simple tips that can easily be forgotten are pointed out in this list.

Hopefully this list helps you get a couple extra deductions. Remember to take your time and educate yourself on what deductions may apply to you. Did I miss anything? What are your best tax tips and advice?

 

Filed Under: Featured, Taxes

Tax Breaks for Home Improvements

August 24, 2011 By Leave a Comment

tax breaks for home improvementsUpgrading your home with new energy-efficient items may just pay off! If you were not aware,  Congress extended the tax break for energy-efficient home improvements through 2011.

Ask anyone who has ever had to replace a heating or cooling system in their home and they will probably tell you they suffered a case of sticker shock. It’s a pricy item to have to replace, but I’m certain that the cost is well worth it when the heat hits triple digits or the wind chill  hits single digits. Simply put, the comfort of heating and cooling is well worth the cost.

If you are faced with a costly home improvement upgrade like air conditioning or heating this year, the good news is that you can still claim a tax break if it meets energy-efficient guidelines.  The slightly less-good news is that the tax breaks aren’t quite as hefty as they were in recent years. I maintain that some money back is better than no money back – especially when it’s something that you would be doing even if there was no tax break. Still, it’s good to know what the guidelines are so you can decide if it’s worth it to you.

Here is your handy guide to 2011 tax breaks for home improvements:
  • Unless the benefits are extended by Congress, the current tax breaks are set to expire at the end of 2011. This means that after that date you will no longer be able to claim them.
  • Tax Credit – 10% of cost up to $500 or a specific amount from $50 – $300
  • Must be an existing home and primary residence. Rentals and new construction do not qualify

Not all items qualify for the same amount so it’s a good idea to check out the specifics more carefully at the engergystar.gov website

So tell us – are you planning any home improvement upgrades for 2011? Have you used the tax breaks in past years for energy-efficient upgrades to your home? Share your story with us in the comments below!

 

*photo credit homecreations.com

 

Filed Under: Featured, Taxes Tagged With:

5 Stupid Ways To Spend Your Tax Refund

March 15, 2011 By Leave a Comment

an official tax refund check from the U.S government

Are you getting a tax refund this year? It’s great to have a windfall of cash, but if you are not careful that money will go quickly. According to the IRS the average tax refund for this year is roughly $3,000. There are smart ways to spend that money and there are stupid ways to spend it. Here are 5 stupid ways to spend your tax refund.

1. Buying more stuff instead of paying off debt

We all like to have nice things. When money is tight and you are struggling with debt there isn’t much extra to spend either. The temptation can be great to splurge when extra cash comes in, but think of what you might be sacrificing before you buy something that you don’t truly need. Once you are out of debt you will have extra money every single month instead of paying creditors. Isn’t that better?

2. Paying off a refund anticipation loan

Let’s just be honest here. If you need the money from your refund badly enough that you would pay hefty fees for a refund anticipation loan you are probably in over your head. Why give up some of that money for the privilege of having it a a few weeks earlier? By offering these loans and charging fees companies are just finding another way to line their own pockets at your expense. It would be so much more cost effective to invest your refund in a healthy emergency fund so that you have cash on hand to cover unexpected expenses that come along.

3. Failing to invest it for the future

New furniture might be nice, but will it still be around during your retirement years to pay your expenses? I didn’t think so. Immediate gratification is so….gratifying. But the reality is that you can’t fiance your future during those retirement years. Taking your refund and letting it accrue interest that is going to serve you for years to come is a smart way to use that cash!

4. Creating more debt

It may be tempting to purchase a big ticket item with your refund like a new car, a recreation vehicle or furniture, but if you don’t have enough to pay for that item in full all you are doing is creating more debt. Retailers will go hard after your business this time of year by convincing you that you both need and deserve whatever you may have your eye on. Don’t give into the temptation! Ask yourself if you can honestly afford to take on another debt and put that money to better use.

5. Becoming a big spender

When you have a big wad of “extra” cash in your pocket it can be easy to become the big spender. A round of drinks for all my friends! Dinner is on me tonight!  Let’s spoil the kids! – these are all natural responses that come from wanting to love others and be accepted. But do you really have that money to spend? Will people love you more if you spend money on them? Try to look at the situation through realistic eyes and spend money in ways that you can afford to maintain….you’ll probably respect yourself more in the morning!

How about you? What are the stupid ways that you’ve seen people spend their tax refund on? Let’s dish!

Filed Under: Entertainment, Events, Featured, Money Management, Taxes Tagged With: ,

The Smart Way To Use Your Tax Refund

March 2, 2011 By Leave a Comment

Although tax season brings stress to a lot of people, it also brings large tax refunds to many Americans. The IRS estimates the average individual tax refund will be close to $2,500 this year. Sure, you could go out and buy a new high definition television or take a trip to the Caribbean, but there are better ways to use your tax refund. These alternatives may not be as much fun as splurging on a toy or a trip but they will pay dividends in the future.

Contribute to Your Retirement Account

According to Bankrate.com, two thirds of Americans will not have enough money for retirement. One of the best uses for your tax refund is to save it for retirement. You can either increase your 401(k) contribution or deposit your tax refund into an IRA, or individual retirement account.

During the last one hundred years, the Dow Jones Industrial Average increased in value by an average of just over 9 percent each year. Assuming that your retirement contribution will increase by this percentage, a $2,500 investment will grow to $14,011 over 20 years. If you have 30 years until retirement it will grow to $33,169.  After 40 years, this $2,500 contribution becomes $78,524.

Better yet, if you make a retirement contribution of $2,500 every year over the next 20 years you will end up with $153,422. A steady contribution of $2,500 for 30 years will turn into $404,607. Do you have 40 years until retirement and want to have a million dollars in your account? Well, that is just about what you will end up with if you invest $2,500 for 40 years and earn 9 percent a year.

An added benefit of using your tax refund for a retirement plan contribution is that the money you deposit will reduce your income tax due. This is because contributions to qualified retirement plans are tax deductible. It is important to note that contributions to Roth IRAs work a bit differently. Money contributed to a Roth IRA is not tax deductible. Instead, distributions from a Roth IRA are tax-free.

Pay Down Your Credit Card Debt

The average interest rate on credit cards is about 13 percent in the United States according to CreditCards.com. An individual’s credit card rate can be significantly higher due to bad credit, late payments or large outstanding balances. Reducing your credit card balance is a terrific way to use for your tax refund.

You will save well over $300 in interest charges in one year if you use a $2,500 tax refund to pay off a credit card with a 13 percent annual interest rate. If you have more than one credit care make sure to pay off the balance that has the highest interest rate first.

Save for College

One of the biggest expenses in life is higher education. The cost of college tuition almost always increases faster than the rate of inflation. So, if you have children, consider using your tax refund to invest in their future education.

The best way to save for education is by contributing to a 529 plan. 529 plans are set up on the state level. Although plans vary by state, the basics of most 529 plans are the same. Contributions to a qualified plan are not exempt from federal taxes, but the money in the plan grows tax-free. Also, if the money is used for education then the distributions from the plan are also tax-free.

If you contribute $2,500 each year for ten years and invest the money conservatively to achieve an average annual return of 5 percent then you will end up with over $37,000 after ten years. Although this may not cover the tuition to a four-year college, it is definitely a good start.

Make a Charitable Contribution

Do you want to save money on next year’s tax bill, help a good cause and feel good? Then consider making a charitable donation with your tax refund. Besides helping out a cause that is important to you, your donation will be tax deductible if it is made to a qualified organization.

Create an Emergency Fund

The one thing just about everyone learned during the latest recession is that anything can happen. It is important to have six to nine months of daily expenses stashed away in an emergency fund in the event of a layoff. An emergency fund should be liquid. A savings account at an FDIC insured bank is a great place to put away emergency funds. Also, emergency funds should not be invested in risky assets such as stocks.

Tax refunds are a great way to improve your financial life. This large influx of cash should be used for productive purposes. Although it is tempting to spend a refund on a fun toy, using the money wisely pays off long into the future.

Filed Under: Taxes

Oh Crap! It’s Tax Time Again.

February 22, 2011 By Leave a Comment

Judging from the posts I am seeing recently on Facebook, the majority of people I know are  aware that it’s tax time. It seems like there is quite mix of emotions surrounding this season. The responses I see range from “Yippee! I’ve been waiting for this return ALL YEAR LONG” to the well known….”Oh Crap. NOW what do I do?”

If you are panicked about tax season, it’s time to relax. Here are some of the most common questions people ask and the best answers I could find.

  1. Is unemployment income taxable? According to the IRS, Yes.  Unemployment income along with severance and accumulated vacation/sick time all must be reported. To avoid a big tax surprise it’s best to estimate your tax for these sources of income and withhold that estimated amount.
  2. What if my income has gone down -does that change anything? Taxes are always calculated based on your income. While a decline in income is not a cause for celebration, the good news is that you MAY be eligible for tax credits that you were not eligible for before. Check  here for more information on the Earned Income Tax Credit.
  3. I can’t pay my taxes due – now what? To avoid penalties and interest, you must pay the amount you owe on time. However, if you contact the IRS directly, they may be able to grant you an extension, installment agreement or another type of payment plan. Ignorance is not bliss in this case – proactively contacting the IRS is key to handling this situation without it costing you more. 
  4. When does my unmarried, dependent child have to file their own tax return? Since guidelines can change from year to year, you should always check the IRS website to get the most up to date guidelines. You can find that information here.
  5. Can I still get a refund if I’m paying a prior year’s taxes with a repayment plan? The bad news is no, you can’t. The good news is that the amount you are due for the current year’s refund will be applied to the amount you still owe which can help you pay it off faster. You can read more about it here.

While these questions certainly don’t cover all the items you may be wondering about, they do represent some of the most common ones. The IRS website has a wealth of information related to any question you could think up with regard to your taxes. If you can afford professional tax help, it’s always easier to rely on the expertise of a professional to prepare your taxes to avoid any surprises.

Filed Under: Featured, Taxes Tagged With: , ,

Latest Video: Own Your Taxes!

February 15, 2011 By Leave a Comment

tax spelled out on a scrabble board April 15 is quickly approaching… what will you do?  Check out CESI Debt Solutions’ latest video!


Filed Under: Featured, Financial Tips and Tricks, Taxes Tagged With: , , , ,

Get Help Filing Your Taxes

February 3, 2011 By Leave a Comment

man holding tax Great news! There are many locations around the United States where you can get assistance with preparing your taxes for free. For those who qualify (IRS Guidelines can be found here) certified volunteers will assist you with finding  all the credits you qualify for, preparing and filing your 2010 taxes. There are two  program available: The first is known as the Volunteer Income Tax Assistance Program (VITA) and the second is known as the Tax Counseling for the Elderly Program (TCE). Both are available nationwide and are a fantastic resource if you need help with your taxes and qualify! To find a location in your area visit this link.

For those of us who prefer to prepare our taxes on our own or who don’t qualify for the free tax preparation programs here is a listing of excellent resources that you can use for the task.

TurboTax Online

TaxAct Online

H&R Block – you can use them online or visit a local office

You can also purchase a variety of tax preparation software that will walk you through the process without utilizing an online service. Turbo Tax is an excellent software that can purchased almost anywhere this time of year.

Gather all your documents

Before preparing your taxes it is important to gather all the documents you will need including all W-2 forms, investment and tax statements and information sent to you by your bank, student loan lender or mortgage company. Typically these items are mailed to you in January – if you save them all in one folder you should have much of what you need at your fingertips when tax time comes around.

Lastly, for any questions you have, the IRS Website has a wealth of information on all things tax related. The site is easy to navigate and has a search feature so you can quickly look up your particular question.

Filed Under: Financial Tips and Tricks, Money Management, Taxes Tagged With: , , , ,

If you are unemployed here are some tax tips for you!

April 2, 2010 By Leave a Comment

This blog post is intended to be of assistance to the unemployed. I will be listing some of the changes for those that were collecting unemployment last year when it comes to filing their tax return for 2009.

If you were unemployed last year or are still unemployed then you already know that unemployment benefits are still taxed and that you are required to file a tax return for 2009. But to your benefit there are some changes going into effect this year to help you out. Below I am listing some of the major changes taking place this year to allow you to get more back or pay less.

New deductions to use to your advantage: In the past every penny you received from unemployment is taxed, but for this year only you will be able to subtract the first $2400 from the amount that you received. Make sure you do the math yourself because the state employment agency will send you the form showing the full amount you received so you are responsible for making that deduction. Also, if you had to withdraw from your 401k to cover medical expenses you will be able to avoid the tax penalty for that withdrawal. And if you are 55 or older and were laid off having to withdraw from your 401k then you do not have to pay the tax penalty for that withdrawal.

Itemize and deduct expenses for the job search: You will now be able to deduct various expenses that are incurred from job hunting. Some of those expenses that are acceptable are; resume printing, postage, long-distance calls, faxes, and travel expenses including airfare, taxis, and tolls. But the rule you will have to use to be eligible is the amount deducted for these expenses have to be more than 2% of your adjusted gross income. Also, if your income plummeted due to unemployment and your medical expenses exceed 7.5% of your gross adjusted income then they can also be deducted.

I hope that this will help you to owe less taxes or get more back and if you were unemployed last year or are still unemployed then I wish you the best of luck finding the right job for you. Does anyone have any other suggestions?

 

Source: http://money.cnn.com/2010/03/08/pf/saving/tax-tips-for-unemployed/index.htm

 

Filed Under: Financial Tips and Tricks, Taxes
« Older Posts