When my son, Jonathan, was seven years old, we went to his favorite toy store to spend his allowance. He had $5 saved and the item he wanted was $4.99. Already a math whiz, he exclaimed, “Wow, Mama, I can buy this and have a penny leftover!” Then I told him about taxes, and his face fell as he realized he couldn’t get the toy airplane. All of the sudden, his eyes brightened with an idea, “I know, Mama, why don’t YOU just pay the taxes and I’ll owe you the money?” Since we “don’t do debt” in the Kay house, I had to explain how I didn’t want him to go into debt to me and he would have to wait another week for his next allowance. Jonathan learned, the hard way, about debt and taxes.
I’ve been doing a lot of research on taxes and my best tips are listed below, courtesy of TaxACT. They’ve partnered with me today so be sure you go to the end of this post to see how my peeps can WIN a free copy of TaxACT Deluxe ($12.95 value) in my giveaway!
- Get Organized Ahead of Time – I recommend my “Sixty Minute Tax Workout” where you whittle down the tax task a bit at a time. Get organized before you sit down by gathering all your W-2s, 1099s, and other tax documents. TaxACT offers a free interactive checklist here (http://www.taxact.com/reference/what-do-i-need.asp) and on TaxACT Central, TaxACT’s free companion mobile app available for download here (http://www.taxact.com/mobile/taxact-central/).
- Get Smart – Familiarize yourself with the new tax law changes by going to IRS.gov and look at Publication 17, the first few pages summarize the major changes. You can also go to taxact.com/taxinfo.
- E-file – For the fastest refund (in as few as 7 days with direct deposit). Unlike paper filers, e-filers receive notification as soon as the IRS has processed your return.
- Get it Free– Use a free tax preparation solution, but beware – free solutions are not created equal. I recommend TaxACT Free Federal Edition because it’s truly free for everyone, including you! Unlike other free tax preparation solutions, there are no restrictions or gimmicks. TaxACT includes forms for simple and complex tax returns, plus unlimited free tax and technical help by email. Your return is backed by TaxACT’s Maximum Refund Pledge and Accuracy Guarantee. TaxACT Quick Convert makes it easy to switch to TaxACT by bringing in info from last year’s return. It’s fast, easy and convenient – you can even use TaxACT Online on your iPad! With your free e-file and direct deposit, you could have your federal refund as fast as 7 days. After you e-file, check the status of your return on TaxACT Central, the free companion mobile app.
- Pay What You Can – If you cannot pay your entire tax balance, file and pay as much as you can by the April 17th deadline to avoid penalties and interest. Call the IRS to discuss payment options, including installments.
- Don’t Forget to Import – Save time and aggravation by importing key data from a PDF copy of last year’s return. If you have multiple W-2s, a 1099 or investment data, use the quick entry features available on TaxACT Free Federal Edition at taxact.com.
- Don’t Procrastinate – Although this year’s filing deadline is April 17, 2012, don’t procrastinate because rushing can result in errors.
- Don’t Get a Cash Advance On Your Refund – When you can get your refund in as little as 7 days by e-filing with direct deposit, it’s a dumb money move to pay all kinds of interest to get your cash a few days earlier. You need that extra money, don’t throw it away!
- Don’t pay more than $15 to e-file State Taxes – If your state charges income tax, then all your federal info transfers to your state forms when you use TaxACT. The federal solution is free and the state solution costs less than $15 –less than half the price of others.
- Debt and Taxes – Don’t spend your refund on Disneyland or a new TV if you have credit card debt. Instead, use 50% of the refund to pay down consumer debt and the other 50% to build up your emergency fund. You may not get the mouse ears this year, but you’ll be in better financial shape!
WIN A FREE COPY OF TAXACT DELUXE EDITION – (Value $12.95)
TaxACT is giving away 10 free copies of Deluxe to my peeps! Your name can be entered in any of the following ways: email firstname.lastname@example.org and put “TaxACT Giveaway” on the subject line (feel free to drop me a note with your own money tips), or you can “like” this post on Facebook or Twitter, you can retweet it, or leave a comment on my blog. (Be sure to enter by Feb 15th, and we’ll draw names and notify you if you won.)
After you enter the giveaway, visit www.free.taxact.com for a sneak peak of TaxACT’s commercial airing on Feb. 5 during the football game and enter Feel the Free Fridays sweepstakes to win a tech prize!
Here’s what you’ll win in my giveaway: TaxACT Deluxe Step-by-step guidance through your guaranteed accurate return, plus free tax and technical help in the Answer Center, online, by email, AND by phone
Biggest guaranteed refund in as few as 7 days. With free federal e-file and direct deposit, you can have your refund in as fast as 7 days.
- Donation Assistant – maximize your deduction for non-cash donations with audit-backed values for more than 1,300 items
- TaxACT Life Events breaks down the tax implications of major life changes, such as getting married, having children or selling your home
- Tax Guides with money-saving tax information about college, education and retirement
- Other tools and guidance, including Stock Import, TaxWatch 2012, calculators and reports
I hope you win!
America’s Family Financial Expert (R)