3 Ways to Save More Money This Tax Season
Tax filing season is upon us once again—an opportunity to assess your financial situation, set goals for the year, and find ways to save towards those goals. Here are three easy ways to save money this tax season and get a jumpstart on your savings goals in the New Year:
1. Check Your Withholdings to Find More Money in Your Paycheck
Do you receive a large tax refund every year? If yes, you may want to check your tax withholdings and adjust your withholdings to “avoid having too much federal income tax withheld from your paycheck,” according to the IRS.
Receiving a large tax refund may indicate you’re giving Uncle Sam an interest-free loan on your money, so now’s the time to take a second look to see if your refund strategy is still right for you.
If receiving a large tax refund (or whatever refund you do receive) during tax season works for you, save a portion of your refund with SaveYourRefund to be entered for a chance to win up to $25,000 in cash prizes!
2. See if You Qualify for the Earned Income Tax Credit
Families should not overlook the Earned Income Tax Credit (EITC), “a refundable federal income tax credit for low- and moderate-income working individuals, couples and families.”
The IRS estimates that about 20 percent of taxpayers who are eligible for the EITC fail to claim it, or are simply unaware that they qualify. It’s one of the reasons you should always file your taxes, even if you don’t think you owe or will receive money. If you qualify for this tax credit, the money you receive from it may be used to fund your savings goal! Take note of these three things:
- You can’t get the EITC unless you file a federal tax return and claim it. Visit irs.gov to determine your eligibility and get additional information.
- If this is the first year that you are claiming the credit, use the IRS EITC Assistant to see if you qualify for tax years 2017, 2016, and 2015. You can file any time during the year to claim an EITC refund for up to three previous tax years. Talk about a bonus!
- The IRS cannot issue refunds before mid-Feb, 2018 for tax returns that claim the EITC or Additional Child Tax Credit. But that doesn’t mean you can’t file when you normally would. Early filers can make the most of this delay by planning to save that refund and avoiding refund anticipation products, offered by commercial tax preparers. Although they loan the amount of your tax refund to you quickly, the fees will have you seeing red, so filers beware!
3. File Your Taxes for FREE
Consider using your local Volunteer Income Tax Assistance (VITA) program to help prepare your basic return and e-file your taxes for free! Find information on the VITA program (and see if you qualify) here. Find a local VITA program with the VITA Locator Tool.
Set yourself up for financial fitness in 2018 by being aware of these three ways to find and save more money this tax season to achieve your goals. When it comes to saving, every dollar counts!
Alecia D. Blair is the Director of Military Saves, a nonprofit program, which seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at militarysaves.org.
Let America Saves help you make the most of the money you save this tax season. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.
3 easy ways to save money this tax season and get a jumpstart on your savings goals in the New Year >> http://bit.ly/2mjNuNF
- Written by Alecia Blair
- Category: Blog
- Published: 09 January 2018