Tax Time: The Perfect Time to Save

Each tax season, households making less than $50,000 claim $100 billion in federal tax refunds. For many Americans, that tax refund is the largest check their family will receive all year! This windfall provides the perfect opportunity to start or grow savings for an emergency fund, education, a new car fund...or whatever. 

We know many of you support savers at tax time either through VITA programs or encouraging Americans to take advantage of tax refunds as a saving, so this partner packet makes it easy for you to encourage tax filers plan and save. 

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3 things you should know about filing taxes in 2018
By America Saves

5 things the IRS will never do
By America Saves

10 Easy Ways to Prepare for Your Tax Site Visit
By Alaska Saves/United Way of Anchorage

Don't forget about savings bonds
By Commonwealth

How to win big ($10,000!) and save big at tax time
By SaveYourRefund

3 things you should know about filing taxes in 2018

By Tammy G. Bruzon

Each year, about 26 million people received the Earned Income Tax Credit (EITC), averaging over $2,400. Yet the U.S. Internal Revenue Service (IRS) estimates that a whopping 20 percent of taxpayers who are eligible for the Earned Income Tax Credit fail to claim it, leaving money on the table that could mean the difference between getting ahead or staying in the red in 2018.

Follow these three tips to make sure you’re getting the most out of this year’s tax season:

1. File a tax return, even if you do not owe any tax or are not required to file.

You can’t get the EITC unless you file a return. End of story. Since the IRS estimates that about over in in five taxpayers who are eligible for the EITC fail to claim it, this is a vital first step in determining your eligibility.

The IRS recommends that anyone who earns less than $54,000 in a year should check their EITC eligibility each and every year.

Bonus? If this is the first year that you are claiming the credit, you can use the EITC Assistant to see if you qualify for tax years 2016, 2015 and 2014. You can file any time during the year to claim the EITC.

2. Decide where and how you will file your taxes and know your free options.

Unless you know your return is going to be complicated this year, paying someone to file a tax return should always be a last resort. Decide whether you’d rather file online or in person, and then check out these free filing options:

    • Use Free File on IRS.gov– This free software walks you through a Q&A format to help prepare your return and claim every credit and deduction for which you may be eligible.
    • Try the Free File Fillable Forms– If you're comfortable preparing your own returns, this option is for you! It allows you to file electronically using online versions of IRS paper forms.
    • Visit a free tax preparation site– If your total household income is less than $54,000 a year, you can seek free tax prep at one of thousands of Volunteer Income Tax Assistance (VITA), Military Volunteer Income Tax Assistance (M-VITA), and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, you can search online or call the IRS at 800-906-9887.

3. Make a plan for your tax refund that accounts for the EITC/ACTC delay.

A tax law that's just a couple of years old delays refunds that claim the EITC or the Additional Child Tax Credit (ACTC) until February 15 to protect tax filers from fraud. We know it can be hard to come up with alternative funds if you already had plans for your refund early in the year, but don’t be suckered by refund anticipation products provided by many commercial tax return preparers. The loan fees will have you seeing red.

If you start your planning by dedicating your refund, or at least part of it, to savings, you can get ahead of your savings goals. Enter the SaveYourRefund promotion with $30,000 in cash prizes and 102 chances to win simply for saving a portion of your refund. For more information including official rules and how to enter, visit saveyourrefund.com.

Tammy G. Bruzon works for America Saves, managed by the nonprofit Consumer Federation of America (CFA), which seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at at americasaves.org.

5 Things the IRS Will Never Do

By Darlene Aderoju

When you think about tax season, you’re probably thinking about getting your refund. But there’s something else to keep in mind--these next few months are the peak time for scammers posing as the Internal Revenue Service (IRS) to attack.

It’s critical to know the warning signs of a scam, that’s why we’ve come up with five things the IRS will never do, so you can know what to avoid and protect yourself from tax fraud.

1. The IRS will never demand immediate payment.

If you receive a notice or call demanding immediate payment, that is a huge red flag. The IRS will always notify you by mail if you owe money. You will receive multiple letters leading up to your final notice. Additionally, each letter will include a payment due date.

2. The IRS will never contact you by email, text, or social media.

You will be contacted by snail mail first. You will never receive an email, text, or message on social media demanding that you pay the IRS. If you receive unsolicited, aggressive communications from anyone posing as the IRS, here's how you should report it.

3. The IRS will never require you to use a specific method of payment.

There are many convenient payment options available for individuals who owe federal taxes. If you’re called and asked to use a specific form of payment like a prepaid card, iTunes card, wire transfer or gift card, hang up the phone. If you’re told you can only make your payment in full, that’s another red flag. The IRS is willing to work with you, and you can apply for a payment plan online. For a full listing of acceptable ways to pay the IRS, click here.

4. The IRS will never call and demand your credit card information over the phone.

You can choose to pay your taxes by phone using the payment processing system. However, it’s important to note that the IRS will never call you and demand your credit card information. We want to make that distinction clear. Paying by phone is optional, but it will never be forced upon you.

5. The IRS will never threaten to get the police involved.

Yes, legal action can be taken by the IRS if you neglect to pay your bill or fail to explain why you haven’t paid. But, legal action does not equal threats to have you arrested. The IRS can seize your property, garnish your wages or take money from your bank account to pay your debt. If someone calls you and threatens to call the police, hang up. That person is not a representative of the IRS.

With these five helpful pointers on hand, we hope you can protect yourself and your loved ones from tax fraud. Don’t forget to save a portion of your refund and check out these nine things you can do with it.

Happy Tax Time!

Darlene Aderoju works for America Saves, managed by the nonprofit Consumer Federation of America (CFA), which seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at at americasaves.org.

10 Easy Ways to Prepare for Your Tax Site Visit

By Maureen T. Haggblom, Director of Income Impact, United Way of Anchorage

HAPPY NEW YEAR! And - It IS that time of year again. Just to help you get started (which is the hardest thing to do when it comes to taxes!), here are some tips from the far, frozen northern region of the country.

1. Find last year’s tax return and bring it along. It’s not required, but it is really helpful. And looking over last year might remind you of other records you need.

2. Don’t forget to bring Social Security cards (or ITIN letters) for everyone to be listed on the tax return.  Tax sites need to see the actual card (or a picture of it), or a statement from Social Security with the name and social security number (SSN). You could photocopy all your family’s cards on one piece of paper, and keep it in the tax return envelope for next year.

3. Bring your picture ID. The tax site will need to verify that you are really you—and your spouse, too, if filing a joint return.

4. If you received an ID Theft PIN from IRS, be sure to bring that notice. Your return can’t be submitted without it.

5. Make sure you have all your records. Did you receive a W-2 from each place you worked? Do you have your unemployment statement? It’s easier to wait to get all your documents together than to make a second trip to file an amended return. And amended returns take a long time to process.

6. If you paid for daycare, note your provider’s name, address and tax ID number/SSN as well as the total spent. You’ll need it to claim the Child & Dependent Care Credit.

7. If you have a college student in the family, be sure you bring their Form 1098-T and know their total tuition, fees and scholarships. Most students can print a summary of charges from their on-line account. You should also know how much was spent for required books and equipment.

8. If you bought health insurance through Healthcare.gov or a state marketplace, be sure to bring your Form 1095-A(s).

9. Bring your checkbook or another way to verify your bank routing and account numbers for direct deposit. You don’t want to deposit it in the wrong account! Consider splitting your refund to dedicate some to savings, then visit www.saveyourrefund.com and enter to win a prize for saving!

10. If you’ll be preparing your own return online, be sure you know your last year’s AGI (from line 37 of your Form 1040; line 21 on Form 1040-A, or line 4 on the Form 1040-EZ.) If you used the same website and username last year, the program will be able to carry the AGI forward.

BONUS: Save money by getting your taxes prepared for FREE by local IRS-certified volunteers at a Volunteer Income Tax Assistance (VITA) site near you! Find a free tax site close to use today

Gathering up that information wasn’t so bad, so now let’s go make this happen! Good luck, and remember that life is always more manageable with a little planning—much better than every day being a surprise party.

Don't forget about savings bonds

By Commonwealth

A tax refund is a once-a-year opportunity to jumpstart a savings habit. This tax season, don’t forget about a savings opportunity that is available directly through the tax filing process: tax-time savings bonds. A savings bond can be purchased easily via Tax Form 8888, allowing people to use a portion of their tax refund to save impulsively at the time of filing without the need for any additional account information.

Series I Savings Bonds are currently offering an interest rate of 2.58% -- a return that can’t be found anywhere else in the market for an investment as low as $50. Purchasing a savings bond at tax time is as easy as checking a box, and in addition to their competitive return, U.S. savings bonds offer:

  • Accessibility--people can save with as little as $50 and they do not need a bank account
  • Safety--U.S. savings bonds are backed by the full faith and credit of the U.S. government
  • Giftability--people can give the gift of saving to a loved one such as a child or grandchild, to help them secure their financial future

And remember, anyone age 18 or over who splits and saves at least $50 of their refund using Form 8888--including through the purchase of a U.S. savings bond--is eligible to enter to win of 100 cash prizes of $100 through the SaveYourRefund campaign. Savers can also enter the SaveYourRefund Grand Prize Photo Contest for a chance to win one of two grand prizes of $10,000 each. SaveYourRefund is a great way to bring some fun into the tax filing process and generate excitement about great savings opportunities like U.S. savings bonds.

Click here to learn more about Series I Savings Bonds, and don’t forget to ask your tax preparer or select the option in your tax filing software to choose to split and save at tax time.

How to win big ($10,000!) and save big at tax time

By SaveYourRefund

Did you know that half of all Americans don’t have any emergency savings, yet 100 million taxpayers get a refund each year from the IRS? It’s the perfect opportunity to save!

Each tax season, households making less than $50,000 claim $100 billion in federal tax refunds. If you're like us, that tax refund is the largest check you will receive all year. But with the holiday spending season in full force, a lot of us are already thinking about what to do with that cash, whether it’s paying off a credit card, fixing the car heater, or taking a vacation. 

You can do all those things, but consider saving at least $50 of your tax refund for longer-term goals, like a rainy day fund or a home. Saving at tax time is as easy as filling out IRS Form 8888 when you file, which automatically sends a portion of your tax refund to a savings account.

By making a commitment to yourself to save now, before you file your taxes, you’re more likely to save. 

And to sweeten the deal, Commonwealth and America Saves are teaming up to offer SaveYourRefund with over 100 chances to win $30,000 in prizes, including two grand prizes of $10,000. To be eligible to win, simply direct $50 or more of your tax refund in a qualifying savings account using IRS Form 8888 and fill out the contest form at saveyourrefund.com.

But to win, you need to save. Improve your odds of saving by making a commitment to yourself now, early in the holiday season. >> Commit to save at tax time

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Social Media Content

Share the following messages with your followers. 

#SavingsTipTues

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You could win $10,000 for saving $50 of your tax refund with #SaveYourRefund: http://bit.ly/2enJLME #SavingsTipTuesday

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Savers with a plan are twice as likely to save successfully. Jumpstart your savings goal with your tax refund. Make your plan with you take the America Saves pledge: http://bit.ly/2dFhJf9 #SavingsTipTuesday

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Save a portion of your tax refund when you file by completing IRS Form 8888 for an amount of your choosing to be automatically deposited into a savings account! http://bit.ly/2nZy16D v/@IRS #SavingsTipTuesday

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File a tax return even if you don't owe because you may be leaving valuable tax credits on the table: http://bit.ly/2mjNuNF #SavingsTipTuesday 

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If you make under $54,000, chances are you are eligible for free tax preparation online or in your community. Seach by zip code here: http://bit.ly/2nSfDfN #SavingsTipTuesday

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Change your mindset: don’t view your refund as extra cash, but rather an annual opportunity to reach your goals. Get ready to file with this video from @ProsperityNow: http://bit.ly/2o1L6eR #TaxTimeSavings

#SavingsFactFriday

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Tax refunds aren't just for spending! It's the largest check many families see each year, a perfect opportunity to save: http://bit.ly/2hTDPg2 #SavingsFactFriday

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The IRS will never contact you by email, text, or social media. They will never demand immediate payment or insist you pay a specific way. Learn more red flags: http://bit.ly/2nUGM1z #SavingsFactFriday

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Tax refund anticipation products don't actually get you your refund faster, they just loan you the money. Don't pay for your money! >> http://bit.ly/2mjNuNF #SavingsFactFriday

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Paying to prepare your taxes should be your last resort. See a list of free options here: http://bit.ly/2nX0w4w v/ @IRS #SavingsFactFriday

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The average Earned Income Tax Credit is over $2,400. But one in five people who are eligible fail to claim it. Are you missing out? >> http://bit.ly/2nWRX9W #BetterMoneyHabits #SavingsFactFriday

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Avoid making several trips to prepare your taxes by gathering your documents ahead of time. Here's a list of what to bring along: http://bit.ly/2BsA9HS #SavingsFactFriday

Additional Posts

Do you have a college savings tip? Share it w/ @AmericaSaves and you could win $25: http://bit.ly/28O0Zgc

Saving for your education? Make @AmericaSaves resources your first stop: http://bit.ly/2a7uiMu

There are THOUSANDS of free tax help sites around the country. Learn more about eligibility: http://bit.ly/2mjNuNF

Ivonne won $25K by simply saving a portion of her tax refund and sharing her motivation for saving through a captioned photograph. Commit to save today: http://bit.ly/2enJLME. If you follow through, you could be a 2018 #SaveYourRefund winner!

$827 is the average amount saved by #SaveYourRefund – a great start to building an emergency fund or pay off debt. Commit to save then follow through, and you could be eligible to win a cash prize! Learn more and enter today: http://bit.ly/2enJLME

Receiving a large tax refund may indicate you’re giving Uncle Sam an interest-free loan on your money. What's right for you and your family: http://bit.ly/2mjNuNF  

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