Tax-Time Savings Strategies
Bobbie Gray
Community Affairs Specialist
FDIC, Division of Depositor and Consumer Protection
Source: MilitarySaves
For many, April 15 marks one of the most dreaded days of the year: it's the day your income tax must be filed. Because the 15th falls on a Sunday this year, the U.S. Government has extended the deadline for Americans to file their income tax returns by three days, until April 18. Instead of looking at that three-day extension as a way to procrastinate, why not view it as three additional days to maximize your financial health? Beginning with the basics, here are several ways to help ensure you file promptly, correctly, and beneficially.
1. Save money on tax preparation. Look for legitimate programs offering free income tax assistance to eligible taxpayers, such as the nationwide network of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). The Armed Forces Tax Council oversees the operation of the military VITA program and serves as the main conduit for outreach by the IRS to military personnel and their families. The Council consists of tax program coordinators for the Army, Air Force, Navy, Marine Corps, and Coast Guard.
2. Make sure you benefit from all tax credits and/or deductions for which you qualify, such as benefits for retirement savings or education. According to the IRS, members of the U.S. Armed Forces, especially those serving in combat zones, may be eligible for special tax benefits.
3. Have any refund direct-deposited into your bank account. This is the fastest and safest way to receive your refund. Taxpayers who e-file and request direct deposit of their refunds will receive their money in as few as 10 days. Why pay costly fees for a loan or advance to get your refund more quickly than this.
4. Reach savings goals-or develop a rainy day fund-by direct depositing part of your refund into a savings account or purchasing U.S. Savings Bonds. You may direct deposit your refund into two different accounts at two different institutions, and choosing to receive all or part of your refund in the form of Savings Bonds is as easy as checking the appropriate box and providing a bit of additional information.
5. Consider using part of the refund to pay down debt, such as high-interest loans or credit cards. Doing this may also help build up your savings.
6. Watch out for tax-related scams and fraud, such as fake emails claiming to come from the IRS that try to trick taxpayers into revealing personal information. Also watch out for unscrupulous tax preparers who promise larger refunds than other preparers and make fraudulent errors that expose victims to costly fees.
For additional information, visit www.MyMoney.gov and www.irs.gov/individuals.
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