I'm not going to talk about adjusting your withholding to bring home more money or how to maximize your IRA contributions, or even the benefits of an MSA (also called a flexible spending account). Things like that need to be discussed with a tax professional.
I'm talking about paying less for tax preparation services. You could save a lot of money and do it yourself on paper, but if you are like me, and like the shiny things and movement of computers (and for me, it takes a lot of the guess work out of it), using a computer program or paying someone else to do it is the method you chose.
1- Check with your bank or credit union and see if they have partnered with a tax preparation service to offer a discount. My Credit union offers a $30 discount at Jackson Hewitt. They have coupons in each branch.
2- Check with your state's website, your state might offer free state online income tax filing. California offers free Cal-File for those who qualify.
3-TurboTax offers free federal and state tax filing services for those who qualify.
4- Make sure to check your newspapers and junk mail. Tax preparation services will start to advertise and offer discounts and coupons.
This goes without saying: If you chose to have a service prepare your taxes, make sure they are licensed and are on the up and up.
If you are thinking about using a service and getting a tax refund anticipation loan, which is where the service completes your tax paperwork and loans you the money that you would be getting back from the the feds and when your tax refund comes, it goes straight to the tax preparation service (you also pay the service a percentage of the amount they are loaning you- so in essence you are paying for being impatient!). There are a lot of articles online warning against it, and I have to agree. If you file your taxes and have the refund deposited into your checking account, you will have the money, in most cases in 10-14 business days. Do the research for yourself- look online, ask questions. If you have to do it, comparison shop.
Waiting 2 weeks for your refund is worth the extra money, which can sometimes be up to 40% of the amount of the refund.
Not to mention (sorry, my two cents), H&R block puts it on a card, but only up to a certain amount. You can't get cash off the card, and you can't use it everywhere.
ReplyDeleteTax Act is a cheap option for those who don't qualify for the thing from turbo tax.
Also, paying the money to e-file over having them take it out of your tax refund can prevent problems too (see stimulus, and H&R block delays).
For the last 5 years, I only paid for state filing (not free with turbo tax), and then I saw the state website last year and filed completely for free.
The anticipated refund loan is a bad idea, IMO, just like pay day loans. They have scary APR's or have crazy restrictions (like the H&R block card from the sounds of it!)
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