Taxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the refundable tax credits that they claim. With tax season approaching and many planning out their financials for 2019, it would be a good idea to start thinking about the best way to file your taxes, and how to make the most out of any refund money that could be coming your way. Below are some tips to leverage your tax refund if you are receiving one, and some different methods to file those taxes.
One way to use your tax refund is to pay off some of your credit card debt. You may have continued to push aside that dreadful credit card debt because you never had sufficient funds to make a dent, but this years tax refund may just give you that boost you need! It is always a good idea to go into the new year with a clean slate on your credit card, and get rid of debt that may be costing you a high amount of interest. A large amount of Americans said they have plans to pay off their credit card debt with their tax return money.
If you are not concerned about your credit card debt, or don’t have any, you could use your tax refund on investing in your retirement fund, pay down or refinance your mortgage, or if you have kids, you could start them a college fund. One thing many people do is invest in a dividend reinvestment plan (DRIP). This is the idea of compounding, which is earning dividends on reinvested dividends.
However, before you can actually do anything with your tax refund, you have to file them first. It is a good idea to plan how you are going to file them and if you are going to do them yourself or if you need extra outside help. There are quite a few companies who help you file your taxes for no cost. These include Turbo Tax, H&R Block, Tax Slayer, and many more.
If you don’t know how to file them yourself, it is okay to ask for help. You should never hesitate to reach out and ask for assistance when it comes to filing your taxes. For some taxes can be fairly simple and straight-forward, and for others it can become extremely difficult and complex, it all depends on your personal and unique financial situation. Regardless of how you decide to file your taxes, there are plenty of resources out there that are readily available, and it is important to leverage those resources to ensure you have covered all your bases! If you decide that you want to do it on your own, the US Tax Center says you may file Form 1040 by paper mail, using IRS e-file, or through an approved tax preparer, but filing taxes online is generally faster, easier, and more secure, and you will get your tax refund much sooner if you choose the Direct Deposit option.