Feeling overwhelmed by tax season? You’re not alone. But with NCACU’s resources and a bit of preparation, you can turn this time into an opportunity for making smart financial decisions.
- Prepare Early: Tax planning is crucial because it helps you understand your financial situation, ensures compliance with tax laws, and can lead to potential savings. Effective preparation also allows you to minimize tax liability, identify available deductions and credits, and make informed financial decisions throughout the year.
Being proactive with your planning can also help you budget for future tax payments and prevent surprises at tax time. For example, regularly reviewing and adjusting your withholdings and estimated tax payments can avoid underpayment penalties. Staying informed about tax laws and consulting with a tax professional can assist with long-term financial planning.
- TurboTax and H&R Block Discounts: As a member of NCACU, you’re eligible for discounts on tax preparation services from TurboTax® and H&R Block. These services simplify the tax filing process with easy-to-use software, ensuring you get the maximum refund possible. Be sure to take advantage of these discounts to ease the financial burden of tax preparation.
These platforms can also provide educational benefits, as they often include guidance on tax laws and offer personalized advice based on your situation. They can help identify potential deductions and credits specific to your circumstances, ensuring you don’t overlook opportunities to reduce your tax liability. Remember, investing a little time in understanding these tools can lead to savings and a more streamlined tax filing experience.
- Collect The Right Information: To get started, gather all necessary tax documents such as W-2s, 1099s, receipts for deductible expenses, and records of charitable contributions. Review last year’s return to remember the credits and deductions you claimed. It’s also wise to stay updated on tax law changes that could affect your return. (If you’re not sure, please consult your tax advisor.)
Additionally, if you’ve had significant life changes such as marriage, divorce, the birth of a child, or buying a home, these events can substantially impact your tax situation. Keep documentation of these events, as they may unlock new deductions or credits. Understanding how life changes affect your taxes ensures you won’t miss significant tax benefits.
- Double-Check Data Entry: Be careful with data entry and double-check for typos, such as an incorrect Social Security Number. Remember, each SSN on a tax return should appear exactly as printed on the Social Security card.
Wages, dividends, bank interest, and other income received and reported on a return should also be entered carefully. This includes information required to calculate credits and deductions. Tax software can help prevent math errors, but individuals should always review their tax returns for accuracy. Ensuring accuracy in income reporting and other factors can also help you avoid potential audits or legal issues.
- Be Wise With Your Refund: Everyone’s situation is unique — and we all have individual goals. However, if you’re getting money back, avoid spending it on trivial things, like new clothing or eating out. You’ll be disappointed if you quickly burn through your money with little to show. Instead, consider something with a lasting impact, such as creating an emergency fund, bolstering your savings, or paying down debt.
Another option is opening a Certificate of Deposit (CD) with your refund. It’s an excellent way to save and grow your money with higher interest rates than a regular savings account.
A Final Thought:
Using your available resources can turn tax season from a stressful period into a financially rewarding one. Utilize the discounts on TurboTax and H&R Block, and consider investing your refund in a CD to build a stronger financial future. Remember, the team at NCACU is always here to help with any questions or concerns you may have.
Call us at (989) 910-5135 to learn more.