Download - Tax returns/refunds and wise planning
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& WISE PLANNING
Sarah Rach-Sovich
S
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FREE TAX PREPARATION West Central Minnesota Community Action (WCMCA) offers
free tax preparation services to families who earn less than $53,000 per year and individuals who earn less than $30,000 per year
Call to schedule an appointment 800-492-4805 Alexandria, Elbow Lake, Glenwood, Morris & Wheaton
Additional information on free tax prep sites: 2-1-1 Minnesota Information and Referral Minnesota Department of Revenue
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ON YOUR OWN
Many reputable sites that will guide you
File online (sometimes for free) Help you identify deductions Less errors (calculated for you)
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UNEMPLOYMENT INCOME
Unemployment income is taxable You'll get a Form 1099-G that will
tell you how much unemployment you must report on that year's tax return
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CHECK EITC ELIGIBILITY The earned income tax credit, or EITC,
is a tax break for workers who don't make very much money
Unemployment benefits don't count toward EITC eligibility, but if you earned any other income during the year, you can use that amount to calculate a possible credit claim
Single taxpayers can claim the EITC, but the benefit is greater for workers with dependent children
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DEDUCTIONS
Medical Expenses Children Student Loan Interest Mortgage Interest Property Tax Interest Rent Credit Donations
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JOB SEARCHING DEDUCTIONS Hang on to all your job-searching related
receipts! There are, however, limits to job-hunt tax breaks
Same field, no substantial break You must itemize to claim job-search expenses These costs are miscellaneous deductions,
meaning they and other eligible miscellaneous expenses must amount to more than 2 percent of your adjusted gross income before you can claim them
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JOB SEARCHING DEDUCTIONS
What you can write off Employment and outplacement agency fees Resume services Printing and mailing costs of search letters Want-ad placement fees Telephone calls Travel expenses, including out-of-town job-hunting trips
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TAX REFUNDS Last year the average refund was $2,860 according
to GoBankingRates What do people do with their tax refunds?
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INVESTING Retirement
Through employer On your own IRA
Stocks/bonds/CDs Repair your credit score
It can affect SO many other areas of your life – even getting a job! Start by getting a copy of your report
In yourself… leading to larger paychecks in the future! Training – conference Tuition – class, degree Membership to an organization Start a business
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SAVING FOR PEACE OF MIND
It can be hard to save! Cash on hand to cover
unexpected expenses Ideal vs. realistic
3 months of expenses Whatever you can save is
better than nothing Even just a portion of it… Opportunity fund!
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DON’T GET CAUGHT UP IN THE FEELING…
REMEMBER THE DIFFERENCE BETWEEN WANTS & NEEDS
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THERE ARE WISE WAYS TO SPEND A TAX REFUND…
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IDENTIFY NEEDS
Housing Food Transportation
Debt Repayment Down Payments Other Needs
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HOUSINGFOOD Find Housing Use for a deposit Catch up Get ahead
Buy gift cards for yourself/family
Stock up Food storage (freezer)
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DEBT REPAYMENT
May be forced (taken from your refund) Anything in collections Things that affect your credit High interest
Credit cards & store charge cards If you were paying 18% interest that is like earning 18% on your
investments… you are keeping that much money in your pocket! Flip that saved money into a savings/opportunity fund – or spend
wisely elsewhere Things that might eliminate a payment
Saving you money every month
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Housing
Utilities
Vehicles
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OTHER NEEDS Health issues
Doctor visits Surgery Dental work Eye glasses/contacts
Repairs & Preventative Maintenance Home Vehicles
Insurance gaps Home, renters, liability vs. full coverage
Computer, phone, internet Helpful if you are job searching
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KARMA & GIVING BACK
If you are able… Consider giving back Can be a deduction Doesn’t have to be monetary Maybe not this year… but in the future?!
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FOR NEXT YEAR
Adjust withholdings?? Pay yourself first Savings account
Earn interest Save receipts Document expenses Start saving
Any amount helps!
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