Income Taxes and Debt Free Living

Income taxes are a fact of life. For those of you who prepare your own tax returns, be sure to take all the credits and deductions you're entitled to. Maximize your tax savings. Read all instructions and use the worksheets included in your income tax filing instruction book. They can be a big help in determining what you're eligible for. When in doubt, utilize the IRS help at 1-800-829-1040 for individuals and 1-800-829-4933 for businesses. You can also find information on their website at http://www.irs.gov.

The newness of the current year is quickly beginning to wear off. If you haven't already started your plan for debt free living, I can't stress enough how important it is to get your spending under control, create a household budget, and start managing debt. Make this the year you commit to eliminate debt and take control of your money!

A professional income tax preparer will cost you and, many use the same types of programs that current online services use. I have filed my own income taxes for many years. My finances are fairly simple. I don't have to itemize or worry about depreciation, etc. Even if your taxes are more complicated, today's easy access to intelligent income tax programs online have made filing as simple as plugging in your information.

Perhaps you itemize deductions, have income property, a home business, or other concerns. No problem. Income tax preparation software will ask the necessary questions, you provide the answers, and everything is placed in the correct place and calculated for you. It's great! I use TaxAct to complete the task, and I must say it is not a chore any longer.

They will even offer different scenarios for different income tax filing status, a comparison to average filers, and an alert check for possible missing items, deductions, or credits, and seemingly incorrect items. Save your money. You can get a free E-file tax return at TaxAct. Preparing, printing, and e-filing the income tax return are free.

You can opt to print and mail your tax return. However, e-filing is a great alternative that speeds up the entire process. And, it's free. Your State income tax return can be completed at the same time and requires little additional information entries. Whatever method you choose, good luck and many happy returns! Tax returns that is :-)

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Getting a Refund?
Be Sure to Use It Wisely!

Stay Focused on Debt Free Living Goals!

If it is your goal to become debt free and financially independent, you'll want to do one of the following:

Use the entire refund to pay down debts.
Set aside a small emergency fund (say at least $500), and put in an interest bearing account. ING DIRECT offers the Orange Savings Account. Great rates, no fees, no minimums. Use the remainder to pay down debts
Set aside a portion for a major expense that you know will be coming up that has not been included in your monthly budget plan. Use the remainder to pay down debt

I know it's difficult to give up your refund to debt. In the past, you probably went on a spending spree or it simply disappeared from the checking account because of uncontrolled spending. You were left scratching your head, trying to figure out where it all went so quickly. Been there, done that.

Giving up your refund to debt free living is not much different than living paycheck to paycheck. The money's gone before you even got it. So, it's certainly not a feeling you are unfamiliar with. At least this time you can confidently, and proudly, know where that money went; To the task of becoming debt free and enjoying debt free living. Another huge step towards taking back your paycheck, your tax refund, and any other financial gain or gift you may get during the year and becoming financially independent.

In the current issue of Cheryl's Sensible Cents, my money saving tips newsletter, the quotable quote was this.......