Make the most of this tax season
Tax time is important. Many people get their single largest payment of the year through their tax refund. Maximize the financial impact of this tax season by taking time to complete your Tax Time Financial Checklist by accessing these important financial products and services.
6 Healthy Things to Do with Your Refund
- Pay Down Priority Debt. Help is available if you want to create a strategic payment plan for any outstanding debt.
- Invest in Your Future. Allocate some of your refund to your financial goals – like buying a new home, signing up for a bank account, getting your paychecks direct deposited, starting your own business, building your credit through a secured credit product, or jumpstarting your retirement savings through an Individual Retirement Account (IRA)! Now is a great time to make an investment in your financial goals. Make your future self smile!
- Reward Yourself! Keep in mind your current financial situation, but don’t be afraid to put some of your refund aside for yourself.
- Create an Emergency Fund. Think of any unusual expenses that may have come up in the last few months, things like a high power bill, an unexpected car repair, or a friend’s birthday. Reserving a part of your tax refund can help you manage unexpected expenses.
- Enjoy Your Refund Throughout the Year. If you receive a large refund, you can deposit your refund into your savings account and set up automatic transfers to yourself every month. This can help offset challenging months or give you more wiggle room in your monthly spending plan. You may want to set up monthly transfers for groceries, restaurants, movies, or other items that are important to you to include in your budget.
- Take Charge of Your Paycheck. If your refund was large because you had a lot taken out of each paycheck, consider lowering your withholding so that you get more in your paycheck each payday. Tell your employer you’d like to revise your W-4 to change your withholdings.
Open an Affordable Bank Account
Open a safe and affordable bank account to receive your tax refund by direct deposit, which is free and faster than a check. If you don’t already have a bank account, we recommend opening an account that is certified to meet the Bank On National Account Standards. These accounts take the stress out of banking by charging only $5 or less per month with no overdraft or insufficient fund fees, and include convenient features like Bill Pay or free checks you can use to help pay rent and other bills without using expensive money orders. These accounts are also great options for anyone with a limited or challenging banking history.
Unsure how to open a bank account? Check out United Way’s My Smart Money guide to getting a bank account for easy-to-follow instructions.
MyFreeTaxes is dedicated to helping people increase their financial wellbeing. That’s why we are collaborating with Change Machine, an organization that builds financial security for low-income communities through people-powered technology, to bring you these tools. Visit change-machine.org to learn more about their mission and Tax Truths project.
You can use these resources as a starting point for managing your financial life. You can even bring these documents with you if you seek help from a professional financial coach!
This tool can be used to identify your motivations and the values that drive your financial goals. Why do you want to be out of debt? What are you building your credit for? What do you want to do with your savings?
6 Healthy Things to Do With Your Tax Refund
This tool gives some general advice on how to maximize your tax refund, and includes a short form you can use to start planning how to invest your tax refund to make an impact.
Which Bills Should I Pay First?
This tool gives some strategies you can use to prioritize your payments if things are ever tight. You can use this if you’re having to make tough decisions while making your dollars stretch.
Self Employed? Track Your Income
Work for yourself? Great! But that does mean you need to do a little more to manage your tax payments. Use this to keep yourself on track and avoid any tax time worries. MyFreeTaxes also offers detailed guides to help self-employed people prepare for and file their taxes.
Reduce Your Taxes and Save with an IRA
An Individualized Retirement Account (IRA) can help you reduce your taxable income while saving for your post-work life. Learn about the different kinds of IRAs and how they can support your goals.
How to Find a Local Financial Coach
Financial coaching is an opportunity to meet with a professional who is up to date on all major financial standards and regulations and who can support you in navigating the steps on the way to your financial goals. They can support you in examining your spending patterns, reviewing your credit reports, and developing healthy financial habits.
If you are interested in working with a financial coach, call 211 or visit 211.org to find the financial coaches and other resources that are locally available to you.