Tax Time

 

Everyone should have received their W-2 by now, and by the middle of February you should be receiving those 1099s. The 1099s have your dividends and your interest, any contract labor. If you’ve taken distributions from your IRAs, those will be on those 1099s. You’ll need those to get ready to file your taxes.

 

Of course, many people are filing online now through e-file. We have many software packages that you can do your taxes through. Of course you have to purchase them. The IRS is offering something called ‘free-file’ for families making below a certain level of income (at this time it was $58,000 or less). They can go through the IRS website (www.irs.gov) and there’s a button for ‘Free File’ to walk them through filing their taxes online without any cost to them. You can through that system, even if your income may be above the limit, get the forms that you need and fill the forms out. Then you submit them the old fashioned way.

 

We also have other tax assistance available. Through the IRS again there is a system called “VITA” which is volunteer tax assistance for families earning below a certain level of income (at this time it was $49,000 or less). You can call 211 which is actually the United Way and tell them your zip code and they will tell you the nearest office to go to get some assistance.

 

There are also many tax prep companies out there at this time of year. I like to go to my old fashioned CPA, my Certified Public Accountant. They are licensed. They have to know all of the rules and regulations. So that’s my choice there.

 

If you are getting a refund, we do have direct deposit, and there is no charge for that. It’s wonderful. You’ll get that refund deposited directly into your local bank account. We also have a debit card option. This is not my favorite, because of course it encourages us to spend that entire refund and not save it. But we do know that there are a lot of these local tax places who are already offering those. So the US government has gotten into this—it’s called MyAccount card—so you can get those debit cards with the refund already on them.

 

Of course we can pay (which is what many of us will have to do) electronically. You can then pay by your credit card or your debit card. I don’t like that choice (credit card) because then it encourages us to let that credit build on our statements. And there are additional fees to use credit cards and debit cards. They can be pretty steep—maybe 2%.

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