Broke Ass Financial Coaching: Last Minute Taxes
While being young, broke and beautiful is all well and good, some people’s finances are more jacked than others. That’s why we’ve invited Betsy Crouch (aka Coach $izzle) to come onboard and dole out some much needed advice. She is a professional financial coach after all. If you’ve got a question you’d like answered please email her email@example.com. Maybe your question will be the next one answered.
“Coach Sizzle, I haven’t done my taxes, do you have any suggestions for last minute tax prep?” – SC
Woohoo tax time! For those of you who get money back, I’m sure you are super stoked! Get it done! If you owe money, get it done, rip off the band aid. I know it is painful especially if you have not saved for your taxes.
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As you know, you need to file your taxes or file an extension by April 15th, 2010, which will give you an additional 6 months to file your taxes.
Some people who owe taxes sometimes do not file because they think they have to pay when they file. “Please be aware that an extension of time to file your return does not grant you any extension of time to pay your tax liability.” -IRS.gov The penalties and interest are higher if you do not file, AND do not pay versus filing an extension and not paying. So at least, efile an extension if you absolutely cannot get your taxes filed on time. That will save you a lot of trouble in the long run.
Where/how should I file? Will it cost me money that I don’t have??
FREE TAX FILING ASSISTANCE:
VITA: “Volunteer Income Tax Assistance, is a free, IRS-sponsored program to help low- and middle-income workers have their taxes prepared and filed electronically at no cost. VITA also ensures that workers receive all the tax credits to which they are entitled.” – http://www.otda.state.ny.us/main/reform/vita.htm, more VITA info from the IRS.
DIY – FREE e-file IRS: Anyone who makes less than $57,000 can use the Traditional Free File through the IRS. Over twenty companies offer their software for free.
If you are getting a refund, you probably have some ideas about where that money is going. Commonly people put that money towards debt and “buying stuff.” Not so commonly, people save part of their refund. If you are in a position where your basic needs are met, I would recommend saving a small amount of your refund, and more if you can do it. If you have been in a cycle of building up money, going into debt, paying it off, and building up savings again, then think about doing something differently to get different results. When you have a little bit of cash, what happens?
The belief “Money is meant to move”:
I have a lot of clients who have the belief that “money is meant to move.” When we are in a situation where we are living paycheck to paycheck then the money always moves, it never sits around long enough to collect dust. So when we are not in need of living paycheck to paycheck, often times we keep the money moving even though there is not a bare necessity for the money to move. We buy stuff, buy other people stuff, and give the money away. “I got my refund, drinks on me!” No. Do you relate to this? If so, I recommend practicing with your refund. Don’t spend it. Let it sit for 30 days unless you need to use it for a bare necessity. During that time, review your Priorities, and plan out intentionally what you will do with that money or better yet what you would like that money to do for you.
Taxes are good, Taxes are bad:
There are certainly some good things that taxes provide. There are some things that you may say you don’t want to contribute to. The good news is that you can vote. If you are not registered to vote, register AND vote, don’t complain if you aren’t willing to do something about it. To those of you who can’t vote and have to pay taxes, dang! Seriously, that sucks. I would recommend working to influence voters. Any other ideas?
In conclusion, file and vote. Happy tax season everyone!