Save Money on Filing and Make the Most of Your Refund
Tax filing season is open. File electronically and direct deposit to your account to receive your refund fast. Here are resources for free tax filing and tips to make the most of your refund.
Save Money on Filing
Filing electronically and using direct deposit is a fast way to receive your tax refund. Avoid advanced refund options offered by tax preparers that charge high fees.
IRS free file https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
MyFreeTaxes helps people file their taxes for free while getting the assistance they need. Free tax prep for consumers making less than $60,000. United Way provides MyFreeTaxes in partnership with the IRS’s Volunteer Income Tax Assistance (VITA) program to help filers prepare their tax returns on their own or have their return prepared for them for free. https://myfreetaxes.com/
VITA and TCE, Volunteer Income Tax Assistance and Tax Counseling for the Elderly sites do free tax prep in person. For locations, check here https://irs.treasury.gov/freetaxprep/
AARP Tax Aid https://secure.aarp.org/applications/VMISLocator/searchTaxAideLocations.action
Tax Credits
EITC – Earned Income Tax Credit is a refundable credit (money sent to you after taxes). If you have worked and earned income under $59,187 in 2023, you may qualify. Even if you know you won’t owe any taxes, you should still file if you qualify for EITC. The credit will be sent to you.
CTC and ACTC – Child Tax Credit and Additional Child Tax Credit are tax credits for filers with qualifying dependents. CTC is applied to the tax bill and ACTC is refundable. Children must be under age 17 and must have lived with you for more than ½ the year.
IRS Tax Assistant is an online tool and calculator that can help filers determine qualification and estimate amounts. https://www.irs.gov/help/ita
Smart Ways to Use Your Tax Refund
This windfall money comes around only once a year so take time to think about how you can best use it. Here are several ways to make the most of your tax refund.
- Direct deposit – have your refund deposited directly into your bank account by using IRS Form 8888. Be sure to put at least part of the refund into savings. It’s easier to save money you’ve never seen or had in your hands.
- Build your emergency fund. You should aim to have at least $1,000 in an emergency fund. A tax refund is a great way to start.
- Paying off debt is as important as saving. Use your refund to pay off some or all credit card debt. OR use the extra to pay down a car, home, or other loan. Paying additional to the principal of a loan can take months off your loan and save money in interest.
- Some other ideas are:
- Save for a Major Appliance
- Save for a child’s education
- Boost retirement funds