Tax Refunds & Advice

Most people see the IRS as an evil entity that does no good. But of course, this is not the case. On Tuesday, during a teleconference, the IRS announced a plan to assist homeowners with federal tax liabilities who are in danger of losing their homes.

IRS Commissioner Donald Shulman explained the situation as “an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.” To go along with this he added that the overall goal of this move is to “balance our responsibility to enforce the law with the economic realities facing many American citizens today.”

As you can see from the above statements, the IRS realizes that collecting money and enforcing the law is not their only responsibility. They have realized that taking the proper steps can help many Americans better their financial and real estate situation.

Of course, homeowners who are interested in this have a few questions on their mind. Mainly, what changes are being made to ensure that this process moves forward soon enough and in a timely manner? Shulman said, “It currently takes about 30 days to apply for and receive either a discharge or a subordination of a federal tax lien. The IRS is committed to putting in place whatever resources are needed to speed this process up as much as possible.” Fred Schindler, the Director of Collection Policy, explained that the word “discharge” means the IRS will not excuse the debt but will remove the barrier of the lien.

Details have not yet been released on just how much the process will speed up. At this time, 30 days is entirely too long but it is not yet known how much time will be cut out.

All in all, it is good to see that the IRS is stepping in to help aid homeowners who are facing tough times. Additionally, this move should help to better the real estate industry which has taken a huge hit over the past few months. As this idea becomes more of a reality, in-trouble homeowners will find it quicker and easier to either refinance their mortgage or sell their property. 

Are you expecting a tax refund sometime in the future? Now that the end of 2008 is closing in you probably have a better idea of what you are going to face when filing your final return. If you are expecting a tax refund you probably have one question on your mind: what am I going to do with this money? You really have two options: spend it or save it. Of course, there are many ways to do both.

If you are going to spend your tax refund you can do something that is fun or practical. For instance, you may want to take your refund and plan a trip with the money. On the other hand, there may be more important things to take care of such as a home repair. This may not be as fun as planning a vacation, but is beneficial nonetheless.

On the other hand who says you have to spend your refund? You could save this money in a number of different ways. You may want to put the entire check in a high yield savings account so your money can work for you by earning interest. If this does not suit your needs you could invest in the stock market or save the money in cash. No matter what you can never go wrong if you decide to save your tax refund.

The nice thing about a tax refund is that this is money you can use however you please. You can spend it or save it. Just make sure you think long and hard about your decision. You don’t want to take this “found money” and do something stupid!

Do you file your own income tax return every year? If so, good for you. This is a great way to better understand your finances as well as the tax system. But at the same time you need to realize that one mistake could cost you big time. For this reason, you must always make sure that you are working accurately. The best way to protect against mistakes is to take your time and then triple check your work. That is right; you need to check your work at least three times to ensure that you did not make any mistakes.

Once you complete your tax return you should put it away for a day. This will give you the chance to rest your mind. After 24 hours or so take your return out and go over it once again. There is a chance that you will catch a mistake this time around. If not, so far so good. You don’t want to find mistakes, but if you do you should take care of them at once.

The final time you check your tax return should be before you submit it for good. This gives you one last chance to look over your return and check for mistakes. If you don’t see anything you should be good to go. But again, if there is a mistake, no matter how big or small, take the time to fix it. It is better to fix mistakes than to risk the IRS finding them and calling you out.

When you file your own tax return you are in charge of making sure that every bit of information is accurate. If you triple check your work you should be able to avoid mistakes.