Tax Refunds & Advice

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!

No matter if you are self employed or work for another, you will pay taxes during the year. The amount you pay, in correspondence with deductions, tax credits, etc., will determine how much you owe or what type of refund you will receive when you file your final return. Most people would rather receive a refund than owe the IRS additional money; and who can blame them? But this is not the best way of thinking. Instead, the perfect scenario is to receive no refund and owe no money but to hit a break even point.

If you receive a refund it means one thing: you paid too much in taxes during the year. Consequently, you were lending money to the IRS when you did not have to. This is money that you could have saved, put towards debt, or anything else that would have worked to your advantage.

On the other hand, if you owe money it means that you came up short and didn’t pay enough. The IRS doesn’t mind this because they will get theirs when you file your final return. This is even worse than lending the IRS money because in the end you have to send an additional tax payment. And that is never fun.

Hitting a break even point and reaching the “perfect scenario” is never easy to do. But if you have a grasp on your tax situation you should be able to come close. This will go a long way in easing your tension and putting a smile on your face when tax season arrives.

Are you wondering where your refund check is? Were you expecting an economic stimulus payment but it has yet to arrive? If this sounds familiar, you will want to get in touch with the IRS at once. Approximately $266 million in refund checks have been returned to the IRS. In other words, the US Postal Service was unable to deliver these checks so they have made their way back to the IRS.

There is a good chance that you did not receive your refund or stimulus payment because your address has changed. In this case, you will want to send Form 8822 to the IRS. In turn, your address will be updated and any payment that is being held will be immediately mailed.

In order to avoid this issue in the future, you may want to opt for direct deposit. This way, the IRS can deposit any refund directly into your bank account. This helps to avoid lost checks, or problems caused by an address change. If you are going to opt for direct deposit you need to make sure that your bank account information, including the routing number and account number, are 100 percent accurate. An error with this information could lead to just as many problems as a returned check.

So if you are still waiting for a refund or stimulus check it is time to get in touch with the IRS. You can do so by calling the hotline number at 1-800-829-1954 to check on a regular refund, or 1-866-234-2942 to receive an update on a stimulus check.