It’s everyone’s favorite time of year, right? As tax deadlines loom next month, many people are pulling out their W-2s and dusting off financial records to see how they did this year. I personally experienced a very different tax return this time around, so I speak from experience when I say no two years are the same!
Here are some tips to help you navigate your taxes in 2017.
Consider your paycheck deduction
My strong preference is to break even at the end of the year, as I use my tax outcome as a barometer for financial planning for the rest of the year.
We follow the ‘save, spend, give’ method, so our tax outcomes absolutely influence how we divvy up those amounts and set our paycheck deductions. I have friends that swear by maximum deductions to better ensure a nice return amount. In fact, some use this as a makeshift savings plan so they can’t touch the funds.
I support anything that helps you build your savings! That said, be sure after the books are closed on your 2017 taxes you take a close look at those allotments to determine what makes the most sense for your family’s finances.
Consider hiring a professional
It’s not too late to seek a professional to help you with your taxes, especially if you own a business. A CPA or tax consultant can pay for themselves in business knowledge and deduction recommendations. While it’s always painful to write a check for something that you can technically do yourself, a big part of tax management is how you plan moving forward.
Don’t count on a return for a payoff plan
Oh the horror stories I’ve heard from people who’ve counted on their tax return to pay something off. From a furniture bill, to a vacation, to last year’s Christmas, wishing any debt away with an upcoming tax return can be a recipe for disaster. For example, this year I unexpectedly owed for the first time in my entire married life. I’m so glad we weren’t counting on the funds for anything! Unfortunately, some people find themselves both owing back and holding a stacked credit card with no payoff plan. Ouch! If you find yourself in that situation, there are still options. Read on!
If you get bad news
As I mentioned, I am no stranger to that jaw-dropping feeling that comes with a tax surprise. It can happen to anyone, even the savviest of savers. If you find yourself in a tough spot, chat with your financial institution on what your options are to get back on track. They will likely take a look at your entire financial picture to determine a payment plan that is realistic for you.
Here’s hoping you all end up in the green after April 18! If not, keep calm and talk with your bank or credit union to make some adjustments as needed.
Kat's Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, visit http://communityamerica.com.