Tax refund and the joy it brings are a hot topic in Sanford at the moment. Of course, we must warn last-minute tax filers that you can’t spend a tax refund if you haven’t filed your returns. We hope you accomplish filing your return before 4-17-18 arrives. We are here to help. Currently, we at AP are seeing many taxpayers, clients and friends in three animated sub-groups:
1. Some taxpayers belong to a nervous group who have delayed filing their tax returns and now are having panic attacks trying to collect or collate data.
Couple Figuring Taxes Together for the First Time Symbolize how Confusing Tax Returns Can Be.
If you are in this procrastinating group, please read a previous post that helped many others like you. To them, the AP message is that we still have help for you. Authentic, case-centric help, not cookie-cutter fixes, but carefully crafted solutions.
By the way, do you know that it is typically far better to file an extension than to ignore the situation?
2. Use professional help and feel better.
3. Some taxpayers are members of a starry-eyed group, full of anticipation for their tax refunds.
Now we don’t want to spoil your fun. Likewise, we won’t add to the huge store of articles already online and full of spending or saving suggestions for your tax refund.
We will, however, tell you that Forbes counsels you to neither save nor spend your tax refund, but to invest it.
We don’t mean to dull your enthusiasm for your refund but, like Forbes, AP Accounting reminds their clients, “When you receive a tax refund, it means that you overpaid your taxes. When you overpay your taxes, it means that you gave a free loan to the government and never got paid for it.”
4. And we see some with a firm resolve to improve their tax planning strategies for next year.
On the one hand, some taxpayers in this group have embraced financial planning for years. On the other hand, some members of it have only recently grasped the financial concepts of planning and strategizing with taxation being one element within the big picture of a person’s fiscal life.
Either way, they are on the right track to structuring their taxation into the overall financial plan for their companies, their families and their lives.
Forbe’s New Mantra: Make this the Last Year You Ever Get a Tax Refund
“We Just Love Our Tax Man. He Gets Us the Best Returns.“
Of course, every client and every case is different and unique. However, no matter which of the above groups you are in, chances are you could benefit from the above mentioned Forbes’ ideas:
To summarize their approach, we want you to answer these questions:
a. Place and Money: Are you aware that each day before that tax refund, you are losing the ability to invest that money, small or large, into funds that could grow for you?
b. Time and Money: Isn’t your dollar today worth more than your dollar tomorrow? “It’s called the time value of money: a dollar today is worth more than a dollar tomorrow. Why? You can invest those funds and earn a financial return on your money.”
c. Do you want your money now or later? (Spoiler Alert: the question is moot. You know you would “prefer to have your money sooner rather than later so that you can invest and earn interest) or reduce debt (and save interest).”
Now, can you see why setting a financial goal to eliminate your tax refund might be a fine idea? Forbes says, “Yes, eliminate it. (Don’t be shocked; it might be a new mindset for you.)
As You Await Your Tax Refund–or Not–Enjoy a Couple of Fun Tax Facts
Although we invite you to enjoy these fast facts, we want you to refrain from judging or criticizing yourself based on them.
Remember, our professionals have the expertise and experience to counsel individual tax cases. A Small Disclaimer: Never consider blogs, articles or internet pages as a substitute for professional consultation in any professional field, least of all medical, legal or financial. All cases are different and dependent on unique qualities and circumstances.
1. From 2012 to 2016, only 17 percent of taxpayers actually were confronted with a tax bill. Not only that, but experts at Magnify Money also discovered that the average invoice was $5294.00
2. In light of our previous commentary about tax refunds, it’s a little shocking to discover:
A. The IRS knew it would pay 70 percent of taxpayers refunds.
B. Only 30 percent of US taxpayers will need to pay Uncle Sam.
3. By and large, we seem to believe that our taxes are too high. At least 52% of us believe the price is too high, in spite of facts 1 and 2 above. However, before 2003, the polls said 69% of Americans believe the federal government was taking too much of their income at tax time.
Seven States Invite You to Live an Income Tax Free Life Style. Alaska is One of Them.
4, History is full of tax trivia. Did you know the story of Lady Godiva’s ride was based on a tax issue? She rode a horse nude to protest her husband’s harsh tax policies.
5. There are seven states that do not have income tax: Alaska, Washington state, Nevada, Wyoming, South Dakota, Texas and Florida.
By the way, Alaska not only has no income tax, they are 2 of the states shown that do have taxes on certain common investment income (dividends and interest) – New Hampshire and Tennessee.
Alaska not only has no income tax program, but they have a Permanent Fund Dividend Program. That program means you get a check if you live there and meet certain qualifications. You can check it out at this online resource.
