3 Ways to Find More Money To Save This Tax Season

Tax filing season is upon us once again, an opportunity to assess your financial situation, set goals for the year, and find ways to save towards those goals. Here are three easy ways to save money this tax season and get a jumpstart on your savings goals in the New Year:

  1. Check Your Withholdings to Find More Money in Your Paycheck

    Do you receive a large tax refund every year? If yes, check your tax withholdings and adjust those withholdings to match the number of dependents in your household to receive more money back in your paycheck throughout the year. Receiving a large tax refund is essentially giving Uncle Sam an interest-free loan on your money, so now’s the time to look twice at your refund strategy.

    To start, check that the number of your dependents match the number of dependents in your Leave and Earning Statement (or LES) on MyPay? If not, consider adjusting your withholdings. For example, a married servicemember with two children can claim four dependents, including himself or herself.

    Run the numbers on online calculators, such as suburbancomputer.com to see how these changes might impact your paycheck. If receiving a large tax refund (or whatever refund you do receive) during tax season works for you, save a portion of your refund with SaveYourRefund to be entered for a chance to win up to $25,000 in cash prizes! For more information and to learn how to commit to saving prior to start of tax season, visit saveyourrefund.com . Then, take the Military Saves Pledge to identify a goal for that savings.

  2. See if You Qualify for the Earned Income Tax Credit
    Servicemembers and families should not overlook the Earned Income Tax Credit (EITC), “a refundable federal income tax credit for low- and moderate-income working individuals, couples and families.” The IRS estimates that about 20 percent of taxpayers who are eligible for the EITC fail to claim it, or are simply unaware that they qualify. If you qualify for this tax credit, the money you receive from it may be used to fund your savings goal! Take note of these three things:
    • You can’t get the EITC unless you file a federal tax return and claim it. Visit irs.gov to determine your eligibility and get additional information.
    • If this is the first year that you are claiming the credit, use the IRS EITC Assistant to see if you qualify for tax years 2015, 2014, and 2013. You can file any time during the year to claim an EITC refund for up to three previous tax years. Talk about a bonus!
    • The IRS cannot issue refunds before February 15, 2017 for tax returns that claim the EITC or Additional Child Tax Credit. But that doesn’t mean you can’t file when you normally would. Early filers can make the most of this delay by planning to save that refund and avoiding refund anticipation products, offered by commercial tax preparers. Although they loan the amount of your tax refund to you quickly, the fees will have you seeing red, so filers beware!
       
  3. File Your Taxes for FREE
    If your tax return is pretty straightforward, consider using your installation’s free tax filing service. To contact your installation’s tax center, visit the official source for installation and state resources available to you.

    Military OneSource is also available to eligible servicemembers to help with online assistance, resources, and filing.

    Set yourself up for financial readiness in 2017 by being aware of these three ways to find and save more money this tax season to achieve your goals. When it comes to saving, every dollar counts!

Blog contributors: Alecia D. Blair, AFC® Candidate, FINRA Foundation Fellow works for Military Saves. Tammy G. Bruzon, works for Military Saves and America Saves.

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