Military Saves Blog
Tips, advice, and the latest news from the savings world.
Did you know there are ways to file your taxes for FREE? No strings attached. Free tax preparation is an easy way to save lots of cash during tax season. The average cost of commercial tax return preparation is around $220, but some taxpayers pay well above that for a simple tax return.
Sometimes preparing for your tax appointment can be the most daunting part of filing a tax return. We’re here to help. Use this checklist for a seamless tax preparation appointment.
Each tax season, Americans are bombarded with numerous IRS scams and fraudulent schemes. There are lots of myths and urban legends floating around social media and the internet. Taxpayers should take caution and know that:
Have a plan in mind when you file your taxes. If you’re due a refund, go ahead and split it up into multiple accounts (think checking, saving, and retirement or college saving account) using the 30-40-30 plan:
- 30% of your refund to pay off outstanding debts or catch up on bills
- 40% of your refund to pay for current expenses, needs, or wants
- 30% of your refund to establish or build up savings. This could be an emergency fund (start with $500) or longer-term like retirement or a large purchase like a home.
Use IRS Form 8888 to split your refund in up to THREE accounts. Form 8888 can be accessed with your tax preparer during your tax preparation appointment. It’s easy to use, so don’t forget to ask if your preparer doesn’t suggest it.
PRO TIP: Add the account and routing numbers or blank checks of the accounts you are using for the 30-40-30 plan to your tax documents folder so you’re ready to fill in Form 8888 before your complete your tax return.
It’s our favorite way to save, automatically and through direct deposit.
Filing income tax forms can be a complicated and somewhat painful process. Gathering documents is a chore. Tax forms can seem confusing to the uninitiated. And military families face additional obstacles at tax time: they may not know about certain military-specific tax provisions that can benefit them, and they are also prey to certain tax schemes that target the military community.