Make Tax Season Less TaxingSome "ABC's" to consider this tax season
Filed your taxes yet? If the answer is no,
you're not alone. Millions of Americans wait until the last
minute to file their annual income tax return. ACU has compiled
a list of a few things that come up when filing taxes such as
Earned Income Credit (EIC), Voluntary Insurance Tax Assistance
(VITA), and Refund Anticipation Loans (RAL).
To qualify for the EIC, you (or your spouse) must have a job, have wages below a certain level, and file a federal tax return. If you're not working now, but you earned income last year, you still may be able to claim the EIC on this year's tax return. You can find specific guidelines and income thresholds on the IRS website at irs.gov (search for earned income tax credit).
Tax forms can be complicated, and you may want some help completing yours. The IRS's VITA program offers free help for low- to moderate-income taxpayers, those earning $50,000 or below.
VITA's trained volunteers can determine whether you qualify for the EIC or other tax credits, prepare your forms, and file your tax return electronically. Most VITA sites are located in community centers, schools, shopping malls, and similar locations. To find the site nearest you, call 800-906-9887.
If the IRS owes you a refund, it may be tempting to accept a "rapid refund," or "instant refund." Several national tax-preparation firms offer this option, which many people don't realize is actually a high-interest loan, or refund anticipation loan (RAL).
RALs are short-term cash advances through large banks secured by consumers' expected tax refunds. The interest rates for these loans are astounding, averaging between 70% and 1,700% nationwide. They usually only speed up the refund process by a couple of weeks--then consumers' tax refunds pay off the loans and fees.
It's better to wait for your refund, but if you do need cash immediately, talk to a loan officer at Ashland Credit Union about the applying for a small loan. Contact us today at 800.245.8112 for more information.
If you take advantage of the great low rates on ACU's First Mortgage or Home Equity products, you're already paying less in interest than you would from most other lenders. But did you also know that as an added bonus, the interest you paid, even though it's so low, may still be tax deductible? Consult your tax adviser to find out if you can benefit from this deduction.
Contributions to Health Savings Accounts (HSA) and Traditional IRAs may be tax deductible, depending on your income and other factors. These two types of accounts are great tools for individuals who anticipate medical expenses or want to get a head start on saving for retirement.