Virginia Saves recommends shopping at home first to see if you already have items on your child’s school supply list. Things like rulers, pencil boxes and backpacks can be reused if they’re in good shape. Also, do a clothing inventory. You may find your child’s clothes are still in great condition. And if they’re not the latest style, update them with paint, patches or sequins.
If you do have to shop for school supplies and clothing, a way to maximize spending is taking advantage of Virginia’s upcoming tax holiday, August 5-7. During this three-day period, purchases of qualifying school supplies selling for $20 or less per item and purchases of qualifying clothing and footwear for $100 or less per item will be exempt from sales tax. That means saving on everything from pencils and binders to jeans and sneakers—every penny counts! And don’t let those pennies go to waste; they could be the foundation for your back to school savings for next year. Become a saver at virginisaves.org today!
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Back to School Shopping – Ways to Save
Shopping for back to school supplies and clothing doesn’t have to break your wallet. In fact, there are ways to find what you need without spending money at all.
Tax Refund Split to the rescue!
Did it happen again? Did you say you were going to put some of your tax refund into savings last year, only to realize you spent the whole thing before you had a chance to move the money? If this describes you, then let the option to split the tax refund come to your rescue!
Savings will improve financial security. Life is unpredictable and brings about unexpected events that cause stress. The stress level of an unexpected event such as a major car repair is difficult to handle. The financial burden of the bill from the repair shop is just part of the problem. The need for new transportation arrangements until the vehicle is repaired is not only inconvenient, but can be very expensive. Money in savings helps buffer the impact on the financial situation.
Virginia Saves encourages people to become savers. The tax refund can jumpstart savings and prepare for life’s bumps in the road. Virginia Saves’ partners offer free or low cost, low balance accounts especially designed for our savers. Most people can become savers regardless of income. Start saving a portion of income received every month. Make savings automatic! Automatic transfers are great saving options at most local banking institutions. Start small. Transfer $5 to $25 to a savings account monthly. Think Big. The amount that is saved is not as important as just starting the habit of saving.
According to the IRS, the average refund for electronically filed tax returns in 2009 was approximately $2900. The IRS allows the tax refund to be split among two or three accounts. For example a $1500 tax refund can deposit $500 into a checking account to pay past bills or purchase current needs and deposit $1000 into a savings account for emergency savings. Tax preparers use Form 8888, Direct Deposit of Refund to More Than One Account, to allocate the tax refund to accounts as requested. This form tells the IRS how much money to electronically deposit in each account. It is important to check the box on the 1040 that indicates the splitting of the tax refund and double check the account and routing numbers before the form is submitted. See Frequently Asked Questions about splitting tax refunds.
Do something different this year; save part of your tax refund. You will be glad you did!
Other article about this subject:
Pay Past, Present and Future with Your Refund
Speculating about how your refund can be best spent can be a fun pass-time almost like considering how you might spend any other windfall that might come your way. Everyone chimes in with their own wishes: "how about a new TV or a game system, or paying off debt". While you want to enjoy a little of the bounty that comes your way, it is also important to balance debt reduction and savings as well.
Having a plan before the money arrives can ensure you get the best use of the funds. Without a plan, you may find that in two months that you are not financially better off than you were before the refund. Our temptation is to spend the money on current wants and desires while leaving debt and savings as they were before the bounty. This is the year all that changes!
Virginia Saves recommends using the 30-40-30 plan to address your past, present and future with your refund in 2011. It is a simple plan and works like this:
PAST: Earmark 30% of all of your refund to debt reduction and catching up on past due bills. This can be a great way to start power paying your debt. Power paying your debt can accelerate your journey toward financial freedom and increased savings.
PRESENT: Dedicate 40% of the refund to current needs and wants. Need that car repaired or wishing for a new computer? This is the money that can be used to improve your quality of life right now allowing you to splurge and enjoy some of the proceeds.
FUTURE: Finally put 30% of your tax refund into a savings plan. This can help jumpstart that emergency fund or be used for larger purchases later.
There you have it. A plan to address past, present and future with your refund. If you use this plan, you will surely find your future looks brighter. Don't forget to join the saver's movement at www.virginiasaves.org/enroll. Together we can make our personal economies stronger!
Having a plan before the money arrives can ensure you get the best use of the funds. Without a plan, you may find that in two months that you are not financially better off than you were before the refund. Our temptation is to spend the money on current wants and desires while leaving debt and savings as they were before the bounty. This is the year all that changes!
Virginia Saves recommends using the 30-40-30 plan to address your past, present and future with your refund in 2011. It is a simple plan and works like this:
PAST: Earmark 30% of all of your refund to debt reduction and catching up on past due bills. This can be a great way to start power paying your debt. Power paying your debt can accelerate your journey toward financial freedom and increased savings.
PRESENT: Dedicate 40% of the refund to current needs and wants. Need that car repaired or wishing for a new computer? This is the money that can be used to improve your quality of life right now allowing you to splurge and enjoy some of the proceeds.
FUTURE: Finally put 30% of your tax refund into a savings plan. This can help jumpstart that emergency fund or be used for larger purchases later.
There you have it. A plan to address past, present and future with your refund. If you use this plan, you will surely find your future looks brighter. Don't forget to join the saver's movement at www.virginiasaves.org/enroll. Together we can make our personal economies stronger!
R-A-L is a B-A-D Deal
Everyone wants their tax refund quickly, but watch out for this bad deal. Some Tax Prep Companies offer a Refund Anticipation Loan, a RAL. These loans are for the short period between when a tax return is filed and the IRS deposits the money into the lender’s account (usually less than two weeks). A RAL allows access to the anticipated refund in one day or less.
The problem with these loans is they are extremely expensive!
The loan amount is the ‘anticipated’ refund minus loan fees and tax preparation fees. If there was an error or miscalculation on the tax return, the refund could be less than anticipated. The entire loan balance must be repaid even if the tax refund is denied, is less than expected, or is frozen.
People who do not have bank accounts are often tempted by a RAL because refunds issued as a paper check can take up to 6 weeks to receive in the mail. Having access to the funds early comes at a large cost because of the fees associated with these loans. Typical fees include a $75 "processing fee", an additional "service fee" (equal to 10% of expected refund amount) and a $50 bank fee.
Tax returns that are e-filed with direct deposit refunds will result in the quickest refund. Electronically filed tax refunds should be deposited into a checking or savings account within 10-14 days. 1040 Central gives all the details.
RAL is a bad deal for the customer. Be patient and do not choose to get a Refund Anticipation Loan.
Keep your refund and spend it wisely!
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