Hopefully you are not like Curt and putting your 2017 Tax Return to good use. What about paying off or paying down bills? Putting money away for emergency savings, or towards your retirement?
If you received a large return this year, maybe consider changing your Federal withholding and make the money available to you to use throughout the year or increase your TSP contribution.
Want help? Visit us here at your Airman & Family Readiness Center.
The Ellsworth Air Force Base Tax Center will be opening Feb. 9. The Tax Center is located inside the Rushmore Center, suite 1300 and will be open Monday to Thursday from 9 a.m. to 3 p.m. by appointment only. Please remember to bring all items listed on the attached flyer. For more information, or to schedule an appointment, call (605) 385-8298.
This week is Tax Identity Theft Awareness Week. Tax identity theft happens when someone files a fake tax return using your personal information — like your Social Security number — to get a tax refund or a job. Here are some tips to help you lessen the chance you’ll be a victim and learn what to do if you are.
Tip #1: File early in the tax season — if you can — to get your refund before identity thieves do. When you file, make sure you use a secure internet connection or mail your tax return directly from the post office to make it more difficult for thieves to get their hands on your personal information. Learn more at ftc.gov/taxidtheft and irs.gov/identitytheft.
Tip #2: What should you do if you think your Social Security number has been stolen? Or if you get a letter from the IRS saying more than one tax return was filed in your name, or that IRS records show wages from an employer you don’t know? Call the IRS Identity Theft Protection Specialized Unit at 1-800-908-4490. Report the fraud and ask for IRS ID Theft Affidavit Form 14039. If you are a tax identity theft victim, the IRS may give you a personal PIN number to verify your identity and protect your file going forward. Learn more at ftc.gov/taxidtheft and irs.gov/identitytheft.
Tip #3: Have you heard about IRS imposters? Tax scammers posing as the IRS call and say you owe taxes, and threaten to arrest you if you don’t pay right away. They might know all or part of your Social Security number, and they can rig caller ID to make it look like the IRS is calling. Before you can investigate, they tell you to put the money on a prepaid debit card and tell them the card number. The IRS won’t ask you to pay with prepaid debit cards or wire transfers, and won’t ask for a credit card number over the phone. If the IRS needs to contact you, they will first do it by mail. If you have any doubts, call the IRS directly. Learn more at ftc.gov/taxidtheft and irs.gov/identitytheft.
Tip #4: Here are some other tips to lessen the chance you’ll be a victim of tax identity theft:
- Always protect your Social Security number or Medicare card number: don’t give it out unless you have to, and always ask why it’s needed, how it’s going to be used, and how it will be stored.
- Shred old taxes returns you’re no longer required to keep, as well as draft returns, extra copies, and calculation sheets.
- Ask for recommendations and research tax preparers before you turn your personal information over to them.
Tip #5: Once tax identity thieves have your Social Security number and personal information, they can use them to commit other forms of identity theft, such as opening new financial accounts in your name. For steps you can take to deal with identity theft, go to ftc.gov/idtheft. Also remember to check your credit report annually. It’s free at annualcreditreport.com.
Effective 1 January 2015, investors will face stricter rules on how they can move their money between individual retirement accounts or IRAs by limiting them to just one rollover in any 12-month period.
Previously investors were allowed a yearly rollover for each IRA you held. For example, if an investor had multiple IRAs, they could roll each IRA over once a year.
But in a Tax Court decision from earlier this year (Tax Court Memo 2014-21), the judge ruled that, despite the Internal Revenue Service’s past leniency, the law clearly states that there is one annual rollover permitted per person, not one per IRA. This does not affect trustee-to-trustee transfers.
The clarification of the law actually does you a favor by reducing the temptation to make risky changes with your retirement savings. It is dangerous to treat your IRA as a source for short-term loans. If you are late on a repayment, even by a day, the tax ramifications can be harsh.
Source: Robert Steen, USAA News, Insight: IRA Rollover Law Change
In the article, Robert Steen also provides some other IRA advice worthy of a quick read.
Now that tax season is over, are you one of the over 101-million taxpayers expecting a refund? According to the Internal Revenue Service the average refund for the 2013 filings is $2,860 (as of 17 Apr 2014).
There are several more sensible ways to use your refund. Consumerist.com recently posted an article titled 10 Ways To Not Suck At Spending Your Tax Refund that provide some great suggestions for using your refund wisely. But it is their bonus point that is the one we would suggest first…change your withholding!
While it’s great to receive that fat check after filing your tax return, do you realize you are giving an interest-free loan to the Internal Revenue Service? If you expect your situation to be the same next year, utilize the IRS Withholding Calculator and adjust your withholdings on myPay.
You can also use the Single or Married withholding calculators that we have built into our budget spreadsheet in our Personal Finance Section. They are located on the fourth and fifth tabs of the budget2014.xlsx Excel spreadsheet.
Use the extra money from your adjustment to pay down debt that is costing you interest or put it into an interest earning account. Make the money work for you!