Tax time can be exciting or overwhelming, depending on whether or not you get a refund. If you get a refund, you feel like you\u2019re on top of the world. If you owe money, it can send your budget into a tailspin.<\/p>\n\n\n\n
Relying on a refund is not the right choice. Everyone should be prepared to NOT receive a refund, by planning and budgeting throughout the year.<\/p>\n\n\n\n
At Creditaid, we want our clients to be prepared for the tax season financially, rather than letting it derail their finances and cause financial destruction. It\u2019s not as hard as it seems. You just need to budget and plan long before tax season begins.<\/p>\n\n\n\n\n\n\n\n
We suggest making room in your budget monthly for taxes. This way if April rolls around and you owe money, you won\u2019t panic. You\u2019ll have the money set aside and can pay your liability.<\/p>\n\n\n\n
If you\u2019ve owed taxes before, use that number as your baseline. Divide it by 12 and save at least that much each month. If you\u2019ve never owed, but worry you might this year because of CERB, save money every month based on what you can afford. Put the money in a separate savings account so you aren\u2019t tempted to spend it.<\/p>\n\n\n\n
We know many people who rely on their tax refund. They have their purchases planned or the money spent before they receive it. What happens if they don\u2019t receive a refund? Their budget implodes, and they scramble to recover.<\/p>\n\n\n\n
Instead, create a budget that works for your current finances outside of your tax refund. Act like a tax refund doesn\u2019t exist. Now, what can you afford and where should you cut back?<\/p>\n\n\n\n
If and when the tax refund comes, use the money wisely. Treat it like found money. Saving or investing it is the best choice \u2013 as it lets your money grow and gives you an emergency fund if you need it.<\/p>\n\n\n\n
It\u2019s always a good idea to work with a tax advisor well before tax time comes. No one likes the unpleasant surprise of a large tax bill, especially when you didn\u2019t budget for it.<\/p>\n\n\n\n
Working with a tax advisor or financial advisor will help you determine if you need money set aside for taxes. They can look at your withholdings, potential deductions, and determine your estimated tax liability, and if you\u2019ll owe money in April.<\/p>\n\n\n\n
Don\u2019t operate without a budget and never rely on a tax refund. If you get one, great, you can set yourself up financially in other ways whether with an emergency fund or investing for retirement.<\/p>\n\n\n\n
If you don\u2019t get a refund, it shouldn\u2019t create havoc for your finances. By planning correctly and being prepared, you should be able to function without it. If you didn\u2019t, the experts at Creditaid are here to help you get back on track, and to stop relying on a potential tax refund.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tax time can be exciting or overwhelming, depending on whether or not you get a refund. If you get a refund, you feel like you\u2019re on top of the world. If you owe money, it can send your budget into a tailspin. Relying on a refund is not the right choice. Everyone should be prepared … <\/p>\n