3 Ways to Have a Smarter Tax Season
March 6, 2024
Tax Season can be a bit of a mystery. With so many things changing in your personal life every year, it’s hard to know what that final tax bill will look like. Here are a few tips and tricks to help you handle whatever comes your way when you finish filing your taxes for 2023.
- If You Owe – It’s never fun to owe money when you finish filing your taxes, but several factors could cause this to be the case. Things like a job change, utilizing unemployment benefits or earning money from a side gig are some of the ways you may see yourself owing a little extra after you file. The good news is that, depending on your situation, several options exist to rectify an underpayment.
- If You Get a Refund – Free money! Well, at least that’s how it feels. But if you’re getting a tax refund, it’s actually because you were paying too much in taxes. The refund you receive is just the government correcting that overpayment. It can be tempting to use this windfall on something fun but, before you go on a shopping spree, try and think if there are any more productive ways to put it to use. Paying off any outstanding debts, amplifying your emergency fund or putting it toward a home renovation that can increase the value of your home are great ways to smartly spend your newfound nest egg.
- If You Break Even – While it may not be as exciting as getting an unexpected check in the mail, it sure beats having to write one yourself. When you don’t end up owing taxes, the main takeaway here is that everything is going according to plan when it comes to your tax payments. But, as we said earlier, things can change very quickly. Don’t assume that a non-payment this year will mean the same next year! It’s never a bad idea to save a little extra on the side for tax season – you may never need it, but if you do you’ll be glad you have it.
The complexity and stress of tax season differs from person to person. Whether you received a refund or owe a little bit more, Community Bank can help handle whatever comes your way.
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