How Much Is Your Tax Refund Really Costing You?
After the holiday season comes to a close, the real adult holiday rolls around: Tax Refund Season. Tax return franchises have opened their doors, some equipped with air dancing balloons and people dressed in costumes flood the streets promoting everything from same-day refund and cash when you file, to options of filing with your last pay stub. With so many people cash-strapped from keeping up with the Joneses on Christmas and balling out for the New Year, cash on the spot seems very attractive, but before you fall into the illusion of free fast money, take a look at how much your tax refund is really costing you.
Who's Preparing Your Returns?
GiphyIf you are one of the people who are lucky enough to receive a refund, then you are most likely not concerned on how or why the refund was issued. If you are in the majority of middle class people who make too much to take advantage of many of the tax credits and end up owing the IRS, you are most likely interested in how to minimize your tax liability going forward. For the people in the second category, big chain tax return preparation companies are not much help to you.
If you fall into the first category, these preparation centers, which are primarily in lower income neighborhoods, advertise products that are not financially responsible for most taxpayers. Refund cash advances can come with fees of up to 18% taken from your refund and they are not always transparent about these costs upfront. They also rarely offer guidance on what tax-saving strategies and tips are available to you. The tax return preparation fee is not revealed until after you have completed your return with a representative and you can feel pressured to file with them since they already have done the work. More importantly, many are only open for the tax season, which is until April 15th, so that audit letter you received from the IRS in June…good luck finding your tax preparer to help you craft a response.
Can Receiving A Smaller Refund Be Better For You?
GiphyI know you're wondering how can a smaller refund be a better option? But in some cases, it may be. First, you have to determine if your refund is due to an overpayment of taxes during the course of the year or because of tax credits/deductions that affect the amount of taxes you owe. If you are withholding more money than necessary, that is money that the government holds all year, interest-free.
Let's say you file your taxes for 2018 and discover that you withheld $1,000 more dollars than you owed, which is approximately $83 a month, and you invested that $83 each month and it earned 5% compound interest monthly. You would have $1,048 at the end of the year as opposed to the $1,000 the IRS refunded you. Of course, your refund would then be smaller but you would have more money overall. Although it can sometimes be hard to see the big picture, these amounts can add up quickly.
Why An Accountant Is A Better Solution
GiphyFinding an accountant that is professional and whom you can trust is really the key to maximizing tax season. While the tax preparers employed at franchises are licensed, they typically do not have the same wealth of tax knowledge as a professional tax preparer or accountant. These are people who can give you specific guidance to your tax situation and if you stick with the same person for a number of years, they can be instrumental in helping you use tax planning to reach your other financial goals.
While it may be a few extra bucks up front to hire a private tax or accountant professional, knowing that you are not leaving any money on the table is worth the peace of mind.
Related Articles
6 Things To Do With Your Tax Refund – Read More
The Best Way To Budget For Taxes When You Are Self-Employed – Read More
Venus Williams Wants Us To Know Our Worth And Add Tax – Read More
Featured image by Getty Images.
- Money Expert Jamila Souffrant Shares Her Financial Independence ... ›
- Budget For Taxes When Self-Employed - xoNecole: Women's Interest, Love, Wellness, Beauty ›
- Costly tax refund loans not really gone - CreditCards.com ›
- How much should you pay for tax prep? - CBS News ›
- You Call That Free? What TurboTax And The Free File Alliance Cost ... ›
- How Much Is Too Much to Pay for Tax Returns? ›
- Here's How Much Your Summer Internship Will Really Cost You ... ›
- What that tax refund really costs you - CSMonitor.com ›
- So how much would buying a Tesla really cost you? ›
ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
Let’s make things inbox official! Sign up for the xoNecole newsletter for daily love, wellness, career, and exclusive content delivered straight to your inbox.
ItGirl In Motion: DonYé Taylor Asked Herself This Question When Creating Her Brainchild
"Being an 'ItGirl' is all about being yourself and taking all of the elements that make you who you are and displaying them at your highest capability," creative brainiac DonYé Taylor says in the introduction of the limited video series, "ItGirl In Motion."
In partnership with Hyundai, xoNecole has unveiled the limited series in conjunction with our inaugural ItGirl 100 list. The list boasts 100 Black women who not only innovate and take up space when it comes to putting on for their cities, but also as the driving force behind brands that create impact for the culture. ItGirl DonYé Taylor is one of the 100 featured ladies who put her purpose into action.
ITGIRL IN MOTION with DONYE TAYLORwww.youtube.com
As a marketing consultant, content creator, and CEO, a driving force behind DonYé's ambitions has been to show others how she sees the world by "creating art and doing things that shift perspective." In founding her brainchild, Nüclei, which is coincidentally also home to the ever-so-chic chrome brain piggybank, DonYé briefly touched on the inspiration behind the brand. "I was like, 'What would it look like if I were to be of service to myself?' And that's what made me create Nuclei," she said.
Watch the video above to take a peek into the life of the LA-based ItGirl, the importance of Black women receiving our "flowers" while we're here, and the three things she believes are absolutely essential to any ItGirl.
See our ItGirl 100 list in full here. Click through the gallery below for some BTS moments of DonYé and our partnership with Hyundai.
CREDITS
Director: Mikkoh @mikkoh
Production Company: @30inthemorning
AD/Gimbal Op: @jeffreyrattanong
DP: @jucelandrin_
Editor: @30inthemorning
1st AC: Bonnie Delgado @bonniebellevue
2nd AC: Liz Robles @lizfatimarobles
FPV Drone Op: Kai Kevin Goh @kaivertigoh
Gaffer: Nelson Nguyen @nelson_ftw
Key Grip: Ames Hoang @mangothemaker
SLT: Jamon Tolbert @jamon.tolbert
Sound Mixer: Deyo Forteza @introducingdeyo
PA: Breyona Holt @exquisite_eye
PA: Aminah Muhammad @aminahmuhamm
BTS: Marika Belamarich @marikarosegold
Featured image by Marika Belamarich for xoNecole