Tax Tips and Tax Advice for Year 2006

Free Tax Tips And Tax Advice For Year 2006 From Expert Credit Counselors

If you are one of the millions of Americans who still owe Uncle Sam a lot of money or if you are receiving a refund and want to know how to use it wisely, we can help.

Tax Tips And Advice For Consumers Who Are Receiving A Refund 

 Open an emergency savings account.  Many people live from pay-check to pay-check and have to borrow money if a crisis occurs.  Having an emergency fund allows you to use cash for unplanned expenses rather than a high interest credit card.

Pay off high-interest loans first.  If you pay off debt with your refund, pay off debts that have the highest interest rates first.  Typically, credit cards have a higher rate of interest than mortgage or car loans.

Get professional debt reduction advice.  A tax refund may not be big enough to solve a serious debt problem.  If you can only make the minimum payments on your credit cards, you are likely to be still paying on the same debt 10 - 20 years from now!  If you are incurring late and/or over-limit fees, your debt may be increasing by as much as $70 per month per card!  If these situations sound familiar, you may need professional help or tax advice. 

Money Management And Tax Tips For Consumers Who May Have Taxes Due At Filing 

Decide how to pay.  Research your options.  Some options include a bank loan, an IRS installment plan and an IRS approved credit card.  You'll pay interest on a bank loan, a processing fee and interest on an IRS installment plan and convenience fees plus interest to American Express, Discover and MasterCard - the approved IRS credit card companies.

Determine how you will pay off the loan.  You can make a bad situation worse by falling behind on you tax loan payments.  Make sure that you can live with the terms before you sign.  Otherwise, you could incur penalties and late fees.

Change federal withholding.  Many people with large tax bills simply didn't withhold enough from their paychecks during the year.  Still others sold stock and failed to budget for the capital gains tax.  Correct both scenarios and avoid similar problems next year.

See a credit counseling professional for help.  Treat your tax shortfall as a wake up call to get your finances in order.  Our credit counselors would be happy to review your finances.