Tax Tips: The Best Ways to Spend Your Tax Refund

Getting your tax refund is exciting and although you may want to spend it on something fun, our tax tips will help you to make the most of your return to improve your financial wellbeing and set yourself up for a future that is a little less stressful. 

saving in piggy bank

Tax Tips to Help You Make the Most Out of Your Tax Refund: 

1. Pay off your debt 

This should be the priority whenever you have something extra at the end of the month or if you receive your tax refund. Debt can get out of control very quickly, and you should aim to pay off the bills with the highest interest first. Paying off your debt as soon as possible leaves you in a more secure position financially, and it will help you to avoid the stress of debt collectors knocking on your door.

2. Create an emergency fund 

Life can go very wrong, very quickly. Accidents, medical emergencies, car troubles and loss of income can ruin any person financially if there is no emergency fund to cover unexpected expenses. To avoid this, you should build an emergency fund that will help you to cover your living expenses for at least three months, but ideally up to six months. Even if you can’t put such a large sum away, any little bit will be beneficial when misfortune strikes. 

3. Increase your insurance coverage 

Protecting the lives of your loved ones as well as your property is always a sound investment. If you are financially sound in other ways, you can put your tax refund to good use by increasing your insurance coverage to include all property and the lives of your dependents. Accidents, damage and theft, are traumatic experiences which are made even worse by not having adequate insurance coverage. 

4. Boost your retirement

It is never too early to start putting money away for your retirement. Even if you already have a retirement fund, your tax refund can help you to grow it even more. Most Americans are not saving enough for their retirement. 22% of Americans don’t even have $5000 set aside for their retirement. Don’t gamble with your future, instead use your tax refund to prepare for your retirement.  

5. Start a savings fund

Whether you have your eye on a new car, a family vacation or if you’re putting money aside for your children’s education, you can use your tax refund to start saving for those big financial goals that you want to achieve. If you get into the habit of saving instead of getting into debt, your overall financial wellbeing will be much more sound than the average person.

6. Invest 

If you’re already in a sound financial position, you can use your tax refund to improve your situation even further by making a sound investment. Whether you decide to invest in stocks or use the money to upskill yourself, your tax refund can give you the push that you need to set yourself up for financial prosperity. 

7. Make improvements to your home 

The key is to make improvements that will increase the value of your home, help you to save on expenses or that will improve your quality of life. Avoid making improvements that will end up costing you more over the years, like installing a swimming pool that needs constant maintenance. Instead, you may want to improve the insulation in your home to bring down your heating bill or give your house a fresh coat of paint to enhance the aesthetic of the property.  

8. Replace an item that cost you money with a more efficient model 

If you own an appliance that gets used regularly, but it’s not a very efficient model, you can use your tax refund to replace it with something a little more modern. Old refrigerators, washers and dryers tend to use more energy to run, which can make your utility bill soar. Investing your tax refund in a newer appliance can help you to save money over the long run. 

9. Donate to charity 

If you’re in the fortunate position where you have financial stability, you can use your tax refund to help those who are less fortunate than you. Do a bit of research into charities in your area and consider donating to a cause that you feel passionate about.

For more tax tips and information on your tax refund, contact accounting service experts, Georgen Scarborough Associates, PC. today.

How to File Past-Due Tax Returns

If you have left filing your tax return too long and it is now past due, you may be incurring penalties and interest on the amount that you owe, and any amount that you are owed may be held back by the IRS until you are up to date with your tax returns. This guide will assist you in filing your past due tax return. 

Filing your tax returns that are past due 

What happens if I don’t file my tax return on time? 

Filing your tax return on time should be a priority to ensure that you don’t incur penalties and interest. Furthermore, failing to complete your tax return may cause you to lose your tax refund (if you have multiple unfiled returns). Unfiled returns can result in a delay in the approval of loan applications, which means that you won’t get approval for a business loan, home refinancing, or federal aid for higher education. 

If you are self-employed, it is vital to file your tax return on time. If you fail to do so, your income may not be reported to the Social Security Administration, and according to the IRS: “you will not receive credits toward Social Security retirement or disability benefits.” 

Failure to file past-due tax returns can result in the IRS taking steps against you, such as filing a substitute return for you (in which case you won’t get credit for deductions and exemptions that you could typically receive). This substitute return will create a tax bill that you need to pay, and if you don’t pay this bill, you will be handed over for collection (which means that the IRS may deduct a levy from your wages or bank account). 

Repeat offenders may receive additional penalties and can be prosecuted criminally for not complying with tax regulations. 

How to file past-due tax returns 

For help in filing your past-due tax return, visit the IRS website, or contact the IRS at 1-800-829-1040 or 1-800-829-4059. You will need to complete the current IRS Form 1040 and mark the return with the year for which you are filing. You can also submit your tax return electronically. If you are experiencing difficulty in filing your return, you may be eligible for assistance through programs such as TCE (Tax Counseling for the Elderly) or VITA (Volunteer Income Tax Assistance). 

What if I owe money on my past-due tax returns? 

If you owe money on your tax returns, you will need to make a payment to the IRS to settle your outstanding balances. If you can’t afford to pay the entire balance immediately, you can apply for a payment plan, temporarily delay collection or find out if you qualify for an offer in compromise. For more information on the options to pay, visit the payment section of the IRS website.  

If you have past-due tax returns, contact Georgen Scarborough Associates, PC, for assistance and advice. Our tax preparation experts are ready to assist you with your past-due tax returns, and tax preparation for individuals and small businesses. 

How to Check Your Tax Refund Status

In the current climate of uncertainty brought on by the COVID-19 pandemic, many taxpayers are eagerly awaiting their tax refunds to ensure that they have adequate liquidity for the challenging months ahead. If you have filed your tax return, this guide will provide more information on checking on the refund due to you. It also includes information about relief measures and announcements made by the federal government relating to the COVID-19 pandemic. 

Checking Your Tax Refund Status

Where do I check on my tax refund status? 

You can check on your tax refund status at this link or by visiting the IRS website and clicking on “Refunds” then navigating to “Where’s My Refund?”. These steps will take you to the “Get Refund Status” page, where you will supply your personal information to display your refund status. 

What do I need to check on my tax refund status?

  • Your Social Security Number (or IRS Individual Taxpayer Identification Number that is shown on your tax return)
  • Your filing status (choose between Single, Married-Filing Joint Return, Married-Filing Separate Return, Head of Household or Qualifying Widow(er))
  • The exact whole dollar Refund Amount that is shown on your tax return

If you are unsure of the information you need to provide, click on the links provided to get clarification and additional information on where to find the information required. 

When can I check on my tax refund status?

You can start to check your tax refund status within 24 hours of submitting your refund through e-filing and 4 weeks after mailing your paper return. 

“Where’s My Refund” tracker  

According to the IRS, more than 9 out of 10 refunds are processed within 21 days or less. If your refund is taking longer, we recommend using the “Where’s My Refund” tool to track the progress of your refund. The tracker displays the progress of your refund through 3 stages:

(1) Return Received

(2) Refund Approved

(3) Refund Sent

The tracker can also direct you to contact the IRS if your refund requires additional review and may take longer than 21 days to process. The tracker provides you with the most up-to-date information on your tax refund, giving you access to the information you need when you need it. 

Measures for Tax Payers during the COVID-19 pandemic

On March 21, 2020, the federal government extended the filing and payment deadlines for all taxpayers to July 15, 2020

For the latest information on the measures that are being taken during the COVID-19 pandemic, visit the U.S Department of the Treasury website and the IRS newsroom

If you have questions relating to your tax refund or need assistance with your tax preparation, contact Georgen Scarborough Associates, PC, now.  

Help! I Can’t Pay My Tax Bill!

hey its going to be okay

If you have filed your tax return and you need to pay an amount on your tax bill that you can’t afford, there is help. This guide will introduce you to the options that may be available to you and help you to choose which option is best for your case.

hey its going to be okay

3 Options to Help You Take Care of Your Tax Bill

1. Extension of Payment

If you find yourself in the temporary position of not being able to pay your tax bill, you may qualify for a short-term payment plan (or extension of payment). If you can make the payment within 120 days of filing your return, this will be a better option than an installment plan because although you will be liable for interest (and some penalties) it may still work out less expensive than paying in installments. Find out if you qualify here (https://www.irs.gov/payments/ online-payment-agreement-application).

2. Paying in Installments

This is a viable (although more expensive option) for paying your tax bill if you can’t settle the entire amount at once. You may be eligible for an installment agreement for a variety of reasons, and this option will have you paying off your tax bill over a time period of up to six years. If you are granted this option it is important to ensure that your installments are paid timeously to avoid defaulting on the agreement. You can apply online for an installment agreement here (https://www.irs.gov/payments/ online-payment-agreement-application).

3. Offer in Compromise

If you can’t pay your full tax bill or if paying the full amount can cause you to fall into financial hardship, you may be eligible to negotiate an offer in compromise. Various aspects of your unique case will be considered before your application for this option is approved including your income and expenses, your ability to settle your bill, and your asset equity.

This option should be regarded as a last resort. It will not be granted without a thorough assessment. You may also request an appeal (https://www.irs.gov/ pub/irs-pdf/f13711.pdf) if your offer is not approved. Find out if you qualify here (https://www.irs.gov/ payments/offer-in-compromise).

It is important to note that these options will not be available to everyone and that these payment options won’t allow you to skip out on your tax bill. Any late submissions, late payments or failure to file your taxes will result in penalties and interest on your tax bill which you should avoid at all costs. For tax assistance and more information on the best payment option for your specific tax bill contact Georgen Scarborough Associates, P.A.

Essential Tax Tips for First Time Tax Filing

tax filing tips

Need some tips on filing taxes for the first time? With these tax tips, filing your taxes for the first time can be a little less daunting.

relieve stress

Tax Tips for Filing Taxes

How you approach your filing can make all the difference between getting it done quickly and a massive tax headache.

Here’s how to make filing taxes easier:

Step 1: Gather all the information you will need, and keep it on hand while filing your taxes.

Step 2: Start the process early to avoid any penalties and deadline related anxiety.

Step 3: Use free resources to help you manage your filing and tax-related issues easily.

Free Resources to Help You With Filing Taxes

Your first stop for reliable, updated tax resources should be the Internal Revenue Service. This website (www.irs.gov) has resources to help out any tax filer, including those in the military service, individuals with disabilities, and seniors or retirees.

Resources also include an Interactive Tax Assistant (https://www.irs.gov/help/ita), various Tax Tools as well as links to the different forms and documents you will need.

More Tax Tips and Questions

Do I Need to File a Tax Return?

The answer will differ from one case to the next, but filing a tax return may be beneficial, even if you are not required to do so by law. If you’re unsure of the requirements, this resource (https://www.irs.gov/ forms-pubs/about-publication-501) can help you determine if you need to complete a tax return.

Can I File My Own Return or Do I Need Professional Help?

In many cases, you can file your taxes without professional help. If you only have a single income from formal employment or your tax status is unchanged (meaning that you didn’t get married or divorced, you didn’t acquire a business or make large investments) and you have a clear understanding of what your tax software requires from you, then you can file your own tax return. However, it is still a good idea to consult the relevant resources to guide you through the process.

You may need professional help with filing your taxes if you have more than one stream of income (from investments, a business, rental income, and the like.) or if you want to get a strategic plan together for structuring your taxes. If you don’t understand the process and you’re worried about making mistakes it is always advisable to get professional help with filing your taxes.

Which Dates Do I Need to Remember for 2020?

Visit our blog for all the dates that you need to remember for the 2020 tax season. Keep in mind that there are different dates for federal and state taxes.

At Georgen Scarborough Associates, PC, we are committed to giving each client personal attention to ensure that your tax preparation is handled quickly and efficiently. For more tax tips and information on our services, visit our website.

File Your Taxes on Time with These Tax Tips

The official tax deadline for the 2019 tax year has been announced and falls on Wednesday, the 15th of July 2020. Worried about being able to file your taxes on time and incurring hefty penalties as a result of not filing on time? Here are some tips to help you get organized.

tax filing tips

Keep your forms in one place

The leading reason why individuals file their taxes after the deadline is the fact that they have struggled to get all of the necessary information, documents, and forms in order. If all of those important forms and documents are strewn in different directions around the home or office, it can prove nearly impossible to gather them all. As such, strive to keep them all in one place right from the very start. That goes for your paperwork for deductible expenses, your W-2s, 1099s etc.

Set aside some time

Set aside a quiet time to prepare your tax documentation when you know that you will not be disturbed or rushed. It is important that you focus on what you are doing and that you double check all information.

Do your research

Most people are well aware of the basic tax deductions – but how sure are you that you do
not qualify for some of the lesser-known ones, such as the Self-Employed Health Insurance tax deduction (SEHI) or the student loan interest deduction? Do your research on all of the available tax deductions, especially above-the-line deductions, which are the ones that are often forgotten about or overlooked.

Enlist the help of a CPA

A CPA, or Certified Public Accountant, can take the stress and burden of doing taxes off of your shoulders completely. They will have all of the necessary knowledge and expertise in order to ensure that you receive the maximum benefit from your tax return and that you submit all of the necessary documents well within the time limit.

Contact the CPA specialists at Georgen Scarborough Associates, PC today for more details on how we can help you file your taxes.

Your Guide to Charitable Donations and Their Tax Implications

charitable giving tax

The warm, fuzzy feeling that comes with doing a good deed is often reward enough for giving to those in need. However, what makes it all the more rewarding is the fact that charitable donations often have positive implications on your tax return. The deadline for filing your federal taxes is April 15th, 2020 (unless you apply for an extension, which will then mean the deadline is stretched to October 15th, 2020). As such, you will likely be keen to find out exactly what your charitable donations could mean for your return.

Here is what you need to know.

charitable giving tax

Only Certain Charitable Donations Can Reflect Positively on Your Taxes

In order to take advantage of the relevant deductions, you should take extra care in choosing a charity to which you would like to donate. The charity in question should be categorized as a ‘not for profit 501(c)(3)’ charitable organization. Also, remember to check whether or not your preferred charity is listed as an IRS qualified exempt organization. You can do so via the IRS website.

How much can you deduct?

The best case scenario for charitable donations is that you may be able to deduct up to 60% of your adjusted gross income. The amount that you are allowed to deduct from your return will be based on the type of contribution that you have made. Having said that, the absolute minimum amount that you will be able to deduct will usually be no less than 20%.

Remember, if you exceed the limit, via carryover, you will usually still be able to deduct the excess from tax returns over the next five years, possibly more.

Looking for assistance with regard to filing your taxes for the 2019 tax year? Contact Georgen Scarborough Associates, PC today for information on how we can help you.

July 15th – Your Federal Tax Filing Deadline in 2020

tax deadline

2020 is officially in full swing, which means that you are likely starting to think about your tax duties and probably wondering when the cut-off date is. This year, Tax Day and, therefore, the tax filing deadline for the 2019 financial year is July 15th, 2020, which falls on a Wednesday.

Plan to Pay Your Taxes on July 15th, 2020

Plan to file your taxes by the July 15th deadline. If you don’t pay on time, you are likely to incur penalties and/or interest. However, if you know you won’t make the deadline, and think you are going to owe money, send in your payment to the IRS when you apply for a tax filing extension by July 15th.

Applying for a Tax Filing Extension

It will be wise to apply for a tax filing extension if you know in advance that you will require more time to file your taxes this year. If you file for an extension, you will be given until October 15th, 2020 to file your return.

The tax filing extension applies to the tax filing and is not a new due date for your tax payment. So, be sure to send in a payment by July 15th.

If you need help filing for an extension or need to determine how much to pay by July 15th, get in touch with the team at Georgen Scarborough Associates, PC today.

Tax Planning TIps to Maximize Your Return

ta returns

As you prepare to file your tax returns, you should also be planning to maximize them, reduce your tax bill and/or get the biggest refund you can. Many unseasoned tax payers are not sure how to do this and feel reluctant to make claims due to their lack of knowledge. For their benefit, we present some simple, key steps to planning and maximizing your return.

Know your bracket

The IRS has seven income tax brackets and which one you fall into depends on your level of income. First, know what percentage of your income you are required to pay, then understand that you will not actually pay those percentages on your full income. This is because you will be able to make deductions from your taxable income. So first determine your tax bracket, then break down your income into the prescribed income types that you earn. Each part of your income will be taxed differently.

Tax deductions and credits

Next, make sure that you know the difference between tax deductions and tax credits. Tax deductions are expenses you’ve incurred that you can subtract from your taxable income. Credits actually give you a dollar-for-dollar reduction on your tax bill. Once you understand how these work, you then need to find out which deductions and credits you are actually eligible for. Often people don’t even know that they can deduct certain expenses from their tax. You need to claim for each and every deduction you are eligible for, so make a point of knowing them all. There are hundreds and not all of them will be applicable to you. If you want to maximize your return, make use of every permissible, applicable deduction you can find.

Know when to take the standard deduction

The IRS offers a standard, no-questions asked deduction, which you can choose to take or you can opt for an itemized deduction that is calculated from your specific mix of deductions. Which one you choose to take will depend on the higher amount. If you can submit an itemized list of deductions and it comes up to more than the standard deduction, then you should itemize your deduction. If not, it’s best to opt for the standard one.

For additional, personalized assistance with your tax returns, contact Georgen Scarborough.

Important Tax Dates To Remember In 2020

tax deadlines

The New Year is already well underway and that means that a new tax year is here, as well the various deadlines for filing tax returns, etc. As providers of public accounting services, we at Georgen Scarborough always have our eye on the tax calendar. For your easy reference, we thought we would draw up a list of the key dates individuals will need to take note of for the coming years.

Tax Day

Tax Day for the 2019 tax year is July 15, 2020. You will need to have your returns filed on or before this date to avoid penalties.

If you are able to get an extension

If you are granted an extension, you will need to file your return by October 15, 2020. If you know that you will not be able to file your return on or before the official Tax Day, you will have to submit an IRS Form 4868, requesting an extension well before July 15.

State taxes

The above dates are only for federal taxes. You will need to find out when your filing deadlines are for your state (unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, where there are no state income taxes).

Estimated quarterly tax payments

For those people who do not have their taxes automatically withheld from their pay – such as people who are self-employed or those who are eligible to pay capital gains tax – payments need to be made to the IRS each quarter. January 15 is the deadline for the final quarterly payment of the 2019 tax year. After that, periodic payments will have to made each quarter: one in April, one in June and one in September.

These are the main dates you need to remember for in regard to your taxes in 2020. For more information on the filing of tax returns – or to engage the services of seasoned professional tax practitioners, contact Georgen Scarborough.