(BPT) - On the heels of your 2024 New Year's resolution and with tax season kicking off, it is the perfect time to focus on your fiscal fitness! According to CNBC 62% of Americans are living paycheck to paycheck. Creating small money changes and smart financial habits can help them kick-start their financial progress.
So if you are one of the many Americans who avoid thinking about their financial situation until tax season hits, check out these eight tips for taking advantage of the hidden opportunities this season offers.
Determine if you need help from a pro. Even if you think your taxes are as straightforward as they come, consider finding a tax expert to take a look. Today, there is so much information available online that it can feel overwhelming to do your taxes and ensure they are done correctly. There are many skilled, experienced tax professionals out there, so don’t be afraid to get a second set of eyes on your taxes.
Don’t forget about those deductions and credits. Do you have any student loans that you are working to pay off? If so, now is the time to claim a student loan interest deduction. Did you make a charitable donation this year? Or start working for yourself? Make sure you're getting all the deductions and credits you have a right to claim.
Staying organized will help you in the long run. Get yourself a filing folder and keep any tax-related paperwork in there. From your W2 to any write-off-related receipts, stash the appropriate documents and save them until you are ready to tackle your taxes.
File on time. This will eliminate any late filing penalties and fees. Many people don’t realize that the IRS can charge interest on owed payments, so get ahead and avoid those charges! If you think you’ll need more time to pay, you can request a tax extension using Form 4868.
Talk with the IRS. If you owe money this year, be realistic about what you need to do to take care of that. Promptly reach out to the IRS and set up a payment plan that works for your budget. This way, you're not forking over a big chunk of change all at once, maybe at the expense of paying other bills or contributing to savings.
Plan to save at least part of your refund. If you're getting a refund, that's awesome! You may be tempted to treat yourself a little. Go ahead, you've earned it. But plan on saving part of that windfall, say 25%. Consider it an opportunity to supplement your emergency fund, or tackle some credit card debt that has been weighing you down.
Sign up for direct deposit of your refund. With a banking app like Chime, you may get your federal tax refund up to six days early1 with direct deposit. The process is easy. You'll need to open a Chime Checking Account, and simply add the account and routing numbers on the tax forms when you file, indicating direct deposit, and Chime will alert you when it's there. Chime members can get their paychecks up to two days early2 with direct deposit, accounts with no monthly fees or minimum balance requirements, fee-free overdrafts up to $2003, a Secured Chime Credit Builder Visa® Credit Card4, and more. These services have led Chime to be the #1 most loved banking app5.
Know your tax terms. The first step in making the most of your taxes is knowing the language. Some of the most commonly used and confusing terms include:
- Above-the-line deduction, which allows you to decrease the amount of taxes you owe. Student loan interest, health savings account (HSA) contributions and tuition all qualify.
- Adjusted gross income is your total annual income, including wages, tips, interest, dividends and capital gains, minus deductions.
- Earned income tax credit is a refundable tax credit designed for low-to-moderate earners. Your income needs to be less than $63,398 to qualify.
Making progress on your financial goals can feel daunting, but this is a marathon, not a sprint. Habits over time will help you make progress, and a great way to start is to minimize your tax burden and maximize your return this tax season.
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank.
This guide is for informational purposes only. Chime does not provide financial, legal, or tax advice. You should check with your legal, financial, or tax advisor for advice specific to your situation. Your state or local unemployment agency is responsible for making all determinations on your eligibility for unemployment benefits. Please contact your state or local unemployment agency if you have questions.
1 Chime does not guarantee timing of refund. Six day refund estimate is based on 2022 tax year filing data. Refund timing estimates are dependent upon timing of complete tax return submission and other requirements.
2 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
3 SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your physical Chime Visa® Debit Card or secured Chime Credit Builder Visa® Credit Card.
Qualifying members will be allowed to overdraw their Chime Checking Account up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime's sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions and fees associated with OTC cash withdrawals. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.
4 To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
5 #1 Most Loved Banking App Source: Chime received the highest 2023 Qualtrics® NPS score.
