Tax Me Out...

From memes asking the IRS where their refunds are to articles that people are legit over these new tax laws - the tone of tax season has changed drastically. Some reports are saying that 2018 returns are seeing a 8% decrease in previous years. No matter the amount of refund you get, you can flip it beyond the cost in deposit. Even if you are one of the ones who owe or break even - you can still benefit from the tax season.

I’m big on taking any extra money and trying to flip it; or how they now say - come up on a lick. Same thing, take the context as you may. While the infamous refunds isn’t new found money, you should check your contributions (State x Fed filing) throughout the year to makes sure you don’t work the boat. Trust me, that isn’t fun. Another TEDTalk for another day, Beloved.

While the refund you get from the government is an apparent come up, many of us aren’t taking that increase to level up in other areas. We all have different financial situations, so our tax refunds will also be different — but one thing we can all do the same is make this season better than the past.

What you do with your tax refund can be the game changer of how the rest of the year would look like. Blow it and find yourself huffing and puffing that your funds aren’t around.

Keep in mind that you do not have to complete everything on this list. Use this guide as a way to jump-start your plan to:

1. Pay down debt

This is a given. Before you swipe, click submit or bird signal––take an account of current and past debt you have. Write it down, Shawty. If ish is late, call them up and ask if you can pay ____. Also, ask if they can take the late charges or interest rates off. Ask not, want not. You should make a payoff plan so that when the money comes, you won’t *forget* and end up buying those Js instead.

*Pull yo credit report* Where? Here and here. Make sure you are viewing your VantageScore.

For old debt that is in collections, send a validation letter to make sure the debt is valid. Then ask the debtor for any discount if you pay in full or set up arrangements to pay it down. Don’t forget when you pay it off to have them update your credit reports at ALL bureaus and send you a confirmation.

2. Compound your funds

Open up yo IRA and/or investment account (be sure to opt for low fees) and take out a small percentage of your money to work in the markets. Plot, plan, and buy a couple of shares. Keep in mind that investing is a long-term process, so don’t get mad when you aren’t a millionaire tomorrow. Most of the time the markets are looking pretty solid to invest in around tax time. Earning reports and job reports can pull the markets in any direction. Always check the 52 week low and high before you buy, Shawty.

3. “Please save the baby”

If you got kids, set them up nicely. Open up a savings account, 529 and custodial accounts to help build their future. And if you are feeling extra - get them life insurance. If you can’t do all of those options, scale them out for the future. One step at a time. Do this for each of your children. No matter if they go to college or not, this money will compound and start them on the path to wealth later on in life.

*If you don’t have children, try to figure out what other things you need to do with this principle.

4. High Savings, High Return

You should flip whatever you could claim and set up multiple high yield savings accounts. I will endorse these accounts until I’m Blue in the face. Why? They are paying you money for them to hold yo money there.

Here are some good ones.

The core creating these multiple savings account is to give your goals “workers.” Make your money work for you. The key is to keep saving alllll year, hmmk? This is a jump start for your savings plan! No matter if you already have accounts already in formation, contribute part of your increase to increase your savings. The more you save and store in a High-Yield accounts will be the more quick back you can stand to see over time.

5. Watch your filing

If you haven’t flied yet, do a double check of what you can and can’t claim on your taxes this year. As you know, things have changed due to the Copy+ Paste Administration. While, I’m not a tax guru, just brace yourself before Nino, I mean the IRS, is not playing this year. Even the tax brackets shifted like an old wig. Long gone are the claims that use to be, now we have to pivot to position ourselves better moving forward. Cry now, cash later.

6. Treat yo self

Yes, you read that correctly. Honestly, truly. Treat yourself in moderation. Give yourself a budget *tax time or any time* and buy yourself something. You work hard, allow your money to work for you. Just don’t neglect your goals and go into debt. Learn to balance expenses with expensive. Scale yourself into figuring out your treat yourself moments (not marathons).

Psst. If you do buy yourself something - check to see if the company is publicly trading (See #1). Like I say about Jordans - if you buy a pair, buy a share. Consume what you consume. Earn and pay yourself more than one way.

7. Fund yo Fun

Save for courses to help you get paid more in your industry. Buy you a passport ($145). Book a trip . Oh did you know you could put plane tickets on layaway? Check out CheapAir and AIrfordable for ways to make that happen! Just double check the fees and even credit requirements before jumping on the deals. Don’t turn your nose down to Groupon (research, please). Find ways to fuel your life along with material things and memorable experiences. Balance.

8. Start or Increase your Emergency Fund

While this is tried and true, most Americans don’t have access to $1000 for emergencies. No matter if your job gets terminated or you have an unexpected repair come up - there is nothing like having that money on hand to keep the stress away. Take an audit of your expenses to gain perspective of how much you will need to save for 3-6 months of living expenses.

9. Funnel yo Funds

Take this new money stream to create another steam of income. Yes, investing is another stream of income, but so is a business. That is IF you an tolerate running a business. Everyone doesn’t have the DNA to be a boss. Research the start up cost, potential ROI and operating expenses. It takes money to make money, so do your alignment.

10. Morph your personal ROI

Take that refund and flip it into increasing your earning power. From classes and certificates to conferences, find out how you can your refund and give your consistent income a boost. Using your tax refund to pay for additional training, tuition, a work-related conference or membership in a professional organization is an investment that can pay off for years to come in bigger paychecks and greater job stability.

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Refunds and help refuel your financial life. Take time and plot before you play with your additional coints. Stop making the same crazy decisions with your refunds and look up in May with nothing to show. Balance create habits.

Update: I talked about resources on how to file your taxes for low cost or free over on CapWay. Check it out.