& WISE PLANNING

Sarah Rach-Sovich

S

FREE TAX PREPARATION West Central Minnesota Community Action (WCMCA) offers

free tax preparation services to families who earn less than $53,000 per year and individuals who earn less than $30,000 per year

Call to schedule an appointment 800-492-4805 Alexandria, Elbow Lake, Glenwood, Morris & Wheaton

Additional information on free tax prep sites: 2-1-1 Minnesota Information and Referral Minnesota Department of Revenue

ON YOUR OWN

Many reputable sites that will guide you

File online (sometimes for free) Help you identify deductions Less errors (calculated for you)

UNEMPLOYMENT INCOME

Unemployment income is taxable You'll get a Form 1099-G that will

tell you how much unemployment you must report on that year's tax return

CHECK EITC ELIGIBILITY The earned income tax credit, or EITC,

is a tax break for workers who don't make very much money

Unemployment benefits don't count toward EITC eligibility, but if you earned any other income during the year, you can use that amount to calculate a possible credit claim

Single taxpayers can claim the EITC, but the benefit is greater for workers with dependent children

DEDUCTIONS

Medical Expenses Children Student Loan Interest Mortgage Interest Property Tax Interest Rent Credit Donations

JOB SEARCHING DEDUCTIONS Hang on to all your job-searching related

receipts! There are, however, limits to job-hunt tax breaks

Same field, no substantial break You must itemize to claim job-search expenses These costs are miscellaneous deductions,

meaning they and other eligible miscellaneous expenses must amount to more than 2 percent of your adjusted gross income before you can claim them

JOB SEARCHING DEDUCTIONS

What you can write off Employment and outplacement agency fees Resume services Printing and mailing costs of search letters Want-ad placement fees Telephone calls Travel expenses, including out-of-town job-hunting trips

TAX REFUNDS Last year the average refund was $2,860 according

to GoBankingRates What do people do with their tax refunds?

INVESTING Retirement

Through employer On your own IRA

Stocks/bonds/CDs Repair your credit score

It can affect SO many other areas of your life – even getting a job! Start by getting a copy of your report

In yourself… leading to larger paychecks in the future! Training – conference Tuition – class, degree Membership to an organization Start a business

SAVING FOR PEACE OF MIND

It can be hard to save! Cash on hand to cover

unexpected expenses Ideal vs. realistic

3 months of expenses Whatever you can save is

better than nothing Even just a portion of it… Opportunity fund!

DON’T GET CAUGHT UP IN THE FEELING…

REMEMBER THE DIFFERENCE BETWEEN WANTS & NEEDS

THERE ARE WISE WAYS TO SPEND A TAX REFUND…

IDENTIFY NEEDS

Housing Food Transportation

Debt Repayment Down Payments Other Needs

HOUSINGFOOD Find Housing Use for a deposit Catch up Get ahead

Buy gift cards for yourself/family

Stock up Food storage (freezer)

DEBT REPAYMENT

May be forced (taken from your refund) Anything in collections Things that affect your credit High interest

Credit cards & store charge cards If you were paying 18% interest that is like earning 18% on your

investments… you are keeping that much money in your pocket! Flip that saved money into a savings/opportunity fund – or spend

wisely elsewhere Things that might eliminate a payment

Saving you money every month

Housing

Utilities

Vehicles

OTHER NEEDS Health issues

Doctor visits Surgery Dental work Eye glasses/contacts

Repairs & Preventative Maintenance Home Vehicles

Insurance gaps Home, renters, liability vs. full coverage

Computer, phone, internet Helpful if you are job searching

KARMA & GIVING BACK

If you are able… Consider giving back Can be a deduction Doesn’t have to be monetary Maybe not this year… but in the future?!

FOR NEXT YEAR

Adjust withholdings?? Pay yourself first Savings account

Earn interest Save receipts Document expenses Start saving

Any amount helps!