All I know is that I hope that this year’s tax return experience is nothing like last year’s. Not that the pro we used did anything wrong. In fact, he was perfect. It’s just last year we ended up owing a ton of taxes for our 2007 return, because we’d used (stupidly) part of our retirement money to buy this house.
This year we’re hoping for a better tax experience. For starters we didn’t dip into any retirement accounts, and we paid our estimated taxes quarterly. Once 2008 was over, I got all of my 1099s collected and filed. Then we added up the mileage on the car, noted the days spent out of town on business (so we can take the per diem), downloaded our expenses into Quicken, and now we’re just waiting for our tax appointment early next month.
Truth be told, I wanted to have our tax appointment this week, but our guy was booked. Now I know why.
I just got a survey from the National Retail Federation that said this: 71% of Americans who are expecting a refund from their 2008 tax return will have filed their tax return by the end of February. Wow. There must be a lot of business accountants and enrolled agents in America right now.
I thought that one of the most interesting stats from that survey was what people getting a refund plan to do with the money:
- 48% plan to pay down debt
- 38.9% will put it in savings
- 26.7% anticipate they’ll use the money to cover everyday expenses
- 11% will use the money to make a major purchase, such as a car
More now than ever, Americans are turning to tax professionals to prepare their taxes. However, the largest percentage (31%) rely on tax software to get their tax returns done. (FYI, if you use Turbo Tax and have a uPromise account, you will earn 6% back on your uPromise account when you file online.)
Regardless of how you get your taxes done, here are 4 tips you should keep in mind, now that tax return season is upon us:
- If you cut costs by bartering this past year, don’t forget to report the value of your barter agreement on your taxes.(Speaking of bartering, this Associated Press story on bartering, which appeared a day after my barter post, mentioned that barter ads on Craisglist are up 100%. Wow!)
- Avoid using services that give you your refund upfront. What you’re really doing is taking a loan against your eventual refund, and you’re paying dearly for it–some companies charge ridiculous interest rates (like 36%) on these refund loans.
- Remember: the IRS never calls or emails for personal information. If the IRS needs to get in touch with you with questions about your taxes, you’ll get a letter in the mail. If you get a call or an email asking for personal information, know right away that it’s a scam.
- Filing for an extension doesn’t get you out of paying taxes. If you just can’t get your self together to file your taxes by the April 15th deadline, no worries–the IRS is cool with giving you a small extension. You must ask for that extension, though, by April 15th. But if you are going to owe taxes on that previous year’s return, you have to pay your taxes on time or you will begin incurring interest and penalties, starting on April 15th.
Have I missed any important tax tips that will help the frugal minded? If so, post a comment to let me know.

I always try to do inventory of the house before I go grocery shopping. In the past when I haven’t done this, I’ll come home with, say, two bottles of maple syrup, only to discover I already had two bottles in the pantry.


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