UNITED STATES—The end of January has come and February has kicked off. Do you know what that means? Tax season is underway people and for a lot of Americans its a stressor, but for some it’s a great time. Why? One of 2 things will happen: 1) You will owe the IRS or 2) You will receive a refund from the IRS.
Not many people love doing their taxes, so advice for the wise, if you do not know what you’re doing, hire a tax professional to take care of your taxes. Another important piece of advice, make sure it’s a legit professional and company. Why? Some ‘act’ like experts, but they are not. Just because someone recommends them, doesn’t mean you have to trust it.
With that said, you have or you will shortly begin to receive your W-2 or 1099, in addition to a ton of other tax forms in the mail. All those forms are important because it delivers you a full picture of your income earned, taxes paid and potential credits and deductions that you can claim on your taxes. Interest paid on student loans, deductions or credits for your home, the amount of credits that you can claim are gargantuan, so don’t leave any potential money on the table.
I’m a firm believer in getting what is owed if I’m owed anything. If I have taxes to pay the IRS, the state government or city government take care of those taxes by the due date so you’re dealing with or having to worry about penalties. Those penalties can add up and be quite expensive. Here is the thing that is crucial, if you have a good idea that you are going to have to pay taxes, you might want to start saving a bit of money right now so you’re not scrambling last minute to come up with those funds.
Yes, you can always file an extension, but you still have to pay the tax that is due. Now you have the flipside of tax season, which makes many Americans happy: a refund. The refund can be a very large amount for a lot of Americans. If you are receiving that refund than you have to prepare. I mean for me, whenever I get a refund I tackle debt, credit card and any other expenses that I am doing my best to eliminate.
People ask me all the time why you don’t splurge on yourself. I just always like to think 2-3 steps ahead of time and just like to have that rainy day fund just in case a medical emergency erupts or some sort of issue inside the home like the water tank, the faucet, the furnace or some other appliance goes out. Yes, things like that tend to transpire when you least expect it. Yes, you can take that money and go on that vacation you have been thinking about for months.
If you want to purchase that electronic item that you have been eyeing for weeks, go for it. Perhaps you need to make a big purchase like a car, or you’re eyeing something bigger like a down payment on a car, that hefty refund can help you a lot. There is another option: save! Yes, it might seem foreign, but saving money is always a plus because it helps you prepare for the unexpected. Start preparation now because before you know it, April 15, 2026, will be knocking on your door. If you don’t know the importance of that day, that is when your taxes are due.
