Feature Articles: Taxes
Tax refund advice: Save some, spend some
Linda Geist, Writer, Extension Communications; Story source: Andrew Zumwalt, Assistant Extension Professor & Associate State Specialist, Personal Financial Planning, University of Missouri Extension
Income tax refunds are ready to roll out. Uncle Sam sends Missourians an average income tax refund of $2,612, according to IRS data. You might want to hold on to some of that cash.
Refunds are wages you earn throughout the year and should be thought of as hard-earned money rather than found money, says Andrew Zumwalt, personal finance specialist with University of Missouri Extension.
For the wise, a refund windfall is a chance to stash some of the cash in an emergency fund. Use some to pay down high-interest debt.
Zumwalt heads MU Extension’s Volunteer Income Tax Assistance (VITA) program, which offers free tax preparation throughout the state for qualified individuals and households.
Zumwalt offers these financial tips:
- Save part of your refund for emergencies. Save $500-$1,000 or more
for unexpected repairs or medical bills that could create a
financial crisis and add to your debt.
- Jump-start a savings account with part of your refund. Have
some of your refund electronically deposited into a savings account.
You can have your refund direct-deposited into more than one account
using IRS Form 8888. Set up a savings account before you file your
taxes if you don’t already have one; have your account and routing
number with you when you go to your tax filer.
- Pay down high-interest debt with some of your refund. If you have more than one credit card, pay off the card with the highest interest first.
Free tax assistance available
Volunteer Income Tax Assistance (VITA) program sites across Missouri
provide free tax preparation to low- and moderate-income taxpayers.
VITA sites can be found in libraries, community centers and other
public locations during tax time. VITA sites can also file your
For the nearest VITA site, go to irs.treasury.gov/freetaxprep or call the IRS toll-free at 1-800-906-9887.
This story was originally published by MU Extension news: http://extension.missouri.edu/n/3037
Last update: Monday, March 27, 2017