The thought of filing taxes on your own can be daunting. At the same time, hiring a professional accountant comes at a price: around $273 of your potential refund.
But, with the availability of low-cost online options – like TurboTax and TaxAct – you may still be wondering if hiring a tax professional makes the most sense for you. To help decide which way to go when filing your taxes, here are a few questions you should ask yourself.
Have you experienced any life changes this year?
Major life changes can definitely be a reason to seek out the help of a professional tax preparer as these events have the potential to complicate the tax filing process. Here are a few lifestyle shifts that may prompt you to hire an accountant:
- You had a baby. While it’s fairly easy to input the child tax credit on regular tax software, if you had a baby within the last year, you may want to seek out a professional to help you figure out possible medical deductions pertaining to your child’s birth. You may also be able to deduct childcare costs.
- You moved. Whether you moved across the street or across the country, if your relocation involved the purchase or sale of a home, you may want to get in touch with a tax professional to make sure you’ll benefit from possible tax breaks.
- You earned more money. If your income spiked significantly in the past year (especially if you made over $250,000), you may benefit from the help of a professional. Why? Taxes often get more complicated as your income rises, and a professional who understands the tax code can often help out.
Do I feel confident doing my own taxes?
You may be great with a budget and managing your money, but taxes are an entirely different beast. If you have a simple return with only your W-2 information to input, you may be ok filing on your own. But, if you started up a new business or have a side hustle in addition to your job, it may be worth the peace of mind to hire a professional.
Also, if you’re going through the free filing process and find that you’re second guessing yourself, it’s time to outsource your taxes. Keep in mind that working with a pro can help you find deductions you never knew existed — like the ability to deduct home office space used to run your side hustle or moving expenses incurred for a new job.
Am I ready to deal with the IRS?
If you are filing solo, even if you feel certain you did everything right, there is no guarantee that you won’t get audited by the IRS. The audit process can be time consuming, nerve-wracking, and costly. Also, if you’re the one preparing your taxes, you’re on the hook should an auditor come calling.
If a tax professional prepares your taxes, this person or firm will be required to defend your return to the IRS. Instead of you, your accountant will be the contact person required to answer questions posed by the IRS, even though you’ll ultimately be on the hook for any amount owed. For this reason alone, hiring an accountant may be worth it.
How much time do I have?
The average time it takes to complete a tax return, according to the Washington Post, is about 13 hours. If you’re already strapped for time, you may want to consider outsourcing this work. And, if you do want to prepare your taxes on your own, make sure you get organized early and set aside plenty of time to file before the April 17th deadline.
Make a decision and start planning
The earlier you plan for tax season, the better off you’ll be. Weigh the pros and cons now to help you decide whether to file alone or hire a professional. And, one final tip: make sure you sign up now for a Chime account. This way, you can get your tax refund deposited directly into your account. Better yet, you’ll get your refund in three weeks rather than waiting for two months.
With the holidays right around the corner, you may be focused on what potluck dish you are bringing to the next Christmas party, who you need to buy presents for, and how to keep your travel plans running smoothly. We get it, there’s a lot on your plate this time of year.
While staying on budget for the holidays should definitely be high on your priority list, it shouldn’t be your only priority. In fact, now is the perfect time to take a step back and think about how you want your bank account to look after the hustle and bustle of the holiday season is behind you. Here are our top 5 tips to get your finances in shape as you head into the new year.
1. Look at last year’s Christmas budget
If your holiday budget isn’t set in stone, take a look at your spending during previous years. Also, look at your credit card statements and bank accounts to see where you may have gone astray. Do you always forget to budget in enough for holiday meals? Do you go overboard on stockings and stuffers at the last minute? Do you need a little more wiggle room than you normally give yourself? Try to pinpoint where you may need to spend a bit more this year before you blow through your budget. Asking yourself key questions and researching your past spending habits can keep you on track while you’re in the midst of seasonal celebrations. More importantly, fixing these problem areas before you overspend can help you start the new year off on the right foot.
2. Factor in saving up for fun stuff
We all want to save more, invest responsibly, knock out debt, and cut back on unnecessary expenses. However, when you approach financial resolutions with a mindset that you can’t spend or save up for anything fun, you may lose the inspiration to save at all.
To avoid this, try shifting your focus to the fun stuff. For example, think about where you want to travel or consider a big ticket item that you really want to buy. From here, you can start setting up savings goals to move you closer to your target. You’ll still need to think about your 401(k) and emergency fund, but if you get psyched up for your bucket list purchases first, you’ll get in better financial shape overall.
3. Think about your long-term financial goals
Instead of getting overwhelmed by long-term goals and crunching numbers, try to put aside the financial worry and dream about what you want your life to look like. What sort of future do you envision for yourself and your family? Maybe you want to buy a house with a big backyard so you can finally have a dog. Maybe you’d like to retire early and devote your life to humanitarian work.
Once you have your big picture in mind, you can start working backwards to figure out how much that dream will cost and how you can achieve it. Remember: it’s fine if your dreams shift and change over time. Gaining financial security along the way will benefit you no matter what.
4. Set up your automatic savings now
Once you have financial goals in sight, protect them by setting up automatic savings. With a Chime bank account, for example, every purchase you make on your debit card will be rounded up. Chime’s round-up savings account is an easy way to save money every time you spend money. You can also sign up for Chime’s “Save when I get paid” feature, which automatically puts a portion of your paycheck into savings as soon as you receive it. This ensures that you’re paying your future self first.
Valuing your goals is a surefire way to guarantee success. If you leave your savings goals until the end of the month, chances are high that you will run out of money or an “emergency” will crop up that derails your opportunity to save. By designating your savings to a separate account, it automatically becomes more sacred and untouchable.
5. Create new healthy habits
When it comes to making financially responsible decisions, it can be an uphill battle. If you’re stuck in bad money habits, like overspending or not budgeting, forming new habits can be hard. But, you still should aim for new healthy financial habits.
Maybe this means leaving your credit card at home and only shopping with your debit card or cash. Maybe you need an accountability partner to motivate you to stick to the path you’ve chosen. Or, perhaps you need to treat yourself when you complete certain milestones. Different methods work for different people. The most important thing is that you develop habits that will help you get ahead.
There’s no time like the present
It may seem like overkill to add something else onto your to-do list when you’re in the midst of making holiday lists, but budgeting for the new year now can save you heartache later. By getting a jump on your priorities and ending the year on a strong note, you’ll enter 2018 focused and ready to tackle your finances head-on.
The holidays are a time for celebrating with family and friends. But the joy of the season often comes with its share of stress. Namely, you may be worried about how you’ll afford all this holiday spending.
Budgeting for the holidays is no easy task, and unfortunately there isn’t a one-size-fits all approach for handling money during this time of year. There are so many factors to take into account: who should you buy gifts for, how much should you spend, and how should you factor in spending without going into debt. Since money is such a taboo subject and you may want to buy whatever you want, it can be hard to cap your holiday spending.
Although we don’t recommend comparing yourself to others, it can sometimes be helpful to learn from those who find themselves in a similar spending quandary. So, we asked five millennials to discuss how they spend and budget during the holidays. Their answers may surprise you:
Sami Lynn, 32
Annual Holiday Budget: $0
While most people find themselves with a spending hangover after the holidays, this isn’t the case for Lynn, a medical consultant from Oklahoma City. She generally doesn’t celebrate the holidays at all, opting instead to either work or take vacation during that time. She budgets 10 percent of her income for travel, and uses it during the holidays. While she may buy presents for a few close friends, she takes that out of her regular budget rather than saving up for months in advance. She wouldn’t want it any other way.
“I’m not in touch with my family so it’s mostly about myself, my critters and my friends,” says Lynn.
Meghan O’Dea, 31
Annual Holiday Budget: $200
Instead of going all out in December, O’Dea of Chattanooga, Tennessee keeps her holidays low key with immediate family and then celebrates Christmas in July with extended family. A scholarship program coordinator, O’Dea admits that neither of these approaches is considered “traditional.”
Her immediate family members exchange books and stockings on Christmas. In July, her extended family takes a beach vacation. During this time, each relative picks a Secret Santa and buys a gift for one person.
When it comes to spending for Christmas, O’Dea sets aside $200 to buy gifts. She picks out presents that she knows her family will love throughout the year. This way the cost is spread out and she can work within her budget to buy meaningful gifts.
“We love focusing on books and food. It makes the nebulous week in-between Christmas and New Year’s extra cozy. Eating leftover Yorkshire pudding and cracking open a new book with some eggnog is the best part of Christmas.”
Lisa Bryant, 23
Annual Holiday Budget: $500
Bryant, an engineer from Sparks, Nevada, typically spends the holidays with either her family or her fiance’s family. She focuses on spending time together over everything else. She spends around $500, mostly on gifts with some money left over for decorations. Since her IRA company allows her to skip a monthly contribution, she skips December and uses this extra cash for the holidays.
Generally, this frees up enough money to buy one big gift for her fiance, plus presents for her her parents and a few close friends. She also tries to give one hand-made gift per year, and uses her holiday budget to pay for supplies.
“I’m usually pretty good at spending within my means.”
Alaina Leary, 24
Annual Holiday Budget: $800-$1000
Leary, a freelance editor from Boston, saves up for Christmas all year long, but ramps up those savings starting each summer. Between family gatherings, “Friendsmas”, and lots of winter-themed fun, there is a lot to take into account when budgeting. Generally, Leary uses about $500 of her holiday funds to buy gifts for her partner, close friends, dad, and cousins. The remaining $300-$500 in her budget is earmarked for experiences. Some of Leary’s favorite holiday experiences include a weekend away with her partner in Maine, a long sleigh ride, and dining out after watching Boston’s annual tree lighting ceremony.
“I budget my money for experiences over gifts, because I’d rather spend time with people than spend money on them.”
Colleen Stinchcombe, 26
Annual Holiday Budget: No limit but $75 per person cap
Stinchcombe, a writer and editor from Phoenix, usually spends the holidays at her house with her family. She asks everyone to agree to a $75 spending cap. While that cap may seem high, this works for Stinchcombe as she budgets for this annual gathering and only buys for her immediate family and maybe a couple of close friends. Instead of saving throughout the year, she sets aside money that she would ordinarily spend on herself for things like eating out, new clothes and other unnecessary items.
She says her gifting style is to give as she would like to receive. With this in mind, Stinchcombe chooses gifts that her family and friend would otherwise buy for themselves.
“I’m not a fan of holiday gift-giving as something extravagant.”
How Should You Budget For The Holidays?
As you can see, there is no one-size-fits-all approach for how you should spend money during the holidays. The most important thing is to take stock of your priorities and your bank account, and find a happy medium this holiday season.
If I tell you I work from home as a freelance writer, you may assume it’s a nice little side hustle to make me feel more productive as a stay-at-home parent. In reality, however, freelancing is my full-time job, and I earn a full-time salary. I’ve been at it for two and a half years and I consistently earn more than $5,000 a month.
What does my workload look like? I work about 15-20 highly focused hours per week (i.e. no checking Facebook while writing) and churn out about 30-40 articles per month on topics ranging from parenting to finance to emotional labor. I write exceptionally fast, which gives me the bandwidth to take on more work. When I’m not writing, I’m still working. I still have to account for the time spent brainstorming and pitching new story ideas, finding new outlets to write for, bookkeeping, and collecting payments for overdue invoices.
Of course, no two freelance writers do exactly the same thing. They also don’t necessarily earn the same hourly or project rates. Some freelancers hustle at it full-time, whereas others prefer to take on freelance projects on the side. To learn more, I decided to talk to a few writers to get their take on how they make money. Take a look.
Katherine Clover: Freelance rookie
Freelancing for two years with earnings of $12,000 to $18,000 per year
Schedule: I set aside three days per week, or about 25 hours, for freelance work. I want to push myself to earn more than my average of $1,000-$1,500 a month, but I want to do so without burning out.
Since I am my own boss, I think about how I’d want a boss to treat me. “That means allowing myself to take breaks, setting a reasonable schedule, and trying to work with my strengths. It also means creating systems to streamline things, and keeping track of the money without getting addicted to the money.”
Best part of the job: The work itself is something I love. I also like going after projects that excite me, like writing about dinosaurs for Salon. I was delighted to learn “the big secret” of freelancing is to simply ask to write about the things you love.
Worst part of the job: People do not realize how much of a hassle it can be to get paid for the work you’ve already done, how much bookkeeping is involved, and how much it really is like running a business. All of that time doing invoicing and paperwork is essentially unpaid labor. I think people imagine when I’m working, I’m writing. This is not always the case.
Advice: Just keep pitching. You won’t get work if you don’t ask for it.
Emily Monaco: Freelance go-getter
Freelancing for four years with earnings of about $48,000 per year
Schedule: I work weekdays between 8:00 am and 6:00 pm, with very little time off for breaks. I’ll usually take off one afternoon per week, but I occasionally do a bit of work in the evenings or on the weekends to make up for it. The work is a mix of interviews and transcribing, pitching, story writing, and working on my novel.
Best part of the job: The freedom. I love being able to decide on a sunny Tuesday morning to go for a hike, or to go back to New York to visit my family for several weeks with little or no disruption of my schedule. I also like that my work life is constantly changing and evolving, and I can work on projects that interest me.
Worst part of the job: Self-motivation is definitely a challenge and it’s important to come up with a system that works for you. I actually think the most difficult part of freelancing is getting other people to respect your work hours. Just because freelancers don’t go into an office doesn’t mean we don’t have to work.
Advice: Break down your income goals into manageable pieces. Look at your life and the money you need to make to maintain it. For example, if you want to earn $2,100 in a month, you can break this down into 21 working days, so $100 a day. “When you get up in the morning, work until you meet that goal. Then you can either take the rest of the day off, work ahead, or pitch for new projects.”
Chaunie Brusie: Freelance veteran
Freelancing for six years with earnings $100,000 to $120,000 per year
Schedule: I start work at 5:30 am and work 40 hours per week around the schedules of my four children. I work on and off all day, spending pretty much every free moment writing, and I try to dedicate at least one full day to working while I have a babysitter. I very rarely have “set” hours.
Best part of the job: I can make significant income and still set my own schedule. I never miss field trips or school events, I go to the gym every day, and I have the freedom to go out to lunch with a friend or do whatever I want. I enjoy being my own boss and the backend of running my own business. I also genuinely love writing and find enormous satisfaction in being a storyteller. I also love how it encourages exploration. “I can write about going on a wine tour, for example, or take my kids to a new museum exhibit. It’s awesome when life overlaps with what works for me.”
Worst part of the job: How incredibly hard it can be to set boundaries for yourself. I only recently have started to cut back on work a bit after it started affecting me physically. I’ve literally been glued to my computer and phone for years and it’s not healthy! The isolation is also hard: I feel a lot like I am writing about life instead of actually living it.
Advice: Know what you’re willing to give up, because freelancing comes with a price. Are you willing to give up leisure time and TV shows? You’ll have to carve the time out from somewhere. On the flipside, set some rules for yourself so you don’t wind up working 24/7.
Do you want to try freelancing?
Whether you’re interested in freelancing as a side hustle or a full-blown career, it helps to set reasonable, actionable goals for yourself. Figure out what you want – whether it’s a cool byline at a big publication or a set dollar amount each month. From there, come up with a plan to achieve your goal.
We all want to save more money.
Perhaps you want to save up for a vacation, your retirement, or a down payment on a house. Or, maybe you want to pay off your debt or build an emergency fund. Regardless of your financial goals, it’s important to take advantage of different ways to save money.
Luckily, keeping track of your money and becoming a more savvy shopper has never been easier – thanks to technology. Before you know it, you’ll be saying goodbye to clipping coupons and hello to these 9 apps that will save you money. Read on to learn more.
If you’re paying full price at a retailer, you are definitely paying too much. Here’s the good news: saving money doesn’t mean you have to join every store’s customer loyalty program and be bombarded with emails and deals. Instead, RetailMeNot gathers all available coupons, promo codes, and other discounts for over 50,000 major retailers and restaurants, so you never have to pay full price. Just log onto RetailMeNot, search for offers at your favorite stores, and boom, you’ll get instant savings.
Switching to a Chime bank account means you’ll no longer have to pay bank fees. With Chime’s Save When You Get Paid feature, you’ll save even more money. Instead of realizing you have nothing left to save at the end of the month, you can direct Chime to set aside a percentage of your paycheck automatically. The app also makes it easy to track your saving goals and progress with minimal effort. And, you can also save money through Chime’s Save When I Spend program. Every purchase you make with your Chime debit card will automatically round up to the nearest dollar, and that round up amount will be deposited into your savings account. This is a great way to kickstart your savings goal without lifting a finger.
Another great way to save on shopping, travel, activities, and services is by signing up for deals through Groupon. When you sign up, Groupon will email you daily deals in your area with deep discounts if you purchase within a certain timeframe. Whether you want to try out a sweet new yoga studio with your friends, get a luxurious massage, or go for a quick weekend getaway – you can do it all for a fraction of the price.
A strong budget is the best way to get control of your money and save big bucks. Mint has long been a favorite budgeting app. It offers an easy-to-use interface and a comprehensive view of your money – right at your fingertips. Mint allows you to link all your accounts in one place, as well as track your spending by automatically grouping your purchases into categories. The app’s bright and easy-to-read pie charts make it simple to understand where your money is at all times. Mint even offers a suggested budget based on your income and spending habits. You can also get reminders when it’s time to pay bills or when your account gets too low for your comfort.
If you’re interested in investing but don’t have a clue where to start, Stash can help get you up to speed and invest like a pro in no time. You can choose between different investing options from “Slow and Steady” to “Roll with Buffet.” Still not sure which option is best for you? Tutorials can help you decide. Stash also has a feature that helps you project your investment gains based on how much you deposit each month and how aggressive your funds are.
Digit is a savings app that connects to your bank account and tracks your income and spending habits to determine where it can pluck out a few dollars here and there without you noticing. Digit will make small withdrawals based on your balance and purchases – and set it aside for saving. If you decide you need that money, you can always put it right back in your spending account.
Acorns is an investing app that links to your bank card and rounds up your purchases to the nearest dollar. This allows you to invest those leftover pennies into financial products like stocks and bonds. You can also set up recurring deposits into your Acorns account. Just think: even a small amount each month can add up to some serious savings and gains. With Acorns’ new Found Money feature, you’ll get even more money added to your account when you shop at certain partner companies including DirecTV, Apple, Expedia, Blue Apron and more. The feature works much like a cash-back rebate, but with the money going straight into your Acorns investing account.
If you’re looking for a quick way to save on gas, download the GasBuddy app to find the best gas station prices wherever you are. Even if you already know where to find the lowest gas prices in your town, GasBuddy is a great way to pocket extra pennies when you’re driving in an unfamiliar city or taking a road trip.
When it comes to a great rebate app, nothing beats Ibotta. You can search Ibotta for offers on items you want to buy, complete a brief “task” like take a poll or watch a short video, and then go shopping. Once you’ve uploaded your receipt to the Ibotta app, your rebate will automatically be put into your PayPal account or turned into gift cards of your choosing.
Other Ways To Save
If you don’t want to mess with a whole bunch of different apps on your phone, there are other ways to save as well. Check out our tips for more ways to save money (and time) here.