Tackle Tax Season

Tax season is upon us and at P1FCU, we’re ready to help make it as simple as possible. Over the past several years, the average federal tax refund has amounted to nearly $3,000 – which is quite a bit of money! It’s never too early to start thinking about how you’ll use your refund this year, and we are here to provide a few pointers.

1. Pay Down Debt

It’s not glamorous or fun by any means, but cutting down on your debt is one of the best decisions you can make. Large outstanding balances can affect your credit score in a negative way, making it more difficult to qualify for the best rates. Consider paying off balances with the highest interest rates first.

2. Save for Emergencies

Rather than dipping into 401k accounts when emergencies strike, we suggest building a “rainy day” fund. Ideally, you should save three to six months of living expenses in a readily accessible account. Because you would need to access the funds when you least expect it, it’s best not to have it tied up where a withdraw could earn penalties.

3. Focus on Needs

It can be incredibly tempting to receive your refund and splurge, but consider using at least some of the funds on what may provide long-term value. Consider where you see yourself in five years and plan to use those funds to reach your goals.

Tax day is April 17^th this year so mark your calendars and plan ahead! If you are paying a company or individual to complete your taxes, make sure you collect all the necessary documentation in plenty of time. If you’re utilizing a service such as TurboTax, be sure to file as soon as possible – the IRS does notice if you don’t submit your returns! Because of all the fraud that occurred last year, the IRS is partnering with agencies to help eliminate fake tax returns. These will just be added security measures such as more complex password requirements and additional security questions, and shouldn’t complicate your filing process. Don’t forget that we’ve partnered with TurboTax to help you save money when filing – check it out here!