10 Things You Could Do with Your Refund

1. Pay down your credit card debt.

2. Pay down a student loan with a high interest rate.

3. Invest it.

4. Buy something you really want.

5. Withdraw it as cash and toss it around your room like McScrooge, yelling “I make it rain.”

6. Nothing.

7. Give it away to the first homeless person you see.

8. Use it as wallpaper.

9. Give it to your parents as an apology.

10. Give it back to the government.


IDK Wednesday: April 15th

Hey, yo, buddies!

So, Monday I gave you a short list on how to do your taxes. Here’s a few questions that you may have and an opportunity to ask me for help!

1. Don’t forget to find you 1098-T (your school should have sent you one, if they didn’t call and ask for one to be mailed) if you were a student in 2012. This form tells you how much the school gave you in scholarships/grants and how much you paid them out of pocket–not with loans! Your loans aren’t taxable, don’t worry. Some of your grants/scholarships may be. For instance, if you paid for housing with scholarship money, that’s technically taxable.

2. If you have a kid and didn’t make a bunch of money, you may qualify for the Earned Income Tax Credit. Credit means they give you money as an apology for your hard life.

3. If you had any medical bills that you had to pay out of pocket, add that up. It’s a deductible. Win.

Have more in-depth questions? Send ’em in!

Death and Taxes

It’s February. Which means you’ve probably already received all the paperwork you need to possess in order to file your 2012 taxes (that is, if you’re filing your own, which, if your parents are declaring you a dependent, you don’t).

Now, this may seem daunting. Because of the media, a lot of us feel like this when it comes to anything the IRS does:

But really, there are only a few situations that the evil taxmen we make the IRS out to be are really jerks and those don’t really apply to young without money people. My adjusted gross income for 2012 was, like, $8000. The IRS couldn’t try to care less about me. They have no more tries to give.

So, what to do? You parents aren’t declaring you a dependent since you’ve been out in the wide world on your own for half of 2012, or for more… now what? Do you take those weird forms you’ve gotten from your three jobs and take them to H&R Block because they have the friendliest commercials? You certainly can. And no one would judge you. You’ll pay a fee ($30-200 depending on your income, the forms filed and fee schedules) and your taxes will be filed and you’re finished thinking about it for the whole year!

Or you can do them yourself. Fo FREEEEEE. It’s actually NOT THAT DIFFICULT, as long as you made under $57,000 in 2012. If you made more than that, I’m not really sure why you’re reading a blog for poor people. Weird.

Anyways, here’s a simple, non-invasive, non-inclusive guide to doing your own taxes:

1. Gather ALL THOSE FORMS, BRO. W2s for all your jobs, 1098-Ts from your school(s) that show how much you paid them while in school (you’ll only have one of these if you’re in or just graduated from school), log on to all the accounts you have for student loans and download the forms that show how much interest you’ve paid, do the same for any investment and retirement accounts you have.

2. Look at said forms. You see how there are boxes on all these forms that have numbers in them? Well, basically, when you fill out your taxes, you’ll just transpose these numbers into the correct box on your taxes. And the IRS has realized that the easiest way to do this is to tell us: How much money did you make in wages, tips, etc? You don’t know? It’s box number 1 on your W2. The WHOLE 1040 form (read: your tax return) is like this, so if you’re freakin’ out, chill out. You’ll probably fill out a 1040 EZ and maybe a Schedule A for deductions. Your service will auto-pick for you based on the info you give it. Nice. (Note: if you live somewhere that isn’t Texas, you may be subject to a State Income Tax. Boo.)

3. Decide which service you want to use. There is a whole list of free online tax services (including H&R Block) that are offered to you so you can fill out your tax return. And they’re all super easy to follow and tell you where to put what numbers. If you successfully passed the SAT, you’ll be able to do your taxes.

4. Follow all instructions on the form of whatever service you’ve chosen. They’ve already figured out what questions you may have and will provide answers for those questions. Like, do I have deductions above the standard deductions? And if so, what are they and how much? Take a deep breath; as long as you aren’t crazy super special and qualify for the weird stuff that shows up on the form (like the Railroad Assistance deduction, or you own a farm…) you’ll mostly be checking off a lot of “No” boxes and filling in boxes with information you already have.

5. Finish your return and turn it in. And stop worrying about it. You’ve filled in all the boxes. It’s all over. And if you messed up, no one will notice or audit you because you’re so poor. Also, if you messed up, they’ll just laugh at you and make you fill out an adjustment form, which you can have a pro do.

A couple things to note:

1. If you made extra money by babysitting or whatever, you don’t actually have to declare it unless you made more than $400 doing it. In which case, you’ll need a 1099 Misc form and the people who paid you will need to declare paying you. This really only happens for people that freelance. Use the 1099 like a W2. No biggie.

2. Find out if you qualify for the Earned Tax Credit at your job. It’s a deduction that gives you more money in your return.

3. If you paid for some schoolin’ in 2012, make sure you use one of the Education Credits so you can get more money in your return. There’s an option that lets your service calculate which will get you more money. Do that.

4. If you paid any medical bills that your insurance didn’t cover, THAT’S A DEDUCTION. Find your bills and calculate how much you paid out of pocket and how many miles you drove to the doctor. You’ll get money back. Which is the best medicine.

5. Did you donate money or goods to anyone/where? Hopefully they gave you a thank you letter– this money is a deductible as well. It’s only really helpful if you gave over $500, though.

6. Investments/retirement accounts. Make sure to include the info on forms given to you by your work and the ones you oversee yourself. Follow it to the tee. The government will not like you if you made money investing that you don’t pay taxes on. Which sounds strange, seeing how billionaires do that kind of stuff all the time, but you don’t make enough (probs) to qualify for the cuts they do. Sad day.

7. If you have any questions, you can always look it up on the good ol’ Publication 17, the IRS’s guide to tax returns, call the service you’re using or ask me!

If for some sucky reason you end up owing the government (instead of them owing you and paying you back in a refund), then pay them. At the end of the form, there are payback options. Choose the one that you like best– pay it all at once, once every quarter, take it out of your refund… whatever. Just make sure you NEVER OWE THE GOVERNMENT. They don’t like that. They’ll take stuff from you. No fun.

That’s it, in the simplest terms. If you made lots of money or have weird financial circumstances, you may want to consider having a pro do it once and showing you page by page how to do it so you can do it on your own next year.

Good luck!