The not-so-happy crossroads of tax refunds and ID theft - FWS012

Most believe a big tax refund is a good thing, but what if you could use your refund during the year instead of getting it in April?

A refund is simply this: Individuals sending more money to the government than they have to and the overage is returned in the form of a tax refund.

While that money is sitting in government coffers, you are not able to use it for investing, debt repayment, car repairs or the grocery bill. It is an interest-free loan to the government.

Example: You have a car payment with an interest rate of 3 percent or credit card at 18.99 percent, yet you are receiving a $1,200 tax refund. Would your finances be improved by bringing home an additional $100 a month and use it to pay down the higher-interest debt?

The not so happy crossroads of tax refunds and identity theft

Identity theft has been on the rise for many years. Last year, an influx of fraudulent tax returns were filed and your tax refund could be sent to somebody else. It takes many, many months for the problem to be sorted out and your refund returned to you.

This is yet another reason why we recommend you follow these three steps:

Estimate your tax liability before the year begins

Adjust your withholdings

Re-assess your situation every quarter

Consult with a Financial Wellness Coach, CPA, or tax professional for help

Learn more about our services and how we can match you up with the right coach for you, visit http://FinancialWellnessShow.com/Coaches

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