frugal tips

Should You Be Paying To File Your Taxes

April 9, 2021 By Kathryn Vercillo Leave a Comment

Should you be paying to file your taxes? After all, there are options out there that allow you to file for free. Why would you pay to file when you can use those options? It really just depends on your finances and your filing preferences. There are pros and cons to both free and paid tax filing options.

Free Tax Filing Options

The easiest way to avoid paying to file taxes is to use the IRS Free File website. You’ll discover that there are two options there for free filing, depending upon your income. If you earned less than $72,000 in 2020 then you can use a free online tax filing tool that works in partnership with the IRS.

This allows for free guided tax preparation. The tool does all of the math for you. And in some cases your state taxes will be free to file as well.

If you earned more than $72,000, though, then you can’t use this free online tax filing tool. However, that doesn’t mean you’re stuck paying to file taxes. Instead, it simply means that you’ll hav to do the work manually. You always have the option, at any income level, to use the available IRS tax forms, do the math yourself, and submit them to the IRS without paying any fee.

Why Paying to File Taxes Online May Make Sense

If you earned less than $72,000 then you have full access to the tools that make it easy to file taxes online for free. However, taxes are complicated. If your only free option is to use those forms and do the numbers yourself, then you may find that it’s worth paying to file taxes. You can use similar tools, as well as ones that are even more advanced, to simplify preparing and filing your taxes online.

If you’ve always paid for a certain service, then you might simply find it more convenient to do so. For example, I personally use TurboTax to file my taxes. (This isn’t a sponsored post; it just happens to be the tool I use.) This year, I made less than $72,000. Therefore, I could have used the free filing option. However, TurboTax already has all of my previous years’ information stored in their system. So, for convenience sake, I went ahead and used their online software again.

Should I have done that? The frugal answer is no. It probably wouldn’t have been that much more inconvenient to file with the free online tool. But I wanted to save the time and do what I know. For me, taxes are a stressor, and getting them done in the way most familiar to me was worth it. However, if I wanted to save the maximum amount of money, then I would have used the free tool.

When Your Taxes Are Complicated

It isn’t just that Turbo Tax had my information stored. It’s that my information is complicated. As aforementioned, Turbo Tax actually does have a free version. However, I can’t use that one because my taxes aren’t simple. I’m an independent contract freelance writer. I had over a dozen different businesses that paid me in 2020, including some that are just royalty payments. Plus I received a variety of grants and other assistance. This isn’t simple. And when taxes aren’t simple, sometimes paying to file taxes makes a lot more sense than spending hours and hours just trying to figure out the right forms to use to file, let alone filling those forms out correctly.

Hiring Someone to Do Taxes

In addition to online filing options, you also have the option to have someone else do your taxes. Who you hire depends on the complexity of your tax situation. You might go to a service like HR Block that does basic taxes for you. Alternatively, you might have a professional tax attorney or accountant who assists you in filing your taxes.

Is it worth it – paying to file taxes by having someone else complete them for you? If your taxes are complicated then it very well might be. After all, you don’t want to get audited. (Or if that happens, then you want that professional behind you to navigate that process.) You want to do your taxes correctly while also getting as much of a refund as possible. Therefore, if your taxes are complicated, then you might find it worth it to hire a professional to do them.

Examples of more complicated tax situations where you might want to hire a professional:

Self-employment especially if you run a business with additional employees and/or contractors
A lot of your money is tied up in different types of investments, especially if cryptocurrency is involved
You sold a large item like a house or expensive vehicle so you have capital gains/ losses
You have a lot of different deductions, potential credits, etc.
A complicated family situation makes your taxes complicated

So, is it worth paying to file taxes? It really just depends on how complicated your taxes are and how comfortable you are doing them. If you have complicated taxes, it could cost you more in the end if you do them wrong yourself than it would if you just hired someone or used advanced tax filing software instead.

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Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

10 Universal (and Frugal) Household Products to Own

August 6, 2015 By Will Lipovsky Leave a Comment

This list covers the 10 household products everyone should have on hand. They are cheap. They are versatile. They are useful. They are the must-have’s:

1. Hydrogen Peroxide

Many people have a bottle of hydrogen peroxide in their medicine cabinet in case they need to disinfect a cut or scratch. But hydrogen peroxide can also be used to sanitize surfaces, clean grout from your tiles or shower, and it can also act as a stain remover. If your bottle of hydrogen peroxide is sitting in the back of your cabinet gathering dust, try using it for a different purpose. Hydrogen peroxide is cheap to start with but it becomes even cheaper if you actually use the bottle without it expiring. 🙂

2. Shampoo

Do you have piles of those small hotel shampoo bottles stored away in a cabinet or drawer somewhere? Or do you end up throwing out your shampoo bottle when there’s nothing more than a couple ounces of shampoo left? Instead of getting rid of that shampoo, you can use it for a couple other purposes. Shampoo or conditioner is a great alternative to shaving cream, for instance. If your cuticles are in desperate need of softening, adding a little shampoo to a bowl of warm water will soften them right up. A tiny drop of shampoo also works wonders if you’re trying to remove an adhesive bandage as well.

3. Distilled Vinegar

Did you know that distilled vinegar can be used for more than just cooking? If you own pets, vinegar can be used to give your dog a gorgeous shiny coat. Create a solution that is 1 cup of white distilled vinegar and 1 quart water and spray or rub your pet’s coat with the mixture. It’ll save you a lot of money on fancy shampoos that promises to make your pets fur look nice and shiny. Additionally, vinegar is also good for getting rid of cat litter odor (just swish some around in the empty litter box). Vinegar also helps rid the smell of skunk if you or your pet has been sprayed.

Suggested reading: 5 Ways to Make Money if You Love Pets

4. Baking Soda

Baking soda also has many crazy uses. If you make a paste of three parts baking soda and one part water, you’ll have a great skin cream that’s cheaper than any store exfoliating cream. Additionally, baking soda can also be used to unclog drains as well as your pores. This will save you from having to call the plumber or spend money on expensive drain cleaner.

5. Plastic Bags

Do you have an overflowing collection of plastic bags? Sometimes it seems like every pharmacy, deli, convenience store, or grocery store hands them out. But plastic bags are one of the easiest everyday products to find a second use for. For instance, if you have a small trashcan in your bathroom or bedroom, don’t waste money by buying trash bags. Instead, use the plastic bags as impromptu trash bags. Plastic bags are also great to use as packing materials if you need to fill up space in a package.

6. Popsicle Sticks

If you eat a lot of popsicles, don’t throw away the sticks. While popsicle sticks are usually either thrown away or reused for craft projects, they can live on. If you’re planning on painting your house, popsicle sticks act as great paint stirrers. If you have a garden, popsicle sticks are also an easy way to mark your plants or keep them from slumping over in the wind.

7. Yogurt Cups

You might not think that yogurt cups can be reused in very many ways, but that’s definitely not true. For instance, you can use the empty cup as a place to start growing seeds. After you poke a couple of holes in the bottom, add in potting soil and the seeds. Once the seeds start to sprout, transplant them into a larger pot or the ground. Another great use for yogurt cups is using them to catch paint drips. If you’re painting, yogurt cups can also be used to hold small amounts of paint. Most yogurt cups are insanely sturdy.

Suggested reading: Is inexpensive food making you fat?

8. Aluminum Foil

Did you know that if you rub aluminum foil along rust spots, you can eliminate the rust? Aluminum foil can also help sharpen dulled scissors. All you need to do is fold a sheet of aluminum foil over a couple of times and cut through it with the scissors. However, aluminum foil is gentle enough that it can be used to polish chrome!

9. Newspaper or Magazines

If you still subscribe to the newspaper or certain magazines, old issues can come in very handing. Not only do they make good packing material, they can also be used as fire starters. If you’re painting certain areas of your house, you can also use the paper or magazine pages to cover areas you don’t want to ruin. Just don’t get distracted and start reading them instead of working.

10. Olive Oil

Olive oil is sometimes used by people as an alternative to shaving cream. Some people also make their own furniture polish by combining two parts olive oil with one part lemon juice or distilled vinegar.

Final Thoughts

How few products can you get by using? I only have about 10 in my entire house! It’s all about buying universal products to keep costs down!

Start a Money Club: Fun Money Friday

July 5, 2013 By Jennifer Derrick 2 Comments

Saving, investing, and educating yourself about finance can be lonely and boring if you go it alone. Unfortunately, too many people try to tackle money issues without support and end up giving up because they’re bored or because they aren’t getting any validation for their efforts. Sure, if you’re an introvert you may prefer to go it alone, but even then a little interaction with like-minded people can be fun and lead to new discoveries. If you want to share your journey with other people, you can start (or join) a money club.

Starting a club about money doesn’t have to be a big deal. You don’t need officers or rules. All you need is a group of willing people and someplace to meet. You can start by recruiting people you know. People from church, coworkers, neighbors, friends, members of other social groups, and family members all make prospective members. You can just casually mention that you’d like to start meeting to trade ideas and resources about investing, retirement, frugality, debt reduction, or whatever other topics interest you. Chances are that you’ll find more people than you think who are also looking for support and inspiration.

If you want to branch out and make a bigger club, you can post the details of your club at the local library, in the local newspaper, at the local community college, or on a site like Meetup.com. If you look around your area, you may also find an existing club that you’d like to join, saving you the hassle of creating one from scratch.

If you’re starting a club from scratch, you’ll need meeting space. You want this to be free of charge, if possible. Libraries often offer meeting space, and they may also help you spread the word about your group. You may also be able to use a classroom after school hours or a room in a church. Coffee shops and casual restaurants can work for smaller groups. They may be happy if you buy a drink, but most don’t require it. You can also use your house, or the houses of your group members, but if you’re recruiting people you don’t know through the library, newspaper, or websites, make sure you have your meetings in public places, at least at first. You don’t want total strangers coming to your home.

Once you’ve got some people and a space, you can let the conversation rip. If you want to stick to one topic that’s fine, although many great ideas are found when the conversation ranges over the course of the evening. You can share success stories and problems, discuss articles you saw online or in a magazine, talk about something you heard from an advisor, or swap recipes and frugal tips. You can also have an occasional book club month where everyone reads the same finance book and discusses it. Just be sure to listen as well as talk. No one likes a group member who monopolizes the conversation and makes it all about themselves and their problems.

A money club doesn’t have to be serious or dull. If your venue allows for food, you can arrange potluck dinners or have members sign up to provide refreshments on a rotating basis. You can occasionally play games related to money, or watch a movie/documentary about money. You can celebrate birthdays and holidays, all while you discuss the financial topics you want to learn about. Occasionally, you can just shelve the money talk and do something fun like plan a group outing to the park or a free concert.

A club can give you support and friendship that might make those hard financial days seem a bit easier. And you get to capitalize on the knowledge of those who might know more than you or have great ideas that you never thought of. At the very least, it’s a chance to get out and make some new friends and have a little fun.

(Photo courtesy of snickclunk)