Borrowing Your Own Money by Jason Holland

Walk in with your W-2 and walk out minutes later with your tax refund. This service is available from many tax preparation companies. It may sound too good to be true. That’s because it is.

That speedy refund is costing you big time. You see, it’s not really your tax refund. You are actually borrowing your own money and paying interest on it. It’s called the refund anticipation loan (RAL).

RALs are trotted out every year by tax preparers like H&R Block and Jackson Hewitt. These companies front you the money you expect to get back from the IRS. Then you don’t have to suffer through the one- or two-week wait if you file online directly with the IRS.

In exchange for your rapid refund, you pay significant up-front interest charges. Those charges can eat away as much 10 percent of your total refund, according to a Georgetown University study. On top of that, you pay fees for the privilege of having a temp fill out your tax return and file it with the IRS. If you choose to have your loan deposited directly in your back account, that’s another fee. Put the loan on a debit card? Another fee, plus usage fees.

RALs are perfect for the impatient and the broke. Low-income earners make up the biggest part of this market. And it’s no surprise that college students are targeted heavily in ads for this "service." People turn to tax prep companies when they don’t understand IRS forms. They often don’t realize they are signing up for a loan, let alone that they are paying huge fees.

If you have a complicated financial situation, you should probably contact a CPA. Otherwise, there are plenty of helpful free resources available in your community and online. Then you can file your own return, at no charge, with the IRS at IRS.gov, with either eFile or Free File. You’ll have your refund in your bank account in as little as a week.

Two tax prep resources to look into are:

* Volunteer Income Tax Assistance: Call 1-800-TAX-1040 or go to tax-coalition.org to find trained volunteers in your area.

* AARP’s Tax-Aide program for seniors: Go to aarp.org/money/taxaide/.

This article appears courtesy of Early To Rise, the Internet’s most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com.

Helpful Tips for Tax Time (Part 2) by Dave Ramsey

I Got A Refund! Instead of thinking this money - whether it's $300 or $3,000 - is a gift from the government to send you to the Bahamas or to get a brand-new spring wardrobe, think about it differently this year. Even though nice trips and new clothes are great, only consider stuff like that AFTER you've taken care of these necessities first:

• Build up your emergency fund. If you don't already have $1,000 in the bank, stash that away as fast as possible. It's important! Life is going to happen, and you need to be ready for your own sake. Don't let Murphy catch you off guard and put you further in debt. If you are already debt free (except for the house), throw this extra money toward building up your full emergency fund of 3-6 months of expenses.

• Attack your debt snowball. If you already have your $1,000 emergency fund, attack your debt snowball with gazelle intensity. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs. In that case, list the higher interest rate debt first. Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan.

• Invest it! Only after you are out of debt and have your full emergency fund saved should you consider investing your refund. Remember that if you are under 50 years of age, you can contribute up to $4,000 per year into a Roth IRA ($5,000 for over age 50). This is money that grows tax-free! If you're already contributing 15% or more into your own accounts, use this money toward your child's college funding.

• Pay off your home. Did you know that you aren't destined to have a house payment for the rest of your life? Yeah, it may sound crazy, but I'm telling you the truth! Once you've completed Baby Steps 1-6, it's time to own your home 100%. Maybe your refund is a whole house payment or two...or three. If you put your refund toward this, you are that much closer to owning your home - possibly months earlier than you originally expected. Now wouldn't that feel awesome?! Just think what life would be like with NO PAYMENTS!

It's time to think differently this year about this extra money! Remember...Debt is normal. BE WEIRD!

Dave Ramsey is a personal money management expert, an extremely popular national radio personality and best-selling author of The Total Money Makeover. Dave is changing the face of America by helping people get out of debt and build wealth. Ramsey exemplifies his life's work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others.

Helpful Tips for Tax Time (Part 1) by Dave Ramsey

I have to pay! When you realized you weren't getting a refund this year, you probably didn't jump for joy, did you? Bet you didn't. None of us are thrilled about sending our hard-earned money away. Even though you have to send money to the IRS this year, it's not the end of the world, even if you're already living on a super-tight budget. Even if you've already sent in your check, here are some things to keep in mind:

• Revisit the budget. See where you can squeeze a little bit of cash out of certain categories in your budget - all the little amounts from various places add up! Try your absolute hardest to resist using money from your emergency fund. How about pulling a little out of your clothing, entertainment, or vacation funds? Get free budgeting forms.

• Clean out the house. It's that time of year again where people are always looking for a treasure in someone else's junk. It's nothing but a win-win situation: you get rid of clutter in your garage/attic/shed AND make extra cash while others walk away with bargains.

• Pizza, anyone? Pick up a part-time job for a short period of time. Delivering pizzas is a fabulous idea - and it's great for attacking your debt snowball like crazy, too!

• Here comes the Debt Snowball! If you absolutely can't write a one-time check to the IRS, put this payment in your debt snowball. Just remember that you will have to pay interest just like most other bills you are attacking in your snowball.

Don't stress about sending in the check. By following the above tips, you'll be back on track with the Baby Steps in no time!

Dave Ramsey is a personal money management expert, an extremely popular national radio personality and best-selling author of The Total Money Makeover. Dave is changing the face of America by helping people get out of debt and build wealth. Ramsey exemplifies his life's work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others.

Taxes Are Done!

This past Monday was a holiday for me (President’s Day) so I worked a few hours on my Federal and State taxes and got them e-filed. I’ll be getting small refunds from our friendly Federal and State governments. In April I’ll pay about half of the refunds back to the city of Xenia and the Xenia school district. Oh well, easy come, easy go!

Wednesday evening our family participated in house church and had a good discussion around James 1.

Thursday my 16-year old son interviewed with Walgreen’s and came away with a new part time job. Next week he’ll be starting there as a service clerk a couple of days each week. Ah, the hurdles of growing up!

My time in Scripture this week produced the following thoughts:

• Jesus was baptized, called some disciples, began teaching and healing, went to a solitary place to pray, which are all good examples for us (Mark 1)
• Folly is undisciplined and without knowledge (Proverbs 9:13)
• Jesus was associated with sinners…they were/are the ones who need him. Jesus was angry and distressed about people with stubborn hearts (Mark 2)
• Laziness makes poor, diligence brings wealth (Proverbs 10:4)
• In Mark 4 we read the story of the farmer sowing seed, some seed the birds ate, some seed fell on rocky soil, some seed grew among thorns and eventually were choked out, and some seed landed in good soil and produced a harvest
• Some people are seeing but not perceiving, some people are hearing but not understanding (Mark 4:12)
• Leviticus is just so full of rules and regulations; thank God we’re not under that system!
• People were amazed at the wisdom of Jesus; he was amazed at their lack of faith (Mark 6)
• You rebuke and discipline men for their sin; you consume their wealth like a moth – each man is but a breath (Ps 39:11)
  

How are you progressing on your 2007 taxes?

The 11 Most Overlooked Tax Deductions

Speaking from experience, TurboTax helps find tax deductions you may have overlooked.

Every year, the IRS dutifully reports the most common blunders taxpayers make on their returns. And every year, at or near the top of the list, is forgetting to enter a Social Security number or making a mistake when entering the nine digits that identify us to IRS computers.

Yes, friends, tax time is here and it can be a dangerous time. It’s all too easy to miss a trick and pay too much. Years ago, the head of the IRS told Kiplinger’s Personal Finance magazine that he figured millions of taxpayers overpaid their taxes every year by overlooking just one of the money-savers listed in this article on the 11 most overlooked tax deductions.