The Diary of a Budgeter – Day 14

Bobbi Olson Articles, The Diary of a Budgeter

Tax time!

Call me crazy, but this is one of my favorite times of the year! I get to do my taxes and find out how much Uncle Sam owes me!

I know – getting a refund means you’re giving the IRS an interest free loan all year long. But it stresses me out to get more money all year long and worry about owing on April 15th, so for my sanity, I’d rather have the refund. Don’t get me wrong, if I was having trouble paying the light bill, I’d make some changes, but that’s not my situation.

Because I look forward to tax time, I can’t wait until January 31st – the deadline for most tax forms – certainly all I need to file. Your situation may be different. Click here for a list of forms & deadlines.

I used to believe the old adage that tax breaks are only for the rich. Not anymore! I’ve found a bunch that are only for low to moderate income – and they’ve helped me a ton! Learning about these tax breaks is what transitioned me from thinking of taxes as boring to something exciting that I want to learn more about!

Turns out, one of the best ways to save money is to reduce your tax burden! My favorite tax breaks also help me with day-to-day medical costs and saving for retirement.

  1. Health Savings Account (HSA) – I started using this when my hubby, Scott had to have a major surgery and we were not prepared for the out-of-pocket expenses we knew we’d have to pay. Thankfully, the HSA allowed me to contribute pre-tax money that I could use right away to pay for medical expenses not covered by insurance. And since it was pre-tax money, I was able to change my withholdings to balance out my paycheck – I could still contribute enough to cover the expenses, without lowering the amount of my paycheck.

Now that the surgery is behind us, I still contribute to the HSA, so we always have money for medical expenses, without having to budget for it, from my paycheck.

  1. 401K – It took me years to understand the importance of saving/investing for retirement. I always told myself I didn’t have the money. When I finally started contributing, I still didn’t have the money, so I changed my withholdings again, and began contributing. It wasn’t much, but I was again able to contribute without changing the amount of my paycheck – and still not owing Uncle Sam!

But wait, there’s more!
Check out some other tax breaks for the not-so-rich
Find even more here!

The truth is, we don’t have to be rich to get tax breaks!
We just have to educate ourselves and find out what’s available!

It’s your money – keep more of it!

Did I miss some tax breaks for the not-so-rich? Let me know! bobbi@centsablechat.com

UPDATE! On January 15, the IRS announced the start of tax filing season will be delayed until February 12.
Bad news, for those of us who want an early refund! But if you use Turbo Tax, don’t delay your purchase of the 2020 software! Click here to get 40% off until January 18!

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