So You Think You’ll Owe Money This Tax Season?

For some Americans, tax season doesn’t mean a refund. If you expect to owe, you’re not alone. In 2017 about 25 percent of LendUp customers expected to owe money upon filing their taxes.

As of January 29, tax season is officially here. Remember, your last date to file is April 17.

So now that we have the dates out of the way, have you decided how you’ll file this year? Make sure to consider all of your potential costs, even if you don't plan to file until the end of tax season. That way you can try to put aside a little money each month to cover what you’ll owe and any preparation fees.

So let’s dive in -- here are five tips to help you get through tax season.

1 - Know How You’ll File (and take advantage of free options!)

There’s good news here! There are a number of free and low-cost options for getting your taxes prepared. And if you’re already expecting to owe money, every dollar counts. Below are a few options:

Credit Karma now offers free tax preparation -- no conditions!
File online for free at MyFreeTaxes.com, sponsored by the nationwide nonprofit United Way, and powered by H&R Block. Your household income must have been less than $66,000 in 2017 to qualify for the free service.
Use the IRS website’s Free File software if your household income was less than $66,000 in 2017.
You can also visit the IRS website to file if your household income was more than $66,000 in 2017, but you’ll need to know how to fill the forms out yourself (no free software available).
If your income was less than $54,000, you could qualify for free tax preparation (in-person, with electronic filing) at a Volunteer Income Tax Assistance (VITA) location. They also offer free tax prep for persons with disabilities and limited English speakers. Call 800-906-9887 or use the online tool to find a location near you.
If you’re over the age of 60, you may qualify for free tax help through Tax Counseling for the Elderly (TCE).

2 - Don’t Miss out on the Earned Income Tax Credit (EITC)

EITC is a benefit for working people with low to moderate income. Learn more about the program here, and use the handy EITC Assistant to see if you qualify. In addition, if you were affected by Hurricanes Irma or Maria, or Hurricane Harvey, you may be eligible for additional tax relief through EITC.

3 - Beware of Scams

Scams tend to increase during tax season. According to the IRS, thousands of people have lost millions of dollars due to tax scammers. Please keep in mind that the IRS will never initiate contact by email, text message, or social media to ask for personal or financial information. Read more tips to protect yourself (and check this out, too!).

4) Worried About Paying?

Paying a large chunk of your income at tax time can be a big hit to your budget. If you’ve prepared throughout the year for what you’ll owe, hopefully there won’t be any surprises. However, perhaps you had unexpected expenses and didn’t have the opportunity to set that money aside. If you are a qualified taxpayer, you could request a payment plan from the IRS.

You may qualify to apply for a long-term payment plan if you owe less than $50,000 or a short-term payment plan if you owe less than $100,000. Remember that if you’re a sole proprietor or independent contractor, you may apply as an individual.

5 - More Ways to Save

If you expect to owe, try to set aside some money each month for the anticipated amount that you’ll owe. Even if you’re not ready to file, you should be able to get an estimate from your preparer prior to submitting. And one of LendUp’s partners, SpringFour, could connect you to local cost savings. Enter your zip code to get started with SpringFour here. Groceries, utilities and prescriptions are just a few of the 26 categories available on SpringFour’s platform. And if you’d simply like to brush up on some savings tips, why not watch this video?

Learn more about LendUp’s products, including short-term loans, installment loans, credit cards, and financial education. If you expect to get a tax refund, read this.

Disclaimer: LendUp is not providing financial, legal or tax advice. If you need or want such advice, please consult a qualified advisor.

This Valentine's Day, Love Your Budget

I imagine if my budget was a person, it’d wish me a Happy Valentine’s Day, and quickly thank me for not going big and spending a lot of money this year. I’m not anti-Valentine’s Day or non-sentimental. In fact, I think we should always give thanks and show appreciation for the ones we love (whether that is your significant other, friends, family, or yourself). For me, this doesn’t mean spending a lot of money.

According to a National Retail Federation survey cited by Time Money, the country is divided about Valentine’s Day, with 55 percent of Americans choosing to celebrate it. The article also cites a Discover survey saying those who do celebrate the holiday spend an average of $146.84 each -- and young adults under the age of 35 plan to spend even more, averaging $185. That’s a big dent in anyone’s wallet.

The retail industry is certainly prepared for the holiday. If you’re at your local drugstore picking up some cold medicine, you’re likely going to see rows of candy and heart-adorned gifts. Stores want you to feel like you need to buy these things.

If you do plan on spending money for Valentine’s Day, it doesn’t hurt to consider less extravagant options, or at least watch out for the big budget breakers. For example, since many restaurants and suppliers of chocolate or flowers jack up their prices because of the holiday, you might want to consider these suggestions that are a bit more budget-friendly.

Wait a day before your purchase. If you thought about it for a day, would you still want it? Small impulse buys can add up, which is why it’s important to factor fun expenses (such as gifts or treats for yourself) into your budget. Knowing you have $25 for this expense can help you stick to that budget promise. Or, if you must buy assorted chocolates, why not celebrate a day late and get them at a discount?
Consider spending a night in. Whether you’re with a significant other or your best friends, consider cooking a meal together or hosting a potluck. It’ll cost a lot less than a prix-fixe Valentine’s “special” (and you may even have have leftovers).
Attend a free or low-cost event. Search for local events that won’t hurt your budget. For example, check out this website for the San Francisco Bay Area or this one for Houston, Texas. If you can’t find an event and the weather cooperates, think about doing something outdoors (like going on a hike and bringing a picnic) or checking out an iconic city destination that you haven’t been to in years (who says you can’t play tourist?).

As for me, I’m going to do two things I love: cook one of my favorite meals and watch one of my favorite movies. It’ll be an evening of eggplant parmigiana, “The Godfather,” and keeping my budget happy.

Disclaimer: LendUp is not providing financial, legal or tax advice. If you need or want such advice, please consult a qualified advisor.

Tax Tips: What to Do With Your Tax Refund

Tax season is now upon us. And if you’re among the many Americans who expect a tax refund, this can be a serious chunk of change. For many Americans, it can be the highest monthly income they’ll take home in the year.

The first date to file was January 29 and the last date to file is April 17. Below are five things to consider to get the biggest bang for your buck. The biggest trophy for your taxes? Okay, moving right along...

Tip 1: Consider all tax preparation options (including free ones!)

Before you file, have you considered all of your options? While many of us may prefer to go to a local tax preparer in our neighborhood, there are a number of free or low-cost preparers online. In addition, eligible tax filers could qualify for free tax preparation at a VITA location. Here are some options:

Credit Karma now offers free tax preparation -- no conditions!
File online for free at MyFreeTaxes.com, sponsored by the nationwide nonprofit United Way and powered by H&R Block. Your household income must have been less than $66,000 in 2017 to qualify for the free service.
Use the IRS website’s Free File software if your household income was less than $66,000 in 2017.
You can also visit the IRS website to file if your household income was more than $66,000 in 2017, but you’ll need to know how to fill the forms out yourself (no free software available).
If your income was less than $54,000, you could qualify for free tax preparation (in-person, with electronic filing) at a Volunteer Income Tax Assistance (VITA) location. They also offer free tax prep for persons with disabilities and limited English speakers. Call 800-906-9887 or use the online tool to find a location near you.
If you’re over the age of 60, you may qualify for free tax help through Tax Counseling for the Elderly (TCE).

Tip 2: Have a plan for your refund

We know it can be tempting to use your tax refund to buy something you’ve been eyeing, or to take yourself out to dinner. But before you do, think about your long-term financial health. This could be your opportunity to:

Minimize or pay off debt: First, attack past-due balances. What credit cards or loans have you been waiting to pay off? Holding balances on cards and loans not only costs you significantly more money in the long term, but it hurts your credit score. After you pay off past-due balances, take care of high-interest debt and other balances. You’ll thank yourself down the road when you’re debt-free, or closer to it!
Save for a rainy day: The IRS makes stashing away your refund easy. Use Form 8888 when you file, which lets you request that a portion of your tax refund be directly deposited into a savings account, certificate of deposit, IRA, prepaid card, savings bond, or Treasury Direct account. Save as little as $50 and you could enter for a chance to win cash. Two nonprofits, America Saves and Commonwealth, teamed up to launch a contest called SaveYourRefund. Tax filers over the age of 18 who use Form 8888 can enter for a chance to win cash prizes.
Contribute to other financial goals: Do you have a goal to buy a house or a car? Are you thinking about tuition for your education, or perhaps a child’s? Why not take some of that refund and put it towards one of those financial goals? And if you’re looking for even more ways to contribute to your financial goals, you may want to see if you’re missing out on local savings in your community. Get started with SpringFour, LendUp’s partner that can help you find ways to cut costs on groceries, utilities, prescriptions, and more.

Tip 3: Know if you qualify for the Earned Income Tax Credit (EITC)

Tip 4: Beware of scams

Scammers come out in full force during tax season. According to the IRS, thousands of people have lost millions of dollars due to tax scammers. Know how to protect yourself! Keep in mind that the IRS will never initiate contact by email, text message, or social media to ask for personal or financial information. Read more tips to protect yourself (and check this out, too!).

Tip 5: Check the status of your refund

Finally, the IRS advises you to be careful not to expect your refund on a certain date. Don’t plan a major purchase or balance other financial commitments around any specific date for your refund. If you’d like an estimate of when you can expect your money, you can check your refund status.

Learn more about LendUp’s products, including short-term loans, installment loans, credit cards, and financial education. If you think you might owe money for your taxes this year, read this.

Disclaimer: LendUp is not providing financial, legal or tax advice. If you need or want such advice, please consult a qualified advisor.

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