This Week In Your Wallet: How To File Taxes For Free
We’re past the halfway point of January, and that doesn’t only mean that about one-third of people have already abandoned their New Year’s resolutions. It also means we’ve got less than a week until tax filing season begins (Monday, January 29).
Before you groan (inwardly or outwardly), you should know there are concrete benefits to filing early, including faster access to refunds and safeguarding yourself against tax fraud. I wrote about how to gauge how much tax prep help you really need in a new piece for The Balance.
If you’ve got a simple return — like one or more W-2 forms, some savings account interest and/or the standard deduction — it’s relatively simple to file for free yourself. Your options include the IRS’ Free File tool, which is available to those who make less than $66,000 adjusted gross income a year. Credit Karma Tax is a free filing service with a 24-hour live chat and no income limit (the company does acknowledge using your information to send you offers from their partners, so keep that in mind before signing up). H&R Block More Zero is also free with a live chat, and you’ve got even more options in TurboTax Absolute Zero and TaxAct Free. (For these free-file software options, anyone filing a 1040EZ or 1040A form is usually eligible — which usually means people who make less than $100,000 a year and don’t itemize their deductions.) If you’d prefer in-person filing help, try the AARP Foundation Tax-Aide (free tax prep help to anyone in over 5,000 locations, regardless of AARP membership status).
If your tax situation is a little more complicated (for example, you itemize your deductions or are self-employed with minimal expenses), most of these companies offer a “deluxe” or “plus” version of at-home tax filing software. They’ll set you back between about $20 and $60 depending on which one you choose, but they’re usually much cheaper than in-office prep. (For example, outside of H&R Block’s free options, tax return prep costs average around $220.)
If you’re a small business owner or partner, rent out property, have significant investment income, had a qualifying event (like selling a home) this year or otherwise have a complicated financial life, you might want to seek out some extra tax help. It’s possible to keep the price low if you’re comfortable filing online. Some tax software companies offer self-employed filing services (H&R Block’s costs $74.99, and TurboTax’s is $89.99). The latter also recently introduced TurboTax Live, which costs $149.99 and allows users to one-way video chat with a tax prep expert or registered agent.
401(Yay)
The number of employers choosing to fund contributions to their employees’ 401(k) plans has jumped nearly 30 percent since 2013 according to data from Ascensus, an independent retirement/college savings service provider. Why the steep climb? It’s in part due to the rosy economic outlook, says Geno Cufone, senior vice president of retirement administration at Ascensus. Many employers reduced or eliminated matching contributions in 2008 due to the financial crisis — or eliminated them altogether — but in 2013, as their financial prospects brightened, they began bringing them back. Companies are also doing it to court millennials who have high expectations of their employers — and their benefits packages. (It’s the same reason you’re now seeing some companies offer to help repay student loans.)
That’s all well and good, but there are still many people who aren’t making the most of their 401(k)s, grabbing all matching dollars, investing the money appropriately and rebalancing regularly. With the markets on an undeniable roll, I’m particularly concerned about the last item on this list. If you’re not putting all of your money into a target-date retirement fund but instead choosing your own mix of investments, the rise in equities has likely thrown your asset allocation out of whack. Whether you set out to hold 60 percent stocks or 40 percent stocks, the jump in stock prices means that percentage is likely higher now than it was a year ago. If so, it’s time to fix your mix by selling stocks or stock funds and plowing the money back into bonds and other assets that haven’t performed as well.
The Latest Resume Booster? Grit
Hunting for a new job? Then you should know that some employers are focusing on grit during the hiring process instead of (or in addition to) more traditional resume boosters. But what is it? The word “grit” is thrown around a lot — it refers to resilience, perseverance, creativity and problem-solving — but in a new Fortune piece, Ellen McGirt reframes it. “Think of grit less as an antidote to a hard-knock life and more as an ongoing quest to master life complexity — an experience all of us share,” she writes. “When recognition of that complexity shapes hiring, it opens transformative opportunities to people from groups underrepresented in top professions: ethnic minorities, stay-at-home parents, working-class kids, veterans. And in a world locked in a tight global battle for talent, it helps companies find people who are resilient and creative in the face of obstacles.”
So how do you grow your own grit? The Week has five research-backed ways to do just that, including finding purpose in your work (and consistently practicing growing related skills). Ask for feedback (especially constructive criticism) from friends and colleagues you trust, and spend time working on your weaknesses. If you’re on the job hunt, take some time to think over the things you’ve accomplished outside the traditional career path — like entrepreneurial steps you’ve taken, volunteering opportunities and strategies you’ve learned for managing whatever life throws at you. During the interview, do your best to be your authentic self by telling your unique story. Finally, take a listen to the episode of HerMoney Podcast we devoted to grit. In it, advertising aces Linda Kaplan Thaler and Robin Koval, authors of the book “Grit to Great,” share how two girls from the Bronx with no special advantages rose through the male-dominated, cutthroat world of advertising to run their own booming ad firm.
High-Flying Travel Deals
If you’re gearing up to travel this year, don’t forget to sign up for your airlines’ frequent flier programs first. Even if you think you don’t travel much, those points could build up and earn you a discount or free flight one day. (One of my reporters used the ones she forgot about for a flight to Atlanta in the fall.) WalletHub recently released its annual ranking of frequent flier programs, and Delta Airlines won top billing for the third year in a row. The site used three different consumer profiles — light, average and frequent flier — and weighted aspects like number of daily flights and destinations, miles restrictions, membership perks and value earned per $100 spent. Delta Airlines and JetBlue are the only airlines offering miles that will never expire, while Hawaiian Airlines and Alaska Airlines offered consumers the most rewards value (both close to $20 for every $100 spent). Plus, more good news for consumers: Airline competition is heating up. Four of the 10 largest airlines are offering more rewards in 2018 than in 2017 — by an average of 20 percent.
Have a great week,
Jean
