With April fast approaching, it's time to start working on your taxes. "Good Morning America" personal finance contributor Mellody Hobson is here with a few simple tips on how to get your refund faster and what to do with the money.
Making an error on your tax return is one of the easiest ways to delay getting your refund check. These mistakes can be as simple as writing your social security number incorrectly or forgetting to sign on the dotted line. If you are going to complete your tax forms by hand, make sure you go over your completed forms to check for mistakes or omissions, and that includes double-checking your math. After filling in information on all those lines it is easy to see how one could make a simple subtraction or addition mistake. Another option is to file electronically, most popular software programs, such as Turbo Tax, will help you prevent many mistakes.
If you are overwhelmed by the prospect of doing your own taxes, your can always find a certified professional in your area through the American Institute of CPA's. If you cannot afford an accountant or a tax attorney, and you have an income of $49,000 or less, the IRS offers an assistance program. Certified volunteers will help you complete your tax return. The IRS also offers tax counseling for the elderly (to find out more about that or the volunteer income tax assistance programs go to the IRS website).
Now let's talk about your refund. Many people see it as extra money in their pocket, kind of like a winning lottery ticket. This could not be further from the truth. If you are receiving a refund, it means you overpaid your taxes during the year, and you essentially gave Uncle Sam a tax-free loan. The IRS is just giving you back your own money, so don't go out and spend this money. Use this money to pay off debt or put it in a retirement account and consider increasing you allowances on your W-4 for this year. You will get a smaller refund, but each paycheck will be bigger.