One of the easiest ways to find money now is to get a jump on filing income taxes. Many consumers wait until April to start gathering their paperwork together. They bring them to their tax preparer and want a rush job. The problem with waiting is that it opens the door for mistakes and it makes the time to get a refund that much longer. For anyone looking to get a jump on filing, here are some tips.

Getting ahead on taxes

The first thing taxpayers need to be aware of is Schedule M. Schedule M is a new tax document that is used to account for the “Making Work Pay” credit money received on paychecks. New payroll tables used last year created an extra $400 for single workers and $800 for married couples filing jointly. For some taxpayers, however, they may have paid too much into the fund. To correct the over-taxation, consumers have to file a Schedule M.

Secondly, it’s time to organize paperwork. January to mid-February is when W-2s and other tax-related documents start coming in. Consumers should create a special place for all tax documents. The needed information on these documents and having them in one place will make it all that much easier to fill out tax paperwork.

Thirdly, consumers need to double-check social security numbers. Though it sounds rudimentary, there are a surprising number of tax returns received without the correct numbers. It holds up processing and refunds for thousands of filers. Having the right number is critical because these numbers have so many transactions keyed directly to them. Everything from income statements to retirement plan contributions are recorded based on the social security number.

Fourthly, consumers need to make sure they receive the right filing package. The IRS package received is based on a taxpayers filing history, but that can change. Most documents can be retrieved online or at the post office or library. For taxpayers who had a major change, like marriage, it’s important to find the right documentation. Married couples looking for money now have to file with the right documents and in the right way.

Fifthly, consider filing electronically. Studies have shown that last year about two-thirds of all taxpayers filed electronically. According to the IRS, E-filed tax returns are processed in about 50% less time than paper ones. In addition, most software has a review portion of the program where entries are double checked for inaccuracies and possible mistakes. The good news for E-filers is that taxpayers may qualify to file for free. This season, taxpayers with adjusted gross income of $57,000 or less in 2009 will be able to file at no cost due to a program created by the IRS and the tax software industry.

Finally, taxpayers can sign up for direct deposit. It takes weeks for a paper return to reach the IRS office, be processed, the check to be cut, and then make it to the post office. On the other hand, it normally takes between 10 to 14 days for a direct deposit check to reach a bank account. Taxpayers who want direct deposit will have to file Form 8888, but it’s a great way to speed up the filing process.

Filing in 2010

Now more than ever, filing tax returns is being made simpler and simpler for taxpayers. Those concerned with receiving their tax return money now should follow the above tips to speed up the process. There are millions of tax returns that have to be reviewed and consumers looking for quick ways to file should use every advantage available.

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Now that the holidays are over, many Americans are mired in debt. Sure it was easy to pull out credit cards for expenses, but now is when the credit card bills are coming in. Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, said, “It will only get worse as the bills continue to arrive…putting it off will only result in ruined credit and more stress.”

One of the most important tips the National Foundation for Credit Counseling gives to all its clients is to set a goal date when holiday debt will be paid off. Cunningham stated, “Setting a goal date like March 31, for example, can give you a clear picture of what you have to do to pay down debt.”

Credit cards and the future

When you are trying to get out of debt, it is important to stop purchasing on credit. Though small charges seem to be more easily handled with plastic, they add up quickly. Cunningham also instructs her clients that stretching out debt payments as a result of a holiday spending spree, only negates savings. Once the holidays are over, leave the credit card at home. If you can’t afford to pay for an item with cash then leave it at the store. Lynn Mayabb, financial planner at BKD Wealth Advisors said, “It is much harder to pay for something if you have to pull cash out of your wallet.” Research shows that people who pay with cash end up spending about 20% less than those who use credit. Using cash can cut back substantially on frivolity.

Budgeting post-holiday season is crucial

Finding a workable budget is also important to getting out from under Christmas debt. Experts warn that budgeting isn’t always fun. In fact, it can be a difficult task to honestly assess what comes in versus what goes out on a monthly basis. In the end though, it’s the only way to get an accurate picture of where your money is going and what changes need to be made.

The best way to get started with a budget is to start tracking every expense for one month. Cunningham said, “It can be as intricate as buying a software program to help you track expenses, using a spreadsheet or getting a notebook for 99 cents.” It’s also important to note everything from a big-ticket item’s purchase to a cup of coffee. You want as accurate a picture of your fiscal month as possible. That way you can make the necessary changes to realistically reach your financial goals.

Check out the paperwork

Finally, it’s important to take time to look at paperwork that may reveal money drains. Reviewing your tax withholding on your W-4 form can show you whether or not you are deducting more than you should every month. Reading credit card statements can show you if there are additional charges you were not aware of. Cunningham said, “You’d be surprised at how many people are unaware of a $9.99 charge to their credit cards that came with a free-trial. Sure it may not sound like a lot, but over the course of a year, that adds up to almost $120.”

No debt is good debt

Debt is something that can easily grow out of control during the holiday season. It’s an expensive time for many Americans and a lot of stress comes along with it. Addressing debt early on is key to overcoming it. It may take a few months, but paying it down will save money in the end. When your credit card statement shows a balance of zero, you will be thankful you conquered it.

Short term loans are proving to be a viable option as America’s financial recession persists. One city that is taking the recession harder than most is Elkhart, Indiana. They are currently suffering one of the highest unemployment rates in the nation. Mayor Dick Moore stated, “When [your city has] one in every five unemployed…until you have that happen you don’t really know the true meaning of the word ‘patience.’” Made up predominantly of couple-owned households, Elkhart, Indiana is relying on the one employed spouse to make household payments. This spouse is turning to alternative funding more and more as debt grows and the recession continues.

Elkhart, Indiana has received about $14 million in stimulus funding, and is waiting on more throughout the next few months. Mayor Moore stated, “We have to fill out the forms; we have to be accountable. We’re going over the same hurdles and going through the same hoops we always did for monies that came from the federal government and state, and there are delays in the process.”

Paperwork Delays Funding

The bottom line is that paperwork delays funding, but it cannot be circumvented. For example, Elkhart already requested $2 million from COPS program to employ 10 more policemen and women. The grant would cover their salaries and benefits for three years, along with training. If the money comes to the city by September, the added police force would most likely not be on the streets until February of 2010. The nature of grants is that there are arduous application processes attached, normally under strict deadlines. Once the paperwork is finished and deadlines met, the long waiting process begins.

Once monies are distributed, city officials are still not out of the water in terms of paperwork. A full accounting of the dollars spent must be developed and submitted. Elkhart’s grant director Robin Wenger stated, “Getting the money is just the tip of the iceberg. It is the compliance that is the work.”

Short Term Loan Options

Many consumers are looking to short term loans as an option. Debt is something everyone in the recession has to deal with, and new ways of handling it are becoming more popular. A short term loan can give consumers peace of mind by extending funding to approved applicants. Typically, the application process is simple. With the Internet, the entire process can be done online and a consumer will know almost instantly if they are approved or not. If approved, their loan amount will be granted based on their current salary. Approved customers will find funds deposited directly to their bank account and deducted from the account when the next payday arrives.

For many satisfied customers, this option is a much needed relief. Deborah Matlin of New York, New York said, “Short term loans are helping us pay our bills on time, the same way credit cards used to. The biggest problem is that credit card companies are penalizing us with huge fees if we’re even one day late. [Short term] loans help us to avoid those fees.”

The Economy of the Future

Hopefully when the recession is over, consumers will be once again able to use credit to their advantage. It will take a significant amount of time, however. With the Federal Government busy focusing on the stimulus plan, the bank lending crash and the auto-industry fallout, credit card regulations are slow to be focused on.   They are a priority, but a priority that is on a long list. In the mean time, consumers need to be aware of strategic budgeting options such as payday loans, short term loans and penny-pinching. Until the economy changes, Americans need to be smart and watch out for themselves.

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