Tax Day is just around the corner. Prepare to file and pay your taxes on time for big savings.
Saving up for a rewarding investment like a house or car takes a lot of dedication and discipline. In these trying times, Americans will do just about anything to cut costs or double their income for extra financial security. Even as the country moves farther from its recessional shadow, the possibility of history repeating itself is always there.
Money-saving strategies have been in place for years, helping the average American save up for the future. Michal Grinstein-Weiss, associate professor at the George Warren Brown School of Social Work, explains that one mechanism in place is the IRS's withholding tax system. This is the money taken from your wage and sent directly to the IRS.
Upon filing taxes on time, taxpayers can receive the excess of the tax withheld to pay the dues, if any. In addition, filing taxes on time prevents late filing penalties on the taxpayer's part, which is five percent of the dues every month it goes unfiled (up to 25 percent). Five percent is a huge amount.
Compliance with the law has its benefits. Not only can you save a substantial sum for the future, it also makes applying for loans easier. Although credit bureaus have no access to who files and pays taxes on time, they have access to tax liens. Tax liens mean a taxpayer is having trouble making his payments to the point of withholding his rights to his properties.
If you want to start investing early without breaking the bank, start small. For instance, buy reliable used cars near Baton Rouge. Used vehicles may not be sparkly new, but considering how a number of car makes and models are actually known for reliability and performance despite a few or more years of service, you can't go wrong with investing in a quality used car from an established dealership like Baldwin Subaru.
Qualifying for financing helps a lot, but only possible with a spotless credit record. While most negative credit items disappear after seven years, tax liens can stay with you for life. Even if poor credit still qualifies you for an auto loan, it isn't usually without a high interest rate, which defeats the purpose of saving for the future.
Once you secure your finances enough, you can move to the next car-buying step by trading in used cars near Baton Rouge, LA for brand new ones. This works well when trading in for the current model; case in point: Subaru's Guaranteed Trade-In Program. You'll stop and look back at how timely tax payments and some discipline can get you that far.
(Source: Why Tax Day Is the Best Day to Save Money, Brookings Institution)
