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How Life Events Can Save You Money from Tax Savings

Experiencing significant life milestones like getting married recently or buying your first home can lead to a myriad of uncertainties and inquiries. While you may be pondering how these pivotal moments impact your financial situation, rest assured that they can also yield tax savings opportunities.

Embarking on the journey of marriage, becoming a homeowner, welcoming a new addition to the family – these pivotal milestones have the potential to bring about tax savings when the time comes for tax filing.

Getting Married

If you have recently tied the knot or are contemplating marriage this year, chances are you are aware of the significant financial commitment involved. Despite the hefty price tag associated with weddings, one silver lining of getting married is the potential for increased tax benefits compared to when you were unmarried.

With marriage joining your lives, you and your partner can now combine your tax returns under the status of married filing jointly. This status may result in decreased tax obligations compared to when you were filing individually, thanks to the more favorable federal tax rates provided to married couples filing jointly.

In many cases, married individuals can enjoy tax benefits. If a couple ties the knot on the last day of the year, they are deemed married for the entire year and can take advantage of the various perks that come with marriage.

Choosing to file jointly as a married couple opens the door to potentially increased tax deductions and tax credits. One notable enhancement is the larger standard deduction available for the 2024 tax year.

In the upcoming tax year, individuals filing as single will see a boost in the standard deduction to $14,600, while those filing jointly as married will enjoy an increased deduction of $29,200. Moreover, married couples filing jointly in 2024 can benefit from an EITC (Earned Income Tax Credit) of up to $7,830 with three children.

tax savings

Buying a New Home

Making the decision to become a homeowner brings about significant life changes and presents an opportunity for substantial tax savings. The costs associated with a mortgage and property taxes can be quite substantial. Still, for those who have recently bought a home or are contemplating the idea, there is potential to lower tax liabilities by deducting mortgage interest and property taxes when itemizing deductions on Schedule A.

Having a Child or Children

If you welcomed a new member to your family this past year, I extend my warm congratulations! Amidst the happiness and thrill that comes with having a child, you might now be contemplating the financial aspects of caring for your little one.

Great news! Your family can now take advantage of additional tax deductions and tax credits. When you welcome a new baby, you become eligible for various tax benefits, such as the Child Tax Credit and the Child and Dependent Care Credit if you incur child care expenses.

Child Tax Credit:

  • Each dependent or a child must be under 17
  • Up to $2,000 for the tax years from 2022 to 2025 
  • If you are a single filer with an income of $200,000 or less or a married couple filing jointly with a combined income of $400,000 or less, you may be eligible for the Child Tax Credit.

Child and Dependent Care Tax Credit:

When considering tax credits for childcare expenses, you may qualify for a tax credit of up to 35% of eligible expenses. This Child Care Tax Credit applies to up to $3,000 of expenses for one child or $6,000 for two or more children.

Once your adjusted gross income surpasses $15,000, the tax credit begins to decrease, dropping to a minimum of 20% instead of the usual 35%. This adjustment highlights how welcoming a new addition to the family can lead to a significant tax benefit.

Experiencing life transitions can evoke a mix of emotions, from excitement and hope to confusion and costliness. However, amidst the whirlwind, it’s worth noting that these transitions often come with significant tax advantages.

Rest assured that you don’t need to stress about understanding the intricate tax regulations. Regardless of the financial decisions you made in the past year, the experts at Rapid Tax dedicated Tax Professional will ensure that they are accurately reflected in your tax filing. Whether you prefer to handle your taxes independently or have one of our seasoned professionals assist you, we are committed to maximizing your refund and ensuring you receive every entitlement you are due, which is guaranteed.

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Should I Get a Tax Refund Advance Loan?

Exploring the option of a tax refund advance loan? Weigh the advantages and disadvantages of obtaining a tax refund advance loan. Rapid Tax provides the opportunity to secure a quick tax refund advance by utilizing certain tax preparation services. While many tax preparation firms may not offer the full expected refund amount to prevent issues during IRS review, Rapid Tax fast refund advance loans facilitate accessing your tax refund funds quicker with minimal or zero charges.

Pros

Access some of your federal tax refund money quickly and affordably.

When opting for certain options, there is a possibility of enjoying a 0% interest rate along with low fees to pay.

Easily manage your finances without any hassle by effortlessly handling your funds. Simply submit your tax return to initiate automatic repayment of your loan when your tax refund is processed.

Prevent potential delays from the IRS. It’s important to take certain precautions. While the majority of tax refunds are typically processed within three weeks of submission, there is always a chance for hold-ups, particularly if you have applied for the earned income tax credit or the additional child tax credit.

refund advance loan

Cons

It’s important to note that obtaining a tax refund advance loan may not be possible for everyone. While tax refund advances typically have a good approval rate, there is no absolute guarantee of approval. If you decide to hire a tax professional specifically for a tax refund advance loan, you could end up feeling let down and out of pocket due to the costs associated with tax preparation.

Should you find yourself with an unwanted account, it might not disappear on its own. After receiving tax advance loan funds into a checking account, remember that the account may linger even after your tax refund is depleted. To close the account after your loan is settled, take proactive steps to close it once your refund is issued.

There is a possibility of facing the consequence of overspending when it comes to tax refunds. It’s important to be prepared for the situation where your actual refund amount ends up being lower than initially anticipated. Should this occur, there may be a need to return the discrepancy between the amount you received and the sum the IRS disbursed.

Can I Still Get a Loan on My Tax Refund Even After I Have Already Filed My Taxes?

When looking to participate in tax refund advance programs, the first step usually involves submitting an application for the loan at the time of electronically filing your taxes with Rapid Tax. 

Individuals who have already submitted their tax return directly to the IRS may find themselves ineligible for these programs due to not meeting the necessary criteria.

To maximize your chances of receiving a tax refund advance loan, it is advisable to select a file with Rapid Tax dedicated Tax Professional at the beginning of the season. These advance options are typically offered during the months of January or February, emphasizing the importance of early action.

To Summarize

Receiving a tax refund advance loan is a convenient and cost-effective way to early access your refund sooner than expected. If you had already budgeted for preparation expenses, opting for a refund advance poses minimal risks and allows for quicker access to your tax refund.

Timing is crucial when it comes to filing your taxes. Failure to act promptly or neglecting to request an advance could mean waiting until the following year to seize the opportunity.

Consider utilizing your tax refund to reduce your debt and optimize your finances. Consult with your assigned Rapid Tax dedicated tax Professional to determine the best approach for allocating extra funds towards paying down debts.

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Can I Get a Fast Loan on My Tax Refund Advance?

Upon completing your electronic tax filing with Rapid Tax you have the opportunity to receive a fast tax refund advance loan. This tax refund advance loan carries a 0% APR and with some fees. Applying for it will not affect your credit score. If your tax return is accepted promptly, you might access the funds on the same day. The loan amount is automatically deducted from your refund once it’s received.

When you find yourself eagerly awaiting your federal tax refund, a tax refund advance loan can be a lifesaver. Look no further than Rapid Tax for a complimentary fast tax refund advance, which is one of our comprehensive service offerings. By opting for a tax refund loan, you can swiftly access your funds and conveniently repay the loan once your refund is deposited.

When utilizing specific tax preparation services, individuals have the option to request an advance on their tax refund. While not all tax preparation companies offer advances for the full expected refund amount to account for potential discrepancies during IRS review, these advances provide the benefit of accessing funds sooner without significant costs. Let’s delve deeper into the mechanics behind tax refund advances.

Eligibility for Fast Tax Refund Advance Loan:

  • I am 18 or older
  • I expected the federal tax refund amount to be $500 or more
  • I am not a resident of North Carolina, Connecticut, or Illinois
  • I am e-filing my federal tax return with Rapid Tax
  • I am not filing on behalf of a deceased taxpayer
  • I am reporting income or incomes on a Form W-2, 1099-R, or Schedule C
Tax Refund Advance

What Is a Fast Tax Refund Advance Loan?

Receiving a fast tax refund advance loan means you can access part of your federal tax refund early by filing your taxes electronically through a tax preparation company that provides these advance loans. These loans often come without fees and have a 0% annual percentage rate (APR). You can often receive the funds on the very day the IRS accepts your electronically filed tax return.

At Rapid Tax, quick tax refund advances are offered to eligible clients. Your tax return and credit are evaluated by the financial institution, usually with a gentle credit check that has no impact on your credit score. While there is a chance of not qualifying for an advance, the approval rate remains high.

How Can I Get a Fast Tax Refund Loan?

Commence your tax filing process by reaching out to our Rapid Tax dedicated tax professional for fast refund advance loans. It’s advisable to evaluate multiple alternatives to ensure you select the tax refund loan that suits your requirements. 

How Much Does a Fast Refund Advance Cost?

While this type of loans usually come without any interest or fees, it’s important to be aware of potential costs and restrictions that could be linked to your loan.

Service Fees from Tax Preparation

Considering tax preparation fees is essential when deciding how to file your taxes. Opting to engage a tax preparation service for a refund advance, rather than filing for free independently, adds an extra cost. It is common for companies to mandate the use of more advanced services in order to qualify for the loan, as opposed to utilizing free or budget-friendly online options.

Unpaid Loan or Debt Balances:

Outstanding debts. Should your refund fall short of covering your existing loan, you may be left with an unpaid balance that will require payment. This situation may arise if the IRS rejects a deduction, resulting in a reduced refund amount.