Consider the best use for

a tax refund. For some taxpayers a tax refund is considered unexpected

income and treated as a reason to celebrate and spend. Though it is natural

to want to go out a treat yourself, a closer examination of your financial

situation my reveal a better use for the money. High-interest credit card

debt costs consumers an average of $1,440 a year in finance charges. Paying

off this debt is a sound financial move. Other smart moves are to put

the money in savings if you do not have a cushion of three-to-six months

of expenses in the bank or fund your retirement account.

Take time to file. No matter

what, always file your tax return or file for an extension. The IRS accesses

a penalty if you do not file a return. So if the reason you do not file

is because you do not have the money to pay taxes owed, you have just

increased the amount by not filing. Consider your options for borrowing

the money, or send the payment amount you can at the time of filing and

contact the IRS right away to make arrangements for payment of the balance

due.

Face your tax problems. Taxpayers

who owe back taxes would be wise to communicate with the IRS regarding

payment. The IRS can and will place a lien on all of your property and

future property to collect taxes. Do not believe that you will not have

to pay the taxes owed from previous years if the IRS has not contacted

you. Not only will they eventually contact you, but also you will have

been accruing penalties and interest from the time the tax was due.

Examine withholdings carefully.

Whether receiving a tax refund or sending a tax payment, review your W4

form. If you are consistently receiving a large tax refund, you are giving

Uncle Sam an interest free loan every year. Increase your withholding

and earn interest income on that money yourself. Likewise if you consistently

owe Uncle Sam taxes, lower your withholding. You may need to have your

employer take additional money out of your paycheck in taxes if you are

already claiming zero on your W4. For those self-employed, it takes greater

discipline to set aside a portion of earnings for tax payments. Make sure

to do so, or you could be digging yourself a large taxpayer hole.

Double check before mailing

return. Review all documents included in your tax return. Make sure the

return is signed. Be sure you have claimed all deductions for which you

qualify. Double-check your addition. Compare with last year's return to

determine anything you may have forgotten.

Seek help. If you are at a

loss as to how you will pay your taxes or would like help budgeting so

you will not be in the same position next year, contact CCCS at 800-330-CCCS

(2227) or www.cccsinc.org for help.

Consumer Credit Counseling

Service (CCCS) is a nonprofit, community service agency dedicated to empowering

people to achieve a lifetime of economic freedom. A United Way partner,

CCCS provides free, confidential budget counseling, community and personal

money management education, debt management programs, and comprehensive

housing counseling. CCCS provides counseling in English, Spanish and American

Sign Language (TTY 770-716-9666). Help is available 24/7 at 800-330-CCCS

(2227) or www.cccsinc.org.