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.