AICCCA Advises Consumers to Plan at Tax Time

Fairfax, VA - February 11, 2013 - Tax time in America is a time of great divide. On one side are those who will receive a refund and on the other are those who will owe additional taxes.

"Both sides need a plan," said Dave Jones, president, Association of Independent Consumer Credit Counseling Agencies. "Those receiving a refund should make the most of their money and those who owe need to figure out how they will pay."

AICCCA says consumers looking forward to a refund should resist any refund anticipation offers and sales and save at least a part of the amount received. Following are three suggestions to save refunds wisely:

1. Tackle your debt. In particular, take a look at any credit card debt you have and work on paying off the highest interest rate cards first. The amount you will save in interest payments can be quite substantial.
   
   
2. Build an emergency savings cushion. High credit card debt is often the result of not having cash on hand to take care of emergency expenses, like car repairs or appliance replacement. Use your refund to get started.
   
   
3. Finance your future. It is never too soon to start saving for your retirement. It is also never too late. Use this opportunity to make savings a priority, so that you regularly pay yourself and watch your savings grow.

For those consumers who must pay, AICCCA offers these tips:

1. Determine how much you owe. April 15 will be here soon. You only have 10 weeks to come up with the money, so you need to know your liability now.
   
   
2. Go to a bare bones budget. Cut back on eating out, entertainment and other non-essential spending. Consider selling items through a garage sale or online auction.
   
   
3. Look for the best terms if you must borrow. Your options are a personal loan, an IRS installment plan or an IRS approved credit card. You can also apply for a short term payment extension online with the IRS for no fee if you can pay in full within 120 days.

Filing on time is important for both sides as is an annual W4 form review. Large refunds mean giving Uncle Sam an interest free loan every year. Decrease the amount you are withholding by increasing your deductions and earn that interest for yourself. If you consistently owe, decrease your deductions. You will bring home less money each paycheck, but it will be less painful than coming up with a large amount at tax time next year.

Founded in 1993, Association of Independent Consumer Credit Counseling Agencies (AICCCA) is a national membership organization, established to promote quality and consistent delivery of credit counseling services. AICCCA and its members are focused on improved creditor relations, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, counsel millions of consumers annually nationwide and provide debt management services to consumers with excessive unsecured debt. For more information or to contact an AICCCA member office call 866-703-TRUSTAICCCA (866-703-8787) or visit www.aiccca.org.