Your Tax Refund in 2014: 3 Things to Know

Few things are as financially exciting as receiving a big check from Uncle Sam, as will probably happen to you when you get your tax refund for 2014. Don't be hasty, though. With your tax refund in 2014 and beyond, there are some things to consider, and avoid, to maximize your dollars.

Don't be scammed
First off, know that you're not the only one eagerly on the lookout for 2014 tax refund checks. So are scammers and thieves. You're probably aware of the problem of identity theft, but you might not realize that 43% of identity theft complaints were tax-related, up from just 15% in 2010, per the Federal Trade Commission.


Scammers mainly need your Social Security number to go after your 2014 tax refund. Being sure to give it out only when really necessary is one way to protect yourself. Another is to file your taxes early. That's because it's what the thieves do. They submit a fake return angling for your 2014 tax refund, and when you later file your actual return, your refund will be rejected because it was already paid out. These matters do get resolved, but it can take many months. If you file your return early, though, you can beat the thieves to the money.

It's also best to mail your return from a post office, not by leaving it in your mailbox for a letter carrier to pick up. If you file electronically, do so from a secure network, not a public Wi-Fi network in a coffeehouse. And finally, know that the IRS won't text or email you -- don't fall for fake communications that are after your information or dollars.

Think twice about loans
As you wait for your tax refund to arrive in 2014, you might find it tempting to grab most of those dollars early, perhaps via a "refund anticipation check" or something like that. There are lots of businesses happy to advance you the money for your 2014 tax refund -- for a fee and/or lots of interest. That fee is usually way too costly, though. (If you desperately need the funds for a major purchase, you can probably get a loan with better terms from the retailer.)

There are ways that you can speed up the receipt of your tax refund in 2014, though. For starters, file your return electronically. Those who do generally get their tax refunds much more quickly -- in four or fewer weeks, instead of up to eight for paper returns. The IRS encourages taxpayers to "e-file" or to use a "Free File" program, available to those who earn $58,000 or less. (Those with any income can e-file with the Free File Fillable Forms option.) Folks eager for their tax refunds can file as early as Jan. 31.

For even faster receipt of tax refunds in 2014, opt for direct deposit. That can get your tax refund to you in just two weeks!

Spend it wisely
Finally, think carefully about what you will do with that tax refund in 2014. It's appealing to just think of it as a windfall and to spend it merrily on some treats. It's not a windfall, though -- the refund is money that has always been yours. You simply overpaid your taxes, and Uncle Sam is returning it to you.

Consider putting it to the most productive use you can. You might, for example, invest it in the stock market. If you do so with $3,000 and the money grows at the stock market's long-term historic average annual growth rate of 10% over the next 20 years, your modest 2014 tax refund will turn into more than $20,000. (Buy a car or stereo with it, though, and those items will shrink in value instead of growing.)

If you're saddled with high-interest debt, apply your 2014 tax refund to that. Paying down $3,000 of credit card debt that's charging you 20% interest is essentially earning a 20% return on your money -- double what the stock market averages.

As you anticipate your tax refund in 2014, be smart about receiving and spending it. You can save yourself headaches and make more money, too!

Here's how to make that refund grow
In our brand-new special report "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

The article Your Tax Refund in 2014: 3 Things to Know originally appeared on Fool.com.

Longtime Fool contributor Selena Maranjian has no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Tax Tips for Real Estate Agents and Brokers

Most real estate agents and brokers receive income in the form of commissions from sales transactions. You're generally not considered an employee under federal tax guidelines, but rather a self-employed sole proprietor, even if you're an agent or broker working for a real estate brokerage firm. This self-employed status allows you to deduct many of the expenses you incur in your real estate sales or property management activities. Careful record keeping and knowing your eligible write-offs are key to getting all of the tax deductions you're entitled to.

Read More

Brought to you by TurboTax.com

What is the Educator Expense Tax Deduction?

The Educator Expense Tax Deduction allows teachers and certain academic administrators to deduct a portion of the costs of technology, supplies, and certain training. Here’s what teachers need to know about taking the Educator Expense Deduction on their tax returns.

Read More

Brought to you by TurboTax.com

Self-Employed Less Than a Year? How to Do Your Taxes

Have you been self-employed less than a year? If you’re just starting out, it’s possible you worked at a job earlier in the tax year before making the switch to self-employment, or you’re working multiple jobs. In this case, you may have more than once source of income you’ll need to report on your income tax return.

Read More

Brought to you by TurboTax.com

Taxes for Grads: Do Scholarships Count as Taxable Income?

Heading off to college to broaden your horizons is exciting, but funding your education via scholarships? That's even better. Scholarships often provide a path to education that might not be feasible otherwise, which is why the Internal Revenue Service (IRS) can be generous in minimizing students' tax obligations. But sometimes scholarship money does count as income, and it’s better to find out now if your scholarship adds to your tax liability than to have a surprise later. Here’s how to decode your scholarship taxation.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.