00:03Now that you've filed your tax return, there's one of two things that will happen.
00:08You'll either owe the IRS some more money, or you'll get a tax refund.
00:13And today, we're going to talk about what to do in either of those situations.
00:22I remember the first time I got a tax refund, way back in the day when I first started working.
00:27I thought, yes, this is great. I got some extra money.
00:30And what did I do with it? I probably saved it.
00:33I was so lame.
00:36But then I realized, that's actually good, because a lot of millennials need to learn how to save more money.
00:41And today, we'll talk about that, too.
00:43We'll answer taxpayer questions from Karina, Shauna, and Jackie.
00:48And to help us answer them, we have our tax experts here today to help us better understand.
00:57When I started filing my taxes, I thought that everyone got a refund.
01:01I was just like, why do people hate taxis, and everyone gets a refund?
01:04Everyone does not get a refund.
01:06You get a refund when you've made an overpayment to the government.
01:09And you end up owing money when you don't pay enough to the government.
01:13If you are owed a refund from the government, congratulations.
01:17You can expect to receive your check within six to eight weeks.
01:20Most people now are getting an electronic deposit.
01:23You enter your bank account information, and it goes directly to your bank account.
01:26If you decide to do direct deposit, you will likely get your funds deposited into your bank account sooner.
01:31But in the instance that you're a check type of person, you actually can get a check sent to you.
01:37Also, if you file your taxes earlier, say in February, you will most likely get your refund faster than if
01:44you file it exactly on April 15th.
01:50You want to make sure that you're using it towards something that's going to help you achieve your financial goals,
01:54or that's an actual investment.
01:56Maybe it is you want to, you know, dig yourself out of a credit card debt.
02:00Or maybe you want to put a significant dent in your student loan debt.
02:03Or maybe you want to finally create an emergency savings fund that you don't have, or creating a cushion for
02:09yourself, since you can breathe a little easier.
02:11You can also contribute to your 401k.
02:14And all of this will set you up better in the future to prepare for your eventual retirement.
02:19You know, a lot of people don't go to the dentist like they should.
02:21So maybe you should schedule that cleaning or get that procedure you need to get that your insurance doesn't cover.
02:26Those of us who drive, you need new tires.
02:29You need to service your vehicle so that your vehicle can continue to operate optimally.
02:34You might also want to take care of yourself.
02:36So I say treat yourself to those new pair of shoes.
02:38Going and getting a massage or doing something that you wouldn't ordinarily do because money is always tight.
02:44So we have a real life taxpayer question from Karina.
02:47So let's watch it now.
02:49Hey, I'm Karina.
02:50I'm 26 and I'm a beauty writer from Washington, D.C.
02:54And my best investment was my college degree, my education.
02:58My question is, any recommendations on how to spend a tax refund wisely if I do get one?
03:04All right, experts, what do you have to say to Karina?
03:06Thinking about Karina's situation, if she doesn't have an emergency savings account, it's a great time for her to set
03:11up that emergency savings fund.
03:13But education is also important to her.
03:14So maybe there's a continuing education class that she wants to take.
03:18And, you know, using that refund towards it, I think it's a good idea because it's going to make her
03:22more money down the line and make her more marketable.
03:23Let's go to our next question.
03:25And this one is from Shawna.
03:27Hi, my name is Shawna.
03:28I'm 35 years old.
03:30I'm a dance teacher from Brooklyn, New York.
03:33And the last item I splurged on were some items from Beyonce's Ivy Park Adidas collaboration.
03:39So I have a question.
03:41Somehow I find myself owing more in taxes this year, but I don't have that amount readily available.
03:48So what should I do?
03:49Shawna, great question.
03:51And I'm sure you're not alone in this situation.
03:54So, experts, what do you have for her?
03:56You don't always owe the money right away if you bring it up to the IRS and contact them.
04:01And they will usually set you up on some sort of payment plan.
04:03You just call the IRS.
04:05Yo, I don't have your money.
04:08I'm sorry, man.
04:10Can I just add the first time that I actually owed the IRS?
04:13I called my mom in tears.
04:14I was like, I owe the IRS.
04:16It's over.
04:17She's like, no, it's not.
04:18I remember the first year I was in business, too.
04:20I had a similar situation.
04:22I was like, they're going to come arrest me.
04:25I'm going to jail.
04:27So you actually won't go to jail in the U.S. for not being able to pay your taxes?
04:32Yes.
04:32You will go if you're evading your taxes.
04:34Yes.
04:34Different scenarios.
04:35If you can't afford to pay your taxes, you will not go to jail.
04:41You can actually, you know, set up an account online so that you can make regular payments.
04:45You'll have to make an initial good faith payment.
04:48And then from there, you'll pay monthly.
04:50The biggest thing you don't want to do is ignore them.
04:52Because ignoring them, you're going to rack up a large amount and penalties.
04:57And so if you do owe money, don't worry.
05:00Contact them and work something out.
05:02But I think the key is figure out why are you owing more in taxes and maybe prepare for
05:07next year so that it doesn't keep catching you by surprise.
05:09And you could actually plan to save or make adjustments to your withholdings and have that
05:15part of the plan.
05:19If you're being audited by the IRS, first and foremost, don't panic.
05:23Calmly collect all of your information or reach out to your tax professional who helped
05:27you.
05:27So what actually happens during an audit is that you will likely have a phone interview
05:32with an IRS agent.
05:33From there, they will schedule some in-person meetings where you'll provide all of the
05:38documentation.
05:38There have been times in the past where the IRS has noticed that they made a mistake on their
05:43end and you are actually owed more money in your refund or you owe less money back to the
05:49government, depending on your specific situation.
05:51And our last question is from Jackie.
05:54Hi, my name is Jackie.
05:56I'm 25 and I'm a designer in New York.
05:58And my question for you is, I've always been curious, what would cause you to get audited by
06:04the IRS and how common is it?
06:07Experts.
06:07Lauren, what would you say to her?
06:09It's a great question and definitely a concern that a lot of people have.
06:12So you may be surprised to learn that you actually have less than a 1% chance of being audited
06:17by the IRS.
06:18If and when it happens, some of the reasons are failing to report some sort of income.
06:23So, for instance, if you receive a 1099 that you don't report, certain swings in deductions
06:29or credits that you've never taken before, if you make $50,000 a year and you claim that
06:35you donated $20,000 of that to charity, may raise a few red flags.
06:41Have either of you been audited before?
06:43I have not.
06:45Tanya?
06:46Oh, I have.
06:48I have.
06:48That's the day I fired my mother as my tax preparer.
06:52It actually was a lot easier than I thought it was.
06:55I put the ball in their court.
06:56I was like, well, here go all of my statements, all the receipts I have.
06:59There weren't any harsh repercussions or anything that anyone should be afraid of as a result
07:03of that situation.
07:04It was just an extra step on my end to verify what we had submitted.
07:09Thank you, ladies, for joining us today.
07:11Such valuable insight.
07:12Thanks for having us.
07:13Of course.
07:14Today, we learned what to do if you get a tax refund, what to do if you owe money and
07:19don't have it, and most importantly, not to be afraid of the IRS and how to deal with
07:25things like an audit and other quote-unquote scary things.
07:29Stay tuned and learn the common mistakes people make with their taxes and how to overcome them
07:34and also hear from our experts about their top tax tips you don't want to miss out.
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