Taxes and Financial Planning: How to Turn Tax Season into a Financial Opportunity

IFWF
1 day ago
3 min read

Dr. Fan Yang

PhD in Economics and Master’s in Mathematics

IFWF Economic Department

November 26, 2025

Introduction: Rethinking Taxes and Refunds

For many people, tax season feels stressful or confusing. Some just hope for a big refund and then spend it quickly. But did you know that a refund is not extra money? It usually means you paid too much in taxes during the year, and the government is giving your own money back.

Instead of dreading tax season or treating refunds like free cash, you can use this time to make smart financial decisions. Tax time is a great chance to look at your money habits, reduce debt, save for the future, and even help others through donations.

Section 1: Understanding How Taxes Can Help You

Taxes aren’t just about paying the government. They can actually help you if you know how to use the system well. Here are three simple things to understand:

· Tax Deductions and Credits: A deduction lowers the amount of money you get taxed on. A credit directly reduces the amount of tax you owe. Some credits even give you money back, like the Child Tax Credit or the Earned Income Tax Credit.

· Standard vs. Itemized Deductions: Most people take the standard deduction (91% of taxpayers chose the standard deduction), which is a fixed amount. But if you have a lot of certain expenses like medical bills, mortgage interest, or charitable donations, you might save more by itemizing.

· Timing Matters: Some actions, like putting money into a retirement account (like an IRA), can still reduce last year's taxes if done before the tax filing deadline.

Learning just these basics can help you keep more of your money and plan better.

Section 2: Smart Ways to Use Your Refund

If you do get a refund, don’t spend it all at once. Here are better ways to use it:

· Save for Emergencies: Life is full of surprises. Use part of your refund to build a savings cushion for things like car repairs or medical bills.

· Pay Off Debt: Credit cards and loans charge high interest. Paying down debt saves money over time.

· Invest in Your Future: You can use your refund to open or add to a retirement account, start a savings plan for a house, or go back to school.

· Give to Charity: Supporting causes you care about, like IFWF, helps your community. It can also give you a tax break next year if you itemize.

Even putting your refund into several of these areas (like a mix of saving, paying off debt, and donating) is a smart way to move forward.

Section 3: How Financial Education Makes a Big Difference

Understanding how taxes work can lead to better money choices. Here’s how:

· Avoid Mistakes: Many people don’t know all their income needs to be reported, like from side gigs or online sales. Learning the rules can help you avoid penalties.

· Adjust Your Paycheck Withholding: If you get a huge refund every year, you might be giving the government too much money during the year. Adjusting your paycheck can mean more money in your pocket each month.

· Make Confident Choices: When you learn about taxes, you feel more in control. You can plan for the future and make decisions that support your goals.

· Give with Purpose: Knowing the rules about charitable giving means you can support causes you love and maybe reduce your taxes too.

Conclusion: Take Action with IFWF

Tax season is more than forms and numbers, it's a time to take control of your financial life. You can:

· Learn the basics of taxes

· Use your refund wisely

· Plan ahead for next year

· Support causes that matter to you

IFWF is here to help. Join one of our Tax Season Education Workshops to learn more, ask questions, and get support. If you’re in a good financial place, consider using part of your refund to donate to IFWF and help others access the same support.

Together, we can turn tax season into a season of growth and opportunity.

Learn More