Do This Every Year at Tax Time

Photo by Kelly Sikkema on Unsplash

I know. It sucks. But you have to file your taxes every year (unless you’re my husband and then I’ll do it for you). Even if you have a CPA or tax preparer you’re still stuck providing records and trying to remember all those times you dropped off stuff at the Salvation Army.

Why not use this opportunity to conduct your own financial check-up? There is no scarcity of financial advice out there for you so I’m not going to espouse the virtues of paying down debt or skipping your morning latte. This is something that EVERYONE should be doing whether you’re a spender or a saver or a combination of both.

Review Your Credit Report

In the financial world, your “credit” is your personal brand. Just as you wouldn’t want your twitter feed hijacked by radicals, you want to make sure your credit reporting reflects the real you.

By federal law, everyone can get a FREE copy of their credit report from each of the three credit reporting agencies (Equifax, Experian, and Transunion) every year. I use tax time as my annual reminder to do this. Fun, isn’t it?

You’ll want to use — this is the only site for free reports. Do not be fooled by other “free” websites that tease you with information and then require a subscription. This site is truly free. The credit bureaus and their advertisers will try to upsell you to uncover your credit score or offer credit monitoring services. Those services are optional; you do not have to pay anything to view your reports.

Here are important things to remember:

  • You have to pull each agency report separately — the website will direct you — be sure to print or save your report as you won’t be able to log in again and access it until next year. Then return to the main site and go to the next agency on the list (remember there are three: Equifax, Experian, and Transunion).
  • Your credit scores are not included in the free annual reports — each agency has its own scoring model (e.g. Experian’s score is the well-known FICO) and will try to get you to pay to view your score. These days you can usually get your score for free from your bank or credit card company. I’ve never seen the point in paying for it.
  • The reports will show every account you’ve ever had but pay the most attention to the open accounts. Is everything correct? Are there accounts not belonging to you? Are there accounts you thought you closed that are showing open?
  • Also, check for any discrepancies in the name and address sections that could be someone else trying to use your social security number; and note if there are any recent “hard” inquiries that don’t look familiar to you.
  • If you are concerned or curious about your credit score, below is how credit scores are calculated. Experian recently reported changes it is making to its scoring model to better reflect debt loads and payment history (see more here) — this means that you shouldn’t max out your credit cards and you should always pay your bills on time.

If you’re having too much fun with this financial check-up and don’t want to stop, here are some other suggestions for you that I try to accomplish annually:

Review your bank accounts

Are they at several different banks/credit unions? Can you make it easier on yourself to consolidate them? Or try using something like so you can view them all in one place.

Review your retirement savings

Did you just get a raise? Would it make sense to give your retirement contributions a raise, too? Wherever your account is housed they will have loads of information to help you plan. It’s awesome that you started a retirement plan, but be sure to check up on it once and awhile.

Review your insurance

I’m no insurance expert. In fact, I hate insurance. I’m pretty sure it’s a scam but I can’t prove it and I can’t find a better way around it. The 99% of us without piles of savings need to know that funds will be available for healthcare, car accidents, homeowner claims, or funeral expenses when we need them. Chances are that most of you reviewed your plan with annual enrollment at your employer at the end of the year. If not, here’s your chance.

Instead of blindly renewing what you had last year, examine the plans that will fit best for you. Most insurance plans will offer questionnaires that lead you to personalized plans — surveys that determine if you’re better off with a high deductible plan or if you need extra prescription drug coverage. Use them! Don’t understand deductibles? Research them. The time to do it is now, not when you’re staring at a health diagnosis in the face and stuck with a bill for an MRI (thank you, daughter). The official government site,, has a lot of good information, but start with your current provider and go from there.

Check your withholdings

There is a new W-4 form out there. Allowances are gone to make your withholdings more transparent (psst, taxes in this country are still not transparent). There is a tool you can use to help you estimate your withholdings but you’ll need your taxes from last year and current paystubs. Don’t worry — you don’t have to fill out a new W-4 form unless you change jobs or want to do so, but every year when TurboTax tells me that fateful $ amount, I promise myself I’ll review my withholdings so next year isn’t such a surprise.

That should keep you busy. Good luck with your taxes and remember you file a tax RETURN and if you get money back it’s called a tax REFUND. I implore you to use the right “R” word. Nerds like me thank you.

I thought by now I’d have everything figured out…

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