A key facet of financial learning is understanding how tax preparation works. Nicole Rosen is an Enrolled Agent (EA) with the IRS, which means she’s in a great position to share some tips for maximizing your 2022 tax refund. 

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Here’s the recap of today’s 15-minute episode: 

• The pros and cons of using tax software versus hiring a professional
• Common mistakes people make when preparing their taxes
• The importance of taking advantage of all possible credits and deductions, especially for single parents and divorced families who may be struggling financially
• Free programs offered by the IRS for those who need help with their taxes, regardless of their income
• Payactiv app users can get a $15 coupon for TurboTax when they download and use the Payactiv app. 
• When you apply for and activate your Payactiv Visa® Card*, you can get your tax return up to 4 days early– simply use the account and routing numbers found in the Payactiv app when filing your taxes

* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll free at 1 (877) 747-5862, 24 hours a day, 7 days a week.

Listen below or read the transcript that follows.

Eric Rosenberg:

Hello. Here’s a quick reminder that today’s episode is intended for education and entertainment

purposes only and should not be considered legal or financial advice. Thank you.

Welcome to the Good Cents podcast, your source for free financial tips to help you stay on top of your finances. As the tax deadline of April 18th approaches, many of you may be scrambling to file on time. But don’t worry. We’ve got you covered with some last-minute tips and important info you need to know.

In this episode, we’ll be focusing on do-it-yourself or DIY methods of completing your taxes. One of the most popular options out there is TurboTax. Payactiv app users can get a $15 off coupon for TurboTax when they download and use the Payactiv app. The Payactiv app is a one-stop shop for all your financial needs, from budgeting to discounts and more. Terms apply, see episode description for details.

Plus, when you successfully apply for and activate your Payactiv Visa Card*, you can get your tax return up to 4 days early. Simply use the account and routing numbers found in the Payactiv app when filing your taxes.

Search for “Payactiv”, that’s P-A-Y-A-C-T-I-V, in your phone’s app store to get started. Standard message and data rates apply. Whether you’re a first-time filer or a seasoned pro, we’re so glad you are here to join us for today’s episode.

Today we have a guest who is an enrolled agent, that’s a professional who’s registered with the IRS, to give tax advice and represent taxpayers when working with the IRS. So our guest is a real expert. Nicole Rosen is here to help us learn how to save money, save time, and cut back on stress when dealing with our taxes. So Nicole, the first thing I want to ask you, we mentioned briefly before we hopped on what an EA is. Now, I think a lot of us know what a CPA or a certified public accountant is. That’s where a lot of people go to get their taxes done. But what is an EA and what is the difference?

Nicole Rosen:

I’ve been in taxation a long time and I love my credential. So I actually get asked this question a lot,

because nobody knows. But an EA is the highest license that the IRS issues to be able to prepare tax

returns and represent taxpayers before the IRS. So to break that down, a CPA gets their CPA license at the state level. So you’ve got 50 states, 50 different ways to become a CPA. But in order to be an EA, you skip all that and you go straight to the IRS. And I have passed three knowledge tests and then I have to take at least 72 hours of a continuing education every three years, plus I have to be a good steward of taxes. So I have to keep my own tax stuff straight. I can’t owe, and so there’s a background check there. But it’s another path to say, “Hey, I really know my stuff.” We’re considered America’s tax experts because all we do is taxation. That’s literally what I focus on. So bookkeeping, not my thing, taxation is my lane.

Eric Rosenberg:

So if you’ve just always had someone in the family figure it all out for you, or maybe you’ve just moved to the US and you’re new to US taxes. Let’s say you are just getting started and you don’t know what’s the best way to go about it yourself if you don’t want to maybe rely on this expert that might not be the best person for you?

Nicole Rosen:

So it’s really hard. If you don’t know the tax law, it’s hard to do your taxes. The US tax code is confusing.

And sometimes I look at it and I go, “Do they mean for it to be this confusing?” But really, what you need to do is when January gets here and you start getting your tax documents, get yourself a folder, one place where you store all of those documents. Everything goes in one spot. Don’t lay it on the kitchen table and then wander off and then go, “Oh, where did I put that? Where did I put that?” You get you a really bright folder, something that you can use that really shows… I’m going to show you guys mine.

Yep, perfect. Here’s mine.

Eric Rosenberg:

I’d say we’re-

Nicole Rosen:

Here’s mine.

Eric Rosenberg:

We’re recording video. I know listeners, you can’t see it, but on our social media feeds for Payactiv right now, I’m showing my tax folder.

Nicole Rosen:

Yep.

Eric Rosenberg:

It says “2022 Taxes” and Nicole’s is way cooler than mine.

Nicole Rosen:

Yeah. So I do really bright because I get so much mail. I get mail from the IRS, so I get so much mail. This is where our personal stuff goes. It’s really bright. It’s meant to stand out. Get you something, and that’s where it goes. That’s where it lives. Now what happens if you lose it, you spill coffee on your W-2? Go back to your employer and ask for a duplicate. They can do that.

Eric Rosenberg:

And I’d say another thing to know for a lot of tax forms, maybe if you misplaced one from, let’s say you have a savings account and you get a tax form for your savings, a 1099. If you lose that, you can

probably still go into your online banking and download a copy.

Nicole Rosen:

Absolutely.

Eric Rosenberg:

So let’s say you have your papers all organized, you have your folder, you are Nicole’s tax student. What do you want to do next? I know there’s tax software. We’ve talked about there could be a person who does taxes for you. What are the pros and cons of trying to do it yourself on the computer or with an app versus going to a professional to go through all those papers with you?

Nicole Rosen:

DIY, do-it-yourself software, there’s some big names out there. It’s really good software. It really is,

especially for somebody who has one or two kids, one or two W-2s, a savings account, maybe a money market account. And it really walks you through it step by step. I think the key to being successful when you use the do-it-yourself software is having a good understanding of what you might qualify for.

So for example, if you are a single individual and you have some kids, and those kids you claim, you

might get the household filing status. So you need to review that when it gets to the end and make sure the way you answered the questions gets the output you’re expecting. Don’t just run through the

questions and then hit the file button. 

You want to make sure you look at those tax documents and make sure it’s what you are expecting. Do you qualify for earned income credit? That’s a really big refundable credit for a lot of families that honestly, is really, really helpful. For a lot of years, my own family qualified. My husband was in the military. We had a couple kids. Almost this entire career, we received earned income credit. But it’s really easy with that do-it-yourself software to answer one yes or no question incorrectly and disqualify yourself from the credit, so you’ve really got to review those forms.

Eric Rosenberg:

I’ve actually almost done that once myself. I missed one little check box and it made all the difference in getting a refund or paying. So I’d just have to say pay close attention there. Nicole knows that.

Nicole Rosen:

Yes.

Eric Rosenberg:

She’s right.

Nicole Rosen:

Absolutely. And most of those DIY places, they have people you can call, people like me, Eas, CPAs, tax attorneys, that we take phone calls and they say, “Hey, I think I should get EIC, but I’m not. Can you take a look at it?” And they’ll look and they’ll say, “Oh yeah, you’re below the income. Let’s figure out what the problem is.”

Eric Rosenberg:

You mentioned that tax professionals will often look back at past years and find, you said A, B or C might be wrong. I imagine you’ve reviewed a lot of tax returns in your career and you’ve seen a lot of A’s and B’s and C’s. So what are those top things people do incorrectly most often, and what are the biggest credits and deductions people might be missing by doing those incorrect things?

Nicole Rosen: 

So the biggest one that I see, there’s two that are really number one top of my list that I zero in when I

look at tax returns. One is earned income credit, especially for divorced parents that may not be

together anymore, because you have this child that your A) mom claims, then your B) dad claims, and it goes back and forth. However, earned income credit only stays with the parent who the child lives with. So there’s a way to set it up, where let’s say the kiddo always lives with dad, but mom claims every other year. Then dad is what we call a custodial parent, mom is the non-custodial parent. So dad, in my very, very basic scenario here, would always get earned income credit, even if he doesn’t claim the child. So just because the dependency passes back and forth, that earned income credit doesn’t.

Eric Rosenberg:

there’s a lot of divorced parents out there, there’s a lot of single parents out there who are really struggling with one kid, two kids, who knows how many kids, and every dollar you get back is a big deal. So don’t forget about those credits. I know there are some programs out there as well that the IRS offers to get free help or free advice through different partnerships. Can you share any advice if somebody wants to reach out for one of those free programs, even if there’s an income limit to participate?

Nicole Rosen:

Yeah, absolutely. So there is, the IRS gives out grants. There’s a granting process and they have to apply for it. But AARP is a really big one. They probably have the biggest free tax preparation clinics across the nation. It’s very established and they have a lot of long-term volunteers. Most of the AARPs in my area, volunteers have been there 10, 15 years, so they really know their stuff.

Eric Rosenberg:

Wow.

Nicole Rosen:

Yeah. The other one is VITA, Volunteer Income Tax, I think, Association. But a lot of times the county,

like food banks, whatever your food bank is, what your non-profit, your housing, so if you get behind on your rent, you go to housing and you need help, those people put on VITA. If you go to Google and you do a search for AARP, it’s called Tax-Aide, T-A-X-A-I-D-E, or VITA, V-I-T-A, then you can find those pretty easily.

If you’re in trouble with the IRS, so if you get a love letter, especially with the EIC, because it’s a big one to be audited, look for what’s called a low income tax clinic. Those are most commonly put on by

colleges. They train attorneys and they also help with tax problems. So there’s three places to go. You can Google. If you don’t have Google, look on your phone or call, in my area, it’s 211. You can call and get hooked up with different places. “Oh, I need food” or “I need electric help.” And they can help you find places.

Eric Rosenberg: 

Those are great resources. Thank you so much for sharing. So I have one very last question. Everyone, who I’m sure all the listeners just loved everything you had to say, if they want to go connect with you and learn more, where should they go?

Nicole Rosen:

I’m pretty easy to find online. My secure portal which I use is a website, just because nobody cares what I have to say. They just care about getting me their stuff most of the time. But it’s Portal.boundlesstax.com.

Eric Rosenberg:

That’s great. Well, thank you so much for sharing. Thank you for taking the time in this busy, busy tax

season out of your schedule to give us a little tax advice. Good luck getting through this last couple

weeks.

Nicole Rosen:

Absolutely. Well as an EA, I actually do, I’m pretty busy year-round. But yeah, this is our absolute busiest time of the year. And thank you so much for having me.

Eric Rosenberg:

Well, that was some great advice. Thank you so much, Nicole, for spending the time with us today. As always, if you are not already, make sure to head to the Apple App Store or Google Play Store to get started with Payactiv. It is a free financial wellness platform. And if you find yourself owing taxes, which we always hope we don’t have to do, you can use Payactiv to save up a little bit every payday

automatically so it’s not such a big shock when that tax bill comes in April.

All right, well that’s all for this time. Again, if you are not already a member, head to payactiv.com or the App Store or Google Play Store to get downloaded and get started. Thank you so much. Now get back out there and live that life you’ve earned.