Let’s take a moment of silence for all the broken and disregarded New Year’s resolutions.
Don’t feel too bad if you’ve fallen behind on your financial goals, though. Research shows that, for most people, resolutions just don’t stick. About a quarter of folks give them up after just one week, and only 19% keep them long term. Coincidentally, today marks the beginning of the Lunar New Year, so if you want a fresh start, consider this your second chance.
And if (or, ahem, when) that second stab at resolutions goes up in flames, consider crossing off some simple, timely money chores instead. Each month, Money brings you a (hopefully manageable) docket of smart money moves. Below, we’ll dive into three key things you should focus on in February: taxes, free COVID-19 tests and masks, as well as the impending interest rate hikes from the Fed.
Let’s jump in.
1. File your taxes (electronically) as soon as you have all your documents
Tax season officially kicked off Jan. 24. By now, your 1099s and W-2s should be available electronically, and if not, they’re likely en route via the mail.
Once you’ve gathered all of your earnings-related documents, consider filing as soon as you can. That’s good advice every year, but this year more than others. Why? Well, to put it gently, the IRS is playing a little bit of catch up: It’s still dealing with millions of tax returns and unanswered requests from last year. That backlog is expected to slow things down this year.
It’s not all doom and gloom, though. Generally speaking, the sooner you file, the sooner you will get your refund. Filing electronically can also help reduce delays. To further cut down on the time it takes to get your refund, sign up to receive your refund as a direct deposit. It avoids additional paperwork and skips the amount of time it takes for a physical check to arrive in the mail.
Filing early is also beneficial if you owe taxes because it gives you a little extra time to prepare your payment. For example, if you file this month and see there’s a balance due, you won’t need to pay it immediately. The taxes you owe are due at the filing deadline, which is April 18 in most states this year.
Bonus tax PSA: H&R Block and TurboTax are no longer part of the IRS’s Free File program. Those tax prep companies may still have no-cost filing options but know that they will likely come with stricter requirements than the discontinued Free File option. You can also still file your taxes for free through one of the eight companies that do still participate in the IRS’s Free File program.
2. Get your free N95 masks and at-home COVID-19 tests
The federal government has recently rolled out a slew of programs that provide Americans with free at-home tests and high-quality masks in an effort to combat the pandemic.
They’re all quite similar and hard to keep track of, so here’s a brief recap:
- You can get four free at-home COVID-19 tests shipped directly to your door.
- Your private health insurer (if you have one) must now cover the cost of up to eight at-home coronavirus tests per month.
- You’ll be able to pick up free N95 masks at thousands of pharmacies and community centers.
The four free tests are available to order at COVIDtests.gov. This is a one-time deal: Four tests per address.
If you have private health insurance, the companies are now required to cover the costs of up to eight at-home tests — either by reimbursing you for the ones you’ve paid for out-of-pocket, or by covering the costs upfront at checkout at certain partner pharmacies. A word of warning: the reimbursement process may be a headache.
Finally, the Biden administration is in the process of shipping out 400 million N95 masks to pharmacies and community health centers all around the country. Some locations started handing the masks out ahead of schedule — as early as Jan. 21 — but the program isn’t taking full effect until later this month.
3. Consider refinancing your mortgage and other debt before the Fed hikes rates
The Federal Reserve System, aka the Fed, has signaled that interest rate hikes are on the horizon. Analysts are predicting several rate increases throughout 2022, with the first one likely happening as soon as March.
This is especially important if you are thinking about refinancing any debt, including mortgages, student loans or personal loans. While the Fed does not directly control the interest rates of those types of loans, it does have the power to set the short-term interest rate that commercial banks use when they borrow money from each other. When this rate increases, lenders and banks usually respond by increasing the interest rates on the loans they give out.
Because interest rates have been near record lows throughout the pandemic, it has been a great time to refinance debt for many folks. But that window to refinance at super-low rates is closing.