Zombie Economics: Tax Day Tips

      You've filed your you know when your refund will arrive, or what to do if you can't pay your bill? Rick Emerson, author of Zombie Economics, stopped by to fill us in on what we need to know to make the most of our money.

      Q: If you're getting a refund this year - how long does it take to arrive?
      A: If you filed online, 10-21 days. If you filed via regular mail, about six weeks.
      Filing your taxes electronically has become more than a matter of convenience - it can actually cut your refund-wait time by 75%. And, if you filed online, the IRS provides a website for tracking the status of your refund, so you can get a better estimate of its arrival date. Go to, click "where's my refund?", and you'll be taken to a page which will tell you exactly that. (You'll need to enter your name, social-security number, and the exact amount of your refund in order to see the status.)

      Q: What's the smartest way to use the money from a tax refund?
      A: Treat it as an extra paycheck...not as a "bonus".
      Remember, that refund money originally came out of your paycheck - it's part of the total, round number that you think of as your yearly income. Use this extra paycheck to increase (or jump start) your financial stability. A good rule of thumb: immediately put 10% of that refund in savings. If you're drowning in credit-card debt, put the rest of your refund -as much as possible- toward the card with the highest interest rate.
      Other ideas for your tax refund:
      1. Pre-pay for all (or part) of a future vacation.
      2. Schedule a doctor, dentist, or other medical appointment that isn't covered by your insurance.
      3. Start (or increase) a "529 Plan" - a special, tax-advantaged savings plan that can help fund your children's college education.
      4. And if you've been making financial progress this year, feel free to put part of your refund toward a cash purchase - something you're saving up for.

      Q: If you owe money (perhaps far more than you expected) to the IRS, what's the best way to proceed?
      A: File on time, no matter what...and if you can't pay it all, pay what you can.

      We cannot say this loud enough or long enough: it is crucial that you file your taxes on time, even if you think you'll end up owing. The penalties for not filing are much, much higher than the penalties for non-payment. In other words: it's better to owe money than to make the IRS come looking for you.
      If you owe the IRS more than you have, pay what you can right away - this shows good faith, and can help cover penalties and interest. Then, contact the IRS to set up an installment plan. Remember: the government is a business, and they want to get paid, so they'll work with you.
      If you feel that your situation is too complicated to handle online or on the phone, the IRS has Taxpayer Assistance Centers that let you sit down and talk to a real, live person. You can find the closest Taxpayer Assistance Center at

      Q: Should I just pay the whole tax bill on my credit card?
      A: Probably not; paying the IRS directly is much usually much cheaper (this year, at least.)

      In past years, taxpayers were often advised to pay off their taxes with a credit card to avoid heavy fines and penalties. At the moment, however, IRS installment plans cost relatively little...about six percent per year. A typical credit card, though, is around 15%, and has added charges and fees on top of that.
      As always, check the specifics of your situation at, and no matter what your plan for payment, pay it off as soon as you can, and get back in the black.

      Q: What's the deal with Portland's new Art Tax?
      A: The Portland Arts Education and Income Access Tax was approved by voters last fall, and is a separate tax of $35 on any adult resident who is above the federal poverty line.

      This tax bill arrives separately in the mail and started going out to residents late last week. Remember: it's a tax on residents, not households, meaning that a married couple, for example, pays twice, for a total of $70. The good news is that it goes to support music and other arts in Portland schools. The other good news? It's not due until May 15th.