The following is a guest post from Tiá Jones, MBA.

I think it’s funny that I can write this blog post for You Have More Than You Think while my poor blog, The Hostess Chick, is waiting to be updated. However, I felt this may be helpful for people like me (the readers who aren’t financially savvy and are just trying to get it together).

A few months ago, Shawanda wrote an article about Flexible Spending Accounts. She was a little upset, because it didn’t garner much traffic, but FSAs are a little confusing.

How do you know what amount to choose?

What if you over estimate what you need?

What do you mean I don’t get my money back if I don’t use it?

Many people hate having money taken from their check. I like it because it reduces my taxable income. If you’re not a good saver, it helps you budget for your health.

I’m usually good with my FSA. I’ve had one since 2004, but 2009 was different.

Last week, I was kicking myself. I budgeted $400 for the second half of 2009, and I hadn’t turned in a single reimbursement claim. My company had a merger so benefits were only for July through December.

My good intentions were to buy glasses for my son and me, then to submit receipts for copays and prescriptions.

I didn’t get our glasses until January 18th, and the only receipt I could find was for some children’s cold medicine valued at $3.99. Devastated, I asked Shawanda if it was unethical for me to try to scrounge up some cash receipts from family and friends so that I could recoup some of the $400 in losses that I’d be incurring.

She advised me to check with my benefits company, because most plans let you incur expenses through March. Well guess what, she was right. I was able to claim our $150 in eyewear against 2009.

She also suggested that I get off my bum and contact my doctor’s office. I haven’t called them yet, but I did check out Walgreens.com. My son has asthma, and I get all of his prescriptions from there.

I found out you can register on their site and get your prescription records for up to 18 months back. The only pain with Walgreens.com is that you have to create separate accounts for each person, but hey….in two days I’ll have a reimbursement check from my FSA.

Don’t forget to enter the $50 Amazon Gift Card Giveaway sponsored by Buxr.com.

Tiá is President of New Legacy Services, LLC, a small business coaching and consulting firm.  Her clients include YouHaveMoreThanYouThink.org and SistersSpace.com.  When she is not trying to change the world through entrepreneurship, she blogs about event planning and all things pretty on TheHostessChick.com.

I almost made a huge mistake. It’s a mistake I see other people make that drives me nuts. Although we’ve already talked about taxes this week in conjunction with the TurboTax Deluxe Online 2009 giveaway, there are other matters we should discuss.

Most people wish to pay as little tax as legally possible. I’m no exception. However, it’s illogical to avoid paying taxes if doing so causes you to incur expenses that exceed your tax savings.

For example, I continuously hear people talk about how buying a home makes financial sense because of the tax deduction. Or some people refuse to pay off their home mortgage because they don’t want to lose their precious tax deduction. That’s absurd. Deductions only reduce your taxable income which means less of your income is subject to tax. So, if you pay $15,000 a year in mortgage interest and you’re in the 25% tax bracket, you’ll save $3,750 in taxes.

Now let’s get this straight. You swapped $15,000 for $3,750. I’m not a tax specialist so never mind me, but that sounds like a raw deal.

If you think about it, you actually pay more than that if you consider you have to itemize in order to claim the home mortgage interest deduction. If you don’t itemize, you’ll still get the standard deduction which, for 2009, is $11,400 for married couples filing jointly, $5,700 for singles or married individuals filings separately, and $8,350 for heads of households. What you actually end up saving in taxes results from the excess of your itemized deductions over your standard deduction. Which means you’re probably not saving as much you think.

*Deep breath*

Eh, I’m rambling.

I actually want to talk about how laser distraction on tax savings almost led me to make a huge mistake.

This year, I’m focusing on fattening my retirement accounts. I spent 2008 getting out of debt, 2009 hoarding cash, 2010 is the year I resume long term investing.

At the beginning of this year, I set up a Roth IRA with Charles Schwab. I already have a high yield checking account with them that I love. I’m glad they have good customer service because I find their web site a bit difficult to navigate.

When I called Charles Schwab inquiring about how to link my ING Direct savings account to my Charles Schwab Roth IRA, the representative asked me if I wanted my first contribution to go towards 2009 or 2010. Like an idiot I replied, “It doesn’t matter. I won’t get a tax deduction for contributing to my 2009 Roth IRA anyway.”

Recall, Roth IRA contributions are made after tax. When you withdraw money in retirement, you won’t have to pay taxes on the distributions (or so they say). Traditional IRA contributions are generally tax deductible, but you’ll have to pay taxes when you make withdrawals.

Back to me being stupid.

It took a day or two before I realized I had until April 15, 2010 to max out my 2009 Roth IRA. After that, I could max out my 2010 Roth IRA. That would bring my total Roth IRA contributions in 2010 to $10,000!

Okay so maybe that’s not such exciting news, but I almost passed up the opportunity to invest an additional $5,000 in any index fund, mutual fund, bond fund, balanced fund, exchange traded fund, etc. of my choosing. I guess the alternative wouldn’t have been so bad. My company does offer a Roth 401(K), but I won’t have complete control over the money I invest in that account until I leave the company AND the fund choices are extremely limited AND the fees are too high for my liking.

Maybe you don’t see what the big deal is, but I almost made a huge mistake.

Have you ever allowed tax savings to cloud what otherwise would’ve been good judgment?

This giveaway has ended and prizes have been claimed, but don’t despair. Read on to learn how you might still qualify for free tax preparation software. Ha ha. That rhymes.

Last Thursday, I attended a Meet and Eat and Drink hosted by the good folks of TurboTax. Although I absolutely adore and appreciate you, dear reader, I was mostly concerned about what I could get for myself – in addition to the free food and drinks. I left the event with three burning hot gift cards for free federal and state tax return preparation using TurboTax Deluxe Online 2009.

Don’t get too excited. Y’all ain’t getting all of ‘em. I’m keeping one. Even though I’m a CPA, I’m not a tax specialist, and I, shamefully, still need to file my 2008 state tax return.

Before entering the giveaway, please consider whether you already qualify for free e-filing. There are governmental initiatives in place that might allow you to use other tax prep software at no cost. According to the Internal Revenue Service’s web site, approximately 70% of U.S. taxpayers can file their federal income tax return using such a free service. Some companies will even allow you to free-file (I just made that word up) your state tax return, so I highly encourage you to head on over to www.IRS.gov/freefile to find out if you qualify.

Do it now. I’ll wait.

Additionally, TurboTax Online Free Edition is available to taxpayers who file relatively simple federal returns (state returns carry an additional cost). Unlike the free products offered through the IRS’ web site, an adjusted gross income in excess of $57,000 won’t exclude you from the offer.

Assuming you’re still bound to pay for federal and/or state tax prep or are just too lazy to determine otherwise, HERE’S HOW TO ENTER.

Record your entries in the Comments section below. Remember to include a valid e-mail address as this is how I’ll contact you if you’re a winner.

You can enter the giveaway up to 4 different ways.

1) Leave a comment telling me how you plan on filing your federal and state income tax returns for free OR at a discounted price.

If you choose to enter the giveaway using any of the methods below, please submit a separate comment for each one.

2) Subscribe to You Have More Than You Think via RSS feed or e-mail.

3) Follow me on Twitter.

4) Blog or tweet about this giveaway.

This giveaway is open to U.S. residents only. No entries will be accepted after 11:59 PM EST on Sunday, January 24, 2010. If you’re one of the winners, you’ll have 48 hours to respond after being notified before an alternate is chosen.

Good luck!!!

An easy way to quickly get more money in your pocket is to increase the number of withholding allowances on Form W-4. By doing so, you don’t change your income. You just change the timing of when you receive your money. In the past, a compelling argument could be made to avoid receiving a large income tax refund because you could’ve earned interest on those funds during the year.

With high yield savings accounts paying interest of 1.o% to 1.5%, that argument isn’t as convincing as it used to be. Toss in the fact that you’re required to pay ordinary income taxes on that interest, and you’re almost back to zero anyway. But giving Uncle Sam an interest free loan is far more sinister than it appears.

I volunteer to teach a budgeting class for Capital Area Asset Builders, a Washington D.C. not-for-profit that focuses on helping people develop and improve money management skills. During class, I’ll bring up the importance of adjusting withholding allowances in order to receive money evenly throughout the year. You’d think I suggest the class participants cancel their cell phone service based on their reaction to this advice.

What’s so bad about receiving your money as you earn it?

While Big Brother is having his way with your hard earned cash, here is what you’re not doing:

• You’re not paying off high interest rate debt. Forget about earning a measly 1.0% on your savings account. Credit card companies aren’t shy about charging interest rates of 20, 25, or even, 30 percentage points. That interest-free loan to the government doesn’t cost an innocent 1.0%. It costs what you paid in interest to American Express, Sallie Mae, and any other creditor you borrowed money from.
• You’re not buying the things you need/want during the year. I’m a big believer in delayed gratification. However, if you take a portion of your income tax refund and purchase a washer/dryer after year-end, then why’d you inconvenience yourself with hauling clothes back and forth from the laundromat all year? That doesn’t make any sense.

Here are the three most popular excuses for continuing to get a big income tax refund:

• “It’s a forced way of savings. I’ll just blow that money if I receive it throughout the year.”
• “I might end up owing the government thousands of dollars at year-end if I miscalculate how much I owe in income taxes.”
• “I’ll still get a huge refund, because I can’t claim more than 10 withholding allowances.”

Hogwash!!! All of it!

• Have the extra funds direct deposited into a savings account from your paycheck with a bank that’s completely separate from the financial institution that holds your checking account. Your employer doesn’t offer this perk? Then have that money automatically transferred from your checking account to your savings account (again at a separate financial institution) no more than a business day or two after you receive your paycheck. If your bank is so antiquated you can’t set up automatic transfers, then get with the times, and find another bank.
• If your income, deductions, and credits are fairly consistent from year to year, then I wouldn’t worry too much about owing the government a large sum of cash come April 15th. If you’re still nervous, check out Dinky Town’s income tax calculators to get a better idea of your tax obligations. To further reduce the risk of being hit with a large tax bill, adjust your withholding allowances so that you only receive 50% of the previous year’s refund during the current year. For instance, if you received a $5,000 refund in 2008, then try to get an extra $2,500 in your paychecks during 2009. Use the Payroll Deduction Calculator at Dinky Town to see how changing your allowances impacts your take home pay.
• You can claim as many withholding allowances on Form W-4 as necessary to ensure you’re paying the appropriate amount of income tax. Many companies allow you to change your W-4 over the Internet. Some organizations cap the number of allowances you can claim on an electronically submitted W-4. Here’s what you need to do if your employer is one such organization: 1) Print out Form W-4. 2) Fill it out. 3) Walk your lazy self over to your company’s human resources or payroll department and turn the form in. It’s that simple.

I actually think it’s better to owe the government money, but not so much you’re penalized for underpayment of income taxes.

Do you receive an income tax refund every year? Why haven’t you adjusted your withholding allowances?