With April 18 just around the corner, chances are you and your spouse are knee-deep in tax work. Most couples file jointly to take advantage of various benefits but depending on your situation, you may want to file separately.
We tapped Kelly Phillips Erb, a Philadelphia tax attorney who blogs at Forbes, for some pointers on when to do this. (Sadly, love doesn’t conquer all when it comes to the tax man.)
1. When a Spouse Has a Tax Liability
Though your spouse’s liability won’t carry over to you, it could throw a wrench in your taxes if you file jointly, Erb says. “It can make filing taxes complicated because you have to file an injured spouse claim” if something goes wrong. For example, if your husband owed back taxes but as a couple you got a refund and the IRS decided to take it, you’d be prompted to file an injured spouse claim. This may help get part of your refund back.
Your spouse’s back taxes could also impact their credit score if the problem gets bad enough. The government could make a claim on your property until the debt is repaid, which is known as a tax lien. This will show up on your spouse’s credit report and could make it harder for them to borrow money in the future. (You can see how a tax lien and other factors may be hurting your credit by reviewing two of your free credit scores on Credit.com, which are updated every two weeks.)
2. When a Spouse Can’t Be Trusted
“When you file a return, you sign under penalty of perjury,” Erb explains, noting taxpayers vow to report everything to the letter. “If you sign the return knowing they tend not to be forthcoming, you’re putting yourself at risk.”
Erb recalls a client who dealt with this issue for 15 years and “ended up with a liability in the millions she couldn’t pay.” However, she had signed a return with her husband claiming things were just fine. The IRS eventually chased both of them down for the money, even after they separated. “When you get married, you like to think everything’s rainbows and unicorns,” Erb says, but “don’t file if you think they’re not being truthful. Ignorance is not an excuse.”
3. When a Spouse Lives Abroad
“There are some tax reasons why you might file separately, but as a rule, most people file separately for non-tax reasons,” Erb says. However, if one spouse has a different residency — not just between states but in another country entirely — it “might be advantageous to file separately, because depending on the situation, you could possibly lose credits or other tax breaks that you might not want to.”
Whether you’re finishing your basement, fixing a leaky bathroom faucet or trying your hand at built-in bookshelves for your family room, Lowe’s is your one-stop-shop for all things home improvement related. While it can be super-easy to spend a ton of cash there, it’s also just as easy to save. Here’s how.
1. Wait for Things to Go on Sale
If you can, it pays to wait for the bigger items you need to go on sale at the home repair superstore … because they inevitably will. Beginning of the year sales, for example, included up to 40% on bathroom essentials like toilets and sink basins, as well as up to 40% off select custom kitchen cabinets when you spent $3,500 or more.
2. Apply for a Lowe’s Credit Card
If you’ll be shopping here enough and you can pay the credit card off on time (the APR is a variable 26.99%, so this strategy only really works if you can absolutely pay your bill on time), apply for the Lowe’s credit card. New cardholders can pick from between 5% off items every day or six months of special financing with a $299 minimum purchase. Just be sure your credit can handle an inquiry before you apply. You can see where you stand by viewing your free credit report summary, updated every 14 days, on Credit.com.
Be sure to check the site for Lowe’s one-day only deals, which are good for that day only and while supplies last.
4. Peruse Their Shop Savings Section
Lowe’s adds new discounted items every week to their Savings section, and deals generally last for a couple days or, even, up to a few months.
5. Check Out Their Weekly Ad
Search through your local paper or check online for the Lowe’s Weekly Ad for savings on items that generally last through that week only.
6. Take a Look at Clearance Items
Use the clearance section of the site to find even more discounts on items like cleaning supplies, flooring, home décor and more. Some items are up to 75% off, but the deals generally expire, so check back frequently for what you need.
7. Submit for a Rebate
Many Lowe’s products come with rebate offers, especially if they’re energy-efficient products. The store makes it easy to find out which products will save you a little cash — just check out the current rebates section on the site and submit an online application if your product applies. You can check the status of your rebates there, too.
8. Sign Up for Their Email Newsletter
Submit your email for the Lowe’s newsletter to get the weekly ad, exclusive offers and promotions, sneak peaks of upcoming events and more, directly to your inbox.
9. Join Their Garden Club
Sign up for Lowe’s Garden Club and you’ll receive an email every week with special promotions and offers, as well as gardening plans, advice and more.
10. Never Miss a Sale When You Follow Lowe’s on Social Media
Catch all the current deals and promotions by following the brand on Facebook, Twitter and Instagram.
11. Get a Price Match
Lowe’s guarantees everyday competitive pricing. As such, if you find a competitor offering a lower price on an identical item, bring in the competitor’s current ad and Lowe’s will beat their price by 10%. If a competitor is offering a percent off discount, they’ll match the final net price the competitor is offering.
12. Use Online Price Protection
If you’re already in the store, be sure to check online to see if the item you want is cheaper there before heading to the checkout line. You can shop for your Lowe’s products online to receive the lower of the online store price or the price at your local Lowe’s store. Or, select “store pickup” to order your items online and pick them up in your local store later, thus avoiding the shipping fee —unless you have $49 or more in items, in which case shipping is free.
13. Ask for a Military Discount
If you currently serve in the armed services or are a retired veteran, you and your immediate family receive a 10% discount. Check here for the stipulations.
14. Load Up on Free Services
While it’s not an immediate way to save, taking advantage of all the workshops and personalized services offered at Lowe’s is a great way to ensure you do your project right, which will save you time and money in the long run. Check out a full list of in-store services, including workshops, clinics and other services, on Lowe’s website.
15. Buy Gift Cards at a Discount
Shop sites like Gift Card Granny to purchase Lowe’s gift cards at a discounted price.
16. Install a Coupon Aggregator on Your Computer
Never miss another online coupon or savings offer when you install a coupon aggregate collector, like Honey, on your computer. The search engine will automatically look for discounts at your time of online checkout and could score you even more in savings.
17. Ask When a Sidewalk Sale Is Happening
A couple times a year you’ll notice that Lowe’s has a ton of items out on the sidewalk. These items are often on sale big-time, and their sidewalk sale happens a couple times a year, so be sure you don’t miss it.
Credit cards may be in the wallets of most Americans, but not everyone is happy with their travel companion.
The Consumer Financial Protection Bureau (CFPB) released its monthly snapshot of consumer complaints in the financial services industry this week. The report, which regularly focuses on a different financial product to highlight consumer complaint trends, focused on credit cards and what irks consumers about their plastic friends (or foes, depending on how you view it).
Credit cards represent only about 10% of total complaints to the CFPB, a small amount considering how prevalent the cards are in Americans’ daily routine. That puts them in fourth for the most complained-about financial products, behind debt collection, credit reporting and mortgages.
Here are four of the major credit card complaints that surfaced in the bureau’s review.
1. Disputes Over Fraudulent Charges
Billing disputes were number one on the CFPB’s top credit card complaint list. Of the nearly 100,000 complaints the CFPB analyzed, 17% were over billing disputes. Credit cards often offer purchase protections and chargebacks — tools consumers can use to combat faulty merchandise or high prices — and these tools are rarely offered by debit cards and never offered by cash. But fraud seems to be the source of most complaints, as consumers finding fraudulent charges cite trouble removing or getting re-billed for them.
How to Avoid It: The best way to keep yourself from having to dispute fraudulent charges is to keep your credit card information as safe as possible from fraudsters. Never share your credit card with shady sites that don’t have a “lock” symbol or https:// when taking your data. And even though it’s convenient, avoid letting shopping websites “remember” your credit card info for next time. While some of those sites have excellent security, data breaches are becoming more and more common and credit card info is a literal gold mine for a hacker. (To keep an eye out for signs of identity theft, you can view your free credit report summary on Credit.com.)
2. Rewards Program Murkiness
If you’ve ever owned a rewards credit card, you know that to make the most of your card’s program, you need to read up on all the details (and those details do change). The CFPB found that confusion over how a credit card rewards program works was sometimes attributed to differences between what consumers encountered online and what they were told by customer service representatives over the phone.
How to Avoid It: The CARD Act of 2009 did a lot to make credit cards more consumer-friendly, but little regulation pertained to rewards programs specifically and business credit cards were not included at all in the act’s purview. That means you need to be a careful shopper, as you should be with all financial products — mortgages, business loans, you name it. Before you sign up for a rewards credit card, read the rewards terms carefully — they are often in a separate piece of paperwork from the APR and fee disclosures.
3. Being a Victim of Fraud/Identity Theft
Identity theft/fraud/embezzlement as a category came in third on the CFPB’s list at 10% of all credit card complaints. Many complaints pertained to account activity that the cardholder didn’t initiate, the report said. It points back to that top complaint of fraudulent charges as well — fraud is a problem for consumers as well as credit card issuers too.
How to Avoid It: In addition to keeping your credit card information safe (see tip #1), keep your identifying information safe. To open a new credit card in your name, a fraudster would need to have access to your Social Security number, name, address and other details. Protect that info and you limit your chance of getting got. And because “embezzlement” is included in this category as well, business owners should be sure to have a policy in place if they’re extending a company credit card to an employee. The rules should be clear so you don’t have to go through the painful process of disputing charges with your issuer.
4. Trouble Closing/Canceling an Account
Even though closing a credit card can do some credit score damage, it doesn’t stop consumers who want to avoid the temptation of spending too much or just have too many cards to manage. Roughly 7% of the CFPB’s credit card complaints pertained to consumers struggling to close accounts.
How to Avoid It: Call your issuer directly (you normally have a number on the back of your credit card) and ask to close the account. Be ready though — you’ll most likely be transferred to a department that is specifically going to try to keep you as a customer, perhaps offering a lower APR or a waived annual fee for that year. (Some consumers use this as a tactic to get a better credit card, in fact.) If you’re adamant on closing the card, just stick with your plan and make sure to monitor your email or mail for your last statement. You don’t want to miss the last payment on your card and put a black mark on your credit report just because you thought the card was closed. A credit card with a positive payment history, even though it’s closed, can still help your credit score. But missing a payment will definitely hurt it, and if you have a business credit card, it could impact not just your personal credit, but your business credit scores as well. You can find a full explainer on canceling credit cards right here.
Spring has begun, which means open season on travelers who aren’t well-versed in the various scams waiting for them on the seamier side of paradise. While the scams abound, being forewarned is forearmed.
Here are some typical scams that can ruin your vacation, drawn from my book Swiped: How to Protect Yourself in a World Filled with Scammers, Phishers, and Identity Thieves.
1. Asocial Media?
One seldom publicized use of social media (at least in crime circles) involves monitoring posted photographs for clues about where you live and what you have that’s worth stealing. In addition to providing a visual inventory, photographs can contain hidden information called geotags that allow a thief to pinpoint the location of your home. If you post pictures while you’re on vacation, you might as well display a flashing neon sign saying, “Rob me.” Rather than sharing your adventure in real time, it is far safer to relive the memories with everyone you know when you return. If you simply can’t resist the urge, at the very least tighten your privacy settings so that you strictly limit who can see these posts.
2. Ticket Scams
You receive a letter informing you that you have a chance to cash in on a big win: free airline tickets. There have been several attempts to contact you about the tickets (you won them through a sweepstakes you have never heard of, in which you were automatically enrolled), and you’re going to lose them if you don’t contact the travel agency or cruise line immediately. The letter provides a toll-free number to call. You call it and there are … well, certain requirements (like providing a credit card or Social Security number). Meeting those obligations will cost you far more than the alleged free tickets. (Fallen for this one? Be sure to check your credit for warning signs of identity theft. You can view two of your credit scores for free, with updates every two weeks, on Credit.com.)
3. Hotel Front Desk Scam
Your plane gets in late, you can’t get a taxi and by the time you arrive at your hotel all you want to do is take a shower and go to bed. About an hour after checking in, the phone in your room rings. It’s the front desk calling to tell you that the credit card you gave them was declined. “Can you please read me your credit card number again? Or, if you would prefer, you can give me another credit card.” If this happens, in lieu of readily handing over your digits, take a trip to hotel lobby to confirm whether there is an actual issue.,
4. Hotel Pizza Scam
When you check into your hotel, you see flyers in the lobby or under your door for a pizza joint. It’s late and you’re starving, so you call the number on the flyer. Someone answers exactly the way you expect they will. You place your order. They ask for your credit card number, which you immediately provide because your mind is on the pie and not your personally identifiable information. Several hours later, you’re still waiting. And starving. Unfortunately, the only one getting fed is the thief — and your credit card is for dinner.
5. Vacation Rental Scam
A thief finds a rental property online and uses the details to create his own website and listing. They’ll even have bogus five-star reviews from fake renters, and it will be particularly affordable, possibly due to a one-day-only internet sale. You book the listing and pay either by credit card or wire transfer, and you get ready to pack your bags.
Here’s the problem: When the time comes and you show up for your vacation, that’s not your condo. It’s not just a matter of bait and switch, where the gorgeous property on the website doesn’t exactly live up to reality. In this case, the property is very real and even very beautiful … but you didn’t rent it. There may even be another family staying in it that week. You now find yourself on vacation with nowhere to sleep, and your scammer is nowhere to be found.
If the person can’t answer questions accurately — or takes too long to answer, which indicates that they’re also doing an online search —that could be a red flag. It is possible that the rental agent is located in another city, but someone in his or her offices should have at least laid eyes on the property and be able give you an idea of the answers.
Tip: Whenever you’re booking a rental property — for any reason, not just a beach getaway — there’s a sneaky little trick you can use to verify the authenticity of the listing and the property. Instead of emailing, call the person on the phone, but first do an online search for other businesses in the area surrounding the property, then ask the listing agent some specific questions that you’ve already figured out the answers to. How far is it to the nearest beach access? Where is the nearest restaurant with a kids’ menu? How far are we from an emergency room in case someone in our group gets hurt?
Keypad overlay devices, ATM skimmers (you can see one in action here) with a pinhole camera — there are many versions. Sometimes skimmers and the hardware associated with them can be spotted (if you know what you’re looking for and it’s one of the skimmers you can detect, for instance, by banging on the ATM machine or trying to shake the user-interface module), but often it’s impossible to detect a skimmer scam. When you’re out having fun, by definition you are distracted and understandably off guard. Try to remember that even in the midst of the time of your life there are bad guys out there intent on a major buzzkill. And monitor your bank statements carefully so you spot any fraud that may have occurred.
7. Wi-Fi Scams
Not all Wi-Fi is created equal, and it’s not all secure. If you’re not sure about a Wi-Fi connection, be careful about what you do online. Do your banking and bill paying on your secure home network, and let your time off truly be downtime so that you don’t end up having a downer of a vacation. You can go here to learn more tips for better internet safety.
Chances are you’re like most Americans and, regardless of your age, you aren’t saving enough for retirement, if you’re actually saving anything at all.
Nearly 40 million U.S. households (45%) have no retirement assets, according to a recent report by the National Institute on Retirement Security, and half of those households are headed by someone aged between 45 and 65. In fact, savings rates are so bad that many Americans are dying with an average of $62,000 in debt.
Even if you are saving enough for retirement, you might still wonder if that money will last your entire lifetime. Defined contribution plans like 401Ks are great at helping employees save for retirement, but they provide no guarantee of income as pensions do. On top of that, most 401Ks are self-directed, meaning those who do a poor job handling their investments could end up with significantly less money than they need in retirement.
But what if you could guarantee yourself income for life, just like ubiquitous company pension plans used to provide (and government pension plans still do)?
Well, you can. Here’s how.
Back in 2014, the Treasury Department started an initiative focused on “putting the pension back” into 401K retirement savings. (Need to brush up on retirement lingo? Here’s a handy guide.) Through loosened restrictions and some tax-law changes, the Treasury made it easier to convert funds from retirement savings into plans known as longevity income annuities, or LIAs, that provide guaranteed lifetime income.
Income for Life
LIAs are deferred annuities and, while they’ve been for a while, they’ve only recently become a part of mainstream retirement planning. The Treasury initiative could even cause them to become an integral part of 401K target funds. Here’s how they work: Say you have $100,000 in retirement savings. At age 65, you use $10,000 of that money to purchase an LIA. “Even in the current low-interest-rate environment, a deferred single-life annuity purchased at age 65 for a male costing $10,000 can generate an annual benefit flow from age 85 onward of $4,830 ($3,866 for a female) per year for life,” a recent National Bureau of Economic Research working paper concluded.
It’s easy to see how helpful this kind of guaranteed income could be, particularly given larger investment amounts. Of course, it’s a hedge that you’ll live long enough to take advantage of those funds, but some programs provide for reimbursement should you die before accessing all of your money. More on that in a minute.
According to Olivia S. Mitchell, a professor at the Wharton School of the University of Pennsylvania and a co-author of the working paper mentioned above, LIAs are available to investors but are not yet tied to defined-contribution plans.
“There has been discussion about including them in the target-date suite of funds, and some employers are actively looking for options,” she said in an email. “Relatively few insurers have them available as yet.”
“One reason annuities or lifetime income streams are not a standard feature of 401K plans is that many people don’t understand these products,” she wrote in an article for Forbes. “For instance, some older individuals tend to underestimate their chances of living a long time, so they don’t take proper precautions against outliving their assets. Others don’t understand financial concepts, and so they’re reluctant to take unfamiliar financial decisions. After all, retirement is usually a once-in-a-lifetime event!”
Just because they aren’t directly tied to defined-contribution plans just yet doesn’t mean LIAs aren’t easily accessed. AARP, for example, has been offering its Lifetime Income Program through New York Life since 2006. AARP’s plan has a cash refund feature so, as we mentioned earlier, if you die before your payments equal your annuity purchase price, your beneficiary will be paid the difference.
Is an LIA Right for Me?
As with most financial tools, some people will benefit from an LIA more than others. “People in poor health might not want to elect deferred annuities, particularly if they have a poor survival prognosis,” Mitchell said. “Some very wealthy people will not need the LIA as they can self-insure against outliving their assets. Retirees with a (well-funded) defined benefit pension probably don’t need additional annuitization. And people with a very small nest egg might not find it worthwhile to annuitize, say, $10,000. But much of the middle class could benefit.”
In considering LIA plans, Mitchell recommends asking how highly rated the insurer is who provides it. She also suggests knowing how well the state insurance guarantee fund is being run and the maximum amount you’d recover should the insurer go bankrupt. (As you’re planning your retirement, you should also make sure you have a full picture of your finances, including your credit. You can get a free snapshot of your credit report on Credit.com.)
So how much should you consider putting into an LIA? “Older individuals would optimally commit 8% to 15% of their plan balances at age 65 to a LIA, which begins payouts at age 85,” Mitchell, et al, wrote in their working paper.
As for timing, it doesn’t really make sense for someone who isn’t at or near retirement age to purchase an LIA. For one thing, you can’t access your retirement funds without penalty until age 60.
“It makes sense to decide how much to devote to the LIA in your mid-60s, since that gives 20 years over which the annuity value can build up,” so you can begin taking payments at age 85, Mitchell said.
Of course, there are a variety of annuity products to suit different personal needs, such as earlier payout options, so it’s a good idea to speak with a financial professional who can help you decide what product might be best for your financial situation.
Are you looking to afford a new mortgage? A 50-year mortgage may be an option, but here are some things to consider when looking at a long mortgage term.
These loans are not bought and sold by Fannie Mae or Freddie Mac. They are smaller banks and portfolio lenders that offer unique financing and, as a result, will charge an additional premium. You can expect your interest rate and fees to be above market. By above market, we mean at least three quarters of a discount point higher in rate than the Freddie Mac mortgage market survey. This type of loan effectively is an interest-only mortgage that is similar to the interest on the loans that were available before the financial crisis.
The 50-year mortgage is pretty much what it sounds like — your loan is amortized over 50 years, similar to the way a 30-year, fixed mortgage is amortized over 30 years. At the end of the loan term, the loan is paid in full. A 30-year, fixed-rate mortgage typically translates to paying double the amount of money you originally borrowed. With a 50-year mortgage you will pay almost four times the amount of interest on the amount originally borrowed. Yes, such a loan term would be incredibly expensive — the cost of having a lower monthly mortgage payment.
Are You Biting Off More Than You Can Chew?
If you are comparing a 30-year mortgage to a 50-year mortgage, you might be trying to purchase more than you can handle — not a prudent move if you’re trying to take on something affordable. While the mortgage payment might be affordable, it would also be an incredibly expensive financing vehicle. For all intents and purposes, this is practically an interest-only mortgage
Interest-only loans can be beneficial for a consumer who has big liquidity in the bank, excellent credit and is otherwise sophisticated in mortgage finance, while looking for cash flow. (Don’t know where your credit stands? You can get your two free credit scores, updated every 14 days, right here on Credit.com.) For everyone else, a 30-year fixed rate mortgage is substantially less expensive than its 50-year counterpart.
If you were thinking about this type of financing, you may want to reconsider and speak with a professional — someone who can guide you on what type of income may be needed to qualify for the purchase of a home.
You’re motivated by a deadline, you’re busy, you’re still getting organized — whatever the reason, you haven’t filed your taxes yet. That’s not a huge deal (there’s a deadline for a reason), but still, waiting until the last minute to file your taxes means you might be rushed. And that means there’s a higher likelihood of making mistakes or overlooking something important.
To help you avoid making a mess of an already unpleasant task, we put together a list of things you should keep in mind as you get ready to face the job you’ve been putting off for months.
1. The Sooner You File …
… The sooner you can get a refund. The IRS says it issues nine out of 10 refunds in less than 21 days.
2. Waiting to File Puts You at Risk
Taxpayer identity theft is no joke. It generally involves someone using your Social Security number to get a fraudulent refund — preventing you from getting yours in a timely manner.
3. If You’re a Tax Fraud Victim, You Need to Prepare a Paper Return
“First, I would definitely contact the IRS, and you should also contact the credit bureaus, and then you would just have to paper file your return if they already e-filed using your Social Security number,” said Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax.
4. The Deadline to File …
… Is April 18. No, that’s not a typo. April 15 falls on a Sunday this year, and April 16 is a holiday in the District of Columbia. So Tuesday, April 18 it is.
5. It’s a Hard Deadline
Your paper return must be postmarked by April 18. An e-file must be submitted before midnight on April 18. Otherwise, the IRS could slap you with fees.
6. But You Can Get an Extension
You can file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, which gives you an additional six months to file.
7. The Extension Is for Paperwork, Not Payment
If you think you’ll owe taxes, you must make your best guess using previous years’ information and an online estimate calculator.
8. Unpaid Taxes Carry Fees …
Interest on unpaid taxes compounds daily from the due date of the return to the date they’re paid in full. The failure-to-pay fee is one-half of 1% of your unpaid balance for each month, or part of a month, up to 25%, until the debt is paid in full.
9. … & Even Affect Your Credit Score
If your unpaid-tax problem gets bad enough, the government may make a claim to your property until the debt is repaid. That’s called a tax lien, and it will show up on your credit report. (You can see how a tax lien and other factors affect your credit by reviewing two of your your free credit scores on Credit.com, updated every two weeks.)
10. Make Sure You Have All Your Forms
“Keep a list of all of your jobs during the tax year,” said Abby Eisenkraft, an enrolled agent and CEO of Choice Tax Solutions. “Some taxpayers receive numerous W-2s (think actors, temps, etc.). Freelancers — you may receive numerous Form 1099-Misc; be sure you received them all.”
11. But Report All Your Income, Even If You Didn’t Get a Form
“Some employers are sloppy and may not issue them to you by Jan. 31 of the following year. Regardless, you must report all of your income,” Eisenkraft said. You can ask an employer for a copy of a missing W-2 or ask the IRS for transcripts of forms you think you didn’t get. Of course, this takes time, so you may need to file an extension.
12. *ahem* ALL of Your Income
“The easiest way to get an IRS notice is to omit reporting all of your income,” Eisenkraft said. “Also, remember that jury duty and prize money (lottery, etc.) are also taxable.”
13. Plan to Wait in Line
At the post office, at your local tax preparer’s office — anywhere that does anything having to do with taxes.
14. Take Advantage of Technology
There are several ways you can file your taxes for free without having to do them the old-fashioned way. Tax software can be a huge help when you’re facing a time crunch.
15. Affordability Is No Excuse
“Many people put off filing their taxes because they can’t pay the full amount,” said Samuel Brotman, a tax attorney and owner of Brotman Law in San Diego. “You’ll cause far more headaches if you don’t even attempt to play ball with the IRS, though.” See: aforementioned fees.
16. Make an Effort to Pay
“It’s in your best interest to file and pay as much as possible by the April 18 deadline,” Brotman said. “If you’re just not ready or able to file by the deadline, make sure you file for an extension. The IRS will automatically grant a six-month extension, giving you additional time to get your taxes in order.” Thinking about paying your taxes with a credit card? Read this first.
17. Or Get a Payment Plan
Keep in mind you must file your tax return before applying for a payment agreement, so get cracking if you think you’ll need one.
18. The Chances of an Audit Are Low
Of all the individual income tax returns filed in 2014, the IRS audited 0.8% and 1.3% of corporate returns. (You can read more about how to avoid an audit here.)
19. But You Still Need to Be Careful
Just because it’s unlikely you’ll get audited doesn’t mean you shouldn’t prepare your taxes as if you will. Not only could you get in trouble for a sloppy return, you could miss out on savings through deductions or credits you didn’t look into.
20. Watch Out for Scammers
Whenever people need help, there are other people out there waiting to take advantage of them. If you’re asking someone to prepare your taxes, make sure they’re qualified to do the job and that they have a good reputation. This guide can help you determine whether or not you need a pro to do your taxes.
21. Ask for Help
If you can’t afford or don’t want to pay for a professional, that doesn’t mean you’re totally on your own. “Go to trusted friends or family with last-minute questions on anything that might be confusing. With a little elbow grease, technology and friendly advice, you can get your maximum refund back — painlessly,” said Micah Charyn, a financial adviser with FTB Advisors in Nashville, Tennessee.
22. You’re Responsible for What You File
Keep in mind that, ultimately, you’re responsible for what’s in your tax return, even if you used software or an accountant to help you. Don’t zone out just because someone else is doing the heavy lifting.
23. ‘Do You Spell That With a C or a K?’
Of course, you know how to spell your name, but don’t leave anything to chance. This is especially important if you changed your name recently. Your tax return must have your legal name on it.
24. While You’re At it, Double-Check Your Address
This is an easy one to mess up if you’ve moved. “Your state may ask you where you lived by the close of the tax year you are filing, but you must file with your current address,” Eisenkraft said.
25. Your Social Security Number
“When you are tired or distracted, it’s so easy to transpose numbers,” Eisenkraft said. “And with so many numbers jumping out at you on the tax return, it’s easy to miss. The IRS will reject your tax return if the Social Security number is incorrect.”
26. Your Dependents’ Social Security Numbers
You must have the right Social Security numbers to get associated credits.
27. & Your Bank Account Info
You want that refund ASAP, right? “One mistake that we’ve seen before is listing the wrong bank details on your taxes,” said Jayson Mullin, the owner and founder of Top Tax Defenders, a tax resolution company in Houston. “This means your return won’t end up in your account. If you notice you’ve made this mistake, you’ll have to notify the IRS and wait an additional six weeks for a check to arrive in the mail.” The same goes for making a payment: You want that go to through.
28. Make Sure You Can Legally Claim Dependents
“There are relationship tests, gross income tests, residency tests, etc. Make sure the person you are trying to claim as your dependent passes all of the IRS tests,” Eisenkraft said. “And if your child is in school and working, remind him or her NOT to claim his own exemption.”
29. There Are Lots of Deductions You Could Potentially Take …
“I call this ‘looking for change in the sofa cushions,’” said Dominique Molina, a CPA in San Diego. “Go back through your bank and credit card statements and scan through, looking for expenses you haven’t been reimbursed for. These can be deducted on Schedule A under Unreimbursed Employee Expenses.”
31. Student Loan Interest
You can get the forms you need from your student loan servicer. They’re usually right there in your online account.
32. Medical Expenses
“You can deduct out-of-pocket medical expenses if you itemize (file Schedule A),” Eisenkraft said. “You cannot deduct any expenses that are reimbursed by insurance. If your medical premiums are deducted pre-tax at work, you cannot deduct them on your tax return. No double-dipping! Be sure to keep all of your receipts.”
33. & Job Search Expenses
You can deduct expenses associated with your job hunt, provided you’re looking for a new job in your current field.
So many people forget to do this, but it’s important. You can count charitable gifts made until April 18 of this year.
36. Or Do a Last-Minute Spring Cleaning
Say you didn’t get around to much charitable giving last year or you didn’t keep records — you could always procrastinate a little more by cleaning the house and donating things you don’t need. Don’t forget a receipt. (But then you really need to get on that tax thing.)
37. Don’t Skip the City Tax
Local and other state taxes, which you can check for at the bottom of W-2 forms, refer to a wage or income tax and may not be automatically deducted from your paycheck if you’re self employed. If you haven’t paid them, be prepared to cut a check. Here’s a handy guide to understanding your paycheck.
38. Contribute to Your IRA
Want a last-minute way to reduce your tax bill? Unlike most other tax-saving strategies, which have to be in place by Dec. 31, you can contribute to your IRA up until tax filing day if you haven’t already contributed your maximum for 2016. As TurboTax notes, for example, you can contribute $5,500, the maximum amount for 2016, and save as much as $1,925 in taxes if you’re in the 35% tax bracket.
39. Don’t Overlook Credits, Either
The IRS estimates that four out of five taxpayers are eligible for the earned income tax credit but don’t take it. A tax pro or software can help you determine if you qualify.
40. Keep In Mind Things Change From Year to Year
Just because you got deductions last year or didn’t qualify for credits last year doesn’t mean the same is true for this tax year. Take time to think about what changed.
Even if you made less than the income threshold that applies to you, don’t ignore tax season completely. “If they had federal taxes taken out of their paycheck or qualify for the earned income tax credit, they may have a refund coming,” Greene-Lewis said of taxpayers.
43. Get a Past Year’s Refund You Forgot to Claim
You have three years to claim a refund.
44. Think About the Best Way to Use Your Refund
Need some motivation to get your taxes done? The average tax refund for tax year 2015 was $3,120. You can finally buy that thing you’ve wanted to splurge on, pay down debt, or even use the cash influx to help yourself build credit.
IRS audits generally go back three years but can potentially reach back six. Keep a copy of your return in a safe place. You may also want to hold onto W-2s if you’re planning on applying for a mortgage any time soon.
47. You Can Make Amends
If you made a mistake in your rush to file, you can amend your tax return. You won’t need to do this for math errors (the IRS can fix those), but you’ll have to file a Form 1040X if your filing status, number of dependents or total income is wrong or if you forgot to claim a certain exemption or deduction.
48. Make a To-Do List
Write down everything that gave you trouble this year or deductions you weren’t sure you could get because you didn’t document them. Maybe you won’t make the same mistake next year.
49. Get a File Folder
For storing all those receipts and documents you forgot to organize this time around.
50. & Set a Calendar Reminder
So you don’t end up in this situation again next year.
But thanks to increased confidence in the economy, leading more people to make large purchases like new homes, that’s exactly the type of real estate market 2017 is ushering in.
According to a recent report from the National Association of Realtors (NAR), the share of households that believe the economy is improving soared to 72% in the first quarter of 2017. “Forty-seven percent believe that strongly, up from 45% in Q4 2016 and 44% one year ago in Q1 2016,” NAR said.
A new report from Redfin bears this out, revealing home prices in February increased 7.2% from a year earlier. What’s more, homes priced for less than $240,000 witnessed the highest appreciation — skyrocketing 8.4% year over year in February and 100% since the market lagged in 2012.
Combined with a lack of housing stock — Redfin reports a 6.4% decline in new listings in February — and you have what might be a daunting buying experience for newcomers.
With that in mind, here are five tips from experts on how best to snag a starter home right now.
1. Work With a Professional
This may seem like less-than-helpful advice, but it’s the first suggestion most experts offer when discussing the predicament faced by first-time home buyers.
“You want someone who knows the neighborhood,” said Jessica Lautz, managing director of survey research and communications for NAR. “It could be difficult if you go it alone.”
Before discussing the pre-approval issue, it’s important to sort out your finances and to do it before embarking upon a search.
This effort should include reviewing your credit score. If it’s less-than-stellar, you can reach out to lenders for tips regarding how best to improve it, said Boston-based Redfin real estate agent James Gulden. You can view two of your credit scores for free, with helpful updates every two weeks, on Credit.com.
“Sometimes people see their credit score and don’t know where to go from there,” said Gulden. “All lenders have different thresholds for what they’re willing to take on in terms of a buyer’s credit score. And they will also look at your employment profile.”
When you’re ready, it’s wise to obtain pre-approval for a mortgage before wading into the market. Not only will it ensure you lose no time when you’re ready to make an offer, it will help clarify what you can realistically afford.
3. Be Prepared to Make Compromises
Even seasoned, older buyers make compromises. Whether it’s the price, condition or amenities, compromising is part of the process.
“It’s more common for millennials to make compromises on first homes, but all buyers really do compromise on something,” said Lautz.
Translation: Figure out what you are willing to let go of or do without.
4. Be Patient
Buying a home is a process, no matter how much money you have. So mentally prepare yourself for the process, including the ups and the downs. Preparing for the downs includes not getting too attached to any one house.
“It’s easy to lose a couple and say, ‘Forget this, we’ll keep renting,'” said Gulden. “A lot of people are losing out on the first five or six homes they submit an offer on before being successful. From a mental standpoint, it’s very easy to get connected to a place, and when you don’t win a place, it can be upsetting. But in this market, it’s important to be able to brush it off and realize there are other places that will be coming onto the market.”
5. Write a Personal Letter
Gulden admitted this tip is not exactly novel, but it can give you an edge in a particularly competitive market.
Writing a personal letter to the seller, enclosed with your offer, can help set you apart when there are 10, 15 or even 20 more offers. And those numbers are no exaggeration, said Gulden, who recently helped clients submit an offer for a Cambridge property with 24 bids.
“If you don’t include a letter or something to differentiate yourself from others, then it’s all just numbers and dates on paper for the seller,” said Gulden. “Introducing yourself and telling the buyer who you are, why you like the property makes a big difference.”
The Trump administration has made it possible for debt collectors to once again charge hefty fees to some student loan borrowers who miss several payments in a row — even if those borrowers make an effort to get back on track right away.
These fees, which can be as high as 16%, are typically levied against the borrower’s entire outstanding loan balance and accrued interest charges. The so-called “collection charges” are meant to help recoup losses incurred by pursuing unpaid debts.
In a recent letter, the U.S. Department of Education rescinded an Obama-era rule that forbade guaranty agencies — debt collectors charged with recouping unpaid federal student loan debt — from charging defaulted borrowers collection fees if the borrowers began a repayment plan within 60 days of defaulting on their loans. In the new letter, the agency said the previous guidance should have included time for public comment and review before it was issued.
The reversal comes days after the Consumer Federation of America released an analysis of Department of Education data that shows the rate of student loans in default has grown 14% from 2015 to 2016.This certainly isn’t the first Obama-era rule or legislation the new administration has sought to undo, with an Obamacare replacement plan on its way to a vote in the House and plans to unravel regulations meant to crack down on for-profit colleges and universities.
A Department of Education spokesperson declined to comment.
Bad news for 4.2 million borrowers
The changes will impact borrowers who took out federal student loans under the old Federal Family Education Loan (FFEL) Program. The FFEL Program was phased out in 2010 and replaced with the current Direct Loan Program, but millions of borrowers are still paying back FFEL loans issued prior to that change. Those who have loans under the Direct Loan Program will not be impacted by the changes.
As it stands, some 4.2 million FFEL borrowers are currently in default on loans that total $65.6 billion, according to Department of Education data. Loans are considered to be in default after 270 days of nonpayment.
The changes will raise the stakes for borrowers struggling to make payments on their federal student loans, and make it even more important for those borrowers to avoid missed payments.
Fortunately, federal student loan borrowers are eligible for several flexible repayment methods, as well as forbearance and deferment.
An Ongoing Debate
The debate over a servicer’s right to charge borrowers a default fee has gone on for several years.
In 2012, student loan borrower Bryana Bible sued United Student Aid Funds after she was charged more than $4,500 in fees after defaulting on her loans. She started a repayment agreement to resolve the debt within 18 days, but was still charged fees.
The Department of Education sided with Bible and said companies had to give borrowers 60 days after a loan default to start paying up before they are charged fees. The Obama administration backed the Department of Education and issued the letter when the court asked for guidance on the issue.
There is one clear winner with this rule change: debt collectors.
“Rescinding the [previous guidance on collection fees] benefits guarantee agencies at the expense of defaulted borrowers,” says financial aid expert Mark Kantrowitz. He adds the change may increase the cost of collecting defaulted federal student loans, since borrowers will have less incentive to quickly rehabilitate their defaulted student loans.
What Happens If I Default on My Federal Student Loans?
Federal student loans are considered to be in default after a borrower misses payments for 270 days or more.
About 1.1 million federal student loans were in default status in 2016, according to Department of Education data.
The consequences of going to default are severe.
The entire balance of your loan + interest is immediately due
You lose eligibility for deferment, forbearance, and flexible repayment plans
Debt collectors will start calling
Your credit will suffer
And … your wages and/or tax refunds could be garnished
Are you missing federal student loan payments?
You’ve got options.
Contact your loan servicer ASAP
Find out if you’re eligible for a flexible repayment plan
Or ask about forbearance
Already in default?
Ask your loan service about loan rehabilitation
If you make 9 on-time payments over the course of 10 months, your default status will be lifted
You’ve only got one shot to rehabilitate your federal student loans after going into default. Don’t miss it.
Eighty thousand points isn’t cool. You know what’s cool? A hundred thousand points.
That’s what the Marriott Rewards Premier Credit Card, issued by Chase, is offering for a limited time after you spend $5,000 on the card in the first three months. And if you add an authorized user and swipe the card in that same period, you’ll score an additional 7,500 points.
As our review of the Marriott Rewards Premier Credit Card notes, the card is ideal for fans of the hotel chain. Cardholders earn five points for every dollar spent at any of the more than 5,700 Marriott and Starwood properties worldwide, and points can easily be transferred between brands such as Ritz-Carlton, Renaissance, Sheraton and Westin.
As an added incentive to keep swiping the card, double points are awarded for purchases on airfare, rental cars and restaurants, and cardholders earn one point per dollar on everything else. The card also carries no foreign transaction fees, so it’s perfect for long stays abroad.
Other Noteworthy Perks
Cardholders also receive other perks. They earn 15 credits toward their next Elite membership level and one Elite credit for every $3,000 spent. Points won’t expire so long as they swipe the card at least once every two years, and each cardholder anniversary they receive a free night stay.
The card also features travel security features like trip delay reimbursement, trip cancellation insurance, purchase protection and lost luggage reimbursement.
Before You Apply
If the 100,000-point bonus has put the Marriott Rewards Premier Credit Card on your radar, you’ll want to make sure you’ll actually use it. The card carries an $85 annual fee, and its variable APR is 16.49% to 23.49%, based on your creditworthiness. Some may find that rate a little too high, especially if they tend to carry a balance from month to month or have difficulty paying their bills off.
Before you apply, we advise checking your credit to make sure you’re likely to qualify. You can do that on Credit.com, where you’ll get two of your credit scores for free, with useful updates every two weeks. Checking your credit scores won’t hurt them one bit and is a great way to keep tabs on your finances.