What’s the Difference Between Dental Insurance and Dental Discount Plans?


Some employers offer dental insurance as an optional benefit, separate from health insurance. But those who don’t have this as an employer benefit, or don’t like their employer’s options, may want to find a plan on their own.

Choosing either dental insurance or a dental discount plan can save you big, but there are important differences to consider before deciding which route to choose.

Dental insurance versus dental discount plans

Before jumping into details, here’s a quick overview of the two offerings:

Dental insurance

Individual dental insurance costs more than insurance through an employer. According to the most recent figures from the National Association of Dental Plans, individual plans cost $4-$15 more per month than group plans (those offered through employers) and $20-$35 more for family plans. In 2016, the average DHMO (similar to HMOs for health insurance) premium cost $14.06 per month for employee-only coverage. The average DPPO cost $24.49 per month. Premiums for individual insurance would be higher, based on past research.

DHMOs are generally cheaper than DPPOs, both in premium and in service cost, but only if you go to an in-network provider, according to Guardian Life Insurance. Most DHMO networks are small, limiting your provider options, and you may be required to choose a primary care dentist. DPPO plans have larger networks and allow you to go to any dentist, though they may offer the best discount at in-network providers. DPPOs may have a maximum limit on coverage (often up to $2,000) per adult per year, while DHMOs do not have annual maximums, according to dental insurer Solstice Benefits.

Many dental insurance plans fully cover preventative care, like two cleanings and one set of X-rays per year. Insurers also tend to cover the majority (generally 80 percent) of basic procedure costs about half the cost of major procedures, according to Guardian Life. How much you have to pay will depend on the copay (DHMO) or coinsurance (DPPO) amounts set by your insurance. Your plan may or may not cover orthodontics, so that’s something to consider when shopping around.

Dental discount plans

With a discount plan, you pay a monthly or annual membership fee and will receive a discounted price on services. We looked at several discount plans on the comparison site DentalInsurance.com, and monthly membership fees for an individual range from about $8-$15, though costs vary by location.

Dental discount plan networks may be more limited than insurance networks, and compared with insurance, the out-of-pocket costs are often higher for patients. You can get full coverage of preventive care with a discount plan, but it’s less common than it is with insurance. With discount plans, there are no copays or coinsurance; rather, there are set discounts on specific services. Discounts range from about 20-50 percent, with routine procedures getting the highest discounts.

Based on a review of dental discount plans available online, it’s clear you’ll have to compare multiple plans to get a sense of your potential savings, as costs and coverage vary by provider and location.

Factors to consider when choosing one option over another
At first glance, you may think the only difference between dental insurance and a dental discount plan is the cost and amount of coverage, but there’s more to consider.

When do you need coverage to start?

Some insurance plans may allow you to get a cleaning or X-ray right away, but there are often waiting periods.

“It’s common to see six-month waits for fillings and one year for major services,” says Adam Hyers, owner of Hyers and Associates, an independent life and health insurance agency in Columbus, Ohio. “These waiting periods prevent consumers from abusing the plan” — using the insurance for a procedure and then dropping it right away.

By contrast, dental discount plans don’t have any waiting periods. It may take a few business days for your membership to go through. If you have an immediate (nonemergency) need, you may be able to pay for a dental discount plan and get a discount on the procedure a few days later.

How many options do you want?

An important consideration is how many dentists you can choose from, and if there’s a well-rated in-network dentist nearby. If you already have a dentist you like, check with the office to see if it will accept the insurance or discount plans you’re considering.

Brian Correia is a director of sales and client services for Solstice Benefits, which provides dental insurance and dental discount plans in five states. Correia says that generally, dentists who are just starting out will participate in dental discount plans and insurance networks because they’re trying to grow their customer base. Established dental businesses and chains might only accept insurance plans, although some offer in-house discount plans. Then there are dental practitioners who have a loyal client base.

“They may not take any insurance or discount plans, because people will keep coming to them and pay out of pocket,” says Correia. He adds that from a practitioner’s perspective, it’s easiest and most profitable to receive out-of-pocket payments from clients.

Dental insurance is the next most profitable for dental offices, because the dentist receives your copay or coinsurance and gets reimbursed from the insurance company. However, with a dental discount plan, the dentists only get what you pay — they don’t receive anything from the plan provider. That’s why new dentists, aiming to grow their client base, are often the only ones who accept discount plans and why your options may be limited.

What do the plans really cover?

As with any contract, you should carefully read the fine print before paying for insurance or a discount plan. Otherwise, you might be surprised to find out when you need to pay for a procedure, and how much it’ll cost you.

“With crowns and bridges, you might see a copay of $250 for a crown or bridge with an asterisk next to it,” Correia says. Read the content associated with the asterisk. It may say that laboratory fees — like the cost to get your new tooth molded — aren’t part of that copay and aren’t covered. You could also have to pay a materials fee if you want a more expensive material. And some inexpensive insurance policies may not offer any coverage for high-cost procedures, like a root canal.

Another fine-print point to consider is that your cost can vary depending on the dentist. Even two dental plan or insurance in-network dentists may charge different prices for the same procedure.

If you already have a dentist whom you want to stay with, you may want to call and confirm how different coverage will affect your costs. If you’re looking for a new dentist, create a short list of well-rated or recommended dentists and ask what your net cost will be before buying insurance or a dental plan.

Which option is best for you?

Compared with having no coverage at all, you can save money with either a dental insurance plan or a dental discount plan.

If you already have a dentist whom you like to visit and are looking to save money, your best bet may be to ask which options the dentist accepts and compare the costs for your family’s general needs. When you don’t have a dentist, it can be more difficult to compare all the different insurance and discount plans available.

For those who regularly get cleanings and don’t have a history of dental problems, a dental discount plan could provide adequate coverage for a low monthly fee. Although you may only break even or save a little money on your twice-a-year cleanings and annual X-ray, you’ll have some added security in knowing you can save money on other procedures. However, since the discount plan isn’t likely to cover the entire cost for major work, you may want to have some savings set aside for an emergency.

Buying dental insurance on your own could make both routine visits and emergencies more affordable, and may be the best option if you have a large family. But for individuals and those who aren’t prone to needing expensive dental care, the premiums can be so high, and the annual coverage limits so low, that you won’t always get a benefit.

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Collection Accounts Don’t Always Hurt Your Credit for Seven Years

When you fall behind on a bill, you might get charged a late fee and your late payments could be recorded in your credit reports. If a bill goes unpaid for long enough, your creditor may send or sell your account to a collection agency.

The collection agency will then attempt to collect the balance from you — sometimes aggressively — and often reports its possession of your account to the credit bureaus. A new account with the collection agency’s name will then appear on your credit reports, and this can have a significant negative impact on your credit scores.

You might think that paying off the debt clears everything up, but that isn’t necessarily the case.

Generally, if you pay the amount you owe or settle for a lower payment, the collection account on your reports will be updated and marked paid in full, settled, or something similar. The impact of a collection account on your credit scores diminishes over time, and a paid account could look better to creditors than an unpaid account. But like other derogatory marks, the account can remain on your reports for up to seven years and 180 days since the account first became delinquent (your first late payment with the original creditor).

After an account is removed from your credit report, collection agencies can still continue to attempt to collect payment as long as the account isn’t outside the governing statute of limitations (state laws determine how long a creditor can attempt to collect certain debts).

Even so, removing a collection account could improve your credit scores, making it easier and less expensive to open new loans or lines of credit. Here are a few exceptions to the standard timeline and instances when a collection account won’t affect your credit score.

You’re a New York state resident. For current New York state residents, satisfied judgments and paid collection accounts must be removed five years from the date filed or date of last activity, respectively.

The collection account was for a medical bill that your insurance paid. A settlement between New York Attorney General Eric Schneiderman and the three nationwide credit bureaus — Experian, Equifax, and TransUnion — in March 2015 resulted in new national credit-reporting policies. Now, medical debt can’t be reported to the credit bureaus for 180 days, and medical collection accounts that are being paid, or are paid in full, by an insurance company must be removed from your credit report.

You didn’t have a contractual agreement to pay the debt. Another result of the settlement in New York was that credit reporting agencies can no longer report debts that aren’t a result of a contract or agreement you signed. In other words, if your debt from a parking ticket or library fine gets sent to a collection agency, it won’t be added to your credit reports.

The collection agency agrees to a pay for delete. Also known as pay for removal, a pay-for-delete agreement with a collection agency is an arrangement in which you agree to pay some or all of the amount owed the collection agency and requests the credit bureaus delete the collection account from your reports.

You’ll want to get a written agreement from the collection agency before sending a payment, but this could be difficult because in general a pay-for-delete agreement is considered a little shady. “Right now, the credit reporting standards do not allow for deletion of accurate collections simply because they’re paid,” says credit expert John Ulzheimer, formerly of FICO and Equifax. “That doesn’t mean it doesn’t happen, simply that it’s counter to the standards that debt collectors have been given by the credit reporting industry players.”

It requires the collection agency to stop reporting an account that legitimately existed, which may violate the agreement the collection agency has with one or more of the credit reporting agencies.

Midland Credit Management bought your debt. In October 2016, Midland Credit Management, a subsidiary of Encore Capital Group, one of the largest debt collection agencies in the world, announced a new policy.

If MCM bought your debt and you begin payments within three months, and continue making payments until the account is paid off, the company won’t report the account to the credit bureaus (i.e., it won’t appear on your credit reports).

Additionally, if it’s been more than two years since the date of delinquency and you pay the account in full or settle the account, MCM will request the credit bureaus delete the collection account from your credit reports.

The account isn’t yours. If a collection account is on one of your credit reports and you don’t owe the debt, or it’s a type of collection account that meets one of the above criteria for removal, you may be able to dispute the account. The Fair Credit Reporting Act requires the credit bureaus and data furnishers (such as a collection agency) to correct inaccurate information.

Your lender uses one of the latest credit-score models. You might have paid or settled a collection account and still have to wait for the account to drop off your credit reports. However, if your lender is using the latest base FICO Score, FICO 9, or the VantageScore 3 scoring model, paid or settled collection accounts won’t affect your credit score. FICO Score 8 and 9 don’t consider collection accounts if your original balance was under $100.

However, lenders may use older credit-scoring models, which means a collection account could affect your score for as long as it’s on your credit reports and regardless of the original debt.

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How to Run a Financial Background Check on Yourself

Imagine getting turned down for a job or an apartment rental and having no idea why. You call up the lender or landlord, and they tell you the worst: you failed their credit background check. You’re dumbfounded. You’ve never missed a bill payment and as far as you know, your credit report should be squeaky clean. You immediately request a free copy of your credit report, only to find out there are all sorts of errors — including missed payments on debts you never borrowed and the names of collection agencies you’ve never heard of.

Unfortunately, this scenario isn’t so far-fetched. In 2012, a study from the Federal Trade Commission found that about one in five people had an error on at least one of their consumer credit reports. Sometimes the errors are minor and can be disputed easily. Other cases are much more complicated. In criminal cases of identity theft — if a person has been using your identity to get medical treatment on your tab, for example — you could find yourself facing legal charges on their behalf.

It’s practically impossible to prevent these types of mistakes from happening. To try to stay ahead of errors and potential fraud, it’s good to know how to run your own financial background check. And we’re not just talking about checking your credit reports. There are several important consumer reports that many people may not realize exist — from your medical history report and insurance records to your bank history and tenant records.

Banks, employers, landlords, insurance companies, lenders, utility companies, and other businesses purchase consumer reports to screen applicants. The information in your reports could impact their decision to offer you a loan, employment, or other type of contract. It’s also used to determine the terms of the arrangement, such as the interest rate on a loan or security deposit on a rental.

If you’re worried something on your consumer reports might blow your chances of qualifying for a job, a loan, or even housing, it is possible to check your credit and consumer reports before sending in an application. Catch them early enough and you have you a chance to dispute any mistakes.

Who Can Check Your Consumer Reports?

The Consumer Financial Protection Bureau maintains a list of several dozen consumer reporting agencies along with their contact information. You may recognize the three largest consumer reporting companies, Experian, Equifax, and TransUnion. But there are also specialty agencies that collect, organize, and sell specific types of information about you, such as your history of prescription drug purchases.

While you can always request a copy of your own reports, consumer reporting agencies can only send a copy to another individual or organization under certain circumstance. Your written permission or a court order, along with a valid reason for needing a copy of the report, could satisfy that requirement.

Generally, you’ll be able to request one free copy of each of your consumer reports at least once every 12 months. You also may be entitled to an additional free copy of a report if:

  •  The information within the report is used to make an adverse action against you, such as denying your application or raising your rate. To get a free report due to an adverse action, you must make the request within 60 days of receiving the notice.
  • You place a fraud alert on your credit file after someone stole your identity.
  • You’re unemployed and will look for work in the next 60 days.
  • You’re on public assistance.

When you don’t qualify for a free report, by law consumer reporting companies can only charge a maximum $12 per report that you request.

While you may be able to request a free or inexpensive copy of your consumer reports from a variety of agencies, the process could be time consuming. Although it’ll cost more, it could be worth your time to pay for a background check that includes information from multiple sources.

To conduct a DIY financial background check on yourself, we’ve listed several types of consumer reports you can check and how to go about checking.

Keep in mind, you might not always have a report to review. For example, if you’ve never had a credit line or loan, you might not have a consumer credit report. Or, if you’ve never filed an insurance claim, you might not have one of the specialty insurance reports.

You also might not have a report if there isn’t any recent activity, as information generally drops off reports after seven years.

Credit Reports

You can request a free copy of your credit report from a bureau once every 12 months on AnnualCreditReport.com. There are also companies that give you free access to your Experian, Equifax, or TransUnion reports throughout the year, as well as several paid options that give you access to your reports from all three bureaus.

Your credit reports contain several sections, including identifying information, a record of your payments on credit accounts, credit inquiries, and public records or collections information. Experian, Equifax, and TransUnion are the three largest nationwide credit bureaus, and your credit report from each bureau should be similar, but not necessarily the same.

Checking your credit reports is an important first step because the data on the reports could be used by lenders, landlords, utilities, insurance companies, and employers. Negative marks on your report could lead to you lose an apartment or job opportunity, or result in worse loan terms or higher insurance premiums. The information on your credit reports is also what determines your credit score, which is used for many similar purposes.

Credit reports contain positive information, such as on-time payments, as well as derogatory marks, including past bankruptcies, late payments, and liens. If you find incorrect information on one of your reports, you can file a dispute online or by mail.

Your credit report won’t necessarily come with a credit score, but there are free and paid ways to get a copy of one, or more, of your credit scores.

Check and Bank Account Reports

If you’re having trouble opening a bank account or getting a merchant to accept a check, look for errors or negative information in reports from the following companies.

ChexSystems keeps a database on consumers’ activity with checking and savings accounts. Many banks will pull your report and consider the information when reviewing your application for a new account. Unlike consumer credit reports, your ChexSystems report won’t have positive information. Instead, they only show negative marks, such bounced checks or unpaid fees.

You can request a free copy of your report online, by mail, or by fax, and file disputes online. ChexSystems also scores people based on a 100 to 899 scale based on the information within their report, and you can request a free copy of your score by mail or by fax.

There are also several companies that track consumers’ history with checks and help merchants and payment processors decide whether or not to accept someone’s check. You can request a free copy of your reports from Certegy Check Services, TeleCheck, and Early Warning Services.

Alternative Lending Reports

Some lenders don’t report your history of payments, or lack of payments, to the three nationwide credit bureaus. However, several smaller consumer credit reporting agencies, such as Clarity Services and FactorTrust, collect this “alternative” credit data. Often, the information comes from subprime or alternative lenders, such as payday lenders, rent-to-own retailers, subprime auto lenders, and check-cashing services.

MicroBilt, and its subsidiary PRBC, as well as CoreLogic Teletrack also compile credit reports using alternative lending data and use the information to create consumer credit scores. You can request a copy of your reports from CoreLogic and MicroBilt.

Insurance Reports

Insurance reports could show the types of insurance coverage you have, your claim history, and the resulting losses from a claim. Your report might have information on your driving record or your personal property insurance claims, and that data could impact your ability to get coverage and your premiums.

LexisNexis Risk Solutions offers two C.L.U.E. reports that you can order for free, one for personal property and a second for auto insurance. Insurance Information Exchange also collect information on people’s driving record. However, you can only request a free copy of your report after an adverse action has been taken against you due to information within the report.

Medical History Reports

Life, health, disability, long-term care, and other health-related insurance companies may use specialty medical reports to screen applicants.

MIB, Inc. collects information related to medical conditions and hazardous work environments, with your permission. Milliman IntelliScript creates reports on people’s prescription drug purchases.

Employment Screening Reports

Some companies pull job applicants’ credit reports, but others use more thorough background checks to screen applicants. The reports could have information about your criminal record, driving record, drug or alcohol test results, workers’ compensation claims, and volunteer activity. They could also be used to verify your education, professional accreditations, and previous salaries.

Employers aren’t allowed to pull your consumer credit report without your written permission. When a company requests a consumer report for employment-screening purposes, it won’t receive a credit score with the report.

The Work Number, Sterling Talent Solutions, Pre Employ, HireRight, GIS, and First Advantage all offer employment screening reports and services. You can request a free copy of your report, if it exists, from each company. Knowing what the hiring manager will or won’t see could give you extra time to prepare an explanation of the potentially negative information they find.

Tenant Screening Reports

With your permission, some landlords will look over a copy of your consumer credit report and check it for past late payments, bankruptcies, or other indications that you’ll have trouble paying rent.

Others use a more comprehensive tenant screening service and receive a report that could detail whether or not a person has a criminal record, is on a sex-offender or terrorist list, or has been evicted. Some tenant screening reports also have a record of the person’s rent payments and include a copy of one of their consumer credit reports.

You could request a copy of your reports, such as RealPage, Inc.’s LeasingDesk report or Experian’s RentBureau report, to check it for incorrect information before submitting rental applications.

Additional Reports

There are a variety of other consumer reports you can request and review for errors. For example, the CoreLogic Credco consumer report contains information related to properties you own and could be used by mortgage lenders or brokers. (The same company’s Teletrack report is mentioned above as an alternative lending report.) LexisNexis collects and compiles information on individuals from a variety of proprietary sources and public records.

There’s also SageStream, whose consumer reports are used by mobile phone providers, utilities, and other lenders. The National Consumer Telecom and Utilities Exchange collects information and sells reports about consumers’ telecom and utility accounts and payment history. If you’ve ever had to show a photo identification to make a return at a store, The Retail Equation could add that data point to your profile, and if they suspect fraudulent activity, you might be blacklisted from making returns to some retailers in the future.

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How BioCatch Uses Behavioral Biometrics to Help Keep Cyber Criminals at Bay


There’s a pressing need for innovative cyber security systems. Analysis from Juniper Research found the rise of professional cyber criminals could result in more successful attacks in the future. The firm estimates that data breaches could cost businesses over $2.1 trillion by 2019.

Founded in 2011 by former Israel Defense Forces intelligence officer Avi Turgeman and cyber security expert Uri Rivner, BioCatch is one example of innovation. The company offers a variety of user authentication and fraud prevention services to businesses based on its use of behavioral biometrics. The company has a portfolio of 34 patents, seven of which have been granted, raised $1 million in seed funding in September 2013, and brought in another $10 million in a series A round in 2014.

What is behavioral authentication?

BioCatch offers cloud-based behavioral authentication services for mobile and web applications. Using behavioral biometric data is one of the cutting-edge ways companies are authenticating users, and it’s potentially one of the best ways to keep your system secure.

Greg Hluska, a web developer and self-described hacker, explains traditional authentication methods differ from behavioral authentication in one key way. Typical authentication methods rely on something the user knows, like a password or passcode. Newer two-factor authentication methods rely on something the user knows and something they have, such as a password and a code that’s sent to their phone or an email account.

Behavioral authentication, on the other hand, changes things up by adding a verification layer based on how a user acts rather than what they know or have.

When companies like BioCatch try to track behaviors of people as they use mobile devices, they typically look at three different types of activity, explains Jason Sinchak, co-founder and CTO of mobile security company Sentegrity.


  • User interaction: How users touch the screen and type on the keyboard can be used to identify them or detect fraud.
  • Environment: Input from environmental sensors on the device, such as GPS, time, and Wi-Fi connectivity.
  • Device movement: How a user holds a device and activity associated with the device prior to an authentication attempt, such as running or walking.

Similar tests are implemented for computer-based systems. For example, if someone steals your information and logs in to your account, a behavioral authentication system might be able to detect the potential fraud based on typing patterns or how the cursor moves.

How does BioCatch’s behavioral authentication work?

BioCatch isn’t the only company in the behavioral biometric and authentication space, but it is one of the industry leaders. The company currently has clients in the banking and e-commerce space in North America, Latin America, and Europe and analyzes over a billion transactions each month.

Hluska says he’s familiar with BioCatch primarily because of the co-founder Turgeman’s previous service in Unit 8200. Unit 8200 is a decades-old intelligence unit within the Israeli Intelligence Corps. “They’re extremely hardcore,” Turgeman says. “It’s like the Jedi Academy of the InfoSec world.”

According to its website, BioCatch uses more than 500 parameters to create unique user profiles. Once you log in to an account, such as your online bank account, the software starts to build a “signature” for you based on how you interact with the site, the device you use, and other identifying information. In the future, when someone tries to log in to your account, their actions can be compared to your normal usage to help detect fraudulent activity.

To build and strengthen its profile, BioCatch creates “Invisible Cognitive Challenges” (ICC) for users to complete. They’re invisible because the user might not even realize they’re taking place. For example, on a mobile device the user might be prompted to input a date, and BioCatch could detect how quickly the person spins each wheel, how they stop, and how they handle corrections if they spin a wheel too quickly. On a computer, ICC could make a user’s cursor disappear after they complete a task and detect how the user goes about “searching” for the cursor.

Even without a user’s profile, BioCatch can help detect and prevent cyber crime by matching a user’s actions with known indicators. For example, cyber criminals tend to use keyboard shortcuts and copy and paste more often than other people.

In addition to helping authenticate users, BioCatch’s platforms offer a variety of protections against malware, bots, and social engineering. As a client, you can log in to a web portal to access a real-time assessment and easy-to-understand visualization of current sessions and associated risk scores based on the user’s biometrics.

Is implementing a behavioral authentication system always a good idea?

“Humans are the weakest link in many organizations’ cyber defenses,” says Joshua Crumbaugh, CEO of cyber security firm PeopleSec and a professional hacker. Cities, casinos, Fortune 500 corporations, and the U.S. government have all hired Crumbaugh to try and find weaknesses in their cyber security systems. Crumbaugh draws his conclusion from the ideas that humans can be “hacked” and can’t be updated or patched, and often people don’t think before they click. “This easily allows attackers to get a foothold within the network and bypass key protections such as multi-factor authentication,” says Crumbaugh. He also thinks that using behavioral biometrics could be a positive game changer for cyber defense.

While he may be right, there could be more to the picture than security. Thomas P. Keenan, a professor in the Faculty of Environmental Design and an adjunct professor in the Department of Computer Science at the University of Calgary, points to the “creepiness” factor inherent in collecting biometric data. “Monitoring things like how we hold our phones may indeed give people reason to dislike the company that is doing this to them,” says Keenan. “If another company makes a point of not tracking you in this way, that may constitute a competitive advantage.” However, a customer also likely won’t be happy if their account gets hacked or their personal information is stolen, so it’s a trade-off that could be worthwhile.

Should you give BioCatch a shot?

While no cyber security system is failproof, BioCatch’s behavioral biometric, authentication, and malware services are worth considering if you’re trying to protect mobile or web applications. The company has expertise working with banks, software vendors, and e-commerce clients and appears to have a good track record. Still, you may want to interview several companies to find the one that best meets your needs and budget.

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Mortgage Broker vs. Loan Officer: The Best Way to Shop for a Mortgage

Senior businessman showing a document to sign to a couple

When you need to take out a loan to buy a home, you generally have two options. You can work with a lender’s loan officer or hire a mortgage broker. Loan officers and mortgage brokers are not the same thing, although the terms are often used interchangeably.

Loan officers work for a bank or a lender and will only be able to show you mortgage options from that financial institution. In contrast, mortgage brokers are individuals or firms that are licensed by a state to act as middlemen between you and multiple banks or mortgage lenders. Because brokers aren’t beholden to a particular lender, they can shop around and try to find you a loan with terms that best fit your circumstances.

Why should you consider working with a mortgage broker?

One of the biggest benefits to working with a mortgage broker is that they take over the job of shopping for a loan. You might be able to do this on your own, and in some cases, you could find a better loan than the broker, but it can be a time-consuming and complicated process.

A broker can help collect and organize the documents you need to apply for a mortgage, such as your proof of employment and income, tax returns, a list of your assets and debts, and credit reports and scores. The broker can then use the information to look for loans, compare rates and terms, and apply for mortgages on your behalf.

Casey Fleming, a mortgage adviser and author of “The Loan Guide: How to Get the Best Possible Mortgage,” says one of the big benefits is that brokers are generally “on your side,” while a loan officer represents the lender’s interest. Brokers are also incentivized to find you a loan that meets your needs and see the deal through closing because they don’t get paid until you close on the home.

Additionally, brokers might have access to lenders that don’t work directly with consumers, meaning you wouldn’t be able to get a loan from the lender even if you tried. And in some cases, brokers can leverage their relationship with a lender to get it to waive fees you’d otherwise have to pay.

Are there risks involved with using a mortgage broker?

While working with a broker could be a good idea, there are potential drawbacks to consider. “Not all brokers are created equal,” says Fleming. “Many have only a few sources for loans, and may not be able to find the best pricing.” There are also some mortgage lenders that don’t work with brokers and will only offer loans directly to consumers (through one of the lender’s loan officers).

Using a mortgage broker can also be expensive. Although you may find the services are worth paying for, consider the costs of using a broker:

Mortgage broker fees

Mortgage brokers are often paid in one of two ways. You may be able to choose how you’d like to pay the broker, or opt for both payment methods.

Some mortgage brokers will charge you a commission based on the loan you take out, often about 1% of the loan. For example, that’s a $3,000 fee on a $300,000 mortgage loan. You’ll pay this fee as part of your closing costs when you close on the home.

Other brokers may offer you a fee-free mortgage. However, what likely happens in this case is that the mortgage broker arranges a loan with a higher interest rate, leaving room for the lender to give the broker a cut. This route could cost you more over the lifetime of the loan but might be the better option if you want to minimize costs now.

Where to find a good mortgage broker

“Word of mouth is very useful when it comes to finding a good [mortgage broker],” according to Professor David Reiss, a real estate law professor at the Brooklyn Law School in Brooklyn, N.Y. You could ask friends or family members who’ve recently bought a home if they used a mortgage broker, as well as your real estate agent if he or she can recommend a broker.

However, don’t settle for the first recommendation you receive. The Federal Trade Commission recommends interviewing several brokers and trying to find one who’ll be a good fit for your home search.

Ask about their experience with buyers like you in the area, the fees they charge, and how many lenders they work with. “You want to know whether the mortgage broker can find competitive mortgage products, is well organized so that loans close in a timely manner, and whether it keeps away from bait-and-switch tactics that can be so difficult to deal with when buying a home,” says Reiss.

You can also look for reviews of the mortgage broker online, and check for complaints against the company with the Better Business Bureau. The National Association of Mortgage Brokers (NAMB) also has a directory of state associations and regulators, which you can use to check the broker’s license and standing.

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7 FinTech Startups Helping Businesses Fight Fraud

fraud identity theft hacker

Whether it’s a small shop or a multinational company, businesses must constantly have their guard up to protect against fraud. Installing security cameras, verifying dollar bills aren’t counterfeit, and hiring a security guard to prevent shoplifting can all help with physical fraud. But as commerce and banking continue to go online, digital security is critically important as well.

LexisNexis’ 2016 True Cost of Fraud study focuses on U.S. merchants. The study reveals businesses reported an increase in the cost of fraud as a percentage of annual revenue for the third year in a row.

On average, companies have dealt with nearly 650 fraudulent purchase attempts each month, and over 200 of those are successful. Increasingly, fraudulent purchases are coming from remote channels, either from mobile devices or other online methods.

Combating in-person, online, and mobile-transaction fraud can be an exhausting process, and several financial technology (FinTech) companies are working to help businesses outsmart thieves and win the fight.

1. Feedzai

freedzaiFeedzai uses machine learning and big-data analysis to help companies prevent fraud while managing payment processing, opening new customers accounts, underwriting merchant accounts, securing marketplaces, and validating customers.

Feedzai claims its Fraud Prevention That Learns technology, which bases its decisions on historical and real-time behavioral profiling, can detect fraud up to 10 days earlier than the competition, and identify 61% more fraud with lower false alarms.

2. IdentityMind Global

identitymindIdentityMind Global has a platform that payment service providers, online merchants, and financial institutions can use to identify and prevent fraudulent purchases, botnets, phishing attempts, account takeovers, and other types of attacks in real time.

The platform also offers anti-money laundering (AML), know your customer (KYC), and other risk management services to companies, including Bitcoin exchanges and internet lenders.

3. InAuth

inauthInAuth is a risk management and fraud-detection and -prevention platform for the banking, payments, health care, e-commerce, and mobile commerce industries. Large companies can also use it to secure and identify employees’ devices and information.

InAuth’s InExchange service allows businesses from different industries to share positive and negative information about devices, helping companies determine whether or not the device has been linked to fraudulent activity in the past. InAuth also works to identify when devices are infected with malware or crimeware, and whether or not it’s a rooted or jailbroken device, potential signs of fraudulent use.

4. Jumio

jumioAvailable for merchants in the retail, travel, gaming, finance, telecom, and sharing economy industries, Jumio offers digital identification verification, mobile checkout, and form-filling software. Two of its three products can help prevent fraud.

Netverify helps authenticate potential customers by letting them take a picture of their photo ID and use their phone or computer to scan their face. The software verifies that the person matches the photo in the ID. BAM Checkout lets customers make mobile purchases by taking pictures of their credit or debit card and driver’s license. The software compares the names on the ID and card, and can help prevent fraud while creating an easy checkout process for customers. Jumio also has a third service, Fastfill, which allows customers to quickly fill in their information by snapping a picture of an ID card.

While Jumio filed chapter 11 bankruptcy in March 2016 due to some reported financial irregularities within the company, Jumio’s assets were acquired by Centana Growth Partners. Under this new umbrella, Jumio does seem to have steadied itself and raised an additional $15 million from Centana in August 2016.

5. iovation

iovationiovation delivers device-based fraud prevention and authentication services to help prevent mobile and online fraud. The service automatically collects information about a device. This information is used to visit a company’s site and decide whether or not they should allow, deny, or conduct a manual review of a transaction. For example, iovation may notice a device was used to make over $1,200 of purchases in the previous 12 hours, check to see if a phone number is connected to more than three devices, and see if this purchase is coming from a high-risk location.

Using iovation’s fraud prevention service, companies can require suspicious users to go through additional identification protocol or prevent a transaction outright. They can also use iovationScore, a predictive risk score, to help them identify good and bad customers. As a result, they make a checkout experience smoother for good customers, by letting them skip a security check, for example. The scoring system uses real-time machine learning to monitor billions of transactions globally and increase its predictive capabilities.

6. BioCatch

biocatchBioCatch has created cloud-based technology that builds user profiles based on over 500 cognitive parameters, including behavioral patterns. By learning what it looks like when fraudsters create accounts, purchase products, or browse websites, BioCatch can help detect and stop future potential frauds. BioCatch can also help detect when someone takes over a legitimate account by comparing a user’s normal behaviors, including typing speed or cursor movement, to behaviors during the fraudulent session.

7. Trulioo

truliooCanadian startup, Trulioo, uses data from over 140 sources to collect and share information on over 3 billion people, making it one of the largest consumer data companies in the world. E-commerce stores can use Trulioo to verify new customers, reducing the risk of fraudulent purchases and subsequent chargebacks. Financial institutions can use Trulioo’s data to help them meet AML and KYC identity verification requirements.

The post 7 FinTech Startups Helping Businesses Fight Fraud appeared first on MagnifyMoney.

Financial Accounts You Should Know About After Graduation


As a new graduate, you may be dealing with a dizzying number of new responsibilities, many of which involve money. There are helpful financial checklists aimed at graduates that recommend money-related habits or management tips. However, to put many of these lessons and ideas into practice, you also need to understand how different types of financial accounts work.

With simple explanations for each, here are several of the financial accounts you may encounter.

Non-Student Checking Accounts

You may have a student checking account that doesn’t have a minimum balance requirement or monthly fee. After graduating, your account could automatically switch to a standard checking account.

With many checking accounts, you’ll need to pay a monthly fee unless you meet a requirement, often a minimum balance or direct deposit each month. You may want to consider switching to a new non-fee checking account if you can’t meet the requirements.

Employer-Sponsored Retirement Accounts

According to the American Benefits Council, most full-time workers at large companies have access to an employer-sponsored retirement account, such as a 401k. If you work for a non-profit, educational institution, or government organization you may have, a 403b or 457 plan rather than a 401k. You can use these accounts to save for retirement, and get tax advantages for doing so.

You can generally choose to contribute a particular dollar amount, or a percentage of your pay, from each paycheck to your 401k account. You also may need to decide where the money gets invested once it’s in the account. You’ll likely be able to choose from a list of different mutual funds, and can ask your 401k manager or look online for guidance.

Your employer’s 401k plan doesn’t necessarily offer the best investment options or lowest fees, but many organizations offer a company match that can significantly increase your savings. The company might match a portion of the amount you contribute, up to a percentage of your annual salary. For example, the company may deposit 50 cents for each $1 you contribute, until they add the equivalent of six percent of your annual pay.

During 2016, you can contribute up to $18,000 ($24,000 for those that are 50 or older) into a 401k, 403b, or 457 plan, not counting the employer’s matching. Your contributions are tax-deferred, meaning you don’t have to pay income taxes on the money this year. In practice, you’ll get a deduction equal to your contribution. You do have to pay income taxes on the money when you withdraw it, unless it’s a Roth account.

You may have to pay a 10-percent penalty for withdrawing money from your 401k before you’re 59 and a half, but there are exceptions to help pay for medical, home, and educational expenses.

Independent Retirement Agreements

If your employer sponsors a retirement account and offers matching, it may be best to start saving for retirement with that account. But, if you don’t have access to an employer-sponsored account, max out your contribution and want to save more, or want more control of where you invest your money you can save money for retirement in an Individual Retirement Agreement (IRA). They’re also often referred to as individual retirement accounts.

There are several types of IRAs, but unless you run your own business, you’ll likely want to use either a Traditional IRA or a Roth IRA. There are differences, but both accounts offers tax advantages.

  • Traditional IRA – Contributions are post-tax, meaning you don’t pay income taxes now (you get a tax deduction), but will need to pay taxes when you withdraw the money. Aside from special circumstances, you’ll pay a penalty for withdrawing the money before you’re 59 and a half.
  • Roth IRA – Contributions are pre-tax, meaning you pay taxes on the money before making contributions (no deduction). You can withdraw your contributions at any time, but a few special circumstances aside you’ll pay a penalty if you withdraw earnings before you’re 59 and a half.

With either IRA, you can contribute up to $5,500 in 2016. Those that are 50 or older can contribute $6,500. As with employer-sponsored retirement accounts, you may need to decide where to invest your money once it’s in an IRA. There are income phase-outs on the tax deductions depending on how much you earn and if you already have access to a retirement plan at work.

myRA Accounts

The government-sponsored myRA account is a type of a Roth IRA. Intended for beginner investors that don’t have access to an employer-sponsored plan, myRA accounts don’t have fees or minimum funding requirements and guarantee a return on your investment without loss of principal.

The return on an investment in a myRA was 1.75-percent APR during April 2016, higher than you’ll get in most checking or savings accounts account but lower than what you might get by making riskier investments. However, if you’re able to just go ahead with a Roth IRA, then it probably makes more sense in many cases.

Brokerage Accounts

If you want to try your hand at investing without using a tax-advantaged retirement account, you can open a brokerage account. There are many brokerage account providers, including major financial services firms such as Fidelity, Merrill Lynch, Charles Schwab, and Vanguard, as well as online discount brokers like TradeKing and RobinHood.

You can deposit money into your brokerage account and then buy stocks or funds with it. You’ll likely be able to buy the same investments no matter where you open an account, but the fee to make a trade depends on the broker. Funds that aren’t invested often stay in a money market account, a bit like an interest-bearing holding account.

Flexible Spending Accounts

A flexible spending account (FSA) allows you to use tax-free money to pay for some medical expenses. FSA accounts must be set up by your employer, and you can only put up to $2,550 into the account per employer. However, that may be more than enough, because if you don’t use the money within the year, you have to forfeit it. Some employers let you rollover $500 to the following year and/or give you a two-and-a-half-month grace period at the beginning of the next year.

Health Savings Accounts

A health savings account (HSA) is medical savings account that you can have access to if you’re enrolled in an HSA-qualified high-deductible health plan. In some cases, your employer may make contributions to your HSA. Unlike the FSA, your HSA funds never expire. You can invest the funds and use them in retirement if you’d like. In 2016, the contribution limits for HSAs are $3,350 for individuals and $6,750 for families.

Insurance Policies

As a new graduate, there may also be several types of insurance you should consider purchasing.

  • You can stay on a parent’s health insurance policy until you turn 26. If this isn’t an option, you may want to buy coverage because there’s a penalty if you don’t have health insurance. Depending on your income and where you live, you may qualify for assistance paying for health insurance.
  • Auto: If you own a vehicle, you’re required to have auto insurance to drive it. Minimum insurance requirements vary by state, and the price can vary by provider.
  • Renters: Renters insurance can help protect you if your apartment is damaged or destroyed, someone gets hurts while visiting you, or your property is stolen (sometimes even if it’s stolen when you’re outside the home).

There may be discounts on auto or renters insurance that are fairly easy to get. For example, the one-time cost associated with buying a fire extinguisher for your apartment, or an anti-theft device like a steering-wheel lock for your car, could result in lower premium payments. You also may get a discount for buying multiple forms of insurance through the same provider.

What Now?

While the details of each account or insurance policies can be tricky to understand, the basic function is often straightforward. Keep this guide handy as you may have a reason to open, or use, one or more of these accounts or policies in the coming months.

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Can’t Find Your Previous Years’ Federal Tax Returns? Here’s How to Get Access

The Marriage Penalty

There are several circumstances when having a previous year’s Federal tax return can be helpful. Perhaps you need a copy for a loan application, the Internal Revenue Service (IRS) is auditing you, or you’re in the process of becoming a citizen and want to bring it to a naturalization interview. But, what happens if you can’t find it or a vindictive ex-spouse is withholding access to the document?

No matter if you lost your files, they were destroyed, or you simply didn’t keep great records, you may be able to request a copy of your federal tax return.

How to order a copy of your tax return 

If you hired a tax preparer to file a previous year’s return, he or she may have a copy of your return. Check with them first as you may simply need to make a phone call or send an email. If you filed on your own or the preparer doesn’t have a copy, you can request a one from the IRS. Copies are generally available for the current and previous six years according to the IRS website.

To request a copy of your tax return, complete and mail the one-page Form 4506 to the appropriate addresses listed in the instructions. You’ll need to fill out your name; Social Security number (SSN), Employer Identification Number (EIN), or Individual Tax Identification Number (ITIN); current address; and previous address if you moved. There is $50 fee for each copy, which you must pay with a check or money order. For copies of previous joint returns, both partners’ names and Tax Identification Numbers must be listed, but only one person needs to sign the form.

It may take up to 75 calendar days for the IRS to process your request. However, if you live in a federal disaster area, you may be able to get a copy expedited to you for free.

A transcript may suffice

Instead of paying and waiting for a copy of your tax return, a transcript may serve just as well. The transcript is on overview that includes many of the attached forms and schedules and shows most line items from your return. You may be able to satisfy the requirements of lenders, including mortgage and student loan issuers, as well as immigration services with a transcript. However, only the current and previous three years’ complete tax return transcripts are available. Transcripts of the information from W-2s, 1099s, 1098s, and 5498s may be available for up to 10 years.

You can request a copy of a transcript from the IRS for free by online, over the phone, by mail or fax, or in person.

  • Online: Fill out an application online with the Get Transcript You’ll need to provide your SSN or ITIN, date of birth, and address. When you request a transcript online, it may not include information from W-2s, 1099s, 1098s, or other income forms.
  • Phone: Call 1-800-908-9946 and follow the prompts. You’ll need to verify your SSN and the number portion of your street address. Directions are available in English and Spanish.
  • Mail or Fax: Complete Form 4506T or 4506T-EZ, which require the same identifying information as Form 4506, and fax or mail it as directed in the instructions.
  • In-Person: To request a copy of your transcript in person you can visit a Taxpayer Assistance Center (TAC). Some TACs offer appointments, but others provide services on a first-come-first-served

After making a request online, by fax, or over the phone, it can take five to 10 days to receive your transcript. It can take up to 30 days if you mail a request. An IRS representative at a TAC may be able to get you a transcript immediately although there could be a wait to meet with someone if you can’t make an appointment. An alternative way to quickly get a transcript is to call the IRS at 1-800-829-0922 and request the representative fax you a copy. You’ll need access to a fax machine and may need to wait on hold, particularly during the busy tax season.

Safe ways to keep copies in the future

Sometimes the loss of tax return is inevitable, but there are steps you can take to decrease the likelihood of missing a tax return in the future. Always print or store a copy after you file a return. Consider purchasing a fireproof safe to store paper copies of your returns at home. You can also save electronic copies on a thumb drive and keep it in a safe deposit box at a local bank. Although it’s a relief to know that the IRS keeps records for a while, there may be times when you need copies of even older tax returns.

The post Can’t Find Your Previous Years’ Federal Tax Returns? Here’s How to Get Access appeared first on MagnifyMoney.

Free Tax Filing Options for Every State Online

Tax return check

Filing your taxes doesn’t need to be expensive. Many tax preparation companies offer different editions of their software, including free versions, and the majority of Americans qualify for at least free Federal e-filing. Because of this, however, many of the companies will try to upsell you on the price to file your state taxes. Luckily, there are plenty of options to file both state and federal taxes for free.

The Free File options and requirements

The Internal Revenue Service (IRS) and tax software developers partnered in 2003 to offer a free option for e-filing federal tax returns. Today, the Free File program gives about 70 percent of all taxpayers a no-cost option for filing federal taxes. There are 13 online preparation options to choose from, including some from the most well-known tax software companies. Some options even work for those with complex tax situations, such as: itemized deductions, business income, or investment income.

There are limitations on who can use the Free File software. At a minimum, you must have an Adjusted Gross Income (AGI) of no more than $62,000. Some of the options have stricter income requirements, age requirements, or are only for residents of select states.

Free File software options that also offer free state filing

Only a few Free File offerings include free state e-filing in addition to a free federal filing.

We’ve rounded up the tax preparation software that allows you to file both state and federal taxes through the Free File program.

Exceptions to the rule: Residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington state, and Wyoming have no state-level income tax and may not need to file a state tax return at all. New Hampshire and Tennessee tax interest and dividend income above $2,400 and $1,250 respectively, and residents may need to file a state return only if they exceed this amount. If you live in one of these states, you may want to compare all the Free File options before choosing.

Tax Preparation Software with Free State and Federal Filing

Free state and federal filing for all states

H&R Block Free FileYou must have an AGI of $62,000 or less and be between 17 and 50 years old. If you’re an active-duty military member with an AGI of $62,000 or less, there is no age requirement.

OnLine TaxesYou must have an AGI of $13,000 to $62,000 and there is no age requirement.

TurboTax Freedom EditionYou must have an AGI of $31,000 or less, be an active-duty military member with an AGI of $62,000 or less, or be eligible for the Earned Income Tax Credit.

Free state and federal filing for some states

1040Now.net You must have an AGI of $62,000 or less and be 60 or younger if you live in CO, CT, DC, DE, HI, IL, KS, LA, MA, MD, ME, MT, NE, NJ, NM, OH, PA, UT or WI. There is no age requirement in other states. Free state filing is available in AL, AR, AZ, GA, ID, IN, IA, KY, MI, MN, MO, MS, ND, NC, OK, OR, RI, SC, VT, VA, and WV. 

FileYourTaxes.comYou must have an AGI of $8,000 to $62,000 and be between 15 and 65 years old. State filing is free for residents of Iowa, Idaho, Nevada, Vermont, and West Virginia.

Free1040TaxReturn.comYou must have an AGI $62,000 or less and be 70 years old or younger. State returns are free for residents of Arkansas, Iowa, Louisiana, New Mexico, Oklahoma, Oregon, or West Virginia. Free federal filing is not offered to residents of Florida, New Hampshire, Nevada, South Dakota, Tennessee, or Texas.

TaxAct Free FileYou must have an AGI of $50,000 or less and be 56 years old or younger, be an active-duty military member with an AGI of $62,000 or less, or be eligible for the Earned Income Tax Credit. Free state returns may be available for filers in AZ, AR, DC, GA, ID, IN, IA, KY, MI, MN, MO, MS, NC, ND, OR, PA, RI, SC, VT, VA, and WV.

Other ways to get free federal and state filing

Not formally part of the Free File program, these software options have fewer limitations but still provide free federal and state tax preparation and filing.

United Way’s MyFreeTaxesOffered from a partnership between United Way and H&R Block, this edition is free for all filers that made less than $62,000. 

TurboTax Absolute ZeroThere are no income or age requirements for the Absolute Zero edition, but you’re only eligible if you file a 1040EZ or a 1040A form without any business, contractor, or rental income, and with a standard deduction. The price may increase on March 18, 2016.

Free File Options for AGI Above $62,000: State-by-state free filing options 

Feeling frustrated because you don’t qualify for a free state filing with online tax preparation software nor with United Way? You may still have one more option. A lot of individual states offer free filing directly through state-backed websites. However, there may not be tax preparation assistance and this isn’t available in all states.

Below, we go state-by-state and list additional free options for e-filing your state tax return. The state-specific offerings sometimes come from tax software companies or are created and managed by the state itself. They may not be as user-friendly as the third-party alternatives, some states only offer electronic fillable forms, but there are often less stringent requirements. Unless otherwise noted, none of the state-specific options have an income or age requirement.

Regardless of where you live, if you need further assistance or prefer to work with someone in person, you may be eligible for free tax preparation assistance from the AARP Tax-Aide or through the federal Volunteer Income Tax Assistance (VITA) program.


You can file resident and non-resident Alabama tax returns online at My Alabama Taxes (MAT) for free, but there’s no preparation assistance.


Alaska doesn’t have a state income tax.


Full-year residents with an AGI below $3,500 can file their Arizona state returns for free on Average1040.com. Arizona also offers free electronic fillable forms and filing to residents, part-year residents, and nonresidents.


Arkansas doesn’t provide additional free tax preparation or filing options.


California offers a state-run CalFile program that lets some full-year residents e-file for free. The requirements aren’t as strict as those of the federal FreeFile program, but there is a maximum Adjusted Gross Income requirement of $178,706 for single filers and $357,417 for joint filers. Among other requirements, you can’t take the Mortgage Income Credit, claim capital gains, or have business income or losses.


You can file a resident, part-year resident, or nonresident state tax return using Colorado’s free electronic filing system, Revenue Online. However, the site doesn’t offer preparation assistance. The Piton Foundation and Denver Asset Building Coalition offers free in-person tax help to Colorado households with a 2015 income of $53,000 or less.


Connecticut allows you to file your taxes online at the state’s revenue service site. To qualify, you must have filed a Connecticut state return the previous year, have no more than ten W-2s and 1099s, and not change your filing status between single and joint.


You can file a Delaware state income tax return for free through the state’s website.


Florida doesn’t have a state income tax, but Impact America offers free federal tax assistance to households with one or more children that earned up to $52,000, or $20,000 for households with no children.


The TaxSlayer Free File Edition offers free state returns to qualified Georgia filers. You must have an AGI of $62,000 or less and be 52 or younger or an active-duty military member.


Hawaii individual resident and non-resident income taxes can be filed and paid online for a $1 administration fee. However, the N-13 Resident Individual Income Tax Return (Short Form) isn’t eligible this year.


Idaho doesn’t have additional free tax preparation or filing services.


Full-year Illinois residents can use MyTax Illinois to file their tax return for free if they have filed an Illinois state tax return before or have an Illinois driver’s license or ID.


Indiana doesn’t have additional free tax preparation or filing services.


Full-year residents can file Iowa tax returns online for free with the eFile & Pay system.


You can file resident and non-resident Kansas tax returns online for free through the KSWebFile system and manage your tax profile online with KSWebTax.


Kentucky state-sponsored KY E-Tax lets users pay their taxes, but doesn’t provide preparation assistance.


You can file individual income tax returns on the Louisiana Department of Revenue’s website for free if you’ve filed a Louisiana state return after the 2004 tax year, or you have a Louisiana driver’s license or ID card.


Maine’s free I-file tax allows full-year residents to file and pay taxes. Some nonresident and part-year residents can also use it.


This year, Maryland’s free iFile service does not support nonresident tax forms, but it’s still working and free for residents.


Full-year residents can file their state taxes using Massachusetts’s WebFile for Income service.


In addition to the FreeFile options, full-year residents can file free returns at Average1040.com, but only if their AGI is less than $3,500.


Minnesota doesn’t have additional free tax preparation or filing services.


Mississippi doesn’t have additional free tax preparation or filing services


In addition to the FreeFile options, Average1040.com offers free returns to full-year Missouri residents with an AGI below $3,500.


Montana allows first-time resident filers, non-residents, and part-time residents to file online with Taxpayer Access Point.


Full-year residents can file their Nebraska tax return with the state-run NebFile system.


Nevada doesn’t have a state income tax.

New Hampshire

New Hampshire doesn’t have a state income tax, but there are taxes on investment income. Non-first-time filers can pay taxes with e-File New Hampshire.

New Jersey

NJ WebFile allows full-year filers, including first-time filers, to pay their New Jersey taxes online for free.

New Mexico

Full-year residents can pay New Mexico state income taxes with the Taxpayer Access Point. The state also provides free assistance and preparation assistance to citizens with an AGI of $22,000 or less.

New York

Full-year residents can use the New York State Web File system. There’s no income limit, but some restrictions apply.

North Carolina

The Benefit Bank of North Carolina provides free tax preparation and filing services to single filers with an AGI of $65,000 or less and joint filers with an AGI of $95,000 or less. There are no age or residency status requirements.

North Dakota

North Dakota provides free web-based fillable forms and interactive software to full-year residents.


Non-first-time filers can file and pay their Ohio state and school district income taxes with the state-run I-File system.


Oklahoma’s free Taxpayer Access Point is available to full-year residents.


Oregon has fillable forms and e-filing available to full-year residents.


Full-year residents can file their Pennsylvania state tax return and pay taxes using padirectfile.

Rhode Island

Rhode Island doesn’t have additional free tax preparation or filing services.

South Carolina

South Carolina offers full-year residents fillable forms and free e-filing with no age or income limitations. Impact America also has free tax prep assistance for South Carolina households with one or more children that earned up to $52,000, or $20,000 for households with no children.

South Dakota

South Dakota doesn’t have a state income tax.


Tennessee doesn’t have a state income tax, but there are taxes on investment income. Residents can file a return and make a payment for free online. Impact America also offers free tax prep assistance to households with one or more children that earned up to $52,000, or $20,000 for households with no children.


Texas doesn’t have a state income tax.


Full-year, partial, and non-residents can pay Utah state taxes for free online at Utah’s Taxpayer Access Point.


Vermont residents can pay, but not file, their taxes online at VT Pay.


Virginia has free fillable forms and e-filing for full-year residents. There aren’t any age or income requirements.

Washington State

Washington state doesn’t have a state income tax. 

Washington, D.C.

Washington, D.C. lets full-year residents use free fillable forms and e-filing. There aren’t any age or income requirements.

West Virginia

West Virginia doesn’t have additional free tax preparation or filing services.


Wisconsin residents, part-year residents, and non-residents can file and pay their taxes with the Wisconsin e-file forms and website.


Wyoming doesn’t have a state income tax.

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Unpaid Debts: 6 Common Questions About Defaults, Statute of Limitations and Your Credit

Very Upset Woman Holding Her Many Credit Cards.

When you borrow money—whether it is to buy a car, refinance other debt, continue your education, purchase plane tickets, pay medical bills, or go shopping—you sign a contract that outlines the rules of how and when you’ll repay the money. But what happens when you miss a payment or can’t repay the loan?

1. What Happens When You’re Late on a Payment? 

If you miss a payment on your loan, the lender will likely contact you to ask you to make a payment, and it may charge you a late payment fee. Unless the lender gives you a grace period, the credit reporting agencies will also be notified that you were late with a payment, and this information will be added to your credit report. Usually, late payments are not reported to a credit reporting agency until you are at least 30 days past due. If you continue to not make payments, the lender may send your account to either an internal or third-party collections agency.

The collections agency will try to get you to make a payment, and it may take more severe measures. Missing payments on an auto loan can lead to the car being repossessed, along with additional fees and expenses. Defaulting on a mortgage can result in the lender foreclosing on the house, although this process can’t begin until the borrower is 120 days delinquent.

Unsecured debts don’t involve a physical object lenders can take away, but they do have the option of suing you. If they win a court judgment against you, they can collect the debt by garnishing—taking money out of—your paycheck or taking money directly from your bank accounts.

2. When Is the Date of First Default?

The day you miss a payment is the date of first delinquency, but the point at which your unpaid loan goes from delinquent to default depends on the contract and where you live. “Generally, after a missed payment there is a grace period, during which there may be fees,” says Lisa Stifler, a senior policy counsel at the Center for Responsible Lending. “Then it goes into default after some time.” For example, for credit cards the date of first default is usually 180 days after a missed payment.

[7 Things You Need to Know if You Have Debt in Collections]

3. How Does Missing Payments Affect Your Credit?

Missing loan payments can affect your credit multiple times over. Late payments are reported to the credit reporting agencies when you’re 30, 60, 90, 120, 150, and 180 days late. Some lenders may charge-off the loan at that point; writing it off their books because they assume you won’t repay it.

The charge-off is a new negative mark on your credit. When the debt is sent or sold to a collections agency, that’s another mark and a new collections account appears on your report. If you continue not to pay and the collections agency wins a judgment against you, yet another negative mark is created. All these negative marks can remain on your credit report and negatively affect your credit for years to come.

  • Late payments remain on your credit report for seven years from the date of first delinquency. If you bring the account current, the series of missed payments will be deleted seven years from the date of the first missed payment.
  • Collections remain for seven years from the date of first default with the original lender, which in total may be seven-and-a-half years after your first missed payments.
  • Judgments remain on your credit report for seven years from the ruling, which could be years after the late payment.
  • Repossessions and foreclosures, charge-offs, and settlements remain for seven years from the date of first default.
  • Chapter 7, 11 and 12 bankruptcies remain for ten years from the filing date. Chapter 13 bankruptcies remain for seven years from the filing date.

These negative marks remain on your credit regardless of whether or not you settle the account. The date of first default cannot be changed by you, a lender or a collections agency.

4. What Is the Statute of Limitations for Debt?

Those who are worried about getting sued for their unpaid debt may look to the statute of limitations (SOL) for relief. States impose a SOL that dictates how long a lender or collections agency has to sue the borrower for the debt. The SOL usually ranges from three to ten years and varies by state and the type of debt. Which state’s laws apply to your loan can depend on where you lived when you took out the loan, where you live now, or what’s in the contract.

It’s important to note that even after the statute of limitations has passed and the debt becomes time-barred, you still owe the money. The lender, or a collections agency, can try to collect the money from you directly, even if they can’t get a judgment against you. In some cases, you might still be sued for time-barred debt, and you could lose if you don’t show up in court to present the SOL as a defense.

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5. Can You Reset the Statute of Limitations?

Those with an old debt are sometimes hesitant to make a payment or speak with a collections agency for fear of resetting the statute of limitations. In many states, the statute of limitations for some debts may reset if the borrower acknowledges the debt or makes a payment of any amount. This could be a reason not to engage with a debt collector.

On the other hand, it is a myth that speaking with a debt collector or making a payment resets the timer for the negative marks falling off your credit report. Those timelines have a particular start point and cannot be reset.

6. What Should You Do If You Can’t Make a Payment?

If you’re going to miss a payment, call the lender before you do so. Explain the situation and tell them when you can make a payment or how much you can afford to pay now. You can try to get late payment fees waived, although it’s a good idea not to make a habit of this.

When you can’t afford or choose not to make payments, the debt goes into default, followed by collections. Your options may change, but an open line of communication can still be critical. The collections agency may be willing to work out an alternative payment plan or settle the debt if you can pay a portion of the amount owed.


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