When Will the New 2018 Tax Laws Affect My Paycheck?

by Gary Strauss, AARP, January 9, 2018|Comments: 0. hands holding a large check. Getty Images. It will take a few weeks before workers see changes in paychecks resulting from the new tax laws. You won't begin to see the impact of the new tax law in your paycheck until at least February. That's because the Internal ...
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7 Things You Should Know Before You Rent Out Your Home

The single-family rental industry is booming. So many homeowners are choosing to rent out their homes these days that annual home sales dipped 5 percent in 2017, translating to about 270,000 fewer homes sold that year, according to a study by Zillow.

Contrary to popular belief, big-time real estate investors aren’t driving that growth. On the contrary, a recent report by the Urban Institute found nearly half — 45 percent — of single-family rentals are owned by investors who own just one unit.

Cindy Kluger, 50, of Rancho Santa Margarita, Calif., became an unexpected landlord in 2017.

In January, Kluger, a single mother of two — a 16-year-old son and 13-year-old daughter — inherited her aunt’s home in the popular Larchmont district of Los Angeles.

“I was sort of excited about it from the beginning simply because it’s the house where I spent all of my holidays growing up,” Kluger told MagnifyMoney. “I get the honor of caring for this house that meant so much to all of us growing up.”

The home was built in the 1920s and had been in the family for nearly half a century, mostly serving as a destination for family holiday gatherings. Because her extended family was emotionally attached to the home, Kluger knew she didn’t want to live in it or sell the property, but there were taxes and maintenance fees to cover. As an alternative, she decided to rent the entire house out.

For any first-time landlord, navigating the ins and outs of renting out a property can be challenging.

“Being an effective single-family home landlord requires discipline first and foremost,” said Brian Davis, co-founder of SparkRental.com. “Being a landlord is not an emotional business, it’s a business of operating systematically.”

Here are some practical tips for anyone planning to rent out their single-family home for the first time.

Any home improvements needed at the property

203k loan

Before you put your home on the rental market, you should make sure it has been properly inspected and that any underlying structural issues are repaired first.

“I think all homes should have an inspection, even new construction,” said Greenville, S.C.- based real estate consultant Sunny Lake. “To protect you and your investment, it’s always a good idea to have experts working for you to give you an opinion of value and condition.”.

Specifically, look for what needs to be fixed to make sure the property is both legally habitable and aesthetically marketable for prospective tenants.

Because Kluger had inherited a home that had been in her family for decades, she soon realized how many issues had been fixed with DIY repairs.

“For the past 20 years [my aunt] had put bandaids on what was broken,” she said. “I realized that everything had to be examined.”

To bring the home into the modern era, Kluger had to completely redo the home’s foundation, electricity, and plumbing, in addition to ripping out the wall-to-wall carpeting in favor of hardwood and repainting the walls.

“I think it’s super important to think about these things that you may not be aware of because you are not living in the house,” she said. “You don’t want to bring renters into that environment.”

Your property management style

One of the most important things you will need to figure out is who will be responsible for managing the property. Most crucial, you’ll need to decide who handles any general maintenance and whom the tenants will contact if something breaks.

If you take on that responsibility yourself, you may be on call 24/7 to fix a broken pipe (or call someone who can go to the property to fix it). This is the approach Kluger plans to take.

“The fact that I sort of enjoyed all of the maintenance things came as sort of a surprise,” said Kluger. As she set about renovating her home, Kluger says made several contacts with vendors in the area whom she can call if tenants report anything broken and trust they will promptly handle the request.

Lake says you can do it yourself if you are a hands-on person with a network of service providers. But, not all landlords want to take the hands-on approach.

“Landlords should hire a property manager if [they don’t live near the property], or if they don’t have the discipline to manage their properties effectively,” added Davis.

If you plan to hire a property management firm, be prepared to pay between 8 to 10 percent of the monthly rent as a fee, says Lake, although that fee will vary by location.

With that fee comes some valuable bonuses, including peace of mind knowing that the major snafus will be handled by someone else.

Having a property management company might also attract higher-quality tenants, assuming the company provides a higher level of service than you would be able to offer as a single property manager.

Property management companies may also have more experience dealing with tenant issues. If the tenants don’t pay rent, for example, the management company may have a process and a legal team already in place to help resolve the issue.

“It all depends on your accessibility, and how much contact you want to have with the tenants,” said Lake. “Lots of investors feel like the fee is worth it to not have to deal with the potential hassles of late rent, walk-throughs, property maintenance, etc.”

What you expect your tenants to maintain

Some property managers handle all of the property maintenance, while others only manage a portion and expect the tenant to do some of the work involved in keeping the property clean and looking nice.

In the case of a single-family property, tenants might be asked to keep up with lawn maintenance, pay for a garbage collection service, or even homeowners’ association fees, if applicable. And that information should be included in the lease that the tenant signs.

If you won’t allow the tenant to do any landscaping or lawn maintenance because you plan to hire a company to come handle that kind of stuff on a periodic basis, for example, that needs to be stated in writing in the lease. If the tenant is expected to cover HOA fees, the details about how you’ll collect the fee needs to be in the lease, too.

In addition, the lease would need to outline what kinds of modifications the renter is allowed to make to the property. Are they allowed to paint the outside of the home? What about the walls on the inside?

Can they install a fence to keep their dogs in the backyard? If you don’t want your tenants to make any drastic changes to the property, that needs to be clearly stated in writing.

How you’ll find reliable tenants

It’s your property, so you’ll need to decide how you’ll choose a tenant for your property. It’s easy enough to post an ad on Craigslist or Facebook, but that’s just the first step. Once you receive applications, you want to make sure you have a way to choose a tenant you can trust to pay rent in full and on time. That may involve some level of underwriting — like like pulling a credit report and running criminal background check — to check a tenant’s creditworthiness.

“Tenant screening is an art and science in itself” said Davis. He offers the following tips to simplify the process:

  1. Always run full credit, criminal, and eviction reports.
  2. Always verify income and employment.
  3. Verify housing history as best you can with not just the current landlord but a prior landlord.
  4. Consider inspecting the applicant’s current home to see if they maintain it well.

Davis recommends making the inspection of the applicant’s current home a condition of lease acceptance.

“Applicants don’t have to agree, and the landlord doesn’t have to lease to them,” he says. “But, because it’s the most labor-intensive part of screening, it should be left for last, and only done for applicants who otherwise will be accepted.”

In Kluger’s case, she decided to get the help of a real estate agent to find her first tenant. The agent will find and screen tenants on behalf of Kluger and her father, this time.

“Once she helps us with that process my intention is to educate myself and learn what needs to be done to properly screen renters,” said Kluger.

Regardless of the agent’s opinion, the landlord gets the last word.

“One of the things my dad had me ask the real estate agent is that after she screens the person and thinks she has found a good candidate that we get last say. That we get to meet them and sign off,” said Kluger.

Even if you have a real estate agent taking applications, as in Kluger’s case, Lake recommends hiring an agency to run background checks on any applicants, as they have more access to financial, criminal, and other personal history.

If you don’t have the budget to hire an agent and agency, you may be able to handle the process on your own.

There are several websites that offer tenant screening services, for a fee. A couple of examples include Spark RentalCozy, and MyRental. Cozy, for example, charges $39.99 for both a background check and credit report, but the fee is assessed to the applicant, not the landlord. MyRental reports even include a ‘tenant score’ — a three-digit number that predicts the likelihood of lease default and lets you see if other landlords in your area accepted or declined applicants with that score for around $35.

How much you’ll charge for rent

To set your number, Lake says you’ll need to know the current market value of your property, which will vary based on the location and vacancy rates. She recommends calling up experts in your market for help in determining the rent amount if you’re not a seasoned agent or investor.

“You don’t want to overprice the property and have it sit empty,” she said. “But you don’t want to underprice it and leave money on the table.”

Beware: There may be restrictions on how much you are allowed to raise rent each year. Rent control laws are passed by cities, so you should check the municipal code to see if any rent control laws apply to the area you live in.

You can find your home’s estimated value on mortgage websites like Zillow or Trulia. You can also pay to have an appraiser come and check out your property in person for a more accurate estimate.

“Appraisals are required for financing, but landlords should learn to assess market rents for themselves,” advised Davis.

You should also decide how much of a security deposit, if any, you will request. The deposit acts as security for you in case the tenant is unable to pay rent for a period of time, or to fix any damages left by the tenant when he or she eventually moves out.

The rules surrounding security deposits vary from state to state. For example, New York has no law limiting the amount a landlord can charge for a security deposit, but, if the apartment is in the rent-controlled jurisdiction of New York City, the landlord is limited to collecting up to one month’s rent for a security deposit. Meanwhile, Alabama state law limits landlords to taking only one month’s rent.

State laws may also regulate where you are allowed to keep security deposit funds, if you must first do a walk-through of the residence to collect a deposit, when you are allowed to keep the deposit, and within what amount of time you are required to return the deposit. Check landlord tenant laws in your state to figure out what rules apply to you. Here are a few resources on NoloAmerican Apartment Owners Association and Landlord.com to get started.

Outside of the law, the amount you require is up to you to decide, but will likely depend on how confident you are about the applicant’s creditworthiness. For example, if the applicant is self-employed and that causes you to be less confident in their ability to make the rent payments, you may require a larger security deposit, or ask them to pay upfront a few months worth of rent before they are permitted to move in.

How the cash flows work

If you’re looking to rent a single-family home as an investment property, you should understand the money going in and out of your investment, and how much it will cost you to make money on your rental. In other words, you should understand your cash flows.

For example, you may run yourself into the red if the rent you charge is only enough to cover your monthly mortgage payment and doesn’t take into consideration all of the other costs you’ll incur renting the property like your property tax, utilities, or what you pay to a property manager or other facility managers.

To get an idea of your cash flows, consider your maintenance costs on the property. In addition to property taxes, community fees, and general maintenance costs, you want to factor in cushion for the unexpected, like any potential lapses in tenancy during which you may not be able to receive rent, too.

“You need to have some risk tolerance to be an investor,” says Lake. “If the rental market is soft in your area, you need to have enough other cash flow to maintain your property even if it’s vacant.”

Lay out the cash flow — what you’ll be paid versus the amount of money you plan to put into the investment — and see if the number you estimate you’ll have after all is said and done makes good financial sense for you to rent the property.

What your insurance policy covers

If you’re renting out a home that’s still under a mortgage, you will likely need to purchase a landlord insurance policy to have the proper protections in place, according to Davis. The protection is similar to a homeowner’s insurance policy, but it doesn’t cover belongings.

Some homeowners insurance policies will cover short-term rentals, but most don’t cover long-term rentals like you would need to rent a home. Landlord policies generally cost about 25 percent more than a standard homeowners policy, according to the III, but you’ll get more protections in exchange for the increase.

Landlord insurance typically provides:

  • Property insurance coverage — This covers any physical damages to the structure of the home caused by nature.
  • Coverage for your personal items — If a lawnmower you keep on-site for lawn maintenance burns in a wildfire, for example, landlord insurance would pay for the loss.
  • Liability coverage — Legal and medical expenses may be covered if a tenant or one of their guests gets hurt while on the property.
  • Coverage for loss of rental income — If for some reason you are not able to rent the property — maybe it’s being repaired or rebuilt after damage from a covered loss — the insurance company should pay you the lost rental income for a specific period of time.

Since landlord insurance won’t cover your tenant’s stuff, you may also want to state in your lease whether or not you will require a tenant to keep renters insurance. When your tenant has renters insurance, that saves you, the landlord, from liability if something happens (think: fire, flood) and the tenant’s items are damaged.

How you’ll cover a bad tenant or an emergency

As a landlord, you’ll want to have an emergency fund or other fast borrowing option in place in case you need to make an unexpected major repair, or cover your mortgage for a few months in case your tenant can no longer afford to pay rent.

“Landlords absolutely, positively need a cash cushion,” said Davis.“As a rule of thumb, I like to keep around two months’ worth of rent on hand for each property, plus a source of available funds if needed.”

The fund exists to cover the occasional bad tenant or extended vacancy, and to keep up with the general maintenance of the home — in case, for example, a water heater breaks and you suddenly need $1,800 to replace it.

Lake, on the other hand, recommends landlords keep six months worth of rent in an emergency fund, but says that amount also depends on what other cash flow options you have at your disposal.

“It can be challenging for people to have that kind of cash along with a personal emergency fund,” said Lake. She recommends working with a financial advisor or property manager as a starting point.

Consider setting up an emergency fund, and contributing to it monthly. At the very least, you should have access to emergency money via quick borrowing options such as a credit card, home equity line of credit or home equity loan.

How much money you’ll need to cover a bad tenant or emergency may fluctuate depending on your property and the average amount of time it takes to evict someone, as it may vary depending on your state’s laws. You also want to consider the average time it may take to get another tenant in who will pay the rent. Check online or with a real estate lawyer in your area to calculate what the worst-case scenario may be for your situation.

The post 7 Things You Should Know Before You Rent Out Your Home appeared first on MagnifyMoney.

10 Tips for Doing Your Taxes Yourself

W-4 Tax Form

If you’re planning to file your own tax returns this year, you’re in good company. Approximately 33 percent of Americans file their own taxes each year.

As you’re gathering all of your 2017 tax documents and preparing to file your taxes there are some important things to keep in mind. Following these tips will help you avoid common pitfalls and mistakes and ensure you keep as much of your own money in your pocket as possible. After all, the less money you have to give to Uncle Sam, the more you can put towards reaching your financial goals, paying off debt, or otherwise positively impacting your credit score.

Know the filing deadline

We all have April 15 burned in our brains as the last day to file taxes. But if that date falls on a weekend or a holiday the due date can be different by a couple of days. Of course, this is always to the taxpayer’s advantage, as no calendar occurrence move the due date prior to April 15 in any year. If the date is different it will always be later than April 15. For example, the filing deadline this year is April 16, 2018.

Make sure you need to file

If you’re not sure whether or not you need to file, you can find out using the IRS’s online Interactive Tax Assistant. By answering some basic questions about your filing status, gross income and whether you had federal income tax withheld, you will be able to determine whether or not you need to file for a particular tax year.

Review last year’s tax returns

Reviewing the information from the previous year’s federal and state tax returns will make the current year’s filing much simpler. Much of the information will be the same, including employer federal ID numbers, children’s social security numbers, etc.

Gather all necessary income documentation

Make sure to gather all forms that include income information, specifically those from employers and financial institution. These includes:

  • Form W-2 (wages)
  • W-2G (gambling winnings)
  • 1099-INT (interest)
  • 1099-DIV (dividends)
  • 1099-B (investment sales)
  • Combined 1099 (brokerage combined tax statement)
  • 1099-MISC (independent contractor work, royalties)
  • 1099-R (retirement distributions)
  • K-1 (MLP, Partnership or S-Corp share of income)
  • SSA-1099 (Social Security benefits)
  • 1099-G (unemployment benefits and state tax returns)
  • 1099-C (forgiven debt).
  • Income Adjustment Documents, including Form 1098-E (student loan interest); 5498 (IRA contributions); 5498-SA (HSA/MSA contributions); and 1098-T (tuition).

Determine whether or not you should itemize deductions

Itemizing deductions is only beneficial of those deductions will exceed the standard deduction. If you’re using a tax software program it will guide you as to what you should do. If you do opt to itemize your deductions, you will need forms including 1098 (mortgage interest) as well as receipts for expenses such as charitable contributions, unreimbursed employer business expenses, and medical expenses.

Don’t forget your state taxes

Most states require a separate state tax return to be filed. There are seven states that don’t collect state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Check and double-check your return

Before you drop that tax return in the mail or hit submit when e-filing, make sure that you’ve checked the figures you’ve entered when filing your return. A mistake can mean a filing error that could give you an overinflated refund you’ll have to pay back later.

File on time

Even if you owe an amount you cannot pay in full by tax day, it’s important to file on time and to pay as much as you can. Doing so will allow you to avoid a late filing penalty and to minimize interest charges on any unpaid balance. If you cannot pay your taxes in full, you can request an installment agreement from the IRS.

Tax advantage of free filing

The IRS offers Free File to file your federal taxes without paying any fees. The amount of your adjusted gross income determines the version you will need to use. If it’s $66,000 or less, you can use the free filing software. If your adjusted gross income is higher, you will use Free File fillable forms that are the electronic version of its paper forms.

File electronically

You can still file paper returns and many filers do so because they’re uneasy sending their personal and tax information over the Internet. However, e-filing via the IRS website is very safe and it will expedite your refund if you’re getting one.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

The post 10 Tips for Doing Your Taxes Yourself appeared first on Credit.com.

Identity Theft and the New Tax Bill

Will Congress Overhaul Credit Reporting Laws?

The 2017 filing season could be the worst yet for tax-related crime. With widespread confusion about the new tax law, IRS budget cuts, and a record-breaking year for data compromises, there’s an opening for fraud that should be serious cause for alarm, but doesn’t seem to be.

The bottom line: you should be concerned.

Last tax year, the IRS stopped 787,000 confirmed identity theft returns, totaling more than $4 billion. For the same nine-month period in 2015, the IRS stopped 1.2 million confirmed identity theft returns, totaling about $7.2 billion. There were many other widely reported wins. But what did not get reported was how much money scammers stole. Given the IRS’s estimate that 2016 would see a loss of $21 billion via fraud, one wonders.

That was then. The compromise of 143 million people in the Equifax breach changed all that. It included Social Security numbers—compromised SSNs being the most common “pre-existing condition” of crimes committed against the U.S. Treasury, and as such that breach poses a significantly increased threat difference over previous years.

We’re looking at a far more significant threat of tax-related fraud in the 2017 filing season than ever before. Compounding this situation, the IRS is less able to fend off the threat of identity-related tax fraud than it was last year.

Overworked

I know it’s risky to publicly sympathize with the nation’s most hated federal agency, but I can’t imagine it’s been much fun to work at the Internal Revenue Service since Congress passed its new tax bill (note that I’m not suggesting there was ever a time I could imagine it might be fun to work at the IRS).

With the new tax year just begun, the agency is racing to find real-world applications for the numerous changes to the tax code conceived in the hothouse of Congress, where ideas do not always (or perhaps even very often) jibe with real life, and the daily concerns of actual Americans has more the feel of an annoyance than a matter of, say, central importance.

There are significant logistical challenges posed by the new tax bill. First order of business is getting the changes in place that need to be implemented now, for instance the coding to adjust withholding, which the IRS hopes will make its first appearance on pay stubs as early as February. There are other provisions that affect the here-and-now, like the new trigger for healthcare deductions, as well as a decent-sized punch list of smaller changes—all of which needing the immediate attention of a greatly diminished staff in the coming months.

Underpaid

Remember those cuts back in 2010? The agency was denuded of $900 million, which led to the loss of 21,000 jobs. That’s a major problem right now.

The last time there was tax overhaul like the current one, “Walk Like an Egyptian” was on the radio and cable TV was just finding its way into the suburbs. Today, Twitter feeds are reloaded continually, and late-show hosts joke about the size of the presidential button.

In 1986, the IRS got a budget increase to accomplish the increased workload, but this time around, “the House and Senate appropriations bills for 2018 would cut the IRS budget by an additional $155 million and $124 million, respectively,” according to the National Treasury Employees Union.

What You Can Do

Wait times were more than an hour last year. The helpline matters because people don’t read tax bills, or even news stories about them. The questions will be many—far more than usual. They will be on a host of topics. People will call in reaction to good, bad and neutral information.

Is there nothing to worry about till this time next year? Do I need to fill out a new W4? Is my tax bracket the same?

The only question that matters is this one: What’s the best way to avoid becoming a victim of tax-related fraud. The answer: file your tax return as soon as you have all the necessary documents to get the job done.

While it’s important to sort out what’s what with regard to the coming changes in our nation’s tax code, it’s crucial to take a look at the simple fact that people are confused, and that creates a beneficial state for fraud to flourish.

For time being, the only “solution” is beating scammers to the punch.

With everything that the IRS needs to do to function well, budgetary issues necessarily come to the fore. We should all be voicing concern about the agency’s ability to safeguard taxpayers from refund fraud given the current situation. And we should all be doing everything we can to protect ourselves in a hostile environment.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

Image iStock

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How to Make Your Financial New Year’s Resolutions Stick

new years resolutions

Making your New Year’s Resolutions is the easy part and you have the best of intentions, however sticking to them can be challenging. Old habits may be hard to break and achieving your financial goals can be difficult. While you may get complacent and comfortable in your old ways as you head into January, you can stay motivated and follow through on your financial New Year’s resolutions if you consciously avoid procrastination and take action! Starting with small steps and setting weekly goals can pave your way to achieving long term goals and will give you a sense of accomplishment. Once you see the positive results and monetary growth, you’ll feel financially happy and healthy.

By following these five tips, you will soon be on your way to making those New Year’s resolutions stick!

  1. Be SMART

Goals which are “SMART,” or specific, measurable, achievable, realistic, and time-bound are the ones which will be easier to keep up with. Set a specific amount that you would like to save or pay off and keep track of the balances on your accounts. Make sure that goal works with your lifestyle and budget, and give yourself a deadline of when you would like to complete your goal which is realistic. Keeping your goals realistic is key to making them stick.

  1. Break it Down

If your goal is to save $5,000 by the end of the year, that can seem very overwhelming. Try to break it down to a monthly goal of $417 or a weekly goal of $104.25. This will help you figure out what you need to put aside per paycheck and how much of your budget you need to reign in. Breaking it down helps to make your goals more tangible and less impossible; you can plan better for the savings and add it to your daily routine instead of making it a second thought.

  1. Take the Extra Steps

Sometimes, using the tools that you presently have may not be enough to make you successful in achieving your goals. Taking extra steps such as making your lunch and bringing coffee, or even opening up a new bank account (should it be in your best interest to do so) will help you in the long run and make your goals stick. The extra step may be checking your statements weekly to make sure you are staying within your budget. Making a habit of checking your statements is a great way to ensure that you aren’t overspending as well. By assessing your spending habits, you can see where you may be able to cut back.

  1. Replace Not Eliminate Habits

If you try to drastically alter your lifestyle, including your habits, it could be an indicator of why you cannot stick to your resolutions. Consider replacing habits such as buying lunch with a habit of making extra food at dinner so you have leftovers or setting up your coffee pot the night before so you won’t feel the need to stop and get some on the way to work. This ensures that your daily routines aren’t cumbersome and hard to keep up with.

  1. Put Your Finances on Autopilot

Taking control of your finances is taking control of your life. Using tools such as Mint or setting up automatic payments for your bills is a great way to keep your resolutions on track. It may also be beneficial for you to sign up for text reminders or application notifications to help keep track of your spending and savings. Having a notification pop up on your screen daily which reminds you that you are that much closer to reaching your goal is a great way to stay on track and make those resolutions stick! You can also do this to help increase your savings. By setting up a monthly or weekly auto-deduct from you checking to savings accounts, you can help ensure that you actually have set aside the amount of money you intended to save.

If better credit is part of your new year’s resolution, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

Image: iStock

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How to Protect Your Devices From Computer-Chip Flaws

How to Protect Your Devices From Computer-Chip Flaws. Take these steps now to minimize your risk of data theft. by Marc Saltzman, AARP, January 8, 2018. digital lock. Saul Gravy/Getty Images. Last week a Google security team announced the discovery of computer-chip flaws that could affect millions of device and ...
Posted in Uncategorized

These 18 States Are Raising the Minimum Wage in 2018

states raising minimum wage 2018
iStock

Roughly 4.5 million workers in 18 states are starting off the new year with a pay raise.

Many of the new minimum wages are significantly higher than the federal minimum wage of $7.25, a rate that states are slowly but surely leaving behind. The Wage and Hour Division of the Department of Labor enforces wage laws, but a new federal minimum wage cannot be set unless a bill is passed by Congress and the president signs it into law.

Since 2009, the last time the federal minimum wage was raised, states have had to act independently to counter rising costs of living as well as the demands of their citizens.

Some 80 million Americans are paid hourly — a group that makes up nearly 59 percent of all wage and salary workers.

The number of people who earned the federal minimum wage or less decreased from 3.3 percent in 2015 to 2.7 percent in 2016, according to the U.S. Bureau of Labor Statistics. The 2016 percentage is far less than in 1979, when records started to be kept consistently and the number of people at or below minimum wage was 13.4 percent.

The 2018 wage increases were, for eight states, due to cost-of-living increases, and for 10 states, a result of approved legislation or ballot initiatives.

Who gets more pay?

An estimated 4.5 million U.S. workers are set to receive a total of $5 billion in additional wages, according to the Economic Policy Institute.

“Increasing the minimum wage is a crucial tool to help stop growing wage inequality, particularly for women and people of color who disproportionately hold minimum wage jobs,” wrote Janelle Jones, an economic analyst with the Institute. “As low-wage workers face a growing number of attacks on their ability get a fair return on their work, Congress should act to set a higher wage floor for working people.”

Keep in mind, however, that tipped wages are significantly lower than minimum wages, and wage laws have exceptions, such as full-time students or persons with disabilities. Not every employee who works on an hourly basis is affected by the changes.

Where is the minimum wage increasing?

Here’s a breakdown of the 18 states with higher minimum wages in 2018, using information from the National Conference of State Legislatures. These states join the 19 states in 2017 that raised their minimum wages.

State

Minimum Wage

Reasons and Future Adjustments

Alaska

$9.84

Change due to cost of living.

Arizona

$10.50

Change due to ballot/legislature.
Set to increase to $11 beginning 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on cost of living.

California

$11

Change due to ballot/legislature.
Set to increase to $12 in 2019, $13 in 2020, $14 in 2021, and $15 in 2022. At the start of 2023, the rate will increase annually based on the consumer price index.

Colorado

$10.20

Change due to ballot/legislature.
Set to increase to $11.10 in 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on the cost of living.

Florida

$8.25

Change due to cost of living, based on a 2004 constitutional amendment.

Hawaii

$10.10

Change due to ballot/legislature.

Maine

$10

Change due to ballot/legislature.
Set to increase to $11 in 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on the consumer price index.

Michigan

$9.25

Change due to ballot/legislature.
At the start of 2019, the rate will increase annually based on the consumer price index, but increases will cap at 3.5 percent.

Minnesota

$9.65/$7.87

Change due to cost of living.
Due to 2014's HB 2091, businesses with annual sales over $500,000 have a higher minimum wage than those with sales under $500,000.

Missouri

$7.85

Change due to cost of living.

Montana

$8.30/hr for businesses with annual sales over $110,000
$4/hr for businesses with annual sales under $110,000.

Change due to consumer price index.

New Jersey

$8.60

Change due to consumer price index.

New York

$10.40

Change due to ballot/legislature.
Set to increase to $11.10 beginning Dec. 31, 2018, $11.80 in 2019, and $12.50 in 2020. At the start of 2021, the rate will increase annually for inflation, capping at $15. Across the state, the minimum wage varies geographically, and by employer size within New York City.

Ohio

$8.30 for businesses with annual sales over $299,000
$7.25 for businesses with annual sales under $299,000

Change due to consumer price index.

Rhode Island

$10.10

Change due to ballot/legislature.
Set to increase to $10.50 beginning 2019.

South Dakota

$8.85

Change due to cost of living.

Vermont

$10.50

Change due to ballot/legislature.
At the start of 2019, the rate will increase annually by the smaller of two options: the consumer index price or 5 percent. The minimum wage cannot be decreased.

Washington

$11.50

Change due to ballot/legislature.
Set to increase to $12 in 2019 and $13.50 in 2020.

The post These 18 States Are Raising the Minimum Wage in 2018 appeared first on MagnifyMoney.

Spice Up Your Meals Without Hurting Your Wallet

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A fistful of parsley dries out in the refrigerator after you used it for a dish or two. And the 15 bottles of spices on your spice rack have long lost fragrance before you noticed.

Sound familiar?

It’s a common home-cook frustration. A new recipe calls for a tablespoon of fresh basil and a pinch of smoked paprika, but when you go to the grocery store, even the smallest quantities of those ingredients provide far more than you need. Why?

The answer is simple: It’s good business.

Big bunches make big money

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As far as fresh herbs go, sellers make more money off of large bunches, according to John Stanton, professor of food marketing at Saint Joseph’s University in Philadelphia.

Demand for fresh herbs — like basil, cilantro, mint, rosemary, thyme, and parsley — has increased dramatically over the past few decades, thanks to gourmet restaurants, and the rise of celebrity chefs and cooking shows. Growing fresh herbs has become a high-profit niche market, experts say, but it’s costly to compete.

Because herbs are at their best when freshly picked, it is important for sellers to establish a quick supply chain. To be successful, they must develop an efficient system to move the herbs from growers to customers, Stanton said. Herbs are also more delicate than vegetables. To prevent damage to the leafy herbs and keep their attractiveness, growers, distributors, and sellers also have to handle them gently and package them properly for long shelf life.

“You cannot have the product sitting around some place too long,” Stanton said. “The withered parsley is almost as powerful as the unwithered, but it just doesn’t look good.”

The complex, labor-heavy logistics that get herbs from growers to grocers in good condition cost a lot of money. Selling herbs in large bunches — more than what a home cook may need — helps make up for these costs.

While no one wants to reveal profit margins for the products they sell, Stanton said growers profit more from fresh herbs than from competitive produce, such as tomatoes and carrots.

The struggle of minimizing waste

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Jeanine Davis, associate professor at the department of horticultural science at NC State University, said small packets of herbs are good alternatives to big bunches of cilantro, parsley, or mint.

While home cooks may avoid food waste by electing the fresh herbs that come in plastic containers, they aren’t necessarily saving money. For instance, a full bunch of cilantro costs $1.99 at Wegmans, a regional supermarket chain in the Northeast, but 0.25 ounces of the same product packaged in a plastic is priced at $1.25. The package is actually more expensive if you calculate the cost per unit. And it may still come with more than you need, as well.

If you’re more concerned about minimizing food waste, subscribing to meal kits might be the way to go. Herbs, spices and seasonings come in the exact amount you need for a dish from meal subscription services like Blue Apron or Sun Basket.

How to make fresh herbs last longer

Compared with buying smaller packages of herbs or subscribing to a meal kit, buying those big, fresh bunches of herbs is the most affordable choice. Buying more than you need doesn’t mean you’ll inevitably waste food either. Karen Kennedy, education coordinator at the Herb Society of America, shared these tips with MagnifyMoney for getting the most value out of your herb purchases:

Spices last longer but can still be problematic

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Most commonly, dried spices are sold in bottles at grocery stores. Each bottle contains a few ounces of herbs, generally about 1 to 2 ounces. Prices vary dramatically by spice.

Kai Stark, purchasing manager at Frontier Co-op, an Iowa-based natural product wholesaler that owns the organic spice brand Simply Organic, told MagnifyMoney that spices are costly because some are extremely difficult to harvest, such as saffron and vanilla, making them incredibly labor-intensive. Others are prone to crop failures, making them risky items for farmers to grow, Stark explained.

Still, many may think two ounces of nutmeg for $5 is costly, especially when the recipe calls for only a tiny bit. Stanton, however, argues that people believe that dried herbs and spices are expensive because they only think of the cost per bottle. He referred to a roasted chicken meal as an example:

“Let’s say a jar of tarragon costs about $3, and a nice chicken may cost $7,” he said. “So you put the chicken in a pan. You took a pinch of tarragon and then you put it in an oven. The cost of the meal is [actually] the full $7 dollars of the chicken and about 3 cents of tarragon.”

“It’s better to think of it as cost per use and then it’s not that expensive,” he added.

How to keep your spice costs down

The trick to getting the most value out of a spice is using the whole bottle. Even though it might seem cheaper to buy dried herbs and spices in larger quantities, Kennedy suggests consumers stock them in small amounts to avoid waste.

In the case of nutmeg, you might want to buy a 0.53-ounce bottle that costs $2.

“If you can’t use it all before the flavor diminishes, you haven’t really saved anything,” Kennedy said.

Stark said the bulk aisle would be the place where consumers should look to save money on spices.

“You can purchase the exact amount of spice you want, whether it’s a pinch or a pound,” he said.

To be sure, not every grocery store has bulk spice aisles, and there may not be a specialty spice shop in your town. If that’s not an option at your local grocer, and you feel like you’re wasting money on spices you don’t use up while they’re most potent, consider these tips:

What you can do to make spices last longer

To keep their shelf life as long as possible, Kennedy said it’s best to store the dried herbs and spices in airtight glass jars and and place the bottles in a dry, dark, and cool location. Use your nose as a judge: You may want to toss your spice jar when a strong aroma or flavor doesn’t come off right away when you open it.

“When the fragrance begins to fade, so has the flavor,” she said. Most spices are good for one year when stored properly.

Spices sitting on the shelf for a year may not smell as good as when they were freshly bought, but Stanton said that doesn’t mean they are not safe to eat.

The expiration dates on food are mostly irrelevant, said Stanton, adding that they were labeled by companies hoping that consumers would regularly toss old products and buy new ones. Indeed, expiration dates are not required by law. Industry groups such as the Grocery Manufacturers Association and the Food Marketing Institute are trying to get food manufacturers and retailers to stop labeling expiration/sell by dates to help consumers reduce food waste.

“If you have an old bottle of dried herbs, you might have to put a little more on,” Stanton said. “So instead of costing 3 cents to make the tarragon chicken, it actually costs 6 cents.”

The post Spice Up Your Meals Without Hurting Your Wallet appeared first on MagnifyMoney.

How to Report Sexual Harassment at Work in a #MeToo World

metoo reporting sexual harassment at work
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Veronica Cannon was just a year out of college when she was took a job at a Jewish community center in South Florida in the early 2000s. At the time, she worked as a social worker and program director for the organization’s senior citizen program.

One morning, about six months after she started, a male colleague made explicit sexual comments toward Cannon in an office corridor. She knew immediately his remarks were out of line. But despite the fact that she took notes of the encounter, recorded her side of the story on tape, and went to higher-ups at her office to complain, the man was never terminated.

“In the two to four weeks that followed, it was very uncomfortable [to work there],” said Cannon, 31, whose name and other identifying details have been changed in this story. “I definitely considered resigning. The only reason why I stayed was because I felt obligated to the clients I was serving. And then after some time had passed, I just tried to put it behind me as much as possible.”

The encounter happened nearly a decade ago, many years before the rise of the #MeToo movement, which was fueled by a wave of public allegations of sexual assault and harassment against Hollywood A-listers — from Harvey Weinstein to Louis C.K. — media moguls like former “Today” Show host Matt Lauer and former CBS anchor Charlie Rose, top editors at NPR and Vice and lawmakers like Sens. Al Franken and Roy Moore.

Momentum appears, for once, to be on the side of victims. In the wake of these allegations, many of the accused have lost lucrative contracts and jobs in their industries. And at the start of the new year, hundreds of well-known actresses and high-powered women in the entertainment industry launched the Time’s Up initiative, which features a multi-million-dollar legal defense fund to aid victims of workplace sexual harassment.

For targets of sexual harassment in the workplace, especially women, it has been historically difficult to speak up for fear of retaliation. According to a 2017 poll conducted by ABC News and The Washington Post, 30 percent of women in the U.S. have experienced “unwanted and inappropriate sexual advances” from a male colleague. And nearly 95 percent of women who claim they experienced unwanted sexual advances at work say the men did not get punished.

“It’s not easy and it takes a lot of courage, but things are changing little by little, and it’s because of more people finding the courage to stand up,” said Candice Blain, Esq., a managing attorney at Blain LLC in Atlanta. Blain, who is also a survivor of sexual assault, has focused on helping victims defend themselves in cases of sexual harassment, cyberbullying and human trafficking.

One thing is for certain. Whereas complaints like the one filed by Cannon might once have been brushed aside by higher management, the tide may be changing in workplaces across the country. Fueled by the heightened awareness of sexual harassment in the workplace, women may find their management more receptive to their complaints and more willing to take action against offending colleagues.

“Having more public role models to give a voice and safe space to reporting these issues is only going to further empower people to not feel as if they have to be shackled by the shame of experiencing discrimination in the workplace,” Cannon said. “By sharing our stories, we can be our best advocates.”

The best thing you can do if you experience inappropriate behavior from a colleague or superior is to be prepared. From bringing any relevant documentation with you to learning about your office’s specific sexual harassment policies, there are steps you can take that will help ensure you did everything in your power to appropriately report what happened.

Tips to report sexual harassment or assault in the workplace:

Report the incident to your company first.

Although some companies may choose not to take action, it’s still an important first step to look up your company’s harassment policy and follow the proper protocol for reporting.

Karla M. Altmayer, an attorney and co-founder of Healing to Action, a Chicago-based organization that aims to end gender violence in the workplace, says it’s a good place to start.

“If a person has followed that policy guideline, then they have done everything in their power to ensure that the company has knowledge of the incident,” Altmayer said. The company’s knowledge of the incident is crucial in the event that legal action is taken later on.

Know when to escalate the situation.

Altmayer says that if an employee has followed the appropriate protocol and the company has not taken proper action, then an employee should file his or her complaint with the U.S. Equal Employment Opportunity Office (EEOC) or their local human rights agency. If you find yourself questioning whether or not your company took appropriate action, Altmayer says to trust your gut.

“Ultimately, if a person feels like the action that the employer took was not reasonable, then usually that’s the beginning of a sign that maybe there are grounds for filing a complaint,” she said.

In Cannon’s case, she knew she needed to escalate her situation after her direct supervisor failed to take it seriously, even if the end result was not the one she hoped for. “If it was something that had happened to me, I was sure it had happened to someone else, and could potentially happen to someone else in the future,” Cannon said.

Bring documentation of the harassment in any form.

Cannon’s decision to record and write about the incident immediately after it happened was crucial. Altmayer says documentation is integral to the success of any claims of harassment, and can take many forms.

One of the common ways news reporters have partly validated stories from women who have come forward with sexual harassment allegations is to ask close relatives or friends whether or not the women told them about the harassment at the time.

“Talking to people is important,” Altmayer said. “Because it does establish a record.” She says another piece of advice she gives her clients is to keep a journal. “Because if you’re keeping a journal in contemporary time with the incidents that are happening, then that is actually admissible as a [court] record.”

If it’s been a long time since the incident occurred and there isn’t documentation, Altmayer says that doesn’t mean the victim won’t have a strong case. “There are ways of establishing the harm that occurred and the credibility of the harm,” she said. One way is by talking about the experience with a therapist, who can then write about it or testify on the victim’s behalf.

“If you don’t have documentation, your testimony is still important … ” Blain said. “If it happened, it’s the truth, it is still worth speaking up and you can work your way around the documentation later on.”

Find an ally.

Cannon called her mom immediately after she wrote down what happened. She said she decided to call her not only because she trusted her mom, but because she worked as a legal administrator and had experience dealing with similar situations.

Blain says having an ally is a great idea, but to be cautious of picking someone at your workplace.

“The problem is that if the victim confides in somebody at the workplace before she actually reports it up the chain, that can create problems for her later on because there is a duty on the part of victim to report it as immediately as possible,” Blain said.

She explains that companies can use the fact that a victim spoke about the incident with his or her colleagues but didn’t report it as a way to say they didn’t know what was happening.

“If you’re going to talk about it in the workplace, the first person you should talk about it with is somebody who can put a stop to it,” Blain said.

Know that not all workplaces are treated equal.

Some companies — especially very small ones — don’t have sexual harassment protocols in place. Cannon’s workplace didn’t have such a protocol, which made it less clear for her on how to proceed with her complaint. Even though her superiors decided not to take action against her colleague, Cannon took it upon herself to meet with the director of human resources to help put policies in the book for reporting incidents of sexual harassment, since none had existed previously.

Altmayer says that for people who work somewhere without protocol, the target of sexual harassment should first consult a manager or someone at the company who has hiring or firing power. She reiterates that one of the most important things is for a company to have knowledge of the incident occurring. If a workplace doesn’t take action, Altmayer says victims want to be able to have the power to say his or her employer had knowledge of the incident and could have done something, but didn’t.

“If you tell your supervisor who doesn’t really have hiring or firing power, that is not enough to bind the employer to actually take action,” she said.

Be prepared for retaliation — and document it.

For employees who don’t have the financial means to gamble with their livelihoods, speaking up against a colleague and facing potential retaliation in the workplace could easily dissuade them from reporting harassment.

If you do speak up, however, and your company retaliates against you in some way — such as reducing your work hours, turning you down for a raise, or moving you to a department that doesn’t match your skill set — you may have an even more firm case against them.

Blain says victims who are nervous of reporting sexual harassment for fear of workplace reprisal should know that retaliation is actually a separate claim.

“The reason that’s important and why victims should take comfort in that is because even if the original claim of harassment is not successful — even if you ultimately can’t prove it or win it — if you reported it and you were a victim of retaliation, that in and of itself is a separate violation,” she explained.

So, if a woman does not win a workplace sexual harassment lawsuit, she can still win one related to retaliation from the incident.

Document the incident and contact the EEOC or legal aid groups, such as Time’s Up.

How companies can better manage harassment claims

Altmayer shares this advice for companies looking to create or tweak their sexual harassment code.

Consider keeping the target’s identity anonymous.

“There’s no law that says that the information has to be kept anonymous,” Altmayer said. “But there are definitely best practices.” Her advice to companies who might be creating or tweaking their current policies is to have a rule in which they keep the identity of the complainant confidential.

Having the victim’s identity revealed could have major consequences. “They might be retaliated against,” she said, “or further harassed.”

Don’t put the offender and the victim in the same room at the same time.

Cannon’s direct supervisor brought her and the offender into the same room to discuss what happened. She says her direct supervisor wanted to give the offender the opportunity to share his side of the story.

Cannon, who no longer works at the community center where the incident occured, says that because she had conviction in what had happened she was OK with this. “But I could imagine that would be a really uncomfortable situation for someone else,” she adds.

Altmayer believes bringing people into the same room is a bad idea. “That’s never good practice,” she said. “Because you’re talking about someone who is really fearful of coming forward in the first place, who has put a lot on the line, and is taking a big risk in the workplace culture.”

Tweak the protocol’s language.

Research conducted by the Harvard Business Review found that often times, the language in companies’ sexual harassment policies is ineffective.

They gave 24 employees of a large government organization a copy of their company’s sexual harassment policy and found that nearly all of the participants found the language to be more concerned with perceptions of behaviors instead of behaviors themselves. “The policy was perceived as threatening, because any behavior could be sexual harassment if an irrational (typically female) employee perceived it as such,” the study’s authors wrote.

Consider taking a close look at your company’s policy to ensure it resonates well with all employees.

Be as proactive as possible.

“It’s important also for employers to think about what steps they can take to prevent the violence from happening in the first place,” Altmayer said.

Being proactive includes ensuring both men and women are at the table to discuss company culture, “because in many of these cases, it’s difficult to protect yourself, especially if you’re in a workforce that is predominantly male,” she said.

The post How to Report Sexual Harassment at Work in a #MeToo World appeared first on MagnifyMoney.

January Best Buys

Best Buys

Now that the Holidays are over, you might need a break from shopping. But, just in case you still have a touch of the shopping bug or you have to visit a store or two to return things any way, this month happens to be a strong month to save while you shop. Retailers bring in a lot of merchandise in anticipation of the holiday rush, and they will be anxious to clear space for spring merchandise if they have excess stock. While there will be sales on and off all month, the experts at deal site Slickdeals.net, found the majority of the deals peaking around mid-January during Martin Luther King weekend. Here’s what we know right now.

Men’s apparel

We expect the most robust sale category to be men’s apparel. Last year, more than 30% of the top deals at Slickdeals were in this category, from retailers like Nike, J. Crew Factory, Macy’s and Walmart.

Deals:

Macy’s: 20% off holiday sale with code TWODAY. Valid 1/14-1/15

REI – holiday clearance up to 50% off  

Target – Extra 20% off Clearance Apparel

Jos A Bank: Clearance sale – suits $79, dress shirts for $15 – valid through 1/11

Men’s WearhouseSave $30 off orders over $100. Through 1/11

Bonobos Men’sSave up to 50% off final sale items. Through 1/14

Land’s End – Save up to 50% off during the Great Winter Sale. Through 1/31

Tax Software

If you’re ready to start thinking about tax time this early in the year, it could be to your advantage. There are typically an abundance of tax prep and tax software deals from retailers like Staples, Amazon and Costco.

Deals:

TurboTax: Get TurboTax Deluxe for $39.99 (coupon is for $20 off TurboTax Deluxe – expires 1/31

Liberty Tax: Take an Extra 20% Off Every Liberty Tax Online Tax Filing Solution. Use Code: LTOCJ20

eSmartTax.com: 20% off Tax Solutions with code ESTCJ20.

H&R Block and United Way: United Way and H&R Block offer 2017 Federal and State Tax Return Filing for those with Adjusted Gross Income of $66,000 or less for Free

White Sales

Since the late 1800s, January has been the month of “white sales”, when all manner of linens go on sale. Many retailers participate, which means you can find bed and bath items slashed up to 60% off from stores like Kohl’s, Target, and Macy’s.

Deals

Macy’s: 25% off winter weekend sale with code STYLE 1/18-1/21

Bloomingdales: Save up to 50% off select home items in the January home sale. Ends 1/15

The Company Store: End of Season sale – save 20% with code X17SAVE through 1/9

Bed, Bath & Beyond: Get up to a $50 gift card with select Aerobed purchases. Through 1/12

Burlington: Save 50% off any order with code AJER587W. Through 1/10

West Elm: Save up to 20% off bedding collections. Through 1/11

Pottery Barn: Annual White Sale – 20% off bedding and towels

New Year, New You

It sounds cliché, but this is the time of year that we think about taking better care of ourselves. Last years’ resolutions may have fallen by the wayside throughout the year, and the snacks, drinks and sweets at all those holiday parties compounded the issue. It’s the perfect time to get back up on that horse!

Deals

My Protein: New Customers, 30% off. No expiration

Vitamin Shoppe: $8 off 5lb Optimum Gold Standard Whey

Sweaty Betty: Save 20% off your purchase. Expires 1/17

Yoga Download: Save 40% off your order. Expires 1/23

Gold’s Gym: Save 50% off select apparel. Through 2/24

Athleta: Save 20% off your next order with code L1B9B9BHBXTW. Through 1/11

What not to buy

Toys

Toys were hot during the holidays, but you probably won’t see many worthwhile toy deals this month. The good news is your little ones are probably set for a while with all of their holiday gifts.

Mattresses

Great deals on mattresses occur in February, when Presidents Day sales bring discounts. For instance, in 2017, Mattress Firm offered up to $500 off storewide. This year, Presidents Day is Feb. 19, so wait another month if you’re in the market for a new mattress.

If February is too soon for your budget, mattress deals will return in May, over Memorial Day weekend, and in September, over Labor Day weekend.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

Image: iStock

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