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Liz Weston

Monday’s need-to-know money news

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Today’s top story: Why credit card loyalty is no virtue. Also in the news: the SmartMoney podcast tackles saving for a down payment, how to decide between buying, fixing, or building, and how to talk to a real human at the IRS without waiting on hold forever.

Why Credit Card Loyalty Is No Virtue
At least 1 in 5 consumers are carrying the wrong card.

SmartMoney Podcast: ‘How to Save for a Down Payment’
Look for the best interest rates.

Buy, Build or Fix: What’s Best for First-Time Home Buyers?
Tough decisions.

How to Talk to a Real Human at the IRS Without Waiting on Hold Forever
The best times to call.

Q&A: How IRS Free File works

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Dear Liz: I wanted to alert you to the fact that online tax preparation companies are up to their old tricks again this year despite being called out last year for deceptively hiding their free tax filing from eligible filers. My son, who qualifies for free filing, was redirected to the paid “deluxe” version when it turned out he qualifies for a “Savers Tax Credit.” He makes modest tax-deferred contributions through an employer that matched contributions. (He’s a low-income student who works in retail.) He logged out of that website and instead successfully used a competitor provider for free.

Answer: The way to access the IRS’ Free File program is through the IRS website, which directs people to the private tax preparation companies that have agreed to offer this service. Unfortunately, many of those same companies spend a lot of money trying to obscure that fact that most Americans can file for free.

Independent news organization ProPublica reported last year that tax preparation companies were hiding their free file options from online search engines and steering people instead into paid tax preparation. A government report in February confirmed that more than 14 million taxpayers paid for tax preparation last year that they could have received free.

The companies have since been banned from hiding the free option and are supposed to include a link that returns people to the IRS Free File site if they don’t qualify for the company’s free offer. But ProPublica found that they continue to steer people away from free filing in various ways, including advertising that misuses the word “free.”

Also, many people like your son discover only late in the tax preparation process — often after they’ve added most of their information — that they don’t qualify for that company’s free option, although they would qualify elsewhere.

Here’s what people need to know about free filing:

People with adjusted gross incomes under $69,000 a year can qualify for free filing, but they should start their search at the IRS Free File webpage.

People in the military and their families can use MilTax, provided by the Department of Defense.

They can also get advice from a tax professional at (800) 342-9647.

In addition, people may qualify for the IRS’ Volunteer Income Tax Assistance if they make less than $56,000, live with a disability or speak limited English. Use the Volunteer Income Tax Assistance locator tool or call (800) 906-9887.

People who don’t qualify for the above services can still use free fillable forms. In addition, some tax preparation companies may have free options for people filing basic forms. The types of income and credits that allow someone to file for free should be prominently displayed on the company’s free file page.

Q&A: Worried about stocks? Why you shouldn’t try to time the market

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Dear Liz: I’m a federal employee with a Thrift Savings Plan account. I’m 35 and have put about $125,000 into my TSP. However, I never changed it from the low-risk G fund so it’s not gaining as much interest as it should. Should I wait for the market to tank before moving it around or is it OK to move it now due to my age and amount of time I have before retirement? I’m worried I’ll move it and I’ll lose the value in a downturn, so maybe I should wait for a downturn to act.

Answer: You sent this question a few weeks ago, before the recent correction. Did you use the downturn as an excuse to hop into the market? Or did you stay on the sidelines, worried it might drop further?

Many people in your situation get cold feet. You’re better off in the long run just diving in and not trying to time the market.

Waiting for a downturn sounds good in theory, but in reality there’s no sure way to call the bottom of any stock market decline. And when the stock market recovers, it tends to do so in a hurry. If you delay too long, you risk missing much of the upside.

It won’t feel good if the market plunges a day, a week or a year after you invest your money, but remember that you’re investing for the long term. The day-to-day or even year-to-year gyrations of the stock market don’t matter. What matters is the trend over the next 30 years — and long term, stocks outperform every other asset class.

Thursday’s need-to-know money news

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Today’s top story: How to stock up wisely, emergency or not. Also in the news: Some rental owners could get an extra tax break this year, how to unlock the debtor’s prison of student loans, and the most important money move that women aren’t making.

How to Stock Up Wisely, Emergency or Not
No panic shopping.

Some Rental Owners Could Get an Extra Tax Break This Year
The new QBI.

Unlock the Debtor’s Prison of Student Loans
Looking for relief.

This is the most important money move that women aren’t making
It’s time to invest.

Wednesday’s need-to-know money news

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Today’s top story: How Gen Z (and everyone else) can combat spending regret. Also in the news: How to spot a good car salesperson – or a bad one, 4 money lessons from ‘Love is Blind,’ and 9 savings strategies to boost your finances.

How Gen Z (and Everyone Else) Can Combat Spending Regret
Prioritize what’s important to you.

How to Spot a Good Car Salesperson — Or a Bad One
Don’t get a lemon of a salesperson.

4 Money Lessons From ‘Love is Blind’
Lessons from Netflix’s new reality show.

9 savings strategies to boost your finances
Gamifying can help.

Unlock the debtor’s prison of student loans

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Earlier this year, a judge denounced the myth that student loans can’t be erased in bankruptcy court as she excused a Navy veteran from having to pay $221,000 in education debt. Bankruptcy judge Cecelia G. Morris’ decision garnered plenty of headlines, along with speculation that the ruling might make such discharges easier.

The battle isn’t over, though. A few days later, Morris’ ruling was appealed by the Education Credit Management Corporation, a nonprofit company that guarantees and services federal student loans for the U.S. Department of Education.

In my latest for the Associated Press, what the American Bankruptcy Institute’s Commission on Consumer Bankruptcy recommends to begin freeing borrowers from their loans.