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Taxes

Monday’s need-to-know money news

February 2, 2015 By Liz Weston

Household-Budget1Today’s top story: Why treating your household like a business could help your budget. Also in the news: The money moves you need to make right now, why it’s going to get tougher to get a student loan, and how to take advantage of the home office deduction.

How to Manage Your Household Budget Like a Business
Thinking of your home as a business can help keep your budget on track.

The Money Moves to Stop Procrastinating and Take Care of Now
No more excuses.

The Student Loan Rule Change That Could Hurt Parents With Bad Credit
Getting a student loan just became more difficult.

Tax Season: Demystifying the Home Office Deduction
Making sure your home office is legitimate.

Nationwide ad meant to be jarring
The insurance company defends depressing Super Bowl ad.

Filed Under: Liz's Blog Tagged With: advertising, budgets, home office, home office deduction, Insurance, money moves, Student Loans, Taxes, tips

January tune-up: Your paperwork

January 29, 2015 By Liz Weston

iStock_000015900242LargeIs anyone else drowning in paperwork? I try to “prevent, prune and process,” but paper has a way of multiplying on its own.

Here’s my game plan for reducing paper clutter:

Prevent. I’ve signed up for the Direct Marketing Association’s opt out list to reduce junk mail and I use Catalog Choice to cut down on catalogs. Unfortunately, some retailers ignore these requests, so I keep a recycling bin handy. Unwanted mail goes straight to the bin so it can’t make its way any farther into our house.

Another way to prevent paper from proliferating is to sign up for electronic delivery. You can download statements or, in many cases, just let the financial institution store those for you. (Check to find out how long they do so; seven years should be as long as you’d need most statements.*) Every time I handle a piece of paper this week, I’ll be checking to see if there’s a way to receive it electronically instead.

One caveat: Going electronic doesn’t mean ignoring your accounts. I regularly check the balances and transactions of all our accounts. An account aggregator such as Mint can be a big help with this process. If receiving a paper statement is the only way you’ll remember to check your accounts, then use the scan-and-shred method as follows:

Prune. Most of our remaining paperwork can be scanned into my computer and then shredded. The IRS accepts electronic documents so there’s typically no reason to hang on to the paper version. The exceptions are paperwork that would be a pain to replace: birth, marriage and death certificates, military discharge papers and so on. Two tools that really help: my ScanSnap scanner and a heavy-duty shredded that can handle up to 15 sheets at a time.

Process. This tends to be my Achilles heel. I can think of so many better things to do than deal with that pile of paperwork on my desk. I’ve tried weekly process sessions but am coming around to the idea that it’s better not to let it pile up even that long.

*You’re likely to get different answers from different providers, which is why you need to ask. Banks and brokerages typically keep statements for 7 years (Schwab keeps them for 10) but may limit free online access to just a few years. Credit card companies are all over the map on this one. For instance, Capital One has access for four years (although you can order older statements) while Amex keeps them available for seven.

While cars no longer require traditional tune-ups, your finances still do. This month I’ll be reviewing some areas of your money that deserve some extra scrutiny and offering suggestions for the best moves now. Stay tuned for more posts–and to make sure you don’t miss any, you can sign up for my newsletter using the link on my home page.

Filed Under: Liz's Blog Tagged With: Catalog Choice, DMA, documents, IRS, opt-out, paperwork, records, scanner, shredder, Taxes

Tuesday’s need-to-know money news

January 27, 2015 By Liz Weston

Zemanta Related Posts ThumbnailToday’s top story: Tax breaks for retirement savers. Also in the news: Surprising tax complaints, how to find cheap airfare, and becoming comfortable with investing using a mock portfolio.

10 tax breaks for retirement savers
How to minimize the taxes on your savings.

The Most Surprising Tax Complaint in America
No, it’s not slow refunds.

Best Ways To Purchase Cheap Airline Tickets
More money to spend on snow globes!

Try a Mock Portfolio to Get Comfortable With Investing
Testing your market skills without the risk.

6 Tips to Plan a Fun and Cheap Super Bowl Party
How to host a big party without spending big bucks.

Filed Under: Liz's Blog Tagged With: Identity Theft, Investing, Retirement, super bowl, tax breaks, tax complaints, Taxes, travel

January tune-up: Your taxes

January 20, 2015 By Liz Weston

returnThe IRS started accepting tax returns today. Perhaps some of you already knew that, and were poised with your finger over the “submit” button on your already-completed return when the IRS opened its gate. For the rest of us, though, this is a timely reminder that “Oh, yeah, I’ve gotta get that done”–preferably well before April 15. (If you need motivation, read about how important it is to file early in my Bankrate column, “What you can do now to protect your tax return.”)

Here are a few ways to make tax time less painful now and next year:

Start a file. List your employer(s), your mortgage lender(s), your financial institutions and anyone else likely to send you a tax document this year. Check off the appropriate issuer when the document arrives and keep it in this file. Note: some issuers have moved to an all-electronic system, so you’ll need to log in to your account to download the W-2, 1098, 1099 or whatever. If you have a tax preparer who sends you an annual organizer, fill that out and keep it with your documents in this file.

Eat the frog. Is there one tax-related chore that always seems to take a long time, causing you to put off filing your return every year? Make this the year you tackle it early. We donate a lot of stuff to Goodwill every year, and every year I swear I’m going to assign values to the donations as I go…and every year I don’t, meaning I have to do it all at once. At least this year, I’m knocking it off the to-do list early. (Salvation Army’s donation value guide is pretty helpful.)

Make the appointment. If you use a tax preparer, call now to make your appointment. There’s nothing like a deadline for encouraging you to get your, er, tax stuff together. If you DIY, set a date with yourself on the calendar. Don’t expect to get much help from the IRS this year–the Taxpayer Advocate Service is predicting half of callers won’t be able to connect and average wait times will stretch past 30 minutes. If money is tight, avail yourself of one of the free help services.

Digitize it. I’m hoping you already understand the importance of filing electronically–it’s safer and a faster way to get your refund than using the U.S. mail. You’d also be smart to make scans of your completed tax return and supporting documentation. Knowing you have this electronic backup can help make it easier for you to let go of the paper copies. Once your tax return is done for this year, you can purge your files appropriately.

While cars no longer require traditional tune-ups, your finances still do. This month I’ll be reviewing some areas of your money that deserve some extra scrutiny and offering suggestions for the best moves now. Stay tuned for more posts–and to make sure you don’t miss any, you can sign up for my newsletter using the link on my home page.

Filed Under: Liz's Blog Tagged With: IRS, tax help, tax software, Taxes

Monday’s need-to-know money news

January 19, 2015 By Liz Weston

Divorce-Money_43Today’s top story: What you need to know about taxes if you’re getting divorced. Also in the news: Honest mistakes that could ruin your credit, what you’ll be paying more for in 2015, and why you might need more care insurance.

Getting Divorced? 8 Things You Must Know about Taxes
Changes during a difficult time.

5 Honest Mistakes That Can Wreck Your Credit
When little mistakes become big ones.

15 things that will cost more in 2015
Prepare to pay more.

Why You Might Need More Car Insurance Than You Have
A little fender tap could end up costing you big bucks.

5 Smart Ways to Use Your Bonus
Instead of piddling it away.

Filed Under: Liz's Blog Tagged With: bonuses, car insurance, Credit, credit mistakes, price increases, Taxes, taxes and divorce

Don’t call the IRS this tax season

January 15, 2015 By Liz Weston

Zemanta Related Posts ThumbnailNeed to call the IRS with a question? Good luck with that. The IRS ombudsman tells us about half of taxpayers who call the agency this tax season won’t get through, and the average hold times could be 30 minutes or more.

In a report to Congress, the Taxpayer Advocate Service blamed the widening gap between the IRS’ workload and its shrinking resources (read: budget cuts) for “unacceptably low levels” of customer service.

You have some free alternatives if you need help filing your returns:

  • The Volunteer Income Tax Assistance program can help people with low to moderate incomes (generally $53,000 or less), the disabled, the elderly and those with limited English.
  • Tax Counseling for the Elderly offers help to all taxpayers but specializes in helping those 60 and over.
  • AARP Foundation’s Tax-Aide provides free tax preparation for low to moderate income taxpayers, “especially those 60 and older.”

In addition, TurboTax and TaxAct offer free preparation of the simplest federal returns, but you pay to file state and more complicated returns.

The software programs do a good job of guiding most people through the preparation and filing process. If your tax situation is at all complex–you own a business, are an active investor or experienced a major life change, for example–consider hiring a tax pro. Enrolled agents are a good, lower-cost choice for most people, while CPAs offer more high-end help.

Filed Under: Liz's Blog Tagged With: AARP, IRS, tax help, tax software, TaxAct, Taxes, Taxpayer Advocate Service, TCE, TurboTax, VITA

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