The Return of Layaway

Posted on May 13, 2017 by FCA Admin

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Do you remember when your mom would put that big purchase on layaway?  It seems like it was so long ago.  Not anymore.  In these tough economic times, many retailers are offering layaway as an option for many of their customers.  This makes it more flexible and will give customers the option of not paying with their credit cards. Some of the top retailers offering layaway plans include Kmart, Toys R Us, and even Marshalls.

Although layaway benefits consumers, it can be costly to some retailers.  Several retailers have chosen to not offer layaway. It costs too much money if the customers fail to make the payments. But don’t get discouraged. A website called e-layaway.com, www.elayaway.com makes it simple to participate in a layaway program through the internet.  This site also provides money savings tips.  Signing up is easy and you can start participating instantly.   E-layaway gets my vote for ease of use and affordability for customers.

Have you used E-layaway?  Tell us what you think of the site?

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Personal calls on business cell phones. Is it time to pay up?

Posted on January 16, 2017 by FCA Admin

The IRS is looking to revamp a 2o year old law regarding employee use of company cell phones.  The law requires employers to track the amount of time employees spend on personal calls.  This is considered benefit income and can be taxed.  This law was not very popular because of the tedious task of tracking employee personal phone calls.   But now the IRS is receiving increasing inquires on reviving this law.  From now until September 4th, the IRS is accepting comments regarding the proposed changes.  The IRS has come up with three possible methods of how this law will work.

The methods are:

  • Minimal Personal Use Method: This method requires that employers limit calls to minimal use and track the minimal use by employees.
  • Safe Harbor Substantiation Method: This method requires an employer to use a percentage to determine the portion of time considered business use and non business use.
  • Statistical Sampling Method: Employers would use a statistical sampling method to determine the amount of time considered business and non business use.

 

For more information, visit the IRS website at

http://www.irs.gov/govt/fslg/article/0,,id=209572,00.html.

 What are your views on these proposed changes?

 

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Four Tax Tips about Your Unemployment Benefits

Posted on November 21, 2016 by FCA Admin

Issue Number:    IRS Tax Tip 2013-26

Inside This Issue

If you received unemployment benefits this year, you must report the payments on your federal income tax return.

Here are four tips from the IRS about unemployment benefits.

1. You must include all unemployment compensation you received in your total income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount you were paid and the amount of any federal income taxes withheld from your payments.

2. Types of unemployment benefits include:

  • Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
  • Railroad unemployment compensation benefits
  • Disability payments from a government program paid as a substitute for unemployment compensation
  • Trade readjustment allowances under the Trade Act of 1974
  • Unemployment assistance under the Disaster Relief and Emergency Assistance Act

3. You must include benefits from regular union dues paid to you as an unemployed member of a union in your income. However, other rules apply if you contribute to a special union fund and your contributions are not deductible. If this applies to you, only include in income the amount you received from the fund that is more than your contributions.

4. You can choose to have federal income tax withheld from your unemployment benefits. You make this choice using Form W-4V, Voluntary Withholding Request. If you complete the form and give it to the paying office, they will withhold tax at 10 percent of your payments. If you choose not to have tax withheld, you may have to make estimated tax payments throughout the year.

For more information on unemployment benefits see IRS Publications 17, Your Federal Income Tax, or IRS Publication 525, Taxable and Nontaxable Income. You can download these free booklets and Form W-4V from the IRS.gov website. You may also order them by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

 

Note. From Issue Number: IRS Tax Tip 2013-26.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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Additional Protection for US Consumers

Posted on October 1, 2016 by FCA Admin

President Obama wants to create the Consumer Financial Protection Agency.  The purpose of the agency is to protect consumer credit and their banking transactions.  Additionally, The Federal Reserve Bank will have the added responsibility of supervising large financial institutions and monitor risk within the financial system.  Obama even wants to give the Consumer Protection Agency some of the current responsibilities of the Federal Reserve Bank and the Treasury Department.  Obama’s goal is to prevent big bank failures such as Lehman Brothers. He further wants to protect consumers from credit risks from   bad lending practices due to mortgages and credit cards.   It is hoped that the new agency will fine companies who have abusive practices and will help prevent another recession.

Do you think the Consumer Financial Protection Agency will serve its intended purpose?

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IRS Offers Tips to Reduce Big Refunds and Prevent Tax Bills

Posted on September 6, 2016 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2012-22

Inside This Issue

The Internal Revenue Service reminds taxpayers that it’s not too late to adjust their 2015 tax withholding to avoid big tax refunds or tax bills when they file their tax return next year.

Taxpayers should act soon to adjust their tax withholding to bring the taxes they must pay closer to what they actually owe and put more money in their pocket right now.

Most people have taxes withheld from each paycheck or pay taxes on a quarterly basis through estimated tax payments. Each year millions of American workers have far more taxes withheld from their pay than is required. Many people anxiously wait for their tax refunds to make major purchases or pay their financial obligations. The IRS encourages taxpayers not to tie major financial decisions to the receipt of their tax refund – especially if they need their tax refund to arrive by a certain date.

Here is some information to help bring the taxes you pay during the year closer to what you will actually owe when you file your tax return.

Employees 

  • New Job. When you start a new job your employer will ask you to complete Form    W-4, Employee’s Withholding Allowance Certificate. Your employer will use this form to figure the amount of federal income tax to withhold from your paychecks. Be sure to complete the Form W-4 accurately.
  • Life Event. You may want to change your Form W-4 when certain life events happen to you during the year. Examples of events in your life that can change the amount of taxes you owe include a change in your marital status, the birth of a child, getting or losing a job, and purchasing a home. Keep your Form W-4 up-to-date.

You typically can submit a new Form W–4 at anytime you wish to change the number of your withholding allowances. However, if your life event results in the need to decrease your withholding allowances or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days of that life event.

Self-Employed

  • Form 1040-ES. If you are self-employed and expect to owe a thousand dollars or more in taxes for the year, then you normally must make estimated tax payments to pay your income tax, Social Security and Medicare taxes. You can use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to find out if you are required to pay estimated tax on a quarterly basis. Remember to make estimated payments to avoid owing taxes at tax time.

Publication 505, Tax Withholding and Estimated Tax, has information for employees and self-employed individuals, and also explains the rules in more detail. The forms and publication are available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). 
Links:

  • Form W-4, Employee’s Withholding Allowance Certificate
  • Form 1040-ES, Estimated Tax for Individuals
  • Form W-4P, Withholding Certificate for Pension or Annuity Payments
  • Publication 505, Tax Withholding and Estimated Tax

 

Note. From Issue Number: IRS Tax Tip 2012-22. Copyright 2013 by Copyright Holder. Reprinted with permission.

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Rent or buy? You decide.

Posted on March 3, 2016 by FCA Admin

These days the buzz word is that it’s a great time to buy. But deciding whether to rent or buy is an individual decision that should be considered on a case by case basis.  It is not wise to buy just because someone tells you that it’s a great time to buy. 

What are some of the factors to consider?

  • Your income and expenses.  This is number one on my list. 
  • Falling equity in current homes. Homes are losing and continue to lose their value. 
  • Rent is cheaper: In most cases this is true. Renters do not have to pay for property tax or home insurance.
  • Benefits of home ownership: There are many benefits such as building equity and tax breaks.

Some smart moves to make right now:

If you’re still unsure of what to do, consider using a mortgage calculator to help you determine the costs of home ownership.  Bankrate.com has great calculators that can help you with this assessment.  Another option is to consider the price to rent ratio.  This is determined by dividing the price of  a home by the annual rent you’d pay on a comparable home.  If your answer is 15 or higher, than it is better to rent.

What are your thoughts?

 

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Paying Debt versus Saving

Posted on February 21, 2016 by FCA Admin

During the current economic crisis, many people find themselves wondering whether it is more important to pay down debt versus building up a savings account balance.  Some of the top financial experts are recommending that people build up their savings versus paying down debt.  Suze Orman recently recommended that people build up their savings and pay the minimum balance on credit cards.  Does this make any sense to you?  Well, let’s look at it from another viewpoint.  Credit Card companies have changed many of their terms without notifying card holders.  Some are reducing credit limits and even canceling accounts.  Many people believe that they should pay the credit card debt.  Then in case of an emergency, they can use the balance remaining on the credit card.  During this current recession, you can’t really depend on credit cards any more.  And that’s why it is recommended that you save first and then pay the minimum on your credit card balance.  See the link below for Suze’s expert advice.

http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=SP&SRCN=suzescoop&GnavID=1&SnavID=134&NewsID=177

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New IRS YouTube Video – How to Check on Your Refund

Posted on January 21, 2016 by FCA Admin

 

Issue Number:    Special Edition IRS Tax Tip 2013-06

 

With the April 15 tax filing deadline approaching, the Internal Revenue Service created a new YouTube video to provide taxpayers more details and tips to check on their tax refund.

The new video How to Use the Where’s My Refund? Tool  offers in-depth information about how the redesigned “Where’s My Refund” tool on IRS.gov works. The IRS’s previous refund YouTube video When Will I Get My Refund? has already received more than 750,000 views. The IRS expects this video will also be a helpful resource for taxpayers.

The IRS issues more than nine out of 10 refunds to taxpayers in less than 21 days. Even though the IRS issues most refunds in less than 21 days, some tax returns will require additional review and take longer.

The refund video released today is one of several YouTube videos the IRS created to help taxpayers navigate this year’s filing season. Other top videos that help people prepare their tax returns or resolve tax problems include:

The IRS YouTube channels offer short, informative videos in English, American Sign Language and other languages. IRS currently has more than 100 videos, which already have more than 4 million views.

 

 

 

 

Note. From Issue Number: IRS Tax Tip 2013-06.  Copyright 2014 by Copyright Holder. Reprinted with permission.

 

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Preparing for Tax Season

Posted on December 3, 2015 by FCA Admin

Tax season is upon us.  My personal belief is that preparation is key to making it through tax season.  Many people become overwhelmed by all of the forms and deadlines.  Well, to help you get organized for this tax season, I offer these simple tips:

 

  • Locate a copy of your prior year return: This is really important in the event that you or your tax preparer wants to compare how you filed last year.  For example, did you claim a deduction last year that you are not claiming this year?  Did your filing status change?  If you aren’t able to locate a copy of last year’s return, the IRS keeps transcripts of prior year returns. Transcripts are free of charge.  Obtaining them is as simple as picking up the phone and making the call or completing Form 4506-T, Request for Tax Return Transcript.  This form can be downloaded from the IRS website, http://www.irs.gov/pub/irs-pdf/f4506t.pdf.
  • Create checklist for expected tax forms:  If you receive multiple forms such as W2s or 1099s etc. a checklist will be really helpful in helping you to stay organized.  The checklist can be as simple as a list using pen and paper or as technical as using an Excel Spreadsheet.  My personal favorite is the Microsoft Money Software.  The software has a feature that allows you to organize all of your accounts so that you know which accounts to expect a form for. Additionally, many companies now offer you to option to receive your tax forms online.  Check with your bank or brokerage to see if this is an option for you. 

If you are not eligible for Free File, decide if you will file your taxes electronically, use a professional tax preparer, or use the paper form.   Bankrate.com has a great site on current tax topics to help you prepare for this tax season.  Visit the site at http://www.bankrate.com/brm/news/news_taxes_home.asp.

  • Use Direct Deposit:   If you are expecting a refund this year, direct deposit is the way to go.  In many instances you will receive your refund faster than if it had elected to receive a check in the mail.  To indicate that you want to receive direct deposit, simply fill in the direct deposit section on your tax form with your banking information. 
  • Research deductions and Credits:   By researching these ahead of time, you are putting yourself ahead of the game. You will have a better idea of which ones you qualify for.  For more information on this topic, visit the Bankrate.com website, http://www.bankrate.com/brm/news/news_taxes_home.asp.

 

 

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Deducting Moving Expenses

Posted on May 18, 2015 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2014-20

Inside This Issue

If you move because of your job, you may be able to deduct the cost of the move on your tax return. You may be able to deduct your costs if you move to start a new job or to work at the same job in a new location. The IRS offers the following tips about moving expenses and your tax return.

In order to deduct moving expenses, your move must meet three requirements:

1. The move must closely relate to the start of work.  Generally, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.

2. Your move must meet the distance test.  Your new main job location must be at least 50 miles farther from your old home than your previous job location. For example, if your old job was three miles from your old home, your new job must be at least 53 miles from your old home.

3. You must meet the time test.  After the move, you must work full-time at your new job for at least 39 weeks the first year. If you’re self-employed, you must meet this test and work full-time for a total of at least 78 weeks during the first two years at the new job site. If your income tax return is due before you’ve met this test, you can still deduct moving expenses if you expect to meet it.

See Publication 521, Moving Expenses, for more information about these rules. It’s available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

If you can claim this deduction, here are a few more tips from the IRS:

  • Travel.  You can deduct transportation and lodging expenses for yourself and household members while moving from your old home to your new home. You cannot deduct your travel meal costs.
  • Household goods and utilities.  You can deduct the cost of packing, crating and shipping your things. You may be able to include the cost of storing and insuring these items while in transit. You can deduct the cost of connecting or disconnecting utilities.
  • Nondeductible expenses.  You cannot deduct as moving expenses any part of the purchase price of your new home, the cost of selling a home or the cost of entering into or breaking a lease. See Publication 521 for a complete list.
  • Reimbursed expenses.  If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income. You report any taxable amount on your tax return in the year you get the payment.
  • Address Change.  When you move, be sure to update your address with the IRS and the U.S. Post Office. To notify the IRS file Form 8822, Change of Address.

Premium Tax Credit – Changes in Circumstances.  If you purchased health insurance coverage from the Health Insurance Marketplace, you may receive advance payment of the premium tax credit in 2014. It is important that you report changes in circumstances, such as when you move to a new address, to your Marketplace. Other changes that you should report include changes in your income, employment, family size, or eligibility for other coverage. Advance credit payments provide premium assistance to help you pay for the insurance you buy through the Marketplace. Reporting changes will help you get the proper type and amount of premium assistance so you can avoid getting too much or too little in advance.

Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

 

Note. From Issue Number: IRS Tax Tip 2014-20.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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