expense Archives - Hanover Mortgages

January 14, 2022

Make Your Money A Daily Routine

Starting a new routine in any area of life can be challenging. Be it changes to your finances, exercise habits, health or any other type of new routine, one of the best ways that you can increase your chances of success is to make it part of your existing daily routine. Making small changes to something you’re already doing drastically increases your chances to stick with any new habit. Here, we’ll take a look at some ways that you can incorporate finances into your daily routine.

Setting yourself up for success

If you are planning or have already set a goal or resolution to improve your finances, Mint can help. Mint makes keeping track of your finances feel less like torture and more like a natural part of your day. Instead of feeling like it’s just “one more thing” that you have to do each day, you can handle your finances in the background of many moments. This makes it much more likely that you will continue on the right path.

Constantly making progress

The hardest thing about making progress is constantly making progress. It’s really difficult to stay in the same place. So if you’re not always moving forward, you may find yourself moving backwards. All you have to do is keep up the pace — and fortunately, Mint makes that easy to do.

One thing that you have to watch out for is making one mistake and then completely giving up on your new financial goal. It’s unrealistic to think that you will never slip up even once — so if you set the mentality of perfect or nothing, you’re more likely than not to end up with nothing. Instead, remember that the road to financial health is a marathon, not a sprint. If you’re over budget one month, don’t give up — instead review what went wrong and strive to improve next month.

Keep track of your spending

Probably the most important thing that you can do to set yourself up for good financial health is to keep track of your spending. This means not only your big ticket items like rent, mortgage, utilities and other loan payments, but keeping track of EVERYTHING. There are many different ways to keep track of your spending, and each of us may prefer a different way. The important thing is to find the way that works best for you and stick with it.

You can go as low-tech as a paper spending journal where you write down each expense and then categorize it into a budget. If you prefer something more advanced and automated, Mint may be a great option. When you connect your bank accounts and credit cards to Mint, it will automatically track your purchases and categorize them for you based on the merchant. You can also set up a weekly or monthly budget and get alerts when your spending approaches or goes over your budget.

Using Mint to keep track of your spending

A good way to use Mint to incorporate your finances into your daily routine is to set up a reminder to review Mint regularly. Once or twice a week is probably a good cadence for many people, but if it’s easier, you can also just review it daily. Find something you do regularly and make checking your Mint account a part of that. This could be during your lunch break, your morning coffee or anything else that you are already regularly doing.

When you review your Mint account, there’s a few things that you’ll want to be on the lookout for:

Look for any fraudulent or unauthorized charges — if there’s a charge you don’t recognize, you’ll want to investigate where it came from
Check for any mis-categorized purchases — Mint uses the merchant where you make a purchase to assign it to a budget category. Check and make sure all of your purchases are being assigned correctly
Review your budget — Take a look at your budget and see how your spending so far is lining up. Make any adjustments that make sense.

The Bottom Line

Making any changes to your life requires mental and physical adjustments. Changing your finances is no exception, and the best way to make a change is to incorporate checking on your finances into something you’re already doing as part of your daily routine. Mint can be a great tool to help you keep track of your finances and stick to your budget. And remember, no matter where your day takes you, it’s always time to Mint.

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Source: mint.intuit.com

January 13, 2022

What’s the difference between a personal loan and personal line of credit?

When you have an unexpected expense or just want to improve your credit profile, a personal loan or a personal credit line can let you borrow the money you need to meet your goals. However, both of these financing options work in very different ways and strategic borrowers must carefully weigh which one would work […]

The post What’s the difference between a personal loan and personal line of credit? appeared first on Credit Absolute.

Source: creditabsolute.com

January 12, 2022

Should I Take a Job With No Benefits? Hereâs What to Know

At some point in your career, you may come across the dream job post: a challenging opportunity complete with the perfect location, room for growth and great company culture—but the employer doesn’t offer benefits.

Whether you’re currently interviewing for a job with no benefits or want to learn more before applying, ask yourself: What should I consider before accepting a job without benefits?

These insights from the experts will help you weigh your options to decide if accepting a job with no benefits is right for you both professionally and financially.

But first: Here’s why employee benefits are so important.

What is the importance of employee benefits?

To give you a sense of how much employer benefits are worth, a federal employment survey found that they make up about 30% of an employer’s total compensation cost. Broken down, only two-thirds of your paycheck is actual pay, so benefits are a major incentive to employees and a major cost for employers.

So, what are job benefits? Job benefits generally include health insurance, a 401(k) or other retirement savings plan and paid time off. A company may offer other fringe benefits too—such as free meals in the office, mental health days or daycare—which can have a surprisingly large impact on whether or not you accept a job without benefits.

In certain situations—for example, if you’re looking for career opportunities during a recession—benefits may be off the table. Whether the lack of benefits is related to economic conditions or another factor, it’s important to assess your own finances before deciding: Should I take a job with no benefits?

How can accepting a job with no benefits affect me financially?

To determine the financial impact of accepting a job without benefits, it helps to have a budget that covers your current job, says Tim Jordan, certified financial coach and founder and CEO of Atypical Finance.

Your budget will help you crunch the numbers to see if accepting a job without benefits is a smart move. If you’re switching from a job with benefits to one without, you may find that once you budget for the additional expenses currently covered by your benefits, a higher salary wouldn’t result in a net financial gain, Jordan says.

If you accept the new job, you will be responsible for paying for your own insurance, contributing to a retirement plan and budgeting for unpaid time off. Your updated budget will make it much easier to manage those new costs.

To determine how these expenses will fit into your budget, rules of thumb aren’t precise enough. You need real numbers, says Ashley Patrick, financial coach and founder of Budgets Made Easy.

These are the biggest expenses you’ll need to calculate if you accept a job without benefits:

1. You’ll pay for your own medical insurance

Health insurance coverage can vary widely depending on the plan you select. That’s why you should write down your specific health needs before getting quotes from potential insurers, Patrick says.

Do you take prescription medications? Do you require specialized treatment for a condition? Your answers to these questions can influence the type of health insurance plan you choose. From plan types to coverage, you have a lot of options. You want to make sure your needs are taken care of and that you’re not paying for coverage you don’t need.

For health and dental insurance, you can search your state’s marketplace to gauge the monthly premiums for your medical needs, Jordan says.

“If you want to keep health, dental and vision insurance packaged together, contacting an insurance broker will be your best bet,” Jordan says.

Jordan recommends gathering three to five quotes. From there, you can add your monthly premium cost into your budget, as well as estimate how your new insurance coverage will impact your current medical spending on things like medication and doctor visits.

2. It’s up to you to keep your retirement savings on track

Even if you don’t have an employer-sponsored retirement plan, you should still save for retirement with an IRA, Jordan says.

“The opportunity cost of not investing is too high,” he says. “I strongly recommend investing in a Roth IRA or Traditional IRA so you can continue to grow your money. Start with the same percentage you’re investing now and add that to your list of monthly expenses.”

If you were investing more than the allowable annual limit for IRAs, which the government sets at between $6,000 and $7,000 per year, Jordan recommends investing the difference into low-cost index funds that track the performance of the broader market. This money won’t reap the same tax advantages, but your retirement savings will still grow over time.

If your current employer matches a percentage of your retirement savings, calculate this figure to help you better understand the financial loss, Jordan says. While this will reduce your retirement savings rate going forward, it won’t necessarily have an impact on your budget—unless you choose to replace the loss with money from your salary.

The bottom line: Whether you receive benefits through work or not, make retirement saving a priority. If you need some tips to get started, here’s how to make a retirement budget.

3. You won’t have paid vacation days

If you won’t be paid for time off, it’s likely you won’t take as much time off, Jordan says. But don’t be tempted to just barrel through without planning for any vacation or sick time, because that will quickly lead to burnout, he adds.

Do the math: Use a paycheck calculator to get a very close estimate of how much your biweekly paycheck will be after taxes and withholdings for programs like Social Security and Medicare. Divide that by 10 days to calculate how much money you would make each workday at your new potential place of employment, Jordan says. Then multiply that by how many days you think you’ll take off.

That will give you the total cost of your time off. Then, to determine how much should go into a monthly budget line item to cover this, simply divide by 12. Once this number is accounted for in your budget, you’ll have a realistic idea of the impact—and you’ll be able to afford a well-deserved break should you end up accepting a job without benefits.

How can I calculate whether a job with no benefits is a good offer?

Now that you’ve determined the extra expenses you need to cover in your budget, the next step is to determine whether this is actually a good offer for you.

Jordan recommends using the paycheck calculator above to see what your monthly income would be after state and federal taxes. Then, subtract the new monthly expenses you would have (medical, retirement and vacation) to get an idea of your real take-home pay. Lastly, pull out your latest paychecks to compare this figure to your current monthly salary. Looking at these numbers side by side can help you get closer to your decision.

When should I reject a job without benefits?

After you’ve calculated what your new salary would amount to after taxes and expenses and compared it to your current salary, Jordan wants you to ask yourself a couple questions. “Does the new salary cover your new expense amount and still give you room to live and breathe? Are you coming out ahead with more cash flow or behind with less cash flow?”

If you’ll be in the same or an even better financial position with your new job with no benefits, then you may want to seriously consider accepting the offer. However, if the loss is greater than the gain, then your next step is to negotiate.

What are some tips for negotiating a salary without benefits?

After receiving an offer, don’t be afraid to negotiate a higher starting salary in light of the lack of benefits, Patrick says. “It doesn’t hurt to ask, and the worst they can do is tell you no,” she says.

This can be key as you contemplate: Should I take a job with no benefits? Here are a few tips for negotiating a job offer before accepting a job without benefits:

Tell your potential new employer what your current job is paying, including all the benefits (your true salary), and how much money replicating those benefits will add to your monthly expenses, Jordan says. Then say, “Based on those amounts, I am going to need $X per year. Is this possible?”
If a salary bump is a no-go, ask for non-salary benefits like a health insurance stipend; reimbursements for day care, tuition or housing; moving expenses; flexible scheduling; some or more paid time off; or funding for professional development opportunities, Patrick says.

It will likely be more difficult to get a bump in pay or benefits after you’ve started your new job, so be sure to take Patrick’s advice before you do.

How do I financially prepare after accepting a job with no benefits?

If you choose to accept a job with no benefits, you will have to manage your own “benefits.” Patrick calls this “the awareness bump.” You are responsible for not only budgeting the money, but for setting up your necessities like health insurance and paying for them on time each month.

After establishing your own self-funded benefits, Patrick recommends doing two important things that will re-create the experience of a benefits-carrying job:

Create separate accounts for key expenses. Open a separate savings or checking account dedicated to each expense, such as one account specifically for your monthly insurance premiums. Multiple savings accounts can help you manage these expenses, ensuring you always have the money.
Automate payments and savings. When you have a job with benefits, you don’t have to do much of anything to fund these expenses. Mimic that experience with automatic payments, like monthly contributions to an IRA, to ensure the money gets where it needs to go.

Be sure to choose what’s right for you

Still asking yourself, “Should I take a job with no benefits?” If you take these steps, you should have a clear idea about the unique-to-you financial pros and cons of accepting a job without benefits. At the end of the day, your job isn’t just about money, Patrick says. While you want to ensure the job offer is financially sound, that’s not the only consideration.

“Just because a job doesn’t have benefits doesn’t make it a bad financial decision,” Jordan says. “If your current job is making you unhappy, or if the opportunity to fulfill what you feel is your life’s purpose comes around, the benefits may not matter as much.”

By carefully weighing your options and considering your unique situation, you’ll be able to determine whether a job with no benefits is right for you, both career-wise and money-wise. If you decide to take the plunge, here’s how to financially prepare for a job transition.

Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

Source: discover.com

January 11, 2022

What Are Fringe Benefits and Which Ones Are Taxable in 2022?

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Dig Deeper

Additional Resources

What keeps employees happy, engaged, and loyal? Salary, paid time off, health insurance, and retirement benefits are vital parts of the equation, but many employers also give their employees perks — otherwise known as fringe benefits.

You might think of fringe benefits as freebies that don’t impact your taxable income. But that’s not always the case.

Employers don’t have to count certain fringe benefits as employee wages, but others they do. Not including these benefits in employee income — and therefore avoiding federal income tax and employment taxes — can be a costly error for both parties.

What Are Fringe Benefits?

Fringe benefits are any type of pay or perks you receive in addition to your salary. Examples of fringe benefits include:

Adoption assistance programs
Cash awards
Cellphones
Child and dependent care assistance
Commuting assistance
Company cars
Continuing education
Disability insurance
Free snacks or meals
Flexible spending accounts
Gym memberships
Health, vision, and dental insurance
Housing
Life insurance
Moving reimbursements
Paid time off
Parental leave
Retirement plans like 401(k)s or savings incentive match plan for your individual retirement accounts
Stock options
Tuition reimbursement

Fringe benefits can be taxable (included in your taxable income and reported on your W-2) or nontaxable (not included in your taxable income and possibly not reported on your W-2). To avoid problems with the IRS, it’s vital to know the difference.

Taxable vs. Nontaxable Fringe Benefits

According to IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, all fringe benefits are taxable and must be included in the employee’s taxable income unless the law specifically excludes it.

Section 2 of Publication 15-B provides a list of excludable benefits, including:

Accident and Health Benefits

These employee benefits include premiums the employer pays toward health insurance and long-term care insurance. They also include payments made directly to you for medical expense reimbursements.

Achievement Awards

Your employer can give you property worth up to $1,600 as an award for length or performance of service or safety achievement. The exclusion doesn’t apply to awards of cash, gift cards, or gift certificates.

Adoption Assistance

Your employer can help you cover up to $14,440 in adoption costs without including the benefits in your taxable income.

Athletic Facilities

If your employer provides an on-premises gym or other athletic facility, it can exclude the value of this benefit from your pay. To qualify, the facility can only be available to employees, their spouses, and dependents. The exclusion doesn’t apply if the employer sells membership or rents the facility to the general public.

De Minimis Benefits

De minimis fringe benefits are property and services the employer provides that have so little value that it would be unreasonable or impracticable for the employer to account for them. That includes token holiday gifts, times when you use the company’s copier, flowers, coffee and doughnuts, or occasional theater or sporting event tickets.

There is no specific dollar amount that automatically makes a benefit more than de minimis. However, the IRS usually considers benefits that cost $75 or less to be de minimis. The exclusion doesn’t apply to any cash, gift cards, or gift certificates, no matter how small the amount.

Dependent Care Assistance

These programs help you pay for the cost of the care of a child or other dependent while you work. Employers can exclude up to $5,000 of dependent care benefits from your wages.

Educational Assistance

Educational assistance programs allow an employer to fully or partially cover costs for your education, including tuition, fees, books, equipment, and supplies. Employers can exclude up to $5,250 of educational benefits from your wages each tax year.

Employee Discounts

Many employers allow employees to purchase the goods and services offered to customers at a discount. Employers can exclude the value of this discount from your wages up to the following limits: 20% of the price charged to nonemployee customers for services or the business’s gross profit percentage times the price charged to nonemployee customers for merchandise and other property.

Employee Stock Options

Typically, employee stock options aren’t part of your taxable income when the employer grants them. However, you may have to pay tax when you exercise the option (that is, actually purchase the stock) or later sell the stock at a gain.

Employer-Provided Cell Phones

If an employer provides a cell phone you can use for work, the phone’s value isn’t taxable income, even if you occasionally use it for personal use. However, if your employer provides a cell phone without a legitimate business purpose, they must include the phone’s value in your taxable wages.

Group Term-Life Insurance Coverage

Your employer can generally exclude up to $50,000 of group term life insurance coverage from your wages. The employer must include the cost of coverage over that limit in your taxable income.

Health Savings Account (HSA)

For 2022, your employer can contribute up to $3,650 to your HSA or $7,300 to a family HSA without including it in your taxable income.

Lodging on the Business Premises

Employers who provide lodging on their business premises (for example, a household employer who provides a room for a live-in nanny) can exclude the value of that accommodation from your wages.

Meals

Employers don’t have to count as wages the value of meals provided as long as the meals are provided on the employer’s business premises and for the employer’s convenience. This exclusion can apply to companies that provide an employee cafeteria and restaurants that allow employees to have a meal before, during, or after their shift.

No-Additional Cost Services

This exclusion applies to employers who provide their normal services to employees without incurring any additional costs. Examples include airline employees taking free flights or hotel employees taking advantage of a free room.

Retirement Planning Services

If your employer provides a retirement plan, such as a 401(k), it can exclude from your wages the value of any retirement planning advice they provide.

Transportation (Commuting) Benefits

Employers who provide transportation and commuting benefits, such as carpooling rides, transit passes or parking permits, can exclude up to $270 of benefits per month from your wages.

Tuition Reduction

If you work for a university or other educational organization that provides reduced tuition to you and your dependents, your employer can exclude the value of that reduction from your gross income.

Working Condition Fringe Benefits

This type of fringe benefit includes property or services that would have been deductible as a business expense if you’d paid for it. The benefit must relate to the employer’s business, and you need to document the business purpose of the expense with records (such as receipts). Examples of working condition fringe benefits include traveling to attend a client meeting, the cost of a business lunch or dinner, or attending professional conferences.

Your employer must include the cost of any fringe benefits that do not fall within this list of exclusions in your taxable income.

Taxable Fringe Benefits

Employers aren’t the only ones who can get into trouble with the IRS for improperly accounting for fringe benefits. As an employee, you should also take notice because you’re responsible for properly reporting your income each calendar year, whether or not you receive a correct Form W-2 from your employer.

The IRS can hold employers liable for Social Security and Medicare taxes they should have withheld on the underreported amounts. The IRS can also audit you and hold you responsible for the income tax owed on the underreported amounts. It can even charge you with tax fraud if you knowingly underreported your income.

There are five fringe benefits employers tend to miss when calculating employees’ income tax withholding and reporting taxable income to the IRS.

1. Gift Cards or Cash Equivalents

If you received a gift card, no matter how small the amount, you should report it as wages — even a $5 gift card.

2. Prizes and Awards

Did you win a contest at work? If so, did you receive an award? What about an iPad as a prize in a raffle? Achievement awards aren’t taxable, but you should include other prizes and awards in your wages.

3. Personal Use of Company Car

Do you use an employer-provided vehicle for work? If you’re also allowed to use it for errands and personal trips on evenings and weekends, you should include the value of that personal use in wages.

4. Moving Expenses

Before the Tax Cuts and Jobs Act of 2017, employers could provide tax-free reimbursement of moving expenses if you moved more than 50 miles away for your job. Moving reimbursements are now a taxable benefit.

5. Expense Reimbursements Under a Nonaccountable Plan

Employers often reimburse employees for business expenses the employee pays out of their own pocket. As long as you and your employer account for reimbursements correctly, they aren’t taxable to you.

Under an accountable plan, you must provide documentation, such as a receipt or invoice, showing the nature and amount of the expense. If your employer reimburses you for more than you actually spent, you have to return the excess to the company within a reasonable timeframe (usually 120 days).

Expense reimbursements under a nonaccountable plan are income, and employers must include them in your wages. For example, if the company gives you $100 per day for meals while traveling and you don’t have to provide receipts for meals or return any unspent funds to your employer, the employer must include that $100 per day in your wages.

A nonaccountable plan is different from a per diem allowance. Per diem is an allowance an employer provides for meals, lodging and incidental expenses you incur while traveling. Per diem amounts aren’t taxable income for you as long as you follow the special rules. The amount you receive must be no more the federal per diem rate and you must file an expense report with your employer within 60 days.

Final Word

While every employer has the responsibility to report wages accurately, you are ultimately responsible for correctly reporting your income to the IRS. If you receive any of the benefits described above, ask questions.

The best place to start is with your company’s payroll department. Make sure you report the fair market value of any taxable fringe benefits as income on your tax return, whether or not your employer correctly includes them in W-2 wages.

Even if your employer claims to report all wages properly, make sure you keep track of the benefits you believe are taxable and include that value on your tax return. Make sure you aren’t setting yourself up for any tax penalties for underreporting your income.

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Janet Berry-Johnson is a Certified Public Accountant. Before leaving the accounting world to focus on freelance writing, she specialized in income tax consulting and compliance for individuals and small businesses. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter.

Source: moneycrashers.com

January 11, 2022

A Complete Guide To Paying Your Federal Taxes With A Credit Card, Updated For 2021/2022

Updated for 2021/2022. Pay1040 price has decreased from 1.99% to 1.87% for credit & debit card payments. ACI payments has also increased debit card payments to $2.20 from $2

It’s that time of the year again, time to pay taxes! For a lot of people, this is their biggest expense of the year and wouldn’t it be great if you could pay your taxes with a credit card? Well as the IRS website clearly states, you can.

Disclaimer: We’re not accountants, this does not constitute tax advice. Please consult a tax professional.

The Basics

The Tax Payer Relief Act of 1997 allowed the IRS to accept credit & debit card payments (under section 6311(a)) and payments were able to made from January 1st, 1999 onwards due to this temporary act. The IRS has authorized three third party providers to process tax federal taxes on their behalf: Pay1040, PayUSAtax & ACI Payments (formerly Official Payments). The reason why the IRS doesn’t process credit cards directly is they are forbidden from charging fees directly for these services due to other federal laws. None of the money these providers collects goes to the IRS and some of these providers can also be used to pay State taxes (we’ll cover this in another separate post).

In this guide we’re going to assume you have the cash to pay your credit card in full, if you don’t have the ability to do this then paying with a credit card is a terrible idea due to the high interest rates credit cards charge. If you can’t pay in full then you’ll most likely be better off with a payment plan/installment agreement with the IRS, more information on this can be found here.

Obviously all these third party providers charge fees (ranging from 1.9% to 2%), those fees are what we look at first.

Another option is to use the Plastiq bill payment service. Plastiq allows paying any bill, including tax payments, with a credit or debit card.

Fees

Obviously all these third party providers charge fees (ranging from 1.96% to 1.99%), those fees are what we look at first. We’ve also included the fees for debit card payments and digital wallet payments. According to Way Back Machine, the fees have been very similar for awhile now (actually mostly getting slightly cheaper since 2012).

	Debit Cards	Credit Cards	Digital Wallet
Pay1040.com	$2.58 flat fee for consumer/personal cards and 1.87% for all other debit cards (minimum $2.50)	1.87% (minimum $2.58)	See debit/credit card fees
PayUSAtax.com	$2.55 flat fee	1.96% (minimum fee $2.69)	See debit/credit card fees
ACI Payments (formerly OfficialPayments.com/Fed)	$2.20 flat fee ($3.95 for payments over $1,000)	1.98% (minimum $2.50).	See debit/credit card fees

There are higher fees if you use any tax preparation software, those can be viewed here.

As for Plastiq, the standard fee is 2.85% for Visa, Mastercard, Discover or Amex.

Making It Worth It

High Cash Back/Rewards Cards

As you can see, Pay1040 is the cheapest option at 1.87%. Even if you used a credit card that earned 2% (e.g Fidelity Visa or Citi Doublecash) you’d only be making 0.13% profit. Even if you had to pay $10,000 in taxes, you’d be earning $200 in rewards but having to pay $187 in fees for a profit of $13. Not exactly worth it. Now if we could reduce our fees, then we might be onto something.

Claiming The Fees On Tax

On the IRS page you’ll notice the following (emphasis mine):

The fees vary by service provider and may be tax deductible

Personal Taxes

Update 2018/2019: Looks like 2%+ miscellaneous deduction option is gone effective 2018.

Nothing like something vague and ambiguous to give to confidence that you can claim these fees as a deduction. In 2009, the IRS introduced a new law that allows some people to deduct these expenses when you file electronically. You can view their statement on this on the official IRS website. Here is what you need to be aware of:

Convenience fees associated with payment of federal tax can be included as a miscellaneous itemized deduction
Only those miscellaneous expenses that exceed 2% of the taxpayer’s adjusted gross income can be deducted

You can view what the IRS considers a miscellaneous expense here. But for most people I doubt they will exceed 2% of their adjusted gross income. So there goes that idea.

Business Taxes

Things are a little clearer for business taxes, they state:

For business tax types, the fee is a deductible business expense.

Meeting Minimum Spend Requirements

As easy manufactured spending methods dry up, more and more people are happy to pay a fee to meet minimum spend requirements. That’s because they usually have large sign up bonuses relative to the minimum spend requirements.

Splitting Payments

If you owe $10,000 in taxes, then chances are you don’t want to be paying $187 in fees just to meet one minimum spend requirement (especially since most of them only require ~$3,000 or less in spending). Thankfully the IRS allow you to split your payments up, how many times you can do this depends on what sort of tax you’re paying. They provide a full table here.

If you use Plastiq, there is no limit to the amount of payments you can make. You’ll pay with a card, but each payment will be sent to the IRS via mailed check. The limits given by the IRS are only for card payments, not check payments.

Our Verdict

I think paying your taxes with a credit card is generally not worth the effort involved, unless you want to meet a minimum spend requirement and are happy to pay the fees involved. Even using a 2% card doesn’t net much profit unless you have a massive tax bill. Liquidating prepaid gift cards could still be worthwhile for some.

Feel free to ask other questions below and I’ll update the F.A.Q as we go along. Also remember that we’re not tax professionals, please consult with one of them relating to anything tax related.

F.A.Q’s

Do Any Credit Cards Code Any Of These Sites In A Bonus Category?

Your payment will be broken down into two different payments:

Your actual tax payment will show as “United States Treasury Tax Payment”
The convenience fee charged will show as ” Tax Payment Convenience Fee”

As far as I know no credit cards will earn a category bonus on this purchase. It’s possible that they do.

Can I Use Visa/Mastercard/American Express Gift Cards To Make A Payment?

Some people have had success in doing this in the past, apparently Official Payments allows you to use more than two debit cards when paying over the phone. Just keep in mind you’ll be paying a $2.25 fee per card. I have no idea if this still works or not.

Will I Be Charged A Cash Advance Fee?

As far as I’m aware, no major credit card issuers charge a cash advance fee. This is confirmed by the websites of each of the payment processors:

Post history:

Update: We’ve updated this post to make it relevant for 2020, hope you enjoy! One thing to note is that the IRS is no longer prevented from fees for processing credit/debit cards directly under 26 U.S. Code § 6311(d)(2) as amended. This won’t make a difference for this tax year, but might make things interesting for 2021. Hat tip to reader Superman

Source: doctorofcredit.com

January 9, 2022

5 Women on Things They Wish They Knew About Finances Sooner

For many women around the world, weâve experienced so much trial and error as it relates to finances. The transitions in life begin in our adolescent years which develop our ideals about money. As we mature, we quickly realize that our wants and needs naturally change over time, directly impacting our money goals. Thereâs no better way to learn about finances as a woman than from other women â take a look at these key lessons and begin these discussions with other women in your life.

Money Mindset

Shannah Compton Game, Certified Financial Planner and Host of Millennial Money Podcast

I wish I had understood the power of my money mindset and the role that plays in financial success. After spending 12 years as a Certified Financial Planner working with clients, I quickly saw that the one thing separating most people from achieving their money goals was their mindset; how they think, act and feel about their money. I wish I had understood that my money journey isnât meant to be linear. Working with hundreds of clients over the last decade has shown me that money definitely ebbs and flows for most people. Itâs easy to get hung up on your money mistakes and choices that you wish you would have made. However, the magic is found in embracing your money journey and doing the best you can to not give money more power than it deserves in your life.

Long Term Planning, Investments and Wealth Building

Erin Lowry, Author of Broke Millennial Talks Money: Scripts, Stories, and Advice to Navigate Awkward Financial Conversations

While I know I should probably give a more traditional answer like “invest in a Roth IRA when I got my first job!” (which is true, I wish I’d done that in college), my answer is actually about learning to invest in relationships. I was incredibly fixated on earning and saving money in my early twenties. But to the point of almost always saying no to invitations to dinners, happy hours, get togethers, small trips — you name it. There is, of course, nothing wrong with focusing on building financial security for yourself. In fact, you should have that as a goal. It’s also important to have some balance in there as well.

Investing in relationships doesn’t have to cost a lot of money, but it’s something you should consider balancing in with your financial journey. Saying no over and over means people will eventually stop asking you to participate. Instead, offer a more cost-effective alternative. “I want to spend time with you, but instead of doing bottomless brunch, how about we get a bagel and go for a walk in the park?” You can also open up with your friends about your financial goals to give them some context about why you can’t always indulge in the activities they want to do.

Deidra Willis, Certified Financial Planner

The first time I finally took the chance to invest, I wish I would have done it sooner.Â Long of the short, you wonât know everything about the company you choose to invest or have an affinity for, yet, if you have 80% of the information, do not get stuck on paralysis by analysis.Â When I finally did, it was âwhatâs next?â

The earlier you plan, the less it takes. Time compounds and works for you. I did an awesome job of starting this right out of college, however, I did not know the same worked for insurances and other financial investments.

Shannah Compton Game, Certified Financial Planner and Host of Millennial Money Podcast

I wish I had understood that there are so many ways to grow your wealth. Growing your wealth isnât about following a set 10-step checklist. Itâs about figuring out what is really important to you and then being intentional with your spending and savings to help fund the life you want to live. I wish I had understood how to invest in stocks from a very early age without having fear come into play. I grew up thinking that men were the only people successful at investing. Because of that, investing always felt scary to me. We need to teach everyone from a really early age how to be savvy investors without fear and greed.

Debt & Money Management

Maggie Germano, Financial Writer, Speaker, and Financial Educator

I wish I knew that I could make payments on my student loans while I was still in college. Even if I could only afford small payments, making a dent before I graduated would have felt really good. Relatedly, I wish I knew that a “refund” from my student loans meant I still had to pay back with interest later. And that I should use it to pay off the loan, rather than spending it elsewhere. I also wish I knew that I didn’t have to isolate myself in order to stick to a budget and save money. There are ways to be social while stick living within your means. I spent too much time at home, by myself, before I realized that!

Elle Martinez, Founder of Couple Money and Host of Couple Money PodcastÂ

For me, I think one of the biggest helps when it comes to finances is doing a goal-based budget. I’m someone who needs something concrete to focus and keep me motivated, especially when working on paying off our debts.

The second piece is more related to the whole marriage and money mix which is having monthly money dates.

By having these regular and lowkey check-ins it helps us adjust the numbers as needed. We’re able to catch things early. This way they’re not a big deal instead of having spending or debts snowball out of control.

Entrepreneurship

Deidra Willis, Certified Financial Planner

In business (so this is more of a tip for the independent employees/contractor/1099) every dollar you earn is not yours!Â Separate your money and the only thing to operate as an employee is your pay until your bank account can sustain you, your team, and your expenses for a month. I see the excitement of earning and spending, but not properly planning as a business.Â A lesson for me as savvy as I was and am was that business operations must have financial structure, even when the expense is not there yet!

As we can see, there are many ways to approach money management, investments and establishing your own money mindset. This conversation doesnât stop here! Rally together a group of family and friends to share your own personal lessons from money. Now you can incorporate some new approaches as you continue to prosper on your financial journey.

The post 5 Women on Things They Wish They Knew About Finances Sooner appeared first on MintLife Blog.

Source: mint.intuit.com

January 9, 2022

What Is the HEMS Standard in Estate Planning?

The "HEMS" (health, education, maintenance, support) standard in estate planning is used to guide trustees in how/when they should release funds to a beneficiary.

The HEMS standard is used in estate planning to guide trustees in how and when they should release funds to a beneficiary. By including HEMS language in a trust, you can exert greater control over how the trustâs assets are ultimately spent and for what purpose, including health and education expenses. This can be especially useful if a trustâs beneficiary is young or financially inexperienced. A financial advisor who offers estate planning services can help you set up a trust that meets the needs of you and your beneficiaries.

What Is a HEMS Provision?

HEMS is an acronym that stands for health, education, maintenance and support. When assets are distributed to the beneficiaries of a trust with a HEMS provision, the money can only be used for specific needs tied to the beneficiariesâ health, education or living expenses. These may include college tuition, mortgage and rent payments, medical care and health insurance premiums.

Hereâs a look at some examples of HEMS distributions:

HEMS Standard: A Breakdown Health Education Maintenance and Support Medical treatment Tuition for all levels of education Mortgage or rent Health insurance College housing and dining Taxes Eye exams and dental care Career training Insurance Prescription drugs Studying abroad Customary vacations Some elective procedures Books Gifts for family members Gym memberships Other support Reasonable comforts

While a HEMS provision gives a trustee guidance on how assets should be distributed (the trustee ultimately has the discretionary authority to decide whether an expense qualifies). This can be relatively straight forward when it comes to the health and education components of a HEMS provision, but the maintenance and support category can be more ambiguous. Thatâs because maintenance and support can include distributions that allow a beneficiary to maintain their typical standard of living, which can even include travel and vacation expenses.

Benefits of HEMS

The "HEMS" (health, education, maintenance, support) standard in estate planning is used to guide trustees in how/when they should release funds to a beneficiary.

Having a HEMS provision in your trust can be beneficial in several ways. First, by limiting what types of distributions are allowed, youâll better ensure that the assets held in the trust are not spent frivolously. This can be especially important if the trustee is also a beneficiary. By establishing certain restrictions, the odds of the trust being drawn down too quickly diminish.

Second, by giving the trustee guidelines for how assets should be distributed to beneficiaries, youâll make their job that much easier. A HEMS provision can narrow the vast discretionary authority that some trusts endow their trustees and can help them better preside over the entity.

Lastly, HEMS language isnât one size fits all. It can be as specific or broad as you like. For example, you can establish a trust whose assets can only be distributed to pay college tuition or the long-term care of a sick or disabled beneficiary. Another grantor may not include such specific language and instead give the trustee broader discretion to allocate assets for any health, education, maintenance and support expenditures.

Bottom Line

The "HEMS" (health, education, maintenance, support) standard in estate planning is used to guide trustees in how/when they should release funds to a beneficiary.

The HEMS standard is used in estate planning to ensure assets in a trust pay for the health, education, maintenance and support of a beneficiary. A HEMS provision can help guide a trustee and protect assets from being spent too quickly. Common examples of expenses that warrant a HEMS distribution are college tuition and medical care, as well as mortgage or rent payments.

Estate Planning Tips

Estate planning can be a complicated and stressful proposition for someone without proper guidance. A financial advisor who specializes in estate planning can help you create a plan that will ensure your loved ones are taken care of when youâre gone. SmartAssetâs free tool can match you with up to three financial advisors in just five minutes. If youâre ready, get started now.
If you have a considerable amount of assets, itâs important to familiarize yourself with the laws surrounding estate and gift taxes. While the federal government charges both estate and gift taxes, some states have their own death taxes that youâll want to consider while planning your estate.

Photo credit: iStock.com/FatCamera, iStock.com/Yagi-Studio, iStock.com/Jovanmandic

The post What Is the HEMS Standard in Estate Planning? appeared first on SmartAsset Blog.

Source: smartasset.com

January 7, 2022

Are Robo-Advisors Worth It? Are They Safe?

When robo-advisors first appeared on the financial scene nearly 15 years ago, they were a novelty. Now these automated portfolios have become a staple offered by numerous financial companies, providing many people with a reliable, cost-efficient way to invest for retirement and other goals — while helping to manage certain market and behavioral risks.

Because robo-advisors typically rely on sophisticated computer algorithms to help investors set up and manage a diversified portfolio, some have questioned whether technology alone can address the range of needs that investors may have over time.

Others note that the lower fees and lower minimum balance requirements typical of most robo-advisors, in addition to the automated features, may provide a much-needed option for new investors. Could a robo-advisor be the right choice for you? It helps to understand how they work in order to weigh the pros and cons.

Is a Robo-Advisor Right for You?

Robo-advisors typically use artificial intelligence to create retirement and financial planning solutions that are tailored to people’s individual needs. Here are some questions to ask yourself, when deciding whether a robo-advisor is right for you.

How Does a Robo-Advisor Pick Investments?

While the term robo-advisor can mean different things depending on the company that offers the service, investors usually fill out an online questionnaire about their financial goals, risk tolerance, and investment time frames. On the back end, a computer algorithm then recommends a portfolio of different securities based on those parameters.

For example one person may be investing for retirement, another saving for the purchase of a home. Depending on each person’s preferences, the robo-advisor generates an asset allocation that aligns with their goals, or suggests portfolio options they can choose from. A portfolio for someone nearing retirement age would typically have a different allocation versus a portfolio for someone in their 20s, for example. Depending on these details, the service might automatically rebalance the portfolio over time, execute trades, and may even conduct tax-loss harvesting.

Can I Choose my Own Investments?

To a limited degree, yes. A robo advisor typically has a range of investments they offer investors. Usually these are low-cost index ETFs, but the offerings can vary from company to company. In most cases, though, your investment options are confined to those available through the robo-advisor.

As the industry grows and becomes increasingly sophisticated, more companies are finding ways to offer investors new options like themed ETFs, stocks from different market sectors, socially responsible investing options, and more.

Who Manages the Portfolio?

Part of the appeal for some investors is that these portfolios are automated and require less hands-on involvement. This may be useful for people who are new to the process of setting up and managing a diversified portfolio, or who don’t feel comfortable doing so on their own. In some cases, a robo-advisor service may also offer a consultation with a live human advisor.

That said, in most cases robo-advisor services are somewhat flexible. Even though you’ve set up an automated plan, it’s still possible to change your asset allocation if your preferences change.

Are There Risks Involved in Using a Robo-Advisor?

Investment always involves some exposure to market risks. But robo-advisors may help manage behavioral risk. Many studies have shown that investors can be impulsive or emotional when making investment choices — often with less than optimal results. By reducing the potential for human error through the use of automation, a robo-advisor may help reduce potential losses.

What do Robo-Advisors Cost?

While there are some robo-advisor services that have higher minimum balance requirements or investment fees, the majority of these services are quite cost efficient. In some cases there are very low or no minimums required to set up a portfolio. And the management fees are typically much lower than what you’d pay for a human advisor. With SoFi’s automated investing feature, for example, you can get started with as little as $1 and you don’t pay any SoFi management fees (although there are typically fees or expense ratios associated with the investments in the portfolio).

Pros and Cons of Robo-Advisors

Hopefully, the questions above have clarified the way a robo-advisor works and shed some light on whether a robo service would be right for you. In addition, there are some pros and cons to keep in mind.

Pros of Robo-Advisors

Saving for Retirement

It’s true that you can use a robo-advisor for almost any short- or long-term goal — you could use a robo-advisor to save for an emergency or another savings goal, for example. But in many ways these services are well-suited to a long-term goal like retirement. Indeed, most robo services offer traditional retirement accounts like regular IRAs, Roth IRAs, SEP IRAs.

The reason a robo-advisor service can be useful for retirement is that the costs might be lower than some other investment options, which can help you keep more of your returns over time. And the automated features, like rebalancing and tax optimization, can offer additional benefits over the years.

Typically, many robo portfolios require you to set up automated deposits. This can also help your portfolio grow over time — and the effect of dollar cost averaging may offer long-term benefits as well.

Diversification

Achieving a well-diversified portfolio can be challenging for some people, research has shown, particularly those who are new to investing. Robo-advisors take the mystery and hassle out of the picture because the algorithm is designed to create a diversified portfolio from the outset; you don’t have to do anything. In addition, the automatic rebalancing feature helps to maintain that diversification over time — which can be an important tool to help minimize risks. (That said, diversification itself is no guarantee that you can avoid potential risks completely.)

Automatic Rebalancing

Similarly, many investors (even those who are experienced) may find the task of rebalancing their portfolio somewhat challenging — or tedious. The automatic rebalancing feature of most robo-advisors takes that chore off your plate as well, so that your portfolio adheres to your desired allocation until you choose to change it.

Tax Optimization

Some robo-advisors offer tax-loss harvesting, where investment losses are applied to gains in order to minimize taxes. This is another investment task that can be difficult for even experienced investors, so having it taken care of can be highly useful — especially when considering the potential cost of taxes over time.

Want to start investing?

Our robo-advisors can build a portfolio to fit your
needs and risk – with no fees!

Cons of Robo-Advisors

Limited Investment Options

Most automated portfolios are similar to a prix fixe menu at a restaurant: With option A, you can get X, Y, Z investment choices. With option B, you can get a different selection, and so on. Typically, the securities available are low-cost, index ETFs. It’s difficult to customize a robo account; even when there are other investments available through the financial company that offers the robo service, you wouldn’t have access to those.

In some cases, investors with higher balances may have access to a greater range of securities and are able to make their portfolios more personalized.

Little or no Personal Advice

The term “robo-advisor” can be misleading, as many have noted: These services don’t involve advice-giving robots. And while some services may allow you to speak to a live professional, they aren’t there to help you make a detailed financial plan, or to answer complex personal questions or dilemmas.

Again, for investors with higher balances, more options may be available.

Performance

Robo-advisors have become commonplace, and they are considered reliable methods of investing, but that doesn’t mean they guarantee higher returns — or any returns. We discuss robo advisor performance in the section below.

Robo-Advisor Industry

Robo-advisors have grown quickly since the first companies launched in 2008-09, during and after the financial crisis. Prior to that, financial advisors and investment firms made use of similar technology to generate investment options for private clients, but robo advisers made these automated portfolios widely available to retail investors. The idea was to democratize the wealth-management industry, by creating a cost-efficient investing alternative to the accounts and products offered by traditional firms.

Today, the robo adviser market is worth about $1 trillion (estimates vary), and there are dozens of robo-advisors available — from independent companies like SoFi Invest®, Betterment, blooom, and Ally, as well as established brokerages like Charles Schwab, Vanguard, T. Rowe Price, and many more.

While these figures are still miniscule compared to the $100 trillion in the global asset-management industry, robo-advisors are seen as potential game-changers that could revolutionize the world of financial advice.

Because they are direct-to-consumer and digital only, robo-advisors are available around the clock, making them more accessible. Their online presence has meant that the clientele of robo-advisors has tended to skew younger.

Also, traditional asset management often have large minimum balance requirements. At the high end, private wealth managers could require minimums of $5 million or more.

The cost of having a human financial advisor can also drive up fees north of 1% annually, versus the 0.25% of assets that robo-advisors typically charge.

How Have Robo-Advisors Performed in the Past?

Like any other type of investment — whether a mutual fund, ETF, stock, or bond — the performance of robo-advisors varies over time, and past performance is no guarantee of future returns.

Research from BackEnd Benchmarking, which publishes the Robo Report, a quarterly report on the robo-advisor industry, analyzed the performance of 30 U.S.-based robo-advisors. As of Sept. 30, 2021, the 4-year total portfolio returns, annualized and based on a 60-40 allocation, ranged from 6.51% to 10.98%. (Data not available for all 30 firms.)

The Takeaway

Despite being relative newcomers in finance, robo-advisors have become an established part of the asset management industry. These automated investment portfolios offer a reliable, cost-efficient investment option for investors who may not have access to accounts with traditional firms.

Robo advisors don’t take the place of human financial advisors, but they can automate certain tasks that are challenging for ordinary or newbie investors: selecting a diversified group of investments that align with an individual’s goals; automatically rebalancing the portfolio over time; using tax-optimization strategies that may help reduce portfolio costs.

Curious to explore whether a robo-advisor is right for you? When you open an account with SoFi Invest®, it’s easy to use the automated investing feature. Even better, SoFi members have complimentary access to financial professionals who can answer any questions you might have.

Check out automated or active investing with SoFi Invest today.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected] Please read the prospectus carefully prior to investing. Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
SOIN20270

Source: sofi.com

January 7, 2022

People Say to Give Up These 4 Things and Retire Early â Theyâre Wrong

If you’re not already rich, the race to early retirement can feel like it’s marred by sacrifice. Give up this, give up that — like the only way to retire before 65 is if you suffer now.

Sure, you want to be able to enjoy early retirement, and that means having enough money saved to do so. But you also want to live your life now in a way that brings you joy.

A study from annuity.com found that people would be willing to sacrifice several of life’s greatest conveniences to be able to achieve FIRE (financial independence, retire early):

The study shows that 20% of people would forgo having children, 27% would live without a pet and 28% would give up dining out just to have their retirement party a decade or two earlier. Some people would even move into a tiny home or sell their car!

But we know there are better ways. You don’t have to give up the things you love just to retire when you’d like to. Here are a few things people suggest giving up to accelerate their retirement timeline — and why we think you shouldn’t.

1. What They Say: ‘Give Up Your Vehicle’

Between car payments, insurance and repairs, having a car can be a big expense. And people eyeing early retirement do tend toward a minimalist lifestyle, so getting rid of your vehicle can be a tempting expense to cut.

But unless you live in a city that’s bikeable or has great public transportation, you’re going to need your own way to get from point A to point B. So instead of selling or letting your lease run out, here are a few tips to cut your car expenses down:

Buy a used car. Even though the average interest rate to finance a used car is higher than a new car or leasing one, financially you can save thousands of dollars over the course of a few years.
Cut your car insurance costs. By checking quotes every six months, you can save an average of $489 a year on your insurance payments. A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

2. What They Say: ‘Give Up Online Shopping’

Online shopping can be an account drainer — it’s so easy to put things into your cart, click a few buttons and wait for your package to arrive a few days later. And if your aim is to save a lot of money over the next decade or two, online shopping can be a major roadblock.

But here’s the thing — you can still shop online. You just need to be smart about it: Never overpay, and get cash rewards.

That’s exactly what this free service does for you.

Just add it to your browser for free*, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.

Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop-up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.

In the last year, this has saved people $160 million.

You can get started in just a few clicks to see if you’re overpaying online.

3. What They Say: ‘Give Up Dining Out’

While the world was in quarantine, we learned to be more self-reliant in the kitchen, and many of us saw a significant drop in our dining-out expenditures (take-out, maybe not so much). So it’s understandable that 28% of people say they’d give it up entirely to reach their early retirement goals.

But for the other 72% who love going to restaurants and ordering delivery, financial independence isn’t off the table. There are just some strategic moves to make so you can keep supporting your favorite local spots and give your family a break from all the dishes.

First, look for discounts: You can find them on Groupon or with a AAA discount. You can even buy discounted gift cards on websites like Restaurant.com. If you have kids, check out restaurants that let them eat free on certain days of the week.

Next, make sure you’re getting cash back every time you go out to eat (or swipe your debit card in general).

If you’re not using Aspiration’s debit card, you’re missing out on extra cash. And who doesn’t want extra cash right now?

Yep. A debit card called Aspiration gives you up to a 5% back every time you swipe.

Need to buy groceries? Extra cash.

Need to fill up the tank? Bam. Even more extra cash.

You were going to buy these things anyway — why not get this extra money in the process?

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

4. What They Say: ‘Give Up More Living Space’

The tiny home — or small space — lifestyle has become increasingly popular among the retire-early crowd. It’s cheaper to own, likely includes no mortgage and is less expensive to upkeep, as well.

In fact, 17% of people surveyed said they would live in a space smaller than 700 square feet, if it meant they could retire early. For a single person that may be fine, but for couples or families — it might just not be enough.

Instead, you could keep the space you love and find ways to save money and make money with it:

Make up to $300 a month from your empty garage

Extra rooms in your house don’t need to be left empty. You can rent out unused storage space — your shed, or your garage — to your neighbors who need it. A website and app called Neighbor can help you earn up to $300 a month, on your terms. Use this calculator to see how much your available storage space is worth.

Kari Faber is a staff writer at The Penny Hoarder.

*Capital One Shopping compensates us when you get the extension using the links provided.

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Source: thepennyhoarder.com

January 5, 2022

How to Make the Transition to Remote Work

One of the most significant workplace changes that came from the pandemic has been the economy-spanning shift to remote work away from the traditional office environment.

Many companies that never offered it now have a remote work option. Some companies that were thinking about going partially remote pulled the trigger and have moved their workforce into working remotely full time.

And unless you work in an industry that really can’t do remote work ( e.g. restaurant server or retail associate) or are employed by a company stuck in 1998, then remote work may be your new reality.

For many people, that’s awesome news. But that doesn’t mean there won’t be adjustments in your transition to remote work.

If working remotely is or could be part of your new routine, we have some suggestions.

8 Things We’ve Learned about the Transition to Permanent Remote Work

1. Make Sure You Actually Want to Work Remotely

It’s not for everyone.

As much as it’s a growing trend, some people still aren’t into remote work. Only 54% of people whose jobs can be done at home said they would want to work remotely after COVID subsides, according to the Pew Research Center. That is a majority, but not by much.

Working remotely has several benefits. So spend a lot of time thinking through the pros – no commute, more focus time and productivity, more efficient meetings, more family time, among others. And then think through the cons – less serendipity, no water cooler conversations, the potential to feel isolated, and so on.

Depending on your personality type, you may thrive or really struggle working remotely. Know yourself and how you might respond before making the permanent jump.

2. Approach Your Employer About Working Remotely

So you got a taste of remote work during the last year, loved it, then your employer decided it was time to bring all the team members back together. What should you do?

If you really want to work remotely, there’s nothing wrong with asking. Your boss might not be on the same page, but it never hurts to ask, right?

The key is to be prepared before the conversation. Prove that you’ve been more productive in a remote environment, and bring the data to show it. Know what your employer’s reasoning is and be prepared to counter it. And be sure to explain all the ways they will benefit, not just you.

3. Know the Remote Work Basics

Here’s a quick checklist of all the tools to think about related to remote work:

Computer setup (with video call accessibility)
High-speed internet
Phone (landline if in an industry like sales)
Headset and microphone
Desk
Comfortable office chair
Dual monitors
Office supplies
Power strip
Good lighting (for Zoom calls)
Shelving or organizational system

You might only need some of those things. But make sure you have at least a few of these home office essentials in place before making the jump to remote work.

4. Get Reimbursed for Initial Expenses

Whether it’s a new laptop, faster internet, a decent desk or a rental space for in-person meetings, make sure you aren’t taking those financial loads on yourself.

Most employers will know to take care of these for their remote workers, but some who are smaller or just transitioning to a remote workforce may let these slip through the cracks. Whether it’s an initial stipend, a reimbursement, or paid through an expense account, your employer should be footing the bill.

Don’t hesitate to bring up these expenses yourself. After all, your employer would be paying for it all in a traditional office environment. That shouldn’t change with the transition to remote work.

5. Your Internet Speed is Going to be Important

Between email and regular internet browsing, plus streaming and all those video calls, your internet connection will matter more than ever. You not only want it to be fast, you also want it to be stable.

Start by testing your internet speed. Then use our guidelines for the speeds you’ll need to use different applications. If you’re lacking in the speed department, talk with your employer about getting an upgrade.

If your provider’s speeds are lacking, or if you live in a part of the country without access to higher speeds, we have ideas on some alternative ways to stay in touch with other team members.

6. Know if You Qualify for Tax Deductions

Yes, you could qualify for tax deductions if you work from home. But, as expected with tax laws, there are quite a few regulations.

If you’re a regular employee, you won’t qualify, unless you also have self-employment income. In other words, the income you make from your full-time job isn’t deductible. Anything you made as a freelancer is.

The space where you work also needs to be your principal place of business, but you don’t need an entirely separate room set up for your work.

Those are just a couple of the qualifiers, however. If you’ve already met those, go check out the others to see if you can get the remote work tax deduction.

7. Consider Job Hunting if Your Job Isn’t Going Remote

Just how important is it to you to be able to work remotely?

If you’re set on making the jump to remote work, weigh the pros and cons of staying at your current job or leaving. Everything from income, work/life balance, flexibility, stability, family time, and more should factor into your decision.

If, after thinking through everything, you’re ready to make the move, get prepared to start interviewing with these 9 remote interview questions.

8. Get in Touch With Companies That Offer Remote Work

Once you’re on the market, it will be helpful to know your options for remote work.

While some companies might be new at managing remote employees post-pandemic, many have been doing remote work for a while now. Here are 31 companies with remote work jobs.

Finally, if you’ve made the jump, just enjoy the transition. For many people, working remotely is a life changer. If it works for you and fits your personality, you’ll likely never want to go back to a traditional office.

Robert Bruce is a senior writer for The Penny Hoarder.

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Source: thepennyhoarder.com

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