Don't Get Scammed When Giving to Japan

The tragedy in Japan is one that makes us want to open our wallets and help in a practical way. But with every tragedy there arises a new crop of scamsters, out to make a profit off of someone else's sorrow. How do you give smart and make sure your dollars go to the people who need it most? Follow these tips:

Email Scams

McAfee recently reported a significant increase in the amount of spam being generated by "Japanese Earthquake Relief" scams. So NEVER respond to an email, even if you suspect it is legit. Do not link to the link provided in such an email. Instead, go directly to your browser and type in the link to investigate--even if it's a charity you recognize. Some criminals are linking to sites like the Red Cross but the link will actually take you to a false site where they skim your money and your credit card number.

Don’t Fund Overhead or Fund Raising

You don’t want your dollars going to pay fat salaries, fancy overhead, or excessive fundraising expenses. The Better Business Bureau’s (BBB) Wise Giving Alliance offers guidance to donors on making informed giving decisions through their charity evaluations, various "tips" publications, and the quarterly “Better Business Bureau Wise Giving Guide.” You can access this information by calling (703) 276-0100, going to www.give.org

You can ask them to mail you the various tip guides or read them online. These guides include information on:

Charitable Giving

Police and Firefighter Organizations

Handling Unwanted Direct Mail From Charitable Organizations

Child Sponsorship Organizations

Direct Mail Sweepstakes and Charities

Contributing Used Cars to Charities

Tax Deductions for Charitable Contributions


Record Keeping

If you itemize, you’ll need all receipts for donations of $250 or more. If you give away more than $250 worth of clothing throughout the year, you should have saved all receipts for tax purposes. The money donated directly to a needy person is not deductible. It would be better to donate the amount, anonymously, to your church and have them send the donation to the family in need. Check with your tax specialist every year for your state and federal tax laws.

Starting Your Own Foundation

If you are fortunate enough to have a large gain from a stock or mutual fund that you have held for over a year, consider using it to become what is essentially your own “foundation.” For example, if you own $5,000 worth of stock that you bought years ago for only $1,000, then you can donate the stock by setting up a Fidelity Charitable Gift Fund account (call 1-800-682-4438 or go to www.charitablegift.org ) By doing this, you get an immediate $5,000 tax deduction and save having to pay taxes on the $4,000 gain. In the years to come, as that $5,000 grows, you instruct the company that manages your “foundation” where to donate the proceeds. Besides Fidelity, there are also charitable gift funds available thorough Vanguard at 1-888-383-4483 or www.vanguardcharitable.org or Schwab at 1-800-746-6216 or www.schwabcharitable.org .

Kid Philanthropists

You may want to allow your children to manage a donation in a predetermined amount $25, $50, or whatever you have budgeted.) They get to research a variety of non-profit organizations and decide which one will receive their donation. Then donate the amount in your child’s name. You get the tax benefit, your child gets the thank you note—you both feel good about giving.

Ellie Kay
America's Family Financial Expert (R)

The Top Do's and Don'ts for Tax Time

Last week, the IRS issued a press release that the delayed returns, any returns including Schedule A (itemized deductions), the educator expense deduction or the tuition & fees deduction – will begin to be processed on Feb. 14 – Happy Valentines Day! This is good news because taxpayers didn’t know when their returns might be processed and rumor had it as late as the end of February. The delay followed the Dec 17 enactment of The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which extended a number of expiring provisions. So you can file now and the sooner you file, the sooner you will get that tax refund back, especially if you e-file and select direct deposit. I’ve been doing a lot of research on taxes this year and my best tips are listed below, courtesy ofhttp://www.TaxACT.com TaxACT Free Federal Edition, a free filing solution that quick, easy, and available to everyone.


DO:



• Do Get Organized Ahead of Time – I recommend my “Sixty Minute Tax Workout” where you whittle down the tax task a bit at a time. Get organized before you sit down by gathering all your W-2s, 1099s, and other tax documents.


• Do Get Smart – Familiarize yourself with the new tax law changes by going to IRS.gov and look at Publication 17, the first few pages summarize the major changes. You can also go to taxact.com/taxinfo.


• Do Ask Questions – It’s smart to ask for help when you don’t understand something about your return. Use the Answer Center in TaxACT, type in your question and get fast answers. Or, email your question for free.


• Do E-file – For the fastest refund (in as few as 8 days with direct deposit). Unlike paper filers, e-filers get an e-mail when the IRS has processed your return.


• Do Get it Free – Use a free tax preparation solution. I recommend TaxACT Free Federal Edition. You can print, prepare and e-file simple complex return absolutely free. TaxACT will guide you step by step through your return and all the tax law changes. Includes free tax help via e-mail. Even if your return won’t be processed by the IRS until February 14th, there’s no reason to wait. You can prepare and e-file with TaxACT now, and they will let you know when the IRS has processed your return.


• Do Pay What You Can – If you cannot pay your tax balance, then file and pay as much as you can by the April 18th deadline to avoid penalties and interest. Call the IRS to discuss payment options, including installments.


DON’T:


• Don’t Forget to Import – Save time and aggravation by importing key data from a PDF copy of last year’s return. If you have multiple W-2s, a 1099 or investment data, use the quick entry features available on TaxACT Free Federal Edition at taxact.com.

• Don’t Procrastinate – Although this year’s filing date is April 18, 2011, don’t procrastinate because rushing can = errors.

• Don’t Get a Cash Advance On Your Refund – When you can get your refund in as little as 8 days by e-filing and selecting direct deposit, it’s a dumb money move to pay all kinds of interest to get your cash a few days earlier. You need that extra money, don’t throw it away!

• Don’t pay more than $15 to e-file State Taxes – If your state charges income tax, then all your federal info transfer to your state when you use an online solution such as TaxACT. The federal solution is free and the state solution costs less than $15.

• Don’t Use A SmartPhone Application – TurboTax released a smartphone application for 1040EZ returns. When it comes to taxes, it’s not about saving time as much as it is about ensuring accuracy and getting the largest refund you possibly can. Spending the extra few minutes could mean a bigger refund or less taxes owed.

• Don’t Spend your Refund on Disneyland or a new iPad – Instead, use 50% of the refund to pay down credit card debt and the other 50% to build up your emergency fund. You may not get the mouse ears this year, but you’ll be in better financial shape!

Ellie Kay

America's Family Financial Expert (R)

Five Top Money Moves for 2011

This week I'll be on over 25 television and radio stations talking about the Top Five Money Moves for 2011.



According to a recent survey, 40 to 45% of American adults make one or more resolutions each year. Among the top new year’s decisions are resolutions about weight loss, exercise, and money management or/ debt reduction. While a lot of people who make decisions during the new year do break them, research shows that making a decision to change is useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don't explicitly make resolutions.

If one of your resolutions involve getting fiscally fit, then there are five things individuals, couples and families should do every January, year in and year out, to help their financial picture. These five money moves will help you pay down debt, save more in your emergency fund and be prepared for possible financial setbacks in 2011. They include:



1) CUT COSTS ON FIXED EXPENSES – there are some expenses that people rarely check, but they could be missing out on hundreds of dollars of savings. For one thing, it’s important to call your homeowners insurance provider and ask about getting a better rate. Oftentimes, you don’t think about this policy because the bank may cover this premium and you put that renewal to the side—wrong answer. The other biggie in fixed expenses is auto insurance. If you drive less, in safer ways, and during safer times of the day you can save money on your car insurance. With Progressive’s Snapshot Discount you can save up to 30 percent. It’s currently available in select states so go see if it’s available where you live. A lot of these money savings tips are courtesy of Progressive Insurance, where you can compare rates with a local insurance agent or online at. It’s a good idea to look at the rates listed from different insurance providers because drivers who saved when switching to Progressive reported saving an average of over $500. Shopping around can add up big time! One final, quick tip to cut costs by shopping around, is for groceries. Go to www.couponmom.com where the site will tell you what’s on sale in your neighborhood, which items have coupons, double coupons and store coupons. Using this layered savings approach in the store helped our large family save hundreds of dollars a year on food.



2) COMPLETE TAXES EARLY & FREE– The sooner you file, the sooner you’ll get your refund. When you have your tax forms, do your “Sixty Minute Money Tax Workout”. I recommend TaxACT Free Edition has everything you need to prepare, print and e-file your federal return free. I’ve partnered with TaxACT because it guides you step by step through your return and guarantees your biggest refund. It’s fast, easy and even offers free help. Remember to e-file and choose direct deposit for the fastest refund. Go to TaxACT.com. And once you have that refund, put the money to smart use.



3) CATCH UP ON SAVINGS – In money moves one and two, you freed up extra money by cutting costs and getting your refund back early. I recommend that you take a hard look at your emergency fund. If you are a single income family, you should have twelve to fifteen months of living expenses in this fund. If you are a dual income family, you need six to nine months of living expenses. With unemployment hovering between 9% and 10% in early 2011, it’s important that you save for a rainy day. Use 50% of that tax refund and money saved from cutting fixed expenses to help build up your emergency fund. Then every time you save money on expenses, write a check or transfer those funds into this important account. It will become a habit and you’ll build that account up more quickly.



4) CUT DOWN DEBT – You took 50% of the money you gained from steps one and two and put it in your emergency fund—good job! Now it’s time to use the other 50% to pay down credit card debt and get started on the “snowball effect” of getting rid of consumer debt. This snowball plan works by paying off the credit card with the highest rate first. Then you take the payment you would have made on that first card and put it toward the next card on your list. Each time you pay off a card, you keep taking what would have been that minimum payments on paid off cards and put them toward the next credit card balance. By the time you get to your last few cards, you are paying 2, 3, 4 times the minimum payment, thus getting ahead of interest charges and paying your debt down more quickly.



5) CARE AND SHARE MORE – This is a good time of the year to map out a strategy to give more and get more out of your giving so that you can itemize your deductions. Go through closets and donate clothing and furniture to IRS- approved charities, but keep track of your donations. Ask charities for receipts. You usually get more for each item than you would selling it at a yard sale. Getting certified values for your donations is where a solution like TaxACT can also help. Remember, monetary donations and certain expenses for volunteering are also deductible.

Happy 2011

Ellie Kay

The Sixty Minute Money Workout

Today's blog is a test: do my kids read my blog or not? For example, here's a pic of my son , from a few years ago, making a New Year's resolution to be more buff. He's now a senior, how long will it be before I'm forced to remove the photo.

According to a recent survey (Source: Auld Lang Syne) 40 to 45% of American make one or more resolutions each year. Among the top new year’s decisions are resolutions about weight loss, exercise, and money management or/ debt reduction.
The following shows how many of these resolutions are maintained as time goes on:
- past the first week: 75%
- past 2 weeks: 71%
- after one month: 64%
- after 6 months: 46%
While a lot of people who make decisions during the new year do break them, research shows that making a decision to change is useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don't explicitly make resolutions.
If you are wanting to make a decision to get fiscally fit in the new year, then take a look at my newest book, The Sixty Minute Money Workout (Waterbrook, 2011) Let’s go through each part of the workout:

Boundaries:
As people prepare for the workout, it’s important to establish boundaries, here are some of the things that you need to know before you begin.
First of all, people need to understand that you don’t have to be a couple in order to do the workout. You can do it by yourself, or with a trusted friend, or even a family member who isn’t your spouse if you are single. But whoever you do the workout with, it’s important to set some boundaries to prepare:
• no condescension or negativity
• no interrupting your workout partner when they are talking
• no name calling
• no throwing food - :-)
• start by saying one positive thing to each other
• end by saying one positive thing to each other
• create an environment that encourages comfort and success
• have a timer on hand
• Do the pretest to prepare you for the work. Each pretest will vary according to the chapter or topic you choose.


Part 1 - 5 Minutes - Make Up Your Mind Warm-Up
Here is where you set your timer for each section. When the timer goes off, then move on! In this section, you set the topic for the hour and begin with a "can do" attitude. It’s important to begin by saying or doing something positive. If you’re working out with a spouse, then begin by taking your spouses hands, looking into their eyes and saying something affirming.

Part 2 - 10 minutes - Strength Training
While step one was to start with affirming words and decide on your money topic, this next section is a time to write down goals on paper so that you will have a tangible and objective standard to work toward. Decide how you would like to see the topic resolved today, in six months and what the outcome of your goals will be in the long run. This gives you both a temporary focus (for today) and a long term focus (for the next few months) as well as a big world picture (for the long term.) Your goals will depend on your topic of the day. For example, if you are discussing a budget your goals might include: a) to set up a budget that is real and workable, b) to stay on that budget for the next six months in order to learn how to spend less than what you make, c) to have a budget become such a habit that it is a financial vehicle that will get your family out of consumer debt, help you pay for your kid’s college and fund your retirement.

Part 3 - 20 Minutes - Cardio Burn

In this step, you give feet to your goals. If you’re setting up a budget, then you write down the specifics and course of action for your topic of the day. This may not seem like a lot of time on this section, but realize that you may not get it resolved during the first workout. The key is to keep the discussion moving and work on what you can, whatever you missed, you can get the next time around. Go to my tool section for free online financial tools, http://elliekay.com/financial-resource-center.php

Part 4 - 20 Minutes - Taking Your Heart Rate
This is the point where you do any “work” that needs to be done after you’ve written a step by step plan from the previous section. For example, if you need to save money on your expenses in order to live on the new spending plan you set up, then you could spending this time on quick ways that will save you hundreds of dollars:

1) Save on Tax Preparation - Go to www.TaxAct.com in order to prepare and file your federal income tax return for free. This free software asks you all the right questions to make sure you are getting every deduction that you have coming your way.

2) Save on insurance – Go to www.progressive.com to compare auto insurance. It only takes a few minutes to get several quotes from different companies. You can save as much as $500 by shopping around.

3) Save on groceries – When you can combine sales, coupons, double coupons and store coupons, then you can save thousands of dollars every year on your grocery bill. We’ve saved over $160,000 in the last 20 years by doing this. Go to www.couponmom.com and enter your zip code they will show you what is on sale and what coupons match up with the sales items to get things for pennies or free.

4) Save with Social Media – By going to the www.facebook.com page of your favorite retailer or signing up to follow a beloved restaurant on www.twitter.com, your savings can add up to hundreds of dollars every year. Social media followers are often the first to know about limited offers or free items. For example, my college student daughter, in Chicago follows her favorite cupcake store and by saying the word of the day, she gets a $5 cupcake free. That’s a savings of $1865 every year! Somedays, she gives the cupcake away—so she saves and shares!

Part 5 - 5 Minutes - Congratulations Cool Down
The workout has gone by quickly and now the last 5 minutes are dedicated to the “Congratulations Cool Down.” End your workout and sit back, grab a glass of something cool to drink and reflect on all you've accomplished in just one hour! You started on a positive note and you’re going to end positive as well. Take this time to tell your partner one thing that you appreciate about today’s workout in order to end the discussion well.

Keep in mind that just as you don’t get physically buff in just one workout, your finances aren’t going to get in shape after the first try either. But after you and your mate have exercised with this money workout a half a dozen times you’ll find you are making progress that can revolutionize your finances in only an hour a week!

Ellie Kay
America's Family Financial Expert (R)

Give the Gift of Education

Christmas is one of my most favorite times of the year and this year, more people are getting into the idea of gifting than last year. In fact, according to a recent survey, 73% of consumers say that they will spend the same as last year during the fourth quarter, and 18% of consumers report that they will spend more. So spending is back up again, but I think that strategic spending is more important now than ever.
It’s important for consumers to be careful and thoughtful in the decisions they make when it comes to buying gifts this holiday. That’s why I’ve partnered with Upromise to tell my friends about the gift of education. So while parents and grandparents (even favorite aunties) are splurging on kids, why not work on saving for kids, too by providing for that cute kid’s college education?

You can open a 529 account for any beneficiary, or gift money using Ugift into an Upromise Investments 529 plan. If you don’t already have a 529 plan, then you are really missing out because the contributions can benefit from tax deferred growth. Also, gifting into one of these plans this time of year also means that you can possibly take advantage of year end tax deductions. Just check to see if you are eligible for states income tax deductions or credits for saving for college. For example, parents and grandparents can contribute as much as $13,000 ($26,000 if married filing jointly) into a 529 plan without incurring gift taxes. A special rule allows married couples to gift up to $130,000 ($65,000 if single) as long as no additional gifts are made to that beneficiary over a five year period. This also applies to recent college grads who might appreciate a meaningful gift to help pay a student loan payment. Plus, you don’t have to be a parent or grandparent to participate, other friends and family can make contributions to your child’s 529 plan by gifting money or by buying gifts, which brings me to my next point—how to save money by spending money.

Most people, know about Upromise from signing up for their buying program. I’ve been participating for years by going to Upromise.com and then purchasing through participating online retailers. These are stores where I would shop anyway and I get anywhere from 1% to 25% back for the purchases I make. And our family isn’t the only one doing this. Last year, during the holiday season Upromise members received $12 million in college savings rewards from eligible holiday spending. Because membership is free and members have collectively earned $575 million in college savings from purchasing items online or even by buying gas or groceries. I book a lot of travel for my business and often find myself eating out—all these are also included toward my children’s 529 plans.

So consider giving the gift of education to a child you love—either by saving or spending, and the world will be a much smarter place!

Happy Holidays!

Ellie Kay
America’s Family Financial Expert ®
www.elliekay.com

Prioritize Your Debt - What to do With Unpaid Bills

Recently, on ABC NEWS, I talked about the fact that some parts of the country still have unemployment in the double digits while other employees are facing cutbacks in hours and salaries. More and more people are having a hard time paying their bills in these economically challenging times. If you only have a certain amount of money available and you know you won’t be able to pay all the bills, you need to know that not all bills are created equal. There are certain bills that have greater penalties than others. Today, I want to help you look at how to tackle those unpaid bills as well as grace periods and the variable consequences for not paying bills on time.
**********
Q. Are people still having a harder time paying their bills? I mean, we hear about new jobs being created and the recession is officially over. Why are some families susceptible to continued financial difficulty?

ELLIE: Obviously, unemployment is a big issue as well as the fact that many workers have had to accept pay cuts or work fewer hours to keep their jobs. With these come a contagion effect in that if you are unemployed or you go part time, there’s additional costs involved such as purchasing health insurance. Even if these workers find new jobs, they still have the residual effect of having less income for many months. In other cases, some may have had homes foreclosed upon and it’s cost them a lot to get established in another place of residence, plus these individuals has tanked their credit ratings—which means that rental property will require a larger down payment. A poor credit score also means these renters have to pay more down to even get basic utilities hooked up to their rental property. All these expenses start to add up and eventually, families are finding that they don’t have enough to pay all the bills.

Q. So if someone is between jobs or had some unexpected expenses such as medical bills, then what bill should they pay first?

ELLIE: When it comes to paying the bills there are always consequences for not paying. However, it’s the severity of the consequences that people need to consider when they are rank ordering which bills they should pay first, second, and so forth. The rule of thumb is to look at how fast your creditors will be likely to move against you. Which brings us to the most important bill and first bill you should always pay—your mortgage. If you fail to pay, the bank can begin foreclosure in as little as three months. Plus, this is the most significant debt you have when it comes to influencing your credit score. And with a poor credit score, the bills will just stack up even more quickly as we know that those who have bad credit have to pay more for deposits, for auto insurance some times and a poor score can even influence whether you get a new job or a job promotion at your existing place of employment. So protect your score and your financial future by paying the mortgage first.

Q. OK, so we understand that the mortgage is the most important bill, what would come second?

ELLIE: The next most important bill to pay is your car loan. Not only because you need a car to go to and from work, but also because as the second most significant loan you have, it will also impact your credit score in a more significant way than a department store charge card or a utility bill will. As for the consequences of not paying, a lender can begin repossess your vehicle if you’re a day late, but in all actuality, most will wait about sixty days. If you are serving in the military in a combat zone, there’s a little more leeway for vehicle repossession, you should contact your base’s financial office if you’re in danger of repossession while on active duty. But for the rest of us, not paying this important bill will cripple your ability to remain gainfully employed as having a vehicle is essential in most cases.

Q. So we’ve paid the mortgage and the car loan, now we pay credit cards, right?

ELLIE: Yes, that’s right. As you know, credit cards payment are very important because if you don’t pay on time, you’ll get hit with late fees. But there are more consequences than just a late fee. You might be faced with a hike in your APR if you’re tardy and then it could spread to other cards as well. You might find your average APR going from 9% on your credit cards to 24% or more in just a month. After about six months of missed payments, credit card companies start to send your account to collections and then you have an entirely new set of headaches to contend with. Concentrate on paying bank cards first such as Visa, Mastercard and American Express. You can even go to www.bankrate.com and look for lower interest rate cards that offer a promotional for transferred balances which can help your overall liability on credit cards. A final option is to go to your local credit union to see about a consolidation loan.

Q. Let’s say you have a little bit of money left, what’s one of the lower priority bills that you can tackle?

ELLIE: The next bill to concentrate on just happened yesterday—taxes. While technically, there is no “grace period” you can ask about an installment plan. The IRS can eventually garnish your wages and seize property or bank accounts. The old saying, “death and taxes are inevitable” exists, it’s because you WILL have to pay that tax bill some day—whether you’re a celebrity dishing on talk shows and making 25 million dollars a picture or whether you dish up ice cream part time at Coldstone making $25 a day!

Q. Thus far, we haven’t mentioned student loan debt, isn’t that an essential bill as well?

ELLIE: Yes, it does seem kind of crazy that student loans haven’t made it into our priority list yet, but I think that it illustrates the fact of how quickly the money goes for more “essential” bills and how there’s often more month left at the end of the paycheck Lenders for student loans will wait about nine months before placing a federal loan in default. As of last July, graduates can opt for a loan program that bases payments on up to 15% of your annual gross income. If you have these kinds of bills, then you can go to www.IBRinfo.org for help in how to pay your student loans more efficiently.

Ellie Kay
America's Family Financial Expert (R)
www.elliekay.com

TAX TIPS for Maximum Refunds

As seen with Ellie Kay and ABC NEWS NOW.

This year 75% of all Americans will get a tax refund. Last year's average refund was $2,753, with 2 out of 3 taxpayers e-filing their returns. Those with direct deposit averaged a $2,997 refund.

With the economy the way it is, families need every dollar they have coming to them.

But taxes can be sooooo incredibly complicated, especially with the recent tax laws that have passed--how can you figure it out? Help is just a click away as you follow my top tax tips for this year:

• Procrastination Costs $$ -- Just do it! Start now, the longer you procrastinate, the more likely you are to be rushed in filing your return and that translates into mistakes or missing something that could cost you money.
• Put Off Spending -- Some of you may be getting big bucks this year, but DO NOT SPEND IT UNTIL YOU HAVE IT! What if you don't qualify for the home buyers tax break and you've already spent that money? This is the same problem we ran into in 2008 when the stimulus checks came out. People spent the money (via credit) before it arrived and then ended up in a pickle when the checks were late. The IRS is having to navigate the new tax credits for home buyers and trying to avoid fraud. This means they won't even start processing those returns with the home buyers credit until mid-February. Many families are counting on these big returns, but you need to be cautious & don't spend what you don't have yet!
• Professional vs. Predatory Preparers --When the economy is down, fraud is up! Don't ever go to a tax preparer who sets up a shingle outside their door for a few months or those who claim they can get you a larger refund than another preparer. Instead go to a reputable and professional site where you can save money and file for free such as TaxAct . They can handle simple or complex returns and they are free for everyone, regardless of age or income, plus it includes the tax forms you will need.
• Pressure Loans -- Any tax preparer who pressures you to take a RAL (refund anticipation loan) is someone you need to run from! The interest rates are a rip-off and there are even big names associated with these costly practices such as H&R Block , so steer clear!
• Put it Off! -- Employers are required to have mailed W-2 forms by Feb 1, 2010. Some tax preparers say they can access W-2s for you early, but it's really best to wait until you receive the real deal in the mail before you e-file.
• Prepare to e-file! -- If you use the TaxACT Free Federal Edition to e-file, then you have an error rate of less than 1%, compared to 20% on paper returns. If you also get direct deposit on your e-file, then you can get your money in as little as 8 days.
• Pay Less -- Some of the new tax laws, such as the ARRA (American Recovery & Reinvestment Act) give tax breaks to 95% of taxpayers, with some families saving more than 13K in home, car, college and other tax credits. Make sure you use an online tax program that is all inclusive and up to date on these tax credits.
• Prepping Year Round -- Go to the IRS website and sign up for their tax e-mail updates that can help you reduce your taxes throughout the year. While you're there look at some of the other information on tax credits, you'll be surprised at how easy it is to understand and that knowledge can translate into dollars in your wallet! Don't forget to go to Ellie's tools section for all kinds of calculators that can help your finances year round as well!
• Print and mail -- Even if you are e-filing, you still need to print your own copy of the return. If you are filing for certain tax credits, such as the Home buyer's credit, then you are not allowed by the IRS to e-file. In which case, you can go to TaxAct, fill out all the info, print it and then mail it in with the necessary documents that aren't available electronically.

Hope this helps!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Tax Free Holidays

Consumers across the country are searching for ways to cut their spending and still buy what they need, especially when shopping for back-to-school essentials for kids. Many states offer tax free holidays during the back to school shopping season to help families purchase back to school necessities.


The tax free holidays are just around the corner and if your state offers this, it's important to take full advantage of this holiday. Here are some tips to help:

• FIND OUT THE DEALS - Take advantage of savings opportunities linked by local retailers to the upcoming Tax Free Holiday weekends. Don't worry, there will be lots of ads in your local paper. Some stores like Sears even offer further discounts like $10 off a $50 apparel purchase just for showing your PTA or PTO card or student id. Be sure you go shopping prepared with these forms of identification to get your discounts.

• FIND OUT LIMITATIONS - Each state has its limitations, so ask the cashier at your retailer what the rules are for your state. For example, some states will only allow up to $100 on any single item of clothing and only up to $750 on a computer. So know the rules by googling your state, "tax free holiday" and "2009."

• FIND LAYAWAY - Some stores such as K-mart have reinstituted layaway in direct response to the recession. This option varies from family to family but our family tries to minimize credit card debt and layaway is another option that helps avoid consumer debt.

Upcoming Tax Free Holiday Dates

STATE

Vermont 8/22
Georgia 7/30 to 8/2
Mississippi 7/31 to 8/1
D C 8/1 to 8/9
Alabama 8/7 to 8/9
Iowa 8/7 to 8/8
Louisiana 8/7 to 8/8
Missouri 8/7 to 8/9
New Mexico 8/7 to 8/9
North Carolina 8/7 to 8/9
Oklahoma 8/7 to 8/9
South Carolina 8/7 to 8/9
Tennessee 8/7 to 8/9
Virginia 8/7 to 8/9

Happy Savings!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Tax Time Tips from Ellie

• Wait for Your Refund – If you’re like everyone else in this economy, you need every penny of that tax return. So even though a tax preparer offers to advance you your refund, just wait. Fees can range from $60 to $100 on an average refund of $3000. In fact Americans spent $890 million in fees for money they would have received anyway in 2007.
• Don’t Cash That Check – Some consumers are trying to get a jump on their spending while they are waiting for the IRS check to come in by cashing the checks that come in with your credit card statements. These “checks” have high fees and interest associated with them and the interest starts accumulating immediately.
• Rainy Day Strategies – I’ve recommended that single income families have 8 months of living expenses in an emergency fund and dual income families put back 6 months worth. But most families do not have anywhere near that amount, so get a jump start on your savings by depositing your check into an emergency fund.
• Beware ID Theft when Filing Taxes – Last minute filers who go to a temporary tax preparer are particularly susceptible to identity theft as the personal information on tax forms are exactly what predators are trying to find. Never go to a temporary tax preparer who may lure you with the promise of quick & cheap tax preparations. Instead, look to Turbo Tax, another software program, or a permanent CPA or tax prep service.
• Don’t Believe the IRS – Another tactic for ID theft during tax time is from scammers posing as IRS or Social Security representatives who try to trick you into revealing personal info via e-mail or phone calls. To validate whether an IRS inquiry is the real deal, call 1-800-829-1040.
• Homebased Business Tips – One of the few areas of our economy that is flourishing is in some of the direct sales companies. There are a lot of ways to make sure you get every deduction coming to you such as using Turbo tax or going to a professional. Homebased businesses can get tax breaks for buying their own health insurance, using a dedicated portion of their home as an office and job related moving expenses. But one of the most overlooked tax breaks is the SEP, or Simplified Employee Pension IRA because they think they are too small to qualify. So as your tax pro if contributing to a SEP IRA will help reduce your tax bill while building your retirement!

Here's to minimal tax trauma for you and yours!

Ellie Kay
www.elliekay.com
America's Family Financial Expert

Tis Tax Season - Smart End of the Year Money Moves

What happens when you come between a mean, barking dog and a young girl? Answer: A Trip to the Emergency Room! Yep, I grabbed the dog's collar and he whipped it around and bit my hand. One tetnaus shot, one x-ray (revealing a dislocated thumb), a prescription of heavy duty antibiotics, one small surgery on the thumbnail and one bottle of vicodin later--and I was on my way.

That dog bite reminds me of how suddenly you can get bit by the tax guy if you don't grab the end of this year by the collar and then run for cover! Here are a few of the end of the year tax tips that I'm recommending:

• Give It Away! -- When you're putting away those holiday ornaments and your attic, the closets and the garage are a mess anyway, start a "donation" pile that you can give to a qualified local charity. Be sure to get a tax deductible receipt and go to http://www.salvationarmyusa.org/ to get a fair valuation of the good to excellent quality items you donate. Remember that you have to itemize your donations in order to get this benefit. Cash donations require that the taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. To get all the details (and as a good cure for insomnia) see IRS Publication 526.

• Give Next Year's This Year -- Maybe you have some donations you'd like to make in January but don't have enough donations for 2008 to itemize. Donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year. By making this extra donation early, you might have enough to itemize.

• Pay Deductible Expenses by Credit Card -- Just as a donation made by a credit card in 2008 will count toward the 2008 tax year, the same applies to business expenses charged before the year ends.

• Bonus IRA -- Invest this year's bonus in an IRA to reduce your taxes. If you have a certain income bracket, you can invest in the Saver's Credit. Check with your tax professional to see if you qualify, or follow the link to look at the tax brackets.

• More 401(k) -- You may already be contributing to your 401(k) in order to get the benefit of your company's matching funding. But keep in mind that you can reduce your paycheck by paying a little more to this fund up to a specified percentage of your salary. Every time you reduce your paycheck, you increase your tax savings!

• Mortgage UP! -- I saw a really lame movie a few years ago called "Cowboy Up" starring Kiefer Sutherland. It was lame because you found yourself crying and you knew the movie was too smarmy to cry! A forgettable flick before he was an unforgettable star. Do your yourself a favor and Mortgage Up to make an extra payment in order to deduct the interest on 2008's taxes.

Don't let this year's taxes take a bite out the hand that feeds it, thereby making you next April's fool. Take the time to tend to taxes--after all, tis the season!

Ellie Kay

"America's Family Financial Expert" (R)

http://www.elliekay.com/

Stimulus Check--How Long Will You Wait?

The good news: I made some money in 2007.

The bad news: I made some money in 2007.

The good news: I gotta pay.

The bad news: I gotta pay. Lots.

A stimulus check? I hope you enjoy yours! But wait a minute, YOU might be waiting a while, too.

On May 2 the IRS expects to make 34 million payments within the first three weeks. Taxpayers who choose direct deposit will get theirs between May 2 and May 16 if everything is in order and they were turned in by April 15th. If you filed via snail mail, then your checks will be mailed starting May 15 and finished by July 11

Direct Deposit Payments:
If the last two digits of your SS# is: It should be sent to bank by:
00 – 20 May 2
21 – 75 May 9
76 – 99 May 16


Paper Check
If the last two digits of your SS # is: Your check should be in the mail by:
00 – 09 May 16
10 – 18 May 23
19 – 25 May 30
26 – 38 June 6
39 – 51 June 13
52 – 63 June 20
64 – 75 June 27
76 – 87 July 4
88 – 99 July 11

My advice for this check?

• Pay Down Debt
• Build Up Savings
• Budget a "splurge" factor while still doing all the above!
• Spend Wisely (see the tips in this blog for ideas)

Hope at least YOU have a good tax day!

Ellie Kay
http://www.elliekay.com/
America's Family Financial Expert (R)