Remaining Vigilant During Tax Season

How much do you really know about taxes?

In an Ohio Credit Union League 2019 consumer survey, the majority of respondents, 62 percent, know how much they pay in income taxes each year. But 38 percent of respondents admitted they haven’t been paying attention.

There’s no doubt taxes can be convoluted. A recent NerdWallet study found that almost half, 48 percent, of Americans don’t know in which tax bracket they belong. In fact, the study found that about 1 in 14 Americans don’t understand how tax brackets work.

However, most consumers do know how their finances should look when their withholdings are adjusted correctly. According to a different NerdWallet survey, about 56 percent of Americans know they should adjust their withholdings to get their tax refunds as close to $0 as possible. In the Ohio Credit Union League survey, about 45 percent of respondents said they understood they should strive for that $0 refund.

While the majority of respondents in the Ohio Credit Union League survey, 70 percent, check their withholdings once a year, another 30 percent only check their withholdings every five years or when they start a new job.

Those are the consumers who could suffer in a year with new tax laws. According to a report by the Government Accountability Office, about 73 percent of taxpayers’ employers are over-withholding from their paychecks as a result of the law changes. These taxpayers may receive larger refunds from the IRS come April, but their paychecks throughout the year will be missing money that could have gone toward bills and everyday expenses.

Conversely, the Government Accountability Office reported that 21 percent of taxpayers, about 30 million Americans, are being under-withheld by their employers as a result of the new tax law. These taxpayers could be stuck with an unexpected bill from the IRS in April.

According to the Government Accountability Office, the IRS has recommended that Americans remain diligent about checking their withholdings, especially as the new tax laws take effect.

Failure to understand certain tax nuances can become costly. Here are some tips to help you be successful in the new tax season.

  • Start getting organized now. It might be tempting to wait until the tax deadline looms to start thinking about filing, but you stand a better chance of getting the most out of the system if you file carefully and rationally. As soon as you receive your W-2 from your employer, begin by making sure the information matches your pay stubs. Then, begin gathering relevant documents, including last year’s return, any relevant property data or real estate documentation, proof of charitable donations, and receipts for medical, business, or education expenses.
  • Adjust your exemptions and withholdings. Check your current W-4 form to make sure you’re claiming all the allowances that make sense for you. Also, make sure your employer isn’t over-withholding or under-withholding money from your paycheck. At the end of the year, your goal should be to owe no money and receive no money from the IRS.
  • Understand what money is taxed and what isn’t. Specific accounts in the U.S. are exempt from taxation. For instance, growth and earnings in a Roth IRA aren’t taxed. Neither is money in a flexible spending account, which can be used to pay for medical or childcare expenses, or income from a 529 education plan, which can be used to save for higher education.
  • Understand what you can deduct from taxes. Most taxpayers understand that charitable donations can be deducted from taxes. But, the average consumer typically overlooks a host of other possible deductions throughout the year. For instance, parents may deduct the cost of babysitting if they volunteer at a charitable organization. Comb through your year and don’t be afraid to ask questions that could lead to the right deductions.
  • Always file taxes – no matter what. In the eyes of the IRS, late is better than never. Even if you’re having a difficult time getting the documents together and know you’ll miss the deadline, be sure to file, eventually. There’s no penalty for missing the April 15 deadline if you are owed a refund, you’ll just get your cash back later. If you’re more than three years late, any unclaimed tax refunds are automatically turned over to the U.S. Treasury.
  • Get help. If you’re confused about any portion of your taxes or feel you’re not receiving all the deductions you should, seek help. Free tax return preparation programs are available to people with limited incomes (generally making less than $54,000 a year), people with disabilities, the elderly, and taxpayers who speak limited English. Credit unions can help you find the right tax help for you.

Learn more about how a credit union can help you prepare for a fantastic future by visiting aSmarterChoice.org to find a credit union near you.

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I believe in Santa Claus

To the delight of children and adults the jolly friend of many and his wife, Mr. & Mrs. Claus, will be making two more appearances at a Hopewell Federal Credit Union location near you!

Join us tomorrow…
12/21 – Heath Office – 2:30PM-4:00PM
12/21 – Newark Office – 4:15PM-5:45PM

Stop by for a visit, take pictures and tell Santa what you want for Christmas!

Santa Claus is Coming to Town

To the delight of children and adults the jolly friend of many and his wife, Mr. & Mrs. Claus, will be making three appearances at a Hopewell Federal Credit Union location near you!

12/14 – Johnstown Office – 3:00PM-4:30PM
12/21 – Heath Office – 2:30PM-4:00PM
12/21 – Newark Office – 4:15PM-5:45PM

Stop by for a visit, take pictures and tell Santa what you want for Christmas!

Tips to Avoid a Holiday Spending Hangover

You can survive the season without suffering a fiscal holiday hangover. By examining the reasons for overspending, planning expenditures, and identifying what’s important to your family, you can rein in your spending and rediscover the joy of the holidays.
Examine your motives. What fuels the gift-giving mania? Tradition strongly influences holiday spending habits. If your family always broke the budget to buy presents for every living relative, odds are you’ll carry on the practice. So even though you haven’t seen Aunt Connie in five years, you buy her a gift.

Then there’s the time factor. People’s lives are busier than ever before. Decades ago we used to make gifts at home. Now we just buy it all because it’s easier. Hectic schedules may prevent us from shopping until the official rush begins after Thanksgiving. By then, we’re battling throngs of shoppers and racing through town looking for something, anything, for people on our list.

Malls cater to our desperation; witness the appearance of countless specialty stands and calendar kiosks that appear only during the holiday season. Their easy access encourages impulse buying.

Credit also is a prime culprit. Department stores try their best to add one more credit card to your wallet by offering a 10%, one-day shopping discount. But it’s a deceptive bargain. Since department store cards charge high interest rates, if you carry over the balance into a second month, you’ll eliminate the discount you got.

Spend some time planning and budgeting before you start your holiday shopping spree.
1. Evaluate how much you can spend. What was the final bill last year? Too much? Estimate how much you can comfortably save between now and the holidays (or what you can pay off quickly afterward) and set that as your limit.

2. Start saving money now. Build it into your regular budget as a periodic expense set aside for the holidays. Consider establishing a separate credit union savings account for holiday purchases. The more money you save, the fewer purchases you’ll have to charge on credit cards.

3. Set a holiday budget. Holiday spending goes beyond gifts. There are decorations, postage, extra food, etc. Organize expenses into categories and if your total exceeds what you can afford, set priorities for purchases and cut back where you can.

4. Start your gift list early. Planning ahead will help you avoid costly impulse spending.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

Holly Jolly Thanks and a Happy New Year

Tips for Surviving the Holiday Crazy
By B. Kelly

The holidays can be stressful; however, they can also be full of joy, family traditions, and fun.  Take time to enjoy the season with these tips to help weather the crazy that can accompany holiday festivities!

HIT THE GROCERY EARLY

Make your grocery list, well in advance, to ensure you have your ideal holiday menu mapped out.  Don’t wait until the day before, or you’ll be sorry.  Procrastinators will be met with crowds and chaos that could create more stress than excitement about the big day.

BE A TASK MASTER

Determine your guests, how you plan to seat everyone, plated or buffet style, and any other details that you want to have for your celebration.  Then determine what you will need to do to make these things happen.  Start early!  Clean the house, set the table, start prepping food – do all the things you can do, in advance, and get them checked off your to do list.

SET A BUDGET

The holidays can quickly get expensive.  Set a budget, watch for great deals, and don’t overspend.

GET SOME SLEEP

One of the worst things you can do before the holidays is get burned out.  Make sure you are eating healthy, exercising and getting plenty of rest.

DON’T OVERTHINK IT

Unrealistic expectations of what your holiday should look like will most definitely end up in disappointment.  Let things happen naturally and be sure and take in all the wonderful moments with family and friends.  Pause to observe all the amazing things you did to prepare for the day and take a moment to enjoy the fruits of your labor.

AVOID FAMILY DRAMA

Perhaps you have a family member who attends the festivities that, well let’s just say, can be a little challenging.  Don’t let this ruin your holiday.  Try the talk, smile, walk method.  Talk to them briefly and exchange pleasantries.  Smile and remember that you don’t have to spend the entire holiday with only one person.  Walk away and remember this too shall pass.

KEEP IT CLEAN

Oh, the major messes that can erupt from hosting a family gathering at your home.  You cleaned for hours and now it looks as though a bomb went off, right?  Don’t clean as soon as the meal is complete, or you won’t have a chance to enjoy it.  Consider purchasing to-go containers and allow guests to pack up some left overs.  The more food that goes, the less there is to clean up!

Ultimately, we are responsible for our own happiness and we need to remember that we can’t control everything.  The more you can let roll off your back, the more enjoyable your holiday experience will be.  Try to stress less and embrace the mess!  Have a wonderful holiday season.

Easy Way to Save – Pack a Lunch

Saving money can be difficult for some people. They feel like there just isn’t enough to spare at the end of the month to put into a savings account. But by making small changes to your spending habits, you’ll see that saving money isn’t really that difficult.

For instance, how often to you buy lunch instead of making your own? Once a week? Every day? If we add up those daily purchases, you may be surprised at the cost per year.

Cost to buy your lunch every day
There are about 250 work days per year.
A lunch at a café or restaurant runs about $6.00 to $15.00.
If you eat lunch out every day, you’re spending between $1,500 to $3,750 per year.

Now, let’s figure out how much it costs to make your own lunch.

Cost to brown-bag your lunch.
If you buy lunch meat, bread, and a bag of chips, it will cost you about $10 and last you the whole week.
$10 ÷ 5 working days = $2.00 per lunch
$2.00 x 250 working days = $500 per year
If you packed your lunch every day, you’d save between $1,000 to $3,250 every year!

Now, let’s say you put the money didn’t spend into a savings account every month.

$4.00 to $13.00 (money saved each day) x 20 working days = $80 to $260 per month.
If you put those dollars into an account that earns even 1% interest, compounded monthly, you’d have $1,046 to $3,399 saved in 12 months!

You can play around with the numbers on this website to see what your actual savings would be: https://www.calculatestuff.com/financial/compound-interest-calculator

See? That isn’t so difficult, is it?

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

Tips for Black Friday and Cyber Monday Shopping

The holiday season is approaching and with that comes the biggest shopping days of the year, Black Friday and Cyber Monday. These high holy days for shoppers follow Thanksgiving each year. To make the most of these days, we offer you the following advice:

1. Make a budget and follow it. Know how much you can afford to spend and stick to that amount. Use cash to avoid overspending.

2. Just like Santa, you gotta have a list. Write down everything you plan to shop for and put them in order of importance. That way, as soon as you enter a store, you can focus on finding those items first.

3. Get out early. The earlier you get to the store, the better your chances of finding popular items in stock.

4. Shop with a friend. Not only is it fun, but you can work together and find your gifts faster. While you hunt for items in one section of the store, your friend can search for items in another section.

5. Sign up to get alerts about various products. There are websites, like bestblackfriday.com, dealnews.com, and theblackfriday.com, that specifically leak Black Friday ads, giving you an early advantage.

6. Use online price comparison tools. Google shopping, PriceGrabber, and Shopzilla allow you to compare prices at various location without having to drive all over town.

7. Use loyalty programs. Many retailers have loyalty programs that offer sales and promotions to their members first and even earn rewards on their purchases.

8. Follow your favorite brands on Social Media. Many retailers will offer special deals on their social media platforms and reward customers who like or follow them with special alerts to discounts.

9. Check timing. Some Cyber Monday deals are for a certain window of time, offering the steepest discounts to early morning shoppers. Check deals before that Monday to know what time to shop for the best deals.

10. Look for deals at Brick-and-Mortar Stores on Cyber Monday. If a store’s Black Friday sales were lower than expected, many will offer deals to lure Cyber Monday shoppers.

After all that shopping, consider participating in Giving Tuesday, which is celebrated the first Tuesday after Thanksgiving. It’s an international movement that encourages everyone to donate their time, resources, talents, and money to helping others. You can get information and updates about the movement by going to https://www.givingtuesday.org/about or following it on social media sites.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.