Will Electric Cars Ever Pay off for Consumers?

With gas prices high, the idea of driving your electric car right past all the gas stations and recharging it at home—as shown in those Chevrolet Volt TV commercials—has powerful appeal. But so far, the high cost of electric models has kept most consumers from acting on that vision.

With the price on electric models like the Nissan Leaf and the Volt (which also has a backup gasoline engine) near $40,000, the differential over similar gas-powered cars is just too great. That remains true even after a $7,500 federal tax credit for electric car buyers plus state credits in some locations.

For example, Edmunds.com senior analyst Michelle Krebs points out that even if gas went to $5 a gallon, gas savings on the Volt, rated at 95 MPG in city driving and 93 on the highway, would take nine years to pay back the price difference over the similar-size Chevrolet Cruze. Consumers can choose from lots of high-MPG all-gasoline cars like the Cruze that cost thousands of dollars less.

Much of the cost premium for electrics results from their very expensive batteries, which can cost $12,000 to $15,000. Cutting that price is crucial to getting electric vehicle prices down to affordable levels. In a recent study, consulting firm McKinsey & Co. projected that the cost of batteries could fall 70% by 2025—pushed by increasingly stringent government regulations around the world. But lower costs depend on higher sales volumes. And that may be the catch-22 for automakers, at least in the next few years.

Whether or not you’re tempted to consider an electric car, the combination of high gas prices and tightening federal regulations has worked to give you more choices. Small, high-MPG all-gasoline cars that once seemed cheap and unattractive now come with comfortable interiors, good driving manners and a host of attractive options.

No matter what you decide to buy, we offer the hands-down winner in new car loan rates and speedy approval. Talk to a Hopewell Federal Credit Union loan officer about your new car today.

Summertime Tax Tips

Summer is filled with activities–weddings, jobs, and summer camps are just a few. Whether you’re tying the knot, or sending your child to camp, these tips from the Internal Revenue Service (IRS) can help you prepare for tax implications that might occur and prepare for some possible tax breaks.

• Report any name change to the Social Security Administration so your name and Social Security number will match when you file your next tax return.
• File address changes with the U.S. Postal Service–this way you’ll continue to receive your mail and can let the IRS know your new address.
• Consider whether you’ll file joint or separate returns.
• If you’re considering buying a house, find out which expenses may be deductible and which are not.

Working students
You may be exempt from withholding taxes if:
• You can be claimed as a dependent (usually on a parent’s return),
• Your total 2012 income will not be more than $5,950,
• Your unearned income (interest, dividends, and so forth) will not exceed $300, and
• You had no income tax liability for 2011.

Summer Camps
Day camp programs can have favorable tax consequences. Unlike overnight camp, the cost of day camp counts as an expense toward the child and dependent care credit. You may figure the credit on up to $3,000 of expenses, $6,000 for two or more children. The credit rate ranges from 20% to 35% of expenses, depending on your income. The 35% rate applies if your income is under $15,000; the 20% rate, if your income is over $43,000.

Check the IRS website at http://www.irs.gov for more information.

Uneven Income Calls for Proactive Money Strategies

It’s feast or famine for a lot of freelance writers, artists, and seasonal workers, but it doesn’t have to be. With a budget and some discipline, even workers with fluctuating incomes can experience some of the stability that their 9-to-5 friends and relatives enjoy.

Follow this advice to keep your budget on track no matter your cash flow:

* Control monthly costs and minimize fixed expenses. Try to reduce and revise expenses you have control over such as rent, phone plans, and cable. Even if it only saves you a few bucks each month—over time that savings adds up.

* Save some of every paycheck. Put extra money into savings instead of spending it. That is one of the most important things self-employed workers can do. Having money on hand to use for future basic expenses is critical when paychecks don’t arrive as regularly as the bills do. Experts suggest saving around 20% of your income as it arrives to cover tax liabilities and to establish a rainy day fund.

* Prepare for taxes. Keep careful records to capitalize on allowable deductions come tax time. The process doesn’t have to be super complicated—programs like QuickBooks are useful, but spreadsheets and even checkbook ledgers can work just as well.

* Get better at budgeting. Developing—and sticking to—a spending plan is key. Consistency helps minimize stress and prevent overspending when money is flush. And that will keep you in business not only when income is light but for the long term.

* Separate personal and business accounts. Maintain a business checking account and credit card that are separate from personal ones. Not only will separate accounts simplify tax preparation, they also will make it easier to track the earnings and expenses necessary for budgeting. Having all your financial accounts at Hopewell Federal Credit Union gives you more than convenience. It gives you peace of mind, knowing that the people at your financial institution truly understand your needs.

Money management takes work and discipline, but is necessary if you want to keep working the way you are now. The longer you do it, the more experience you’ll get, and the better you’ll get at it.

Need help? The professionals at Hopewell Federal Credit Union can help you develop a spending plan and help set up the business accounts you need. Stop by or call us today at 740.522.8311.

Credit Unions’ Tax Status Well-Deserved

Credit unions were created to provide financial services in a democratic, not-for-profit, cooperative manner—that is, with member ownership and control. Those unique characteristics are the foundation of the tax exemption. You may not even realize that your credit union doesn’t pay federal and corporate income tax.

Some bankers and their trade associations are asking legislators to tax credit unions, even though it was only banks that needed and took huge government bailouts. And the truth is, a tax hike on credit unions would be a tax hike on all American consumers.

What the folks who want to tax credit unions don’t make clear is that credit unions do pay property, sales, and payroll taxes.

Why credit unions are tax-exempt
Superior financial service to members distinguishes credit unions from other financial institutions, particularly banks. A bank’s first priority is to maximize shareholders’ profits—from the rates and fees it charges customers for loans and other services. A credit union’s top priority is to serve members with exceptional customer service, products, and services at fair prices.

Last year, on average, each credit union member got a direct financial benefit of $62. That came from lower rates on loans, higher returns on savings, and lower and fewer fees than he or she would have paid by doing business with a bank.

But that $62 benefit is only an average. Active members who use many credit union services often see even greater benefits. The difference amounts to about $6 billion spread among 96 million credit union members nationwide.

In addition to individual savings, credit union members also have access to a financial institution that they own and that keeps their interests first, providing exceptional service to members at all income levels.

How tax status affects consumers
Further, the tax exemption helps to ensure that all consumers have competitive choices in the marketplace.

In fact, for every $1 of their tax exemption, credit unions return $10 to consumers in better rates and lower fees. That’s a solid investment in our communities. The reality is, if credit unions were taxed, it’s unlikely members could still see the financial benefits they do now. Just as banks pass along their tax payments in fees and interest rates, if taxed, credit unions would have to pass those expenses along as well. The effect on how much you pay for credit union loans for cars, education, and houses, or the dividends you earn on credit union savings, would be significant.

By making and keeping financial services more affordable, Hopewell Federal Credit Union helps you reach your goals and improve your financial well-being.

The value all consumers receive because credit unions are tax-exempt far outweighs the “cost” to the government.

If credit unions paid income tax, the contribution to state and federal treasuries would not make one penny difference in the taxes you pay as an individual.

All taxpayers have legitimate concerns about the federal budget deficit and state deficits as well. Credit unions and members already share in reducing those shortfalls:

You pay taxes on dividends your Hopewell Federal Credit Union accounts earn.

The credit union tax status is one of the highest yielding investments the federal government has made.

Hopewell Federal Credit Union values your membership. Stop by or call us today at 740.522.8311 for all your financial needs.