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10 Ways to Teach Kids Financial Literacy
Understanding financial literacy concepts such as budgeting, saving, and investing is crucial for everyone, children included. Financial literacy is the ability to comprehend and make decisions that contribute to financial readiness. This proficiency isn’t inherently taught in schools and often falls on parents or other family members.
How to Stick to Financial Resolutions
Near the top of the list at the start of every year are often financial resolutions—commitments to save more, spend less, pay off debt, or prepare for upcoming financial milestones. The challenge, however, lies in sticking to these financial resolutions throughout the year.
Here are some strategies and tips to help improve the likelihood of sticking to resolutions.
Should I Consider a Roth IRA Conversion?
A Roth conversion is the process of moving assets from a Traditional, SEP, or SIMPLE IRA, or from a qualified retirement plan, into a Roth IRA. When the conversion occurs, taxes are due on contributions and the accumulation. However, qualified distributions of earnings are tax-free later.
A Guide to Understanding Tax Refunds
A tax refund is a repayment to taxpayers for any excess tax paid. It is a form of refund issued by national, state, or local tax authorities to taxpayers who have overpaid their taxes. The phenomenon of overpayment may occur due to several reasons:
The Rise in Consumer Credit and How to Manage Yours
Credit is a vital component of the current economic system. Consumers frequently use credit as a financial tool for various reasons. First, it allows them to make significant purchases, such as homes and vehicles.
National Credit Awareness Month: Understanding and Nurturing Credit Intelligence
In National Credit Awareness Month is held each March to educate the public about the importance of credit in our daily lives. This month, consumers are encouraged to review their credit reports, learn more about credit management, and take steps toward improving their credit scores.
Tax Season Final Push: An Essential Checklist for Accurate Filing
As the deadline for filing income tax approaches, it’s crucial to have all the necessary information and documents at your fingertips. The final push requires organization, preparation, and a helpful checklist to streamline the process and make it straightforward.
Understanding Workplace Benefits and How to Maximize Them
Workplace benefits are an essential component of an employee’s overall compensation package. These benefits not only protect one and improve the quality of life but also contribute significantly to financial independence. Let’s delve deeper into understanding these benefits and how to leverage them optimally.
Tax Season Alert! A Less-Stress Tax Filing Checklist
Tax season can sometimes bring a mix of anxiety and a long list of action items, but it doesn’t have to! And you don’t have to be an expert on the tax code or a senior accountant to have a smooth filing experience. The secret ingredient is organization. By gathering your documents early, you can help avoid last-minute scrambles, reduce the risk of errors, and potentially speed up your refund.
Why Organization Matters
The IRS processes millions of returns every year. Errors, even small ones like a transposed digit in a Social Security number or a missing 1099, may lead to processing delays or potentially an audit. Having a clear picture of your annual income and expenses allows you or your tax preparer to help identify tax-saving opportunities and may avoid the headache of mistakes that require more paperwork.
Your Tax Prep Checklist
To help you get started, we’ve compiled this checklist based on the latest IRS guidelines. Use this to create a tax folder (either physical or digital) to house everything as it arrives in your mailbox or email this month.
1. Personal Identification & Information
- [ ] Social Security Numbers: Required for you, your spouse, and all dependents.
- [ ] Bank Account Info: Routing and account numbers for direct deposit (the fastest way to get your refund).
- [ ] Last Year’s Return: Your Adjusted Gross Income (AGI) from last year is often needed to verify your identity for e-filing.
2. Income Statements
- [ ] Form W-2: From every employer you worked for during the year.
- [ ] 1099-INT / 1099-DIV: For interest and dividends earned on your investments.
- [ ] 1099-B: Details the proceeds from the sale of stocks or bonds.
- [ ] 1099-NEC / 1099-K: If you did freelance work or participated in the gig economy.
- [ ] 1099-R: For distributions from IRAs, 401(k)s, or pensions.
- [ ] SSA-1099: If you received Social Security benefits.
3. Adjustments & Deductions
- [ ] Form 1098: Mortgage interest statement and property tax records.
- [ ] Charitable Contributions: Receipts for cash donations and acknowledgments for donated goods.
- [ ] Education Expenses: Form 1098-T for tuition and receipts for books or supplies.
- [ ] HSA/FSA Contributions: Records of your health savings account activity.
- [ ] Medical Expenses: If you plan to itemize, keep a log of unreimbursed medical costs.
4. The Digital Frontier
- [ ] Cryptocurrency & Digital Assets: Records of any sales, exchanges, or “airdropped” tokens.
- [ ] IP PIN: If the IRS issued you an Identity Protection PIN, you must have this to file.
How We Can Help
While gathering documents is the first step, the real strategy comes into play when we assess how these numbers fit into your long-term wealth plan. Are you taking full advantage of tax-advantaged accounts? Is your portfolio balanced to minimize future tax liabilities?
Don’t wait until April 14th. Reach out to our office today to schedule a pre-tax review. Let’s make this tax season an opportunity to review your financial health, maximize your deductions, and set the stage for a prosperous year ahead.
Source:
https://www.irs.gov/filing/gather-your-documents
This material is for educational purposes only and is not intended to provide specific tax or legal advice. Please consult with a qualified tax professional regarding your individual situation. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed. This guide is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney. SWG 5143383-0126
A History of Modern Credit and Why It’s Important Today
You’re probably familiar with credit in your everyday life. Many Americans have credit cards, use them for everyday expenses, and (most) try to act responsibly to increase their credit scores. But where did it all come from? How did “credit” come about? And why is it such a prevalent part of our daily lives?
The History of the US Credit Industry from Railroads to Credit Scores
The railroad industry that initially connected America’s cities was funded almost entirely by government-backed bonds and high-interest private debt. It was the first industry that required billions in funding, made possible only though the pooling of money on a massive scale. This introductory phase of corporate finance saw corruption, scandal, and later, reform. Why is this piece of history important? Because this was the first time that debt became its own business in America. The railroad industry essentially collapsed due to the prioritization of debt payments over infrastructure and innovation. Many railroad companies went bankrupt, and the industry began to lose its luster.
Before credit scores were conceived, borrowers relied on testimony from friends and neighbors to vouch for their character and creditworthiness. But as credit reporting began to modernize, private firms began tinkering with ways to standardize the evaluation of credit. These early reports were subjective at best and often discriminatory, as they were influenced by the social biases that were held at the time. Eventually, private firms began to move toward impersonal, algorithmic forms of credit evaluations. Concerns over privacy and surveillance led to the Fair Credit Reporting Act in 1970, a landmark piece of legislation that required credit bureaus to open their files to the public. It also required the expungement of data on race, sexuality, and disability, as well as the deletion of negative information after a specified period of time.
In 1989, the “Big Three” credit reporting agencies (Equifax, TransUnion, and Experian) began to use a credit-reporting algorithm developed by FICO. This algorithm is basically the same algorithm used to generate your credit score today, which is a comprehensive assessment of your financial trustworthiness. Loans represent risk in the eyes of lenders, and a credit score functions as a financial identity, quantifying the likelihood that a particular borrower can – and will – pay back their loan. Credit history, paying off loans, late payments, declaring bankruptcy, and even simply applying for a loan can all affect your credit score.
The Fiduciary Responsibility
Understanding the origins of the credit industry can help contextualize many of our financial decisions and can help us appreciate how far our nation has come in terms of fair, responsible financing practices. Financial advisories like ours are bound to a fiduciary responsibility, meaning we’re legally obligated to act in your best interest. As a fiduciary, financial responsibility is the backbone of our business, and with March being credit awareness month, this is the perfect opportunity to demonstrate our commitment to that responsibility. And when it comes to credit management, we’re here to help you understand how credit works in your life and to empower you to make informed financial decisions.
When was the last time you assessed your financial situation or checked your credit score? If you’re interested in talking about financial practices that can help you manage your credit, reach out to us and we’ll take a tailored approach to guiding you through personal finance best practices. It can make a significant difference when it comes to interest rates and your monthly loan payments on life’s largest expenses.