Early Results from Tax Season

Early returns prepared at the Volunteer Income Tax Assistance (VITA) site where I volunteer are resulting in similar refunds or taxes due from previous years. VITA serves individuals with incomes at or below $55,000.

Dependents listed on returns are the biggest factor resulting in similar results. The child tax credit increased to $2000, the refundable portion of the child tax credit has increased to $1,400, and there is a non-refundable credit of $500 for dependent individuals who are 17 or older on December 31st of the tax year.

At the tax site, parents often state they won’t claim a dependent, even when they are eligible. If someone can be claimed as a dependent on your return it should be done; the IRS doesn’t allow a choice. Income deductions don’t increase and the $500 credit may be lost.

Lower withholding hasn’t been a problem with clients we’ve seen, but it has resulted in slightly higher incomes on the state returns, due to reduced deduction on Line 31. While most individuals won’t exceed the federal standard deduction, it makes sense to gather and record allowable deductions so they will carry over in software to the state return. Iowa has a standard deduction of $2,030 for single and $5,000 for couples, so it’s much easier to itemize on the state return.

If you aren’t setting up your refund to be deposited directly into your checking or savings account, this would be the year to start. As one client stated, ” The Federal government could shut down again. It’s hard to tell when I would get my refund, if I have a check mailed. Here is my bank information!”


Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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A Book to Read

How’s your New Year’s resolution going?  Maybe I can help. Add a short term goal to read one book about money or personal management by the end of January and use the content to improve your original plan to improve your well being. Here are few I recommend:

The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. If your resolution was to slow down the purchase of stuff, adopt a minimalist approach to life, or start recycling/reusing what you have, the book could give additional reasons to stick with it.  Authors are  Thomas Stanley, PhD and William Danko, PhD

 

 

Loaded by Sarah Newcomb, PhD, introduces you to behavioral finance. The book explains how our experiences with money have a psychological basis and can often run counter to what we’d like to accomplish. She explains that money is just a tool and how we use it is entirely a matter of personal choice.  The book offers advice about overcoming negative behaviors, so if you are concerned that you might fail to follow through with plans to change your use of money in 2019, this book offers tips that could help you change your goal and make it more achievable.

 

Charles Duhigg is a business reporter. The Power of Habit describes why habits exist and how they can be changed. Your resolution might be failing because you haven’t really examined why you are repeating the same behavior loop over and over again. Taking advantage of his tips to find your weak links and embrace change could lead to success.

 

Finally if you use this suggestion and read one book before the end of January, don’t forget to celebrate.   One short term resolution accomplished!!!

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Packages on the Doorstep

When will it be delivered?  I’m learning that tracking services offered by vendors vary with accuracy and details. Packages I mailed at Halloween took a broom stick ride in the opposite direction of their destination and then circled back for a late delivery.  I have a purchase that has been “out for delivery” for a week and there are no details.

The Federal Trade Commission enforces rules for online and mail order sales. Packages have to arrive within 30 days. If that isn’t possible, you must be notified and have an option to cancel the order.

Where will I find it? I have an inspection routine at my house when I receive confirmation of delivery. Packages have been found in multiple locations: on the front porch; the back porch; the bushes near the doors; and the back of the mailbox.  I’m thankful I don’t have my son’s dog (shredded packages) and I’m not on a busy city street. There are alternatives to consider: work address, neighbor, requiring a signature for delivery (usually involves a separate charge), using the carrier’s designated pickup and delivery location.

I’m not complaining. “Mail-order” shopping has come a long way from the days of the Montgomery Ward catalog.  I remember when you mailed in an order and instead of a package, the vendor’s letter arrived informing you the item was “sold out” or “not in stock”. Sometimes they sent a substitute item, which wasn’t always satisfactory. Inventory control with access from your home computer has reinvented “mail-order” shopping, and it’s definitely on the up swing.

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Health Insurance: Time to Decide

Making a decision about health insurance coverage is not easy. Most of us rely on our employer to wade through the details of policy coverage and negotiation of rates. We gladly accept what is offered, choosing between 2-3 options that personalize the coverage.  HR sends a letter or hosts a meeting for questions and answers. If we don’t do anything, the policy we have continues into the new year.

It’s not quite as easy when you are purchasing insurance on your own: some parts of Medicare, the Marketplace, and plans offered from private insurance agencies can be more confusing. The options for coverage have experienced a period of volatility.  Assistance with enrollment varies. Here is an overview of the open enrollment time frame, who can help you sort through the options, and major changes to be aware of in 2019:

Medicare:  Open enrollment for Medicare Advantage and Prescription Drug coverage (Medicare D) began on October 15th and closes on December 7th.  SHIIP volunteers are excellent resources to help sort coverage and find plans that will meet your needs. Medicare is also providing assistance through an online education program, Medicare Plan Finder.  Advantage plans are increasing in numbers and are being heavily marketed this season.  Individuals enrolled in supplemental coverage (Medigap) and prescription drug (Medicare D) plans should open and read any notices they received in the past 30-60  days.  Your coverage may have changed.

Marketplace Coverage:  Open enrollment began on November 1 and closes on December 15th. Iowans may call 1-800-318-2596 or visit healthcare.gov for information. Independent insurance agents may be able to assist. If you received assistance last year, try contacting the agency that sponsored the service. Medica and Wellmark will be offering ACA-compliant individual health insurance plans to Iowans statewide for plan year 2019. If you currently have coverage through the exchange and do not choose a plan for 2019 by the end of open enrollment, you will be re-enrolled into the same plan offered by Medica. Reminder: if you want to use Premium Tax Credits to help cover the cost of your insurance, you must purchase it in the marketplace.

Private Plan Coverage: Enrollment is not limited to a set period of time for most policies. The Iowa Insurance Division provides a listing of licensed agents.  New this year for individuals who do not qualify for premium tax credits are association benefits plans.

Children’s’ Health insurance Plans (known in Iowa as HAWK-I): Enrollment is not limited to a set period of time. Contact the Department of Human Services for applications and program details.

Medicaid: Enrollment is not limited to a set period of time.  Individuals may qualify based on income or specific health issues.  Contact the Department of Human Services for applications and program details.

Iowa State University Extension and Outreach has available education programs that can help with understanding choices and coverage.  Contact your local extension office to request delivery for your community.

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Stocking the Grocery Pantry

I threw a list of Pantry items together in 2004 and went shopping. My goal was to confirm or dispel what participants in my budgeting classes would argue: that it was cheaper to purchase groceries at larger markets, especially those in larger towns where there is more than one grocery store.

What I challenged them to consider was the cost of transportation and the added time it took to make a 1 hour round trip each week for groceries; especially if the sale items were the same price in a local store.  Did they save enough to off-set those costs? Even though the cash register receipt is lower for the same items, it wasn’t enough savings to cover the cost of transportation.

I took my list shopping to the local grocery in 2007 and again today.   Here’s what I’ve learned from the comparison:

  • The cost for store brands, 2004-2018, increased 54.7%, the national brands increased 34.3%.
  • The margin between the cost of buying a store brand and buying a national label continues to erode. In 2004 the difference was 30%, in 2018 the difference is 24%. Store brands still cost less, but not as much.  Quality becomes more important.
  • The changes in package sizes has slowed. I found several items in smaller packages between 2004 and 2007; but only Oat Cereal was found in a smaller package in 2018.
  • Some items are lower priced. Brand name stick margarine is priced lower than the 2004 cost and the store brand is equivalent to the brand name price. Oat Cereal, when broken down into price per ounce, is 27 cents today. In 2004 it was 26 cents an ounce.  Brand name green beans have declined slightly since 2007, with store brands getting close to equivalent price.
  • Items on my pantry list with a larger than average increase in price are: a 2 lb. block of processed cheese food – the national brand increased 100%; a 5 lb. bag of national brand flour increased 61%.

A new player in the pantry shopping list is a local dollar store.  My grocery sack included a combination of store brands and national brands. The sizes were equivalent. Not everything on the list was available. Some items were lower, but others were higher in price. In the end my combination sack cost the same as the store brands at the local grocery.   If you have the time and pay attention to prices you could lower your total grocery costs by shopping at both stores if they are close to each other.

Visit the Spend Smart, Eat Smart website for low cost recipes and other tools to manage your grocery dollars.

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Credit Freeze

Thirty percent of U.S. consumers have been notified of potential compromise of their personal information in a data breach. In 2017, for the first time, more Social Security numbers were exposed than credit account numbers. Research finds that counterfeit use of credit cards is more difficult with the new microchip technology; as a result, criminals are focusing on new account creation. The number tripled in 2017 resulting in $5.1 million in losses. Now the Federal government is joining states to give consumers options to protect their credit history.

New federal legislation supports the right for individuals in all states to apply, free of charge, a credit freeze to their credit reports. The action can be taken after September 21, 2018.  By activating a freeze, you put a block on the creation of any new credit account by preventing prospective lenders from viewing your credit report. If lenders can’t confirm your capacity to repay a potential debt, they are unlikely to open an account in your name.   Iowa’s law went into effect in May.  Note: a freeze requires management; you must lift the freeze when applying for new credit.

If you are denied credit, lenders and agencies are required, by law, to send you documents informing you of your right to obtain your credit report and to dispute errors. The documents are now required to also notify you of your right to freeze your files.

In cases of identity theft, consumers have long had the option to place a fraud alert on their credit reports; the alert is a tip that this individual’s personal information was compromised, and consumers are still encouraged to pursue this action. The time frame for how long an alert is posted has been extended from 90 days to one year.  A fraud alert does not, however, block potential lenders from viewing your information; therefore it does not prevent unauthorized opening of new accounts in your name.

Joyce

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Unpaid Debt

What happens if a credit card balance goes unpaid? If you aren’t receiving collection calls, does it mean the debt is no longer a problem?

All states have statute of limitation laws setting a time when a debt can no longer be collected. Credit card debt is considered open account debt because the lender has the option to change the terms of the agreement at any time. Iowa law states open account balances can no longer be collected after 5 years from the last charge, payment, or admission of ownership of the debt in writing.

Once the original lender has exhausted their attempts to collect and elects to discharge the balance, the debt is sold to collection agencies. Timelines vary for when an account is sold, typically at 180 days.  Collection agencies will contact you and attempt to collect a settlement. If the agency is unsuccessful they may bundle the uncollected debts and sell it again to a different agency. Attempts to collect your debt can occur at any time in the five year period and can result in court action. If the debt results in a court judgement to pay, it is valid for 20 years. Iowa allows actions to be taken to renew judgements extending the time when active collection can take place.

Ignoring unpaid debt won’t make it go away. Resources that may help are available through the Iowa Attorney General’s office, the Consumer Finance Protection Bureau, the National Consumer Law Center, and local attorneys.

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Archiving the Past

Many of Iowa’s County Extension Districts are celebrating their 100-year anniversary this year.  Wayne County, where my office is located, is one of them. Starting in January a team of county staff have developed plans for a special day.

Lending a hand with the effort has raised my awareness of  how fortunate you can be when someone at work or in your family takes on the responsibility to preserve history.  Staff at the office have had some fun “aha”  moments sorting through papers, pictures, annual reports, and other archived materials.  It  has also exposed flaws and errors.

Glue, is definitely an enemy to pictures and paper. So is lack of duplication. At one point, the files containing 50 and 75-year histories were misplaced, much to the consternation of a former employee who had invested sweat equity putting them together.

Guidance for doing a better job can be found at the National Archives: 

  • Use a 3-2-1 back-up plan. Make three copies, use two different forms of media, and store one copy off site.
  • Metadata to record includes Who, What, Where, and When.
  • Use picture mounting tabs and plastics that are stable –  polyester, polypropylene or polyethylene.
  • When a very important paper needs restored, find a Conservator.

As landmark celebrations end or you finish family reunions, time improving maintenance of special papers, pictures, and history would be a nice gesture for the future.

Joyce

 

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Is There Treasure Hiding Near You?

Geocaching is an electronic treasure hunt. It is a great low-cost activity, and can be fun year-round. It is easy to catch on to and there are caches all over – literally around the world (2 million to be exact).

To get started set up a free account at geocaching.com, then download the free app to your smartphone or purchase a GPS unit. Search near you for a cache, use your app or plug the coordinates into the GPS to start hunting.

Many geocaches are found in safe places like rest areas, parks and cemeteries or near landmarks. What you will find may be very small like a pill fob OR it may be larger, like an ammo box. Some will be harder to find than others but they are never buried. Inside will be a log to sign. There may also be “swag” like geodes, stickers, patches, pins, marbles, key chains, lanyards, and geocoins.

Tips:

  • Dress appropriately.
  • Let someone know where you are going or enjoy navigating with someone else – perhaps a child or grandchild.
  • The caches are secret so don’t let passersby know what you are doing.
  • If you take something, you should leave something of equal or greater value.
  • Always return the cache to its hiding place.
  • Bring your own pen to sign the log, then enter your find at https://www.geocaching.com.

Discover what is hiding near you today! How many will you find?

Written by Sandra McKinnon, Human Sciences Extension and Outreach family finance specialist and geocacher since 2009

(Photo by Christopher Gannon/Iowa State University)

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Credit Reports: Changes in 2018

A big thank you is in order from Iowa consumers to the Legislature, Governor Kim Reynolds, and Attorney General Tom Miller for passage and enactment of Senate File 2177  . Beginning on July 1st you will no longer be charged fees to use a “freeze” on your credit report.

The Equifax Breach put many individuals in a pool of consumers whose personal information was compromised. Faced with potential misuse, one step to limit damage was freezing your credit report at the three credit reporting bureaus, but the cost was $30.  In passing the new law, Iowa government officials reasoned that consumers should not be forced to bear the cost when a reporting bureau is negligent.

The credit bureaus are also making other changes: what data they collect; how it is reported; and credit score calculations.

  • All public record information, except for bankruptcy, is being removed from files.
  • Reports on medically-related debts are held for six months before posting to allow for insurance closures.
  • Medical debt is given less weight compared to other consumer spending when calculating your credit score.
  • Rent data can now be included in your credit report; only positive reports will be accepted.
  • A series of auto or mortgage inquiries are treated as one event.
  • Paid collection accounts will be removed from reports.
  • Keeping a card open that is paid in full will not help your credit score if it isn’t used. A card that is not used in a 3-6 month time period is dropped from credit score calculations.

Checking your credit report for accuracy is a good habit to maintain. If you haven’t checked yours in the past 12 months, now would be a good day to start!

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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