Monthly Tips

January 2013

Tax Time is Here

It’s time to dig out your records so you can accurately file your personal income tax return. Don’t get overwhelmed; help is available. The IRS website, www.irs.gov, has a ton of information to answer your questions. If you have difficulty understanding any of their explanations, IRS representatives are just a phone call away. Call 1-800-829-1040 Monday through Friday from 7 a.m. to 7 p.m.

If you earn under $50,000 you can get free in-person tax filing help through an IRS-sponsored VITA or TCE site. Both VITA, Voluntary Income Tax Assistance, and TCE, the Tax Counseling for the Elderly, sites are staffed by community volunteers who receive IRS-approved training to assist individuals with their tax returns. The sites are also set up to provide fast electronic tax filing. To find a site near you, call 1-800-906-9887.

To view a short IRS informational video on free tax preparation assistance go to: http://www.youtube.com/watch?v=26ESO1dqip0

July 2012

Money Wiring Scams

Scammers come up with all kinds of convincing stories to get you to wire them money through companies like Western Union and MoneyGram.

Don’t Become a Victim:

þ Wiring money is like sending cash – once you send it, you can’t get it back. Crooks insist that you wire them money because it’s nearly impossible to reverse the transfer or trace the money.

þ  Never wire money to strangers, including:

• Sellers who insist on wire transfers for payment
• Sweethearts who ask for money favors
• Landlords advertising apartments or vacation rentals online
• Someone who is offering you a job
• Someone who claims to be a relative or friend in trouble in a foreign country

þ Never agree to deposit a check and then wire money back

• The check will bounce, even if you withdrew the money. By law, banks must make the funds from deposited checks available within a day or two, but it can take weeks to uncover a fake check.
• When the check bounces, you’ll owe your bank the money you withdrew because you are responsible for the checks you deposit.
• If you don’t pay the bank back, they can send you to collections and close your bank account.

For more information, visit the Federal Trade Commission’s website at www.ftc.gov and search for “money wiring scams.”

June 2012

Are Prepaid Cards Safe to Use?

While a prepaid card looks like a conventional credit or debit card, it does not come with the same required consumer protections. The Consumer Financial Protection Bureau will be looking into ways to safeguard consumers, but for now consumers are on their own. Prepaid cards are popular because they can be obtained without having to qualify for credit or open a bank account. Unfortunately, the use of a prepaid card can come with hidden fees and confusing terms. It you are interested in getting a prepaid card, it’s important to think about how you are going to use the card. Then shop for the card that will meet your needs most economically. Consumer Action, a nonprofit consumer advocacy organization, has conducted a survey of prepared cards. The survey, which looks at fees, fraud protection, error resolution, load balances, restrictions and more, can be found at: http://www.consumer-action.org/downloads/press/2012_Prepaid_Card_Survey.pdf.

For additional information about prepaid cards, visit the FDIC’s website at http://www.fdic.gov.

May 2012

Are You Using Too Much Credit?

Everyone’s financial situation is different; but if many of these statements apply to you, you are using too much credit.

• You are not sure how much you owe.
• You are usually late in paying your bills.
• You are working overtime just to make ends meet.
• You are paying bills with money you need for necessities, such as food, clothing or shelter.
• You can only make the minimum payments on your debts.
• You have reached the limits on your charge accounts.
• You are not saving any money and are dipping into savings to pay the bills.
• You are charging groceries and other basic needs because you are short of cash.
• You are putting some bills off until next month.
• You are always “short of money” before payday.
• You put off medical or dental visits because you cannot afford them now.
• You have been threatened with repossession or other legal action.

Most people can easily handle short-term debts amounting to ten percent of their take home pay. Fifteen percent is still manageable but not quite so comfortable. But if 20% or more of your take home pay goes for credit payments, you are in a dangerous zone and need to take some measures to control the use of credit.

Calculate how much of your income is going towards monthly credit payments by using the Evaluating Your Credit Load handout. If you are in the danger zone, re-examine your expenses and make the necessary adjustments.

April 2012

Your Credit Score

Your credit score is derived by taking the information in your credit report (your bill-paying history, number and type of accounts you have, collection actions, outstanding debt, age of your accounts, etc.) and applying a statistical program to it, most commonly from FICO (the Fair Isaac Corporation).

Your credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time.

Your credit score will be used by creditors to determine whether to give you credit and to decide the terms you are offered for a loan, such as the interest rate you will be charged.

Your credit score may also determine if you qualify for, and what you will pay for, auto and homeowners insurance.

To learn more about credit scoring visit http://www.myfico.com/crediteducation

March 2012

Stop Unwanted Telemarketers from Calling

If you are tired of receiving calls from telemarketers, you can have your home and/or cell phone number added to the FTC’s Do Not Call Registry. You can add your number to the Registry, for free, either by calling 888-382-1222 from the phone you wish to register, or going online to www.donotcall.gov.  

You should stop receiving calls once your number has been on the registry for 31 days. Telephone numbers on the registry will only be removed when they are disconnected and reassigned, or when a consumer chooses to remove a number from the registry. 

WHAT YOU SHOULD KNOW ABOUT
THE NATIONAL DO NOT CALL REGISTRY

Placing your number on the National Do Not Call Registry will stop most telemarketing calls, but not all. Because of limitations in the jurisdiction of the FTC and FCC, calls from or on behalf of political organizations, charities, and telephone surveyors would still be permitted, as would calls from companies with which you have an existing business relationship, or those to whom you’ve provided express agreement in writing to receive their calls. However, if you ask a company with which you have an existing business relationship to place your number on its own do-not-call list, it must honor your request. For more information about the registry go to http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt107.shtm. 

February 2012

EITC for Tax Year 2011

The Earned Income Tax Credit (EITC) is a refundable credit for individuals and families with low-to-moderate incomes. Many of the people Cooperative Extension staff work with are eligible for this credit. Unfortunately, 20 – 25% of eligible individuals do not take advantage of this opportunity to keep more of what they earn. Workers who qualify for the EITC and claim it on their federal tax return can receive a refund check from the IRS even if their earnings were too small to owe income tax. Here is the eligibility information for the 2011 Tax Year:

Applying for the EITC is easy. Taxpayers just need to file a federal tax return and Schedule EIC. If confused about what to do, taxpayers can visit a VITA site for free assistance in preparing the tax forms. To find a local VITA site call 1-800-906-9887 or visit the IRS website at www.irs.gov and search for “site list”.

EITC Resources:

PowerPoint presentation: Promote the Earned Income Credit and Child Tax Credit EITC Tax Year 2011

Downloadable tax credit outreach materials:  http://eitcoutreach.org/

Please help spread the word about EITC.

January 2012

Annual Credit Report

Now is a good time to order a free copy of your credit report from one of the three major credit reporting agencies. Go to www.annualcreditreport.com to order your copy. You will need to provide your name, address, date of birth, and Social Security number. It is fast and easy. You can download and print the report to your home computer. Be sure you check the report for errors or signs of identity theft. Report any issues to the credit reporting agency that provided the report.