Smart Ways to Handle a Tax Refund
- Created on Wednesday, 15 April 2015 14:38
- Written by Roberta Pescow
With federal tax refunds averaging over $3,000, chances are yours might be a nice chunk of change too. If so, it presents a good opportunity to brighten your financial picture.
Prepare for retirement
Retirement may be years off, but the sooner you start saving, the better your chances of spending that time in style rather than struggle. Traditional, Roth or self-employed retirement accounts can help you put that refund to work and may deliver tax benefits too.
Close insurance gaps
With a refund on the way, examine your insurance situation and determine if you have adequate coverage. If you need more, you may be eligible for preferred member pricing in areas such as life, home and auto coverage at major insurers.
Reduce and manage debt
High-interest credit card debt can really cramp your style. Your refund may be enough to free you from that burden or at least take a big bite out of that bill.
If debt is out of control and you’ve fallen behind on mortgage or other loan payments, your refund can be a lifesaver. Getting caught up on bills can improve your credit score and save you money the next time you need to borrow.
Refinancing a high-rate mortgage could be easier to pull off if you put a refund toward the closing and other costs. With interest rates still near historic lows, you may be able to lock in a significantly lower monthly payment.
Build your savings
Having strong cash reserves helps pay for emergencies as well as education, travel and entertainment. So using a refund to bolster savings is a wise move. Since a rainy day fund needs to be immediately accessible, savings or money market accounts are good options. To prepare for college costs, consider Coverdell or 529 savings plans. For other long-term goals, take advantage of federally insured certificates that offer higher rates than traditional savings accounts, in exchange for limiting your access to the funds.
Lend a helping hand
While you’re celebrating coming out ahead, don’t forget those who aren’t faring so well. A charitable donation may reduce your taxes for this year too. A tax refund used thoughtfully can be so much more than a windfall. It has the power to improve your financial health and the situation of others in need. Your smart choices can result in immediate benefits and positive effects for years to come.
Roberta Pescow, NerdWallet
Cut out paper to help reduce identity theft risks
- Created on Friday, 10 April 2015 13:33
- Written by Joe Mecca
Major data breaches and the rise of online and electronic fraud get plenty of media attention, but one frequently overlooked vulnerability in the fight against identity theft lies in paper documents themselves.
Bills, statements, paper checks and other documents often contain private personal and account information that can be used for fraudulent purposes. While most people are careful to protect the information they keep online, many let their guard down when it comes to information that lives on paper.
“People worry about the risk of using online channels, but they ignore the fact that paper documents are still a risk and are, at times, completely unsecured,” notes Coastal’s Vice President of Risk Management, Carlton Howard. “In many cases, it’s as easy as stealing someone’s mail.”
One way to reduce this risk is by switching to electronic statements, e-Bills and online bill payments. On top of being far more secure than traditional paper methods, electronic solutions are significantly faster and typically much easier to track in the event of a problem. Most financial institutions and major billers offer electronic alternatives to paper, and between online bill pay, mobile deposit and peer-to-peer payments, there’s little reason to have to mail a paper check.
“You might be surprised at how many companies have an electronic option,” says Joe Mecca, Coastal’s spokesman. “Utilities, cable, phone bills… those are fairly obvious. Bills you might not consider, like pest control and veterinarians, many of those can be received electronically, too.”
For the paper documents you do retain, be sure to keep anything with sensitive information in a secure location. Documents you no longer need should be destroyed. A good household paper shredder will suffice, but if you find yourself with boxes of documents, a free shred event like the Better Business Bureau’s Secure Your ID Day are a great way to shred larger quantities.
Besides, isn’t it nice to cut down on paper clutter?
For additional tips on preventing identity theft, check out How to Keep Your Personal Information Secure from the Federal Trade Commission.
"When it comes to detecting fraud on their accounts, members who are online discover fraudulent activity 7 times more quickly than a member who does not do business online."
Online users can check out their information at any time - non online users must wait for the mail to arrive - THEN that mail has to also be opened and reviewed...which is not always done promptly."
Secure Your ID Day: April 18th
- Created on Tuesday, 31 March 2015 08:05
- Written by Joe Mecca
BBB Secure Your ID Day: Free Document Shredding and Electronics Recycling
Coastal is once again hosting the ever-popular Better Business Bureau of Eastern NC’s semi-annual “Secure Your ID” Day document shredding and electronics recycling event on Saturday, April 18, 2015 from 8:00 a.m. to 12:30 p.m.
The event will be held at Coastal's headquarters located at 1000 St. Albans Drive in Raleigh.
PROSHRED® Security and A Shred Ahead® will provide free, on-site document shredding. Participants may bring up to three boxes or bags of documents that have been removed from binders. GEEP® will be providing electronic recycling for computers, tablets, cell phones, as well as electrical devices such as TVs, microwaves and vacuums.
Get Organized for Tax Season
- Created on Friday, 27 March 2015 07:03
- Written by Tony Armstrong, NerdWallet
A little planning can go a long way in ensuring that you’ll receive the maximum tax refund this year. Here’s a look at the forms and information you’ll need to have on hand, as well as other tips to help you get organized for tax season.
Compile the necessary documents
Whether you’re preparing your taxes on your own or working with an accountant, there are a number of items you’ll need to compile before you get started. First, be sure to have either your Social Security or tax identification number available. These can typically be found on your all-important W-2 earnings statement, which your employer should have sent you by now.
You’ll also need to collect the personal information, including Social Security numbers and all sources of income, of any dependents you claim on your return. Other sources of income will also need to be accounted for, such as any money earned from rental properties, pensions and investments.
This list isn’t exhaustive, and you might need additional forms and pieces of information depending on your individual tax situation. Check your state’s website for more insight on what you need to have at the ready before filing your returns and to learn whether you qualify for deductions like mortgage interest paid.
Take advantage of tax deductions
So you don’t leave money on the table, take advantage of any deductions and credits you qualify for. Some credits aren’t as well known, so investigate to figure out whether certain expenses can be written off this tax season.
Among the dozens of potential deductions out there: Charitable contributions to qualified businesses are tax deductible. If you work from home, you might qualify for a home office deduction. Additionally, you could receive a credit of up to 35% of the cost of renewable energy equipment that you installed in your home or purchased during 2014.
Although it might not be much fun, getting organized will make tackling your taxes much easier. With the April 15 deadline fast approaching, now’s the time to start gathering the necessary forms and figuring out which of your 2014 expenses are deductible.
Tony Armstrong, NerdWallet