Category: Finance

If you can’t afford to pay your IRS taxes, you should reach out to your accountant for help. A certified public accountant (CPA) or another tax pro can help you explore the different options and negotiate with the IRS for a payment plan. While we can’t give you tax advice, we can help if you’re wondering what to expect if you can’t afford to pay. Here’s what you need to know. 

1. You should still file your return. 

Even if you think that you can’t afford to pay your taxes, you should still file your return. For personal income tax returns, the fees for not filing are much higher than the fees for paying late. This also applies to most business tax returns.

By filing, you let the tax agency know that you’re aware of the tax obligations. Then, you can contact them about making arrangements for the bill. If you don’t file, you will incur higher penalties and potentially even face tax evasion penalties. 

2. You can often set up a payment plan. 

The IRS and most state tax agencies allow you to set up payment plans on your tax debts. If you owe less than $10,000, you can set up a payment plan with the IRS online. You don’t have to provide much information to get accepted.

If you owe more, you may need to contact the IRS directly or provide more financial details with your application, but the IRS accepts payment plans on bills that are tens of thousands or even a hundred thousand dollars. With most payment plans, you can take several years to pay off the balance. 

3. You may be able to get out of tax debt for less than you owe.

If you really cannot afford to pay your tax bill, you may be able to settle it. Through the offer-in-compromise program, the IRS lets people settle tax debts for less than they owe. To qualify, you generally have to pay the most you possibly can.

You may need to sell assets or take loans against them. If the IRS agrees with your offer, you usually have to pay it in a lump sum, but in some cases, you can take a few months to pay the offer. 

4. You can typically stop IRS collection actions if you can’t afford to pay. 

The IRS can be harsh, and the agency has a lot of powers to collect unpaid taxes. However, the IRS is also reasonable. You can apply for hardship if you truly can’t afford to pay the tax bill.

If you qualify, the IRS will stop collection actions against you. Then, the agency will review the situation every few years. If you can afford to pay in the future, you may have to, but if the statute of limitations passes on the debt, it may just basically disappear. 

5. You should work with a tax professional. 

Dealing with the IRS and state tax agencies can be challenging. The rules are complicated. There are a lot of deadlines, and you may have to provide detailed financial information.

An accountant can help you decide which programs are best for your situation. They can help you decipher the paperwork and set up the best arrangements for your situation. An accountant can also ensure that you don’t incur more penalties or fall more behind than you need to. 

With inflation on the rise and wages stagnant in many parts of the country, families everywhere are searching for ways to save money. While generally buying less can work well, certain products can also save you money.

Making an investment now can save you money in the long run. Let’s talk about five products that will help save you money over time.

1. Hydro Flask Water Bottles

A reusable water bottle keeps plastic water bottles out of the landfill and saves you from buying water while you are out and about. Having the right water bottle to fit your needs can save you time and money—and it is also better for the planet.

Hydro Flask water bottles are made from 18/8 stainless steel, which is not only BPA and phthalates free, but it also keeps drinks cold for 24 hours and keeps hot beverages warm for up to 12 hours. These bottles are practically indestructible and come with a lifetime guarantee.

2. Wool Dryer Balls

Dryer balls are an eco-friendly replacement to purchasing liquid fabric softener and using dryer sheets. They also help dry your clothes up to 40% faster compared to not using them.

SimplrSpaces Wool Dryer Balls are made completely from organic wool. They are safe around babies, pets, and those who have sensitive skin. They will last up to four years or 1000 loads. While they might be a little bit of an investment upfront, they are totally worth it in the long run.

3. Smart Thermostat

The energy you use every day can end up costing you a ton of money. However, having a way to automatically turn down your furnace or air conditioner while you are away from the house can be a great way to save money.

The Google Nest Learning Thermostat is programable, but it also learns from the programming to create a plan that works for your needs. You can control it from your phone, even while you are out of the house. It also supports saving money by showing temperature settings that are the most energy-saving options.

4. Food Vacuum Sealer

The NutriChef PKVS Sealer automatically seals food so that it stays fresh longer. Once sealed, they are freezer safe and can stay fresh up to five times longer than using a zipper bag or container. You can save money on food and decrease food waste by simply using what you have.

5. Multi-Cooker

Cooking from home can save lots of money over time. A multi-cooker can help you make low-effort, delicious meals to feed the whole family. The Magic Chef MCPSMCSC10S7 6 Qt All-in-One Multi-Cooker can pressure cook, slow cook, cook rice, steam, sear, and even make yogurt. With all of these cooking options, your family will want to stay home to eat!

What three digits define your finances? Your credit score. And if you want to take the road to financial independence, you better get a handle on this number now. It’s your key to getting the most value for your money.

Red Carpet Treatment or Service Exit?

A credit score close to the 850 max gets you the red carpet treatment when it comes to credit, loans, rent, or any kind of payment. You get the lowest interest rate, the easiest payment schedule, and the fewest restrictions.

One from 579 to the 300 bottom leads you to the service exit. Lenders won’t even want to talk to you let alone extend you any kind of credit.

Getting your score as high as possible should be a top financial goal.

What’s Your Number?

Credit scores vary slightly by provider. You can find yours for free from Credit Karma. You’ll need to create a usercode and password, but you won’t need a credit card. This service shows the credit scores from two of the three major credit bureaus, Equifax and TransUnion.

If you don’t want to log into an unknown website, you may also be able to get your credit score from your credit card company.

Checking Your Report

Your credit report is just as important as your score because creditors use this document to judge your financial activities and credit situation.

• It contains personal information, such as all your names, social security number, phone number, birthdate, and current and former addresses.
• It details all your credit accounts including mortgage, student loan, credit cards, and payment plans, what’s owed on each, your payment history, and any collection efforts.
• It stores public records, such as bankruptcies, foreclosures, liens, and civil judgments.

You can get your credit report from Credit Karma. However, you should check the ones offered by the two previously mentioned credit bureaus and the third, Experian. By law, you can receive one report from each for free once a year. If you check one company’s report every four months, you get a constant read of how your finances are doing.

Study the credit report for any mistakes, which can affect your credit score. Tell the credit bureau in writing what’s wrong. They must report back to you how they are investigating your dispute, which may include updating or removing the invalid info.

Raising the Score

The most effective way to raise your credit score is to pay your bills on time or before they’re due. For maximum convenience, set up automatic payments, which guarantees you’ll never be late.

Pay off your existing balances. The less debt you have, then the more likely that merchants will extend credit because you’ll have the money to pay. If you have trouble juggling payments for several creditors, consolidate them into one credit card, which may offer a period of free interest.

Limit how often you apply for credit at once. When you do, providers do a hard inquiry on you finances, which can ding your credit score. If you have to apply for additional credit, make sure you have a varied credit mix that includes installment loans, a mortgage account, and revolving debt, such as in a credit card.

Tired of being in debt? Dreaming of the day when you achieve financial freedom for good? If so, you’re not alone. In fact, according to a 2020 Experian study, the average American carries more than $92,000 of debt. The good news? There are steps you can start taking today to work towards long-term financial independence.

Know Where You Stand

It all begins with knowing how much debt you have accumulated. This might sound obvious, actually sitting down and calculating your total debt is an important first step. After all, most people have debt that is scattered across many different sources, ranging from credit cards to student loans and mortgages. By getting the “big picture” of how much debt you actually have, you’ll be able to create a better game plan to pay it off.

Check Your Credit Score

Now is also a good time to check your credit score. First, doing so will help you know where you stand when it comes to your credit, which can be affected by things like your debt-to-income ratio and whether you make your payments on time. If you have good credit, you may even qualify for a debt consolidation loan, which can help you pay down your debts sooner while potentially saving you on interest.

Checking your credit score can also alert you to potential errors on your report that can be disputed and resolved. 

Explore Debt Repayment Methods

Now that you have a better idea of how much debt you have, it’s time to explore some different strategies for paying it down. The two main strategies that people use are the debt avalanche and the debt snowball.

The debt avalanche focuses on paying off your highest interest debt first, allowing you to cut down on total interest paid out of your own pocket. With the debt snowball method, on the other hand, you pay off your smallest debt amounts first. With each account that is paid off, you free up more money to pay ahead on your other debts until everything is paid off.

Create (And Stick To) a Budget

After you’ve decided which debt repayment strategy makes most sense for you, it’s time to create a budget. This involves tracking how much money you have coming in versus how much you spend each month. When creating a budget, be sure to categorize your spending into essentials (such as rent/mortgage, utilities, and groceries) and non-essentials (dining out, entertainment, etc.).

From there, consider cutting back on non-essentials so you can free up more money to pay off your debt. Once you have a budget that works for your debt repayment strategy, stick with it. 

Consider New Income Sources

If you want to pay off your debt even faster, explore “side gigs” and other income sources. From driving for a ride share service to selling off clothing you no longer wear, there are plenty of potential sources of extra cash these days.

Get Started on the Path to Financial Freedom Today

With a little bit of planning and persistence, you can achieve financial freedom by paying off your debt sooner. Follow these practical tips and you’ll be well on your way!

College is expensive. Pretty much everything about college costs a lot of money, so instead of getting nickeled and dimed, you’re probably getting ten’d and twenty’d. A lot of young adults are overwhelmed financially when they depart for college, but that doesn’t have to be you. If you’re concerned about student debt, paying for groceries or credit cards, there are some hacks that you should know about. Here are five tips to help you financially for the next two, four or however many years you’ll be spending in school.

5. Small Balances Come First

When you’re a student, the likelihood of you having to take out a massive six figure loan over the course of four years almost seems inevitable these days. It won’t all be in one lump sum, though, so it’s important to look at all of your loans (which also includes credit cards). The smaller a balance is, the quicker you’ll want to pay it off before you start looking at the big ones. Interest rates vary so consolidation isn’t always the answer, and hitting one loan at a time to a $0 balance will work wonders.

4. Pay More Than Minimum

A lot of us want to pay the bare minimum that’s due while we work toward a future where we’re getting paid enough to just zero out a student loan or credit card balance. Instead, you should be paying as much as you can now to make things easier for you in the future. If you’re able to pay toward your principal balance right from the get go, you won’t have to worry about high interest payments. Start early and start often. If you have extra cash that you’re not using, put it toward your balances.

3. Pick Your Books Wisely

Let’s just get it out there, college textbooks for the most part are a scam. Every semester a new copy of what’s practically the same book comes out and costs students an arm and a leg. Instead, do your best with an older secondhand copy that you can get from a local bookstore and save yourself hundreds of dollars in the process. The newest version might be required, but the internet is here to help you get around that peskiness.

2. Don’t Go With Name Brands

Of course you have to eat when you’re a student. It’s not like your appetite suddenly vanishes. With that said, be mindful when you’re at the grocery store. You don’t need the name brand of everything, and don’t be too proud to shop at a dollar store for snacks and other small items like utensils. Grocery stores like Aldi are a lifesaver when you’re a college student (or anyone with a budget, really).

1. Use Those Student Discounts

When you think of discounts, you probably tend to think about those that are in the military or senior citizens. College students, however, have a slew of discounts that they can pick from. Always browse online to see if there’s a student discount available for you as even the biggest companies provide them. Amazon, State Farm, Best Buy, you name it. Even if you’re a sports fan you can get discounts as the NFL television package is much cheaper and doesn’t require a satellite television subscription.

Want to see places but not spend a fortune? While travel always includes some expenses, you can keep costs low with these tips on how to save money while traveling. Keep more in your wallet, so you can travel farther and do more.

1. Schedule Trips for the Offseason

The offseason is when people don’t go to an area as much, and the lower demand results in lower prices for everything. Secure lower rates on lodging, find deals at restaurants, and pay less for activities. This one tip could save you more than any other.

Sometimes traveling during the offseason means a lot is closed while you’re at a destination. If you want to ensure things are open, travel during the shoulder season. It’s between the peak season and offseason, when things are still open but tend to cost a bit less. You’ll still save, and you’ll be able to do almost everything.

2. Be Flexible With Your Dates

Changing your travel schedule by just a few days can sometimes lead to vastly reduced costs. Hotel rooms and flights are usually cheaper during weekdays, and you might also find lower prices at attractions.

The specific days that are cheapest can vary. You could save on major expenses if you have a flexible schedule that makes it possible to travel on these days, though.

As an added bonus, most attractions will be less crowded on the low-demand days that are cheaper.

3. Open a Travel-Friendly Bank Account

You’ll need to access money when traveling, but make sure you don’t pay to use your own money. Depending on where you go, your bank may charge ATM withdrawal fees, foreign transaction fees, and above-market exchange rates.

Find a bank account that doesn’t have foreign transaction fees and reimburses ATM withdrawals, and get a credit card that also has minimal or no foreign transaction fees. Cards with these features will likely also have competitive exchange rates.

4. Find Lodging With a Kitchen

Eating at restaurants is part of the travel experience, but having every meal out quickly becomes expensive.

Find lodging that has a kitchen or kitchenette, and you won’t have to eat out every meal. You can cook up a meal each day, before you leave or when you come back to the room. You also could heat up leftovers for a meal or snack.

This savings is especially significant if you have a family to feed, although it still makes a difference even when traveling alone.

5. Avoid Using a Vehicle

If you’re traveling to a city and are able to, leave your vehicle in the driveway at home. You’ll not only save on fuel, but you also won’t have to pay for tolls or parking. Parking in major cities can cost more than a meal.

Instead, take mass transit wherever you need to go. Most cities have a bus system, and some have a subway. You can also rent cost-efficient electric bikes or scooters in many tourist areas. All of these options are apt to be less than the cost of diving a car.