DIY Financial Planning

Here's a great article from DailyWorth.com on financial planning. It tackles issues I've talked briefly about like taxes, creating a will, investing, and saving.

Credit for the article goes to Jocelyn Black Hodes.

DIY Financial Planning

Tax Season Tips for Beginners

Tax time is around the corner, and it's one of the least favorite times of an average person's year. Whether you're filing as an individual, married, or as a business, the task seems daunting. And unless you're a tax professional, and you don't want to use tax software like TurboTax, then it is quite a pain. But fear not! Here are a few tips that will help the average person when it comes time to sit down and crunch the numbers.

Know the Difference Between Taxable and Non-Taxable Income

Taxable income includes the following:

• Dividends on investments
• Lottery winnings, royalties, gambling gains
• Interest from bank accounts, and all bonds except municipal bonds
• Unemployment compensation
• Your salary, sick pay, or severance pay from your employer
• Capital gains on investments
• Withdrawals from an IRA
• Bonuses and tips

Non-taxable income includes:

• Contributions to an IRA
• Gifts
• Return of invested capital
• 401(k) rollover
• Child support receipts
• Money received as payment for a loan

Make use of adjustments

Adjustments are used to lower your total taxable income. Some examples include

• Expenses you incur moving for a new job at least 50 miles away
• Classroom expenses for teachers
• Qualified performing artists
• Traditional IRA deductions
• Student loan interest deduction
• Several others. Here's a link to the IRS page on adjustments.

Be Smart About Your Deductions

There are many deductions, and a little research or help from a tax professional can save you a lot of money. If you have a relatively simple financial situation, as in you don't run a business or own property, then you'll be better off taking the standard deduction. The government allows all citizens to reduce their taxable income by at least the standard deduction, even if they don't participate in activities deemed deductible. For a list of deductions, go here.

Be Sure You Have to File at All

There are several factors that go in to filing a return, and not every single person that received income has to file. Here's an informative chart from Forbes:

 

Basically, it reads right to left, and if you hit those criteria, you have to file a return.

I hope these tips help in your tax filings!

5 Ways to Avoid Online Scams

We all know the internet can be a dangerous place, what with all the people on there and everything. For every Nigerian Prince asking you to do him a favor, there has to be at least half of a decent person out there, right? I’d like to think so, but people keep coming up with creative ways to coax you into parting with your money. I've compiled a list of questions to ask yourself if you ever come across a website or email that just sounds too good to resist.

1. Is it Too Good to be True?

So you've clicked on an ad that promises to get you ripped in four weeks. Pretty enticing, so long as you don’t know anything about the human body or, you know, physics. That little ad you clicked on then takes you to a different site. And hey! Look at that, they’re trying to sell you something. Most of the time it’s pretty generic stuff: a new supplement that will magically give you muscles with little to no effort, a new way to learn a language in just a week, or how to erase 20 years of your face. If these products worked, then we’d all be ripped twenty-somethings, speaking Cantonese in France, and sharing stock market secrets that have made literally everyone rich. The only people making money, not so ironically, are the ones behind the ad.

2. Has Anyone Heard of This “Miracle” Product?

There are several substances that claim to be breakthroughs in their respective fields. Real things, like aerogel or carbon nanotubes. Those things get media coverage, and a hefty amount of Google search results. The shady-looking product claiming to boost testosterone or give you your hair back with one application, or both, probably isn't real or its benefits have been hilariously taken out of context. Always be sure to fact-check. There are usually plenty of reviews online by people who have already fallen for these traps. Learn from their mistakes.

3. But How Could It be Bad If Its Free?

The first thing that comes to mind here is the website freecreditreport.com. Their marketing campaign consisted of an unknown band singing catchy tunes about the dangers of not knowing your credit score every day. When you sign up for the site, you’re not signing up for a one-time viewing of your credit report. You’re actually signing up for a monthly service that allows you to view your credit score whenever you feel like it. The company happily bills you on a monthly basis for something you didn't even know you had, and would be perfectly content if you just forgot about it. Oh, and it’s ridiculously hard to cancel the service you started once you realize its draining your bank account. The funny thing here is, you actually can check your credit score for free, once a year, at annualcreditreport.com. That site is legitimate, and the concept of knowing your up-to-the-minute credit score is ridiculous, because it actually doesn't change that much.

“Free” things are normally notated with asterisks, or “*”, and are contingent on the completion of some kind of offer. So no, unfortunately there are no feel-good companies out there that just give away iPads all day.

4. Is the source credible?

There are several ads claiming that their product or service has been featured on CBS, ABC, Telemundo, or any national media outlet they feel like slapping on there. If this makes you wonder, “Wow, I don’t remember ever hearing about this!”, it’s because you haven’t. Ever. People will fake credentials like this all the time, because it’s the internet and no one can stop them. They’re anonymous snake-oil salesmen, only these days they’re claiming even the snakes are using it.

5. Is this email/website trustworthy?

There are so many fake email and fake website scams it’s hard to keep up. The best thing is you can avoid their many versions using the same set of tactics. If it’s from someone you don’t know, from a strange sounding web address, it might be a good idea to ignore it. If the website you’re on looks slightly different, or the text in the address bar just isn't right, then don’t enter your info. Is there a green “lock” icon, or other similar symbol synonymous with internet safety? No? Don’t enter your credit card number or any private information. Simple! Here’s a more expansive list of scams that you can avoid in the future. Top Ten Online Scams