From ProPublica: Chime, a “neobank” serving millions, is racking up complaints from users who can’t access their cash. The company says it’s cracking down on an “extraordinary surge” in fraudulent deposits.
File Taxes On Time This Year
It’s tax filing time. April 15th is the due date. Taxes are due one month from now. My friend Rachel wrote this piece for Real Simple. She talked to Raphael Tulino from the IRS and he gave the following advice.
“Filing and paying as soon as possible will keep interest and penalties to a minimum.”
Tulino emphasizes why it’s advantageous to file your taxes even if you don’t have the full amount available to pay when you file. “If you have a requirement to file and you have a balance due, and you don’t file that return and leave that balance due, that penalty is much greater than filing a tax return and not full paying,” says Tulino. He says being proactive “is always a good thing” when it comes to your taxes.
File Your Taxes Now
Clark.com says you should file taxes now. https://clark.com/personal-finance-credit/taxes/income-tax-file-early/
If you e-file this week and opt to get your refund via direct deposit, the IRS says you’ll likely get your refund within 21 days.
Note that refunds claiming the Earned Income Tax Credit or the Additional Child Tax Credit are automatically delayed, as the IRS is required to hold your money.
“The IRS expects the first EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return,” IRS.gov notes online.
1099s Need To Be Filed by January 31st
Happy New Year! Did you procure the services of independent contractors/freelancers last year? Did you send payments to any of the independent contractors totaling $600 or more?
If so, then you are required to file these forms to the IRS and ensure that the contractors received copies to those people by the end of the month. [Note: This is also the deadline for W-2s, but many businesses outsource their payroll services, so their payroll vendor will take of that for them.]
Back in the day, you had to get the paper forms from Staples or order them online. Now you can e-file and do everything online.
To e-file the 1099s, you need four things:
- Full name of independent contractors (legal name that they use for tax purposes)
- The current mailing address of the contractor
- The total amount paid to the independent contractor. If less than $600, there’s no need to file.
- Tax identification number or social security number of the independent contractor.
If you are using a bookkeeping services, you can run a report to get a list of the total amount paid to vendors. Also, going forward it is best practice to obtain W-9s from independent contractors when they initially start work. Then you can be proactive and have a good sense of how many 1099s you will have to prepare next year.
BTW, 1099s don’t have to be sent out to independent contractors who live in another country and do not file taxes in the United States. Please consult a CPA or the IRS.gov if you have more questions.
If you are a freelancer yourself and are looking for these forms in your mailbox, make sure your clients have your current mailing address.
Cash App Seems To More Susceptible to Fraud
A Cash App spokesperson sent us this statement: “Preventing fraud is critically important to Cash App. We continue to invest in and bolster fraud-fighting resources by both increasing staffing and adopting new technology. We are constantly improving systems and controls to help prevent, detect, and report bad activity on the platform.”
The Budgetnista
Tiffany Aliche, The Budgetnista, is on the cover of the February issue of Money magazine.
Walmart is Getting into Fintech
Walmart said Monday that it is creating a fintech start-up with Ribbit Capital, one of the investment firms behind Robinhood, to create unique and affordable financial products for Walmart employees and customers.
The big-box retailer did not share the name of the new company or say when its digital financial services will be available.
The Biggest Money Mistakes to Avoid in 2021 – Clark Howard
Don’t pay too much for your mobile phone service and review your monthly streaming subscriptions. If you’ve ever made a financial faux pas and learned from it, that lapse may be well worth it. But be sure not to make the same mistake twice!
— Read on clark.com/personal-finance-credit/money-mistakes-to-avoid/
Tax Wrinkles for Work-at-Home Employees During COVID-19
Taxes are going to be weird and I don’t know how filing taxes will be because so many people main source of income will be unemployment. For those who have jobs they will not be able to itemize expenses. https://www.kiplinger.com/taxes/601689/tax-wrinkles-for-work-at-home-employees-during-covid-19
In short, your eligibility to claim these expenses as deductions largely comes down to one question: Are you an employee or an independent contractor? Sadly, for employees now forced to work from home, the Tax Cuts and Jobs Act eliminated deductible expenses tied to maintaining a home office. On the other hand, independent contractors are in luck.
Debt Nirvana
I don’t know if Rod and Karen of the podcast The Black Guy Who Tips coined the term “debt nirvana” but I love it. Debt nirvana is when you reach a point where you are in so much debt that it doesn’t matter. So many people are experiencing debt stress right now for the first time. However, people who were already cash strapped before the pandemic may have reach to the point of debt nirvana. Debt nirvana is when you can’t do much to chip away at the debt you have. I recently started rehabilitation of my student loans and if feels good. However, the amount is so much that I don’t know when I will pay it off.
Bottom Line: For student loans, check out Nerdwallet for a list of student loan refinance companies. For credit card debt, consider the rolling over to a lower interest credit card or negotiate a settlement. BTW, listen to The Black Guy Who Tips on Spotify.
FinTech And Personal Finance 