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Inspired Tax Tips for 2012

January 27th, 2012 · Taxes

Even though it only takes me a few hours to do my taxes, every year without fail I procrastinate until the last minute. But that doesn’t mean I wait until then to think about them. In fact, come January 1, I think about them just about every day, as the media is saturated with articles and advertisements reminding me I need to do them! I don’t know if I will manage to gather the gumption to tackle my 2011 taxes sooner than later this year, but the focus of this blog certainly inspires me to do so.

Whether you’re a procrastinator like me, or your taxes will be done and mailed before the end of January, you may benefit from some 2012 tax tips. Now, these aren’t just any tips. They’re tips from the IRS. And if there is one thing the government knows best, it’s the right way to file your taxes. You can read the tips in full at IRS.gov, but the ones that should take top priority are summarized and expounded on below:

1) Don’t wait until the last minute. That’s so much easier said than done for someone like me, but I know it to be true. Imagine all the hours of anxiety you’ll save by preparing your taxes now instead of spending the next two-plus months stressing about them.

2) Gather and organize all the receipts and documentation you need to claim your deductions. This definitely takes some time, though I at least have a good start. All of my receipts for the year go into one big basket, so they’re concentrated in one place. But they need to be weeded through. Then there are the documents saved only in electronic form that I need to locate, print and toss into the mix.

3) Take advantage of the free online help offered through the IRS website. In addition to general 2012 tax tips, you’ll also find answers to frequently asked questions in IRS Publication 17. For anything you don’t find there, or elsewhere on the website, you may try asking via the IRS Interactive Tax Assistant.

4) File online. The IRS offers two options for doing so. First, there is the general e-file option – one that, by the way, 79 percent of tax filers opted for last year. You may take it one step further and use the IRS’ free online software for the actual tax preparation itself, which may be used in combination with the e-filing option.

5) Quadruple-check your return. The last thing you want to do is carefully approach the preparation process only to rush through the filing process. Carefully review everything before submitting, be it snail mail or e-file. Personally, I like to prepare my taxes one day then review them with a fresh pair of eyes the next day.

I’m challenging myself to get my taxes done by the end of February. What about you?

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Big Banks Getting Off Easy In Settlement on Illegal Foreclosures?

January 26th, 2012 · Mortgages

Though proponents to the settlement characterize it as little more than a slap on the wrist, big banks could soon be required to shell out some cash to homeowners affected by deceptive lending and foreclosure practices. From checks to mortgage adjustments, nearly 2 million Americans could soon see some restitution.

Bank of America, Chase, Wells Fargo, Citi and Ally are the five big banks involved in the settlement offer. This is a settlement that stems from banks involved in the robo-signing debacle, during which time people were foreclosed on without proper documentation.

Specifics of the settlement include:

  • Sending a check of $1,800 to 750,000 affected homeowners
  • Adjusting mortgages down by an average of $20,000 for as many as 1 million homeowners who are “underwater” on their mortgages (i.e., owing more than they are worth)

Though this latest news makes mention only of these five major banks, I blogged last month of a $19 million settlement deal in the works for 17 banks. It’s unclear how this settlement offer ties into that one. As I blogged in December:

Last year’s launch of the investigation into the “robo-signing” debacle is coming to a head. If all goes according to plan, a number of the nation’s attorneys general will reach a $19 billion settlement with the banks involved in this illegal, economically-damaging practice in the years preceding the financial crisis (aka, the Great Recession).

Unfortunately, $19 billion comes nowhere close to compensating all of the nation’s homeowners who were wrongly foreclosed on.

It’s that last point that gets to the heart of the objections to this latest settlement news. Namely, that the penalty being imposed on the offending banks pales in comparison to the depth of damage their illegal foreclosures imposed not only individual homeowners, but on all Americans via the subsequently devastated U.S. economy.

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U.S. Charitable Giving Jumps 7.5 Percent

January 25th, 2012 · Your Money

As much as Americans like to consume, they are equally fond of giving too. Yes, the numbers speak for themselves, but I also know this from personal experience as, I’m sure, do you. Fortunately, both consumption and charitable giving are signs of economic health, so going into 2012, we seem to be in pretty good shape.

New numbers released for charitable giving in 2011 show an increase of 7.5 percent over 2010. Americans gave $347 billion to non-profit organizations last year, an increase of 24.2 billion over the year before. What’s even more exciting to hear is that it’s projected giving will see another jump in 2012 of 3.9 percent over last year.

This increase in giving to non-profits probably come from the same confidence that fueled such a healthy holiday retail sales season. As I blogged a couple of weeks ago, consumer credit surged 10 percent in November, the largest increase since 2001. In other words, consumers are feeling exceptionally confident they can handle increased debt. What’s important to note here, too, is that consumers have simultaneously demonstrated a commitment to paying their bills on time.

That said, it’s essential that consumers keep their heads in 2012. The GDP is only projected to grow 2 percent this year. Yes, that’s a move in the right direction, but not enough to stimulate the healthiest of economic recoveries. And we cannot overlook the fact that consumers are saving less these days. Consumption and charitable giving may be key indicators of economic health, but so is the amount of money you consistently pay yourself.

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Get Spanish Version of Credit Report (But Only If You Pay for It)

January 24th, 2012 · Credit Reports

As you know, you are legally entitled to one free credit report each year from each of the major credit reporting bureaus. Oddly enough, what this entitlement does not include is the guarantee you will be able to read it. Free credit reports are only available in English. But, if you are willing to pay for it, FICO now offers a credit report in Spanish.

It’s funny how something so obvious can go unnoticed for so long. Not once have I ever wondered whether credit reports were, indeed, available in other languages. Now that I know they’re not, it seems a glaring, near-offensive, oversight in a country where Spanish is the primary language spoken at home by millions.

Fortunately, FICO has taken the lead in correcting this gross oversight. Now when you visit the site, you can not only order a copy of your credit report in Spanish, but you can access the entire website in the Spanish translation. Specifically, you may toggle between Spanish and English while navigating the site, select the Esponol tab, or simply go directly to espanol.MyFICO.com.

While it is certainly a step in the right direction that FICO now offers Spanish versions of credit reports, it begs the obvious question. When will the same be true of the free credit reports offered by Experian, Equifax and Transunion? Yes, English versions of credit reports can be translated, like anything else, but considering the importance we place on credit in this country, shouldn’t we be petitioning for a system that makes credit monitoring and credit repair as hassle-free as possible?

What do you think? Should the free copies of annual credit reports we are legally entitled to be made available in Spanish? Or is it not that big of a deal? Why or why not?

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