Did You Earn $66,000 or Less Last year? File Your Taxes for Free

If your income is $66,000 or less, you can file your tax returns online for free.

The IRS Free File program  is a partnership between the IRS and the Free File Alliance, offering do-it-yourself tax preparation software at no charge.

The Free File Alliance  is a group of a dozen major tax preparation software companies, including H&R Block and Intuit, that have agreed to provide free access to its online tax preparation and electronic filing software.

Generally, taxpayers with adjusted gross incomes of $66,000 or less for the 2017 tax year qualify to use the software through the IRS Free File program. You answer a few questions on the IRS Free File website and the IRS matches you with a software program.

The IRS Free File program is not well known. It is estimated that 100 million US taxpayers qualify for the IRS Free File program, yet only about three million use it each year.

Several members of the Free File Alliance also offer free versions of their tax preparation software through their own websites. However, each company sets its own guidelines on who qualifies to use the free version (income requirements may be lower), and they may set limits on the complexity of the returns that can be filed.

Thus, when using the IRS Free File program, be certain to start at and consistently return to work on your return via the IRS Free File website.

If your income is greater than $66,000 you can use Free Fillable Forms at IRS.gov.

These are electronic versions of the paper forms which you can fill out online. Limited guidance is available, however.

Three In-Person Tax Assistance Programs

If you prefer to work with a live person and you meet the qualifications, community-based, free personal tax return assistance is also available.

The IRS sponsors two in-person tax assistance programs. With both programs, the help is provided by IRS-certified volunteers who are associated with non-profit organizations receiving grants from the IRS.

1.  The Volunteer Income Tax Assistance (VITA) program provides free basic income tax return preparation. This service is available to people who typically make $54,000 or less, persons with disabilities, and people with limited English speaking skills who need help to complete the tax forms.

2. Tax Counseling for the Elderly (TCE) offers tax help for all taxpayers, but gives priority to people aged 60 and above. It specializes in retirement-related issues unique to seniors.

Both the VITA and TCE programs focus on basic tax returns. If you have more complicated tax matters, such as Schedule C with losses or Schedule D with capital gains and losses, and want in-person assistance, you should consult with a professional tax preparer. The services available at each VITA and TCE site vary in accordance with the level of the volunteers’ certification.

For more information about the VITA and TCE programs and to locate a visit IRS.gov.

3. The AARP Foundation Tax-Aide Program offers free tax preparation assistance provided by IRS-certified volunteers. It serves low to moderate income taxpayers, particularly people 50 and older who can’t afford a tax preparation service. To locate an AARP Tax-Aid Program site, visit AARP.org.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Social Security Numbers to be Jettisoned from Medicare Cards

At long last, Medicare is removing Social Security numbers from all Medicare cards.

For any years the Centers for Medicare & Medicaid Services (CMS), which administers the Medicare health insurance program, resisted pressure to make this change. In 2015, however, Congress passed the Medicare Access and ChiP Reauthorization Act (MACRA) requiring CMS to replace the existing Medicare claim numbers, which are currently based on individuals’ Social Security numbers.

This move is expected to reduce medical identity theft for Medicare beneficiaries. It is also expected to decrease the amount of Medicare fraud, saving the government and tax payers money.

All Medicare beneficiaries are required to have new Medicare numbers by April 2019.

There are two terms to know:

1. Health Insurance Claim Numbers (HICNs) are the current numbers on Medicare cards. They are usually the beneficiary’s Social Security number plus a letter.

2. Medicare Beneficiary Identifiers (MBIs) are the new claim numbers. The new number will consist of 11 characters – randomly generated numbers and uppercase letters. Each MBI will be unique and “non-intelligent,” meaning they won’t have any hidden or special meaning. The MBIs will be used for Medicare transactions such as billing, eligibility status, and claim status.

CMS will begin mailing the new Medicare cards with the new MBIs in April of this year. It will randomize the mailings by geographic location. All beneficiaries should have their new card by April 2019.

The period from April 1, 2018 to December 31, 2019 will be a transition period during which medical providers and patients with Medicare can use either the HICNs or the MBIs to submit claims. Following the transition period, the old HICNs can still be used to appeal or check the status of a claim made prior to January 1, 2020. Beginning January 1, 2020, all new claims will need to be made with the new MBIs.

As with Social Security numbers each MBI will be confidential. Both beneficiaries and medical providers will need to safeguard these numbers.

To see an image of the new Medicare card design, click here. 

*Medicare Cards will have a new design beginning April 2018.*

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

MemoryBanc: A Comprehensive Place to Store and Locate Your Information

If you were unexpectedly incapacitated, would your loved ones know which of your bills to pay?  Would they know how to contact your accountant or insurance agent, or even know who they are? Would they be able to give your health insurance information to your medical providers? Be able to check your e-mail?

We all carry this information in our heads or have it stored somewhere in our homes, phones and computers. No one expects others to need this detail, but if you can’t act for yourself, your personal representative will need to have access. On the flip side, you may need someone else’s information to assist him.

This is a lot of information to gather and compile. How do you record it all? Exactly what information should you document?

One useful tool is MemoryBanc: Your Workbook for Organizing Life by Kay H. Bransford. MemoryBanc provides one place to record all your key personal information.  Chronicling this information can be overwhelming. Bransford breaks it into manageable sections: personal, financial, online, medical, household, and “etcetera” (to include such information as birthdays and pet care).

While there are other record-keeping systems on the market, I like MemoryBanc for several reasons:

The workbook is available in three formats: a paperback book, a binder with dividers and loose leaf pages, and, for individuals who want a portable paperless system, a flash drive with editable PDFs. For security, Bransford recommends not storing your sensitive personal information in your computer unless your documents have very strong encryption. This, however, could make it difficult for your representative to access your data when they are needed.

The workbook can be used by individuals or couples as there are separate pages for each person’s information.

Emphasis is placed on the importance of recording online usernames and passwords for electronic accounts. It is easy to forget online access, including social media, shopping sites, and even your highway toll pass. Yet, we use these every day. Bransford writes, “Even mundane situations can arise that require you to know the basics of your accounts. For example, if your spouse or partner were unavailable, would you be able to make changes to your mobile account or request services for an item under warranty? Many of these accounts include PINs or security questions.”

The workbook can easily be handed over to loved ones should the information ever be needed to help them navigate your medical care and finances.

There is ample room to document information. The book edition has large spaces to record information which is important for people who have difficulty writing. Additionally, there are plenty of entries. There is space to enter 12 credit cards, for example.

The financial section is comprehensive. It includes income sources, bank and investment accounts, trusts and securities, retirement accounts, insurance policies, real-estate, loans, credit cards, and utilities.

Consider MemoryBanc not only for yourself, but for others for whom you are currently assisting or may assist in the future. And, while we may think chronicling this information is for “older” adults, don’t forget our youth. If something should happen to your twenty-year-old college student, for example, would you be able to access his bank or social media accounts?

We live in the Information Age. We have plenty of information relating to all aspects of our lives. The MemoryBanc workbook provides one comprehensive go-to place to store and locate your important information.

MemoryBanc: Your Workbook for Organizing Life by Kay H. Bransford in paperback lists for $19.95 and is available from book retailers. To order multiple copies of the book, the binder or flash drive, visit www.memorybanc.com.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Photo by Robyn Young, Money Care, LLC

Equifax Breach & Protecting Yourself

Note: This is a guest blog originally posted by my colleague Alison Salisbury, President and Founder of Fiscally Fit, Inc. in Los Altos, California. 

Between Equifax and the Yahoo breaches, millions of Americans and billions of accounts were exposed. Rather than rant and rave about how security violations happen, I’d like to focus on how to take control. Given the laws of probability, we all experience some kind of fraud or exposure. Many of the tips shared below I’ve done, or we’ve helped clients straighten out the messes caused by fraudulent activity.

Anatomy of a Social Security Number

Did you know the last four digits are the most important numbers in your social security number? Those last four numbers are unique to you. All the other digits are assigned based upon where you lived when the card was originally issued to you. The first three digits represent an area number. The middle two digits are “central” or a group number and aren’t related to a particular geographic area. Curious what your social security number says about you? Check out this primer.

Lock Down Your Credit

In a recent Bankrate article, they recommend assuming your identity has been compromised. Consider freezing your credit at all three credit bureaus. The upside is that freezing blocks fraudsters from applying for new credit. The downsides are: 1) you may have to unfreeze your accounts when applying for new credit, (e.g., car loan) or opening a new service (e.g., cellphone) and then refreeze them afterward, and 2) it can be a time-consuming process when applying for a new credit account.

Potential fraud aside, freezing your credit has another benefit especially if you’re struggling with credit card debt. The average American family owes $8,377, which is 6% higher than last year. While locking down your credit doesn’t help you with outstanding debt, it’s a psychological stake in the ground. Start your New Year’s resolutions early and vow to pay down those cards and avoid taking on new debt obligations.

In this Simple Dollar article, there are links to all three credit bureau freeze forms.

Paid Monitoring Services

If freezing your account is not your style, a paid monitoring service might be the solution. LifeLock is one option; it may get expensive depending upon the plan. Many of my clients use EverSafe (it’s an AARP award winner) and they offer discounts for family members and seniors (60+).

There are many other identity theft monitoring providers, so I recommend you do your due diligence to find the right service for your needs and budget. Such providers typically monitor:

  • Credit file activity
  • New loans
  • Requests for change of postal address

If you are affected by fraud, most paid service provides will also help you restore your credit.

Free Monitoring

There are also free monitoring services like CreditKarma. Curious about your credit score or want to build up creditworthiness? Then this may be the service for you. Receive alerts if anything important changes on your TransUnion report as well as get access to financial calculators and educational articles. The service is free because CreditKarma partners with financial providers; you’ll receive recommendations (and approval odds) based upon your credit file. If you’re already a CreditKarma user, check your profile settings to see which alerts are checked. I recommend you at least check: 1) credit monitoring, 2) large purchases where you set the amount, and 3) credit limit changes.

Credit Sesame offers a similar service, and you can upgrade to a premium account for monitoring of all three credit bureaus.

Free Fraud Alerts with Each Credit Bureau

Did you know that under Federal law, if you put a fraud alert on one credit bureau, they must notify the other two? If you’re one of the many Americans concerned by the Equifax breach, place a fraud alert on your credit. Fraud alerts make it harder for identity thieves to open more accounts in your name. An initial alert lasts at least 90 days. An Extended Fraud Alert  can last seven years. This FTC Article provides an excellent overview of the fraud alert process.

Don’t forget that you’re also eligible by law to receive an annual review of your credit report for free.

Super Safe Passwords & Other Not So Safe Items

I’d be remiss if I didn’t address safe passwords, especially to online banking accounts. “123456” is still the most common password, according to a CNN Tech article. We all know the importance of difficult-to-hack passwords. We should also have unique passwords each for each account. I can hear you now… “but that’s such a hassle and I can never remember them!!” Consider a password vault (like LastPass) or other solution to generate passwords that aren’t easily guessed or hacked by brute force software. In light of the Equifax and Yahoo attacks, it’s a good idea to update the passwords on all your accounts.

Lastly, remember that sending sensitive information via email isn’t a good idea. Oh, and never log into bank or sensitive accounts on a public computer. While I’m not promoting paranoia, caution is warranted. Hackers are very crafty at getting our personal and private information. Better safe than sorry.

Special thanks to Alison Salisbury of Fiscally Fit, Inc. for use of this blog. Please feel free to contact Alison at 650-965-4090, or visit Fiscally Fit. 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate

Buy Yourself Some Happiness

Money can’t buy you happiness, the old saying goes.

But, maybe it can.

Many studies have found money can create some happiness – depending on how you spend it.  Purchasing physical things for ourselves isn’t the ticket.  Any good feelings from the purchase wear off quickly, and we are left with just more stuff.

To boost our happiness, we need to get away from buying things. Instead, we can:

Invest in others.

Behavioral scientists have discovered we get more out of our money when we give to others, whether it is buying coffee for a friend or making a donation to charity. When we give to charitable causes, the part of our brains associated with pleasure triggers the release of endorphin’s or “happiness hormones.” Even a dollar donation can make a difference.

Spend on experiences.

Studies have shown when we spend the same amount of money on an experience as on a tangible item, the experience makes us happier in the long run. It doesn’t matter if the experience is a deluxe ski vacation or coffee with a friend.  Experiences are often shared with family and friends, deepening our connections with others. These connections help boost our positive emotions.

Buy time.

A recent study found when we buy timesaving services such as house cleaning, lawn mowing and grocery shopping, our happiness level rises. This may be related to a reduction in stress. Today, people are hiring virtual assistants to help with other mundane tasks.

The amount of money we have does not matter. Nor does where we live. Researchers have found people in all income levels all over the world experience greater happiness when they invest in others, pay for experiences, or buy themselves time.

Although we can spend to increase our happiness, we still need to meet our basic needs, save for the future, and keep our spending in check. When we spend beyond our means, we create debt which can lead to stress. This will certainly negate any emotional boosts.

Want some more happiness? Try being more selective about where and how you spend your money.

If you would like to read more about this topic, here are some interesting articles discussing the link between money and happiness;

 

Need A Happiness Boost? Spend Your Money To Buy Time, Not More Stuff, National Public Radio

Science Proves It: Money Really Can Buy Happiness, Los Angeles Times

Research: Can Money Buy Happiness? Insights by Stanford Business

Can Money Buy You Happiness? The Wall Street Journal

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

What To Do When You Turn Up Dead

Imagine you go to your ATM one day and find you are locked out of your account. You inquire at the bank and learn your bank account is closed. You have been reported dead. This happens more than you would think. About 500 alive people each month are recorded as dead -, enough that Social Security has a Frequently Asked Question about this on its website.

People learn they are dead when they go to pick up a prescription and learn they no longer have health insurance. Or they apply for credit and are told they are dead. Or they receive a letter from Social Security expressing condolences on their death. Sometimes their government benefits stop.

According to the Social Security Administration, 90 percent of these errors originate at the Social Security Administration. Social Security receives death notices from funeral homes, county clerks, the post office, family, health insurance companies, and states. If one of its workers inadvertently types in a wrong number, a living person can end up dead on paper. It is also possible that reporting sources have made a mistake.

Once this happens, your name goes on to the Social Security Administration’s Death Master File. In the past anyone who paid a fee could purchase this list, making your information readily available to identity thieves. In response, Congress passed legislation,  which went into effect November 2016, restricting access to the Death Master File for the three calendar years following an individual’s death to authorized users. Authorized users include banks, credit reporting agencies, and insurers.

While this helps reduce identify theft, it does not alleviate the headache of having died on paper. When this happens, you are locked out of your life. The information spreads quickly to banks, insurers, hospitals, pharmacies, and other important parts of your health and financial life. You are left with the job of proving you are still alive.

Start with Social Security. You will need to meet in person with a Social Security representative and show an ID or document that proves your identity.  Social Security will remove the death coding. To locate your closest Social Security office, visit ssa.gov/locatorThe SSA will provide a letter that you can give to banks, doctors or others to show that your death report was in error.  You can also locate the erroneous death certificate, have it amended through the issuing office, and send it to your banks, insurers, the credit bureaus, and other financial organizations.

If you are one of the unfortunate people who learns they have died, first I send you my condolences. Then I urge you to act quickly to rejoin the land of the living.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

What Happens to Debt When Your Loved One Dies?

What happens to a deceased person’s debt after he dies? His heirs may wonder whether they are responsible for the debt their loved one left behind.

When a person passes away, she leaves an estate which is comprised of money in bank and investment accounts, cash, real estate, vehicles, household furnishings, and other financial or tangible assets. The estate, managed by the executor named in the person’s will, pays the debts. Anything left over is passed to heirs as dictated by the will. If the loved one didn’t have a will, state law governs how any remaining funds are distributed.

If the deceased does not have any assets or there is not sufficient money in the estate to pay debts, the estate is declared insolvent and the creditors don’t get paid.

There is some exception to this, including:

  • Loans with co-signers. These payments now become the responsibility of the co-signers.
  • Credit cards with joint owners. The surviving joint owners need to pay these bills.
  • Secured debts. Secured debts have an asset attached to it such as an automobile or a house. These loan or mortgage payments still need to be paid. If the estate is insolvent, an heir may need to make these payments until the loan is paid off, the property is sold, or it is returned to the lender.
  • Debt in community property states incurred by a deceased spouse.  According to NOLO.com, “in the handful of states with “community property” rules, most debts incurred by one spouse during the marriage are owed by both spouses.” (Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.)

Family members and other heirs may be contacted by debt collectors when those members become responsible for a loved one’s debt. They are protected by the Fair Debt Collection Practices Act which, according to the Federal Trade Commission (FTC.gov), “prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.”

State laws determine the order in which bills and debts get paid. Generally, estate administration fees, funeral expenses, medical bills, and taxes get paid first. These are followed by secured debts. Credit card debt is usually paid last.

There are some monies creditors cannot tap to have their bills paid. These are assets that have named beneficiaries and include retirement accounts and life insurance policies.

If you have questions regarding a loved one’s debt or estate, I recommend you contact an estate planning attorney. He or she will know the state laws and be able to advise you. You can look for an attorney at findlegalhelp.org

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

How to Protect Yourself Following the Equifax Data Breach

It is estimated about 143 million Americans had their personal information stolen during a data breech at Equifax earlier this year. This is just about half of the population of the United States. Essentially, any individual with a credit report is potentially impacted.

Equifax is one of the three major credit reporting agencies.  These agencies gather personal and loan payment information on anyone with credit. This data is factored in to decisions such as whether you receive loans or credit cards, your credit limits, your interest rates, and the cost of your insurance premiums.

The data stolen in the Equifax cyber theft includes names, social security numbers, birthdates, and some driver’s license numbers. This information will be available to the thieves for years to come. In contrast, when your credit card number is stolen, you can close the card and have a new one issued. You can’t change your birthdate, however.

With all this information, thieves have a better chance of using your identity to take out loans, withdraw funds from your bank and investment accounts, file tax returns and medical claims, and create a whole new you.

As consumers, we need to be constantly on the alert for fraudulent activity in our names – indefinitely.

You can visit the Equifax website at equifaxsecurity2017 to find out whether your information was exposed. Click on the “Potential Impact” tab and enter your last name and the last six digits of your social security number. The site will give you the option of signing up for a year of free credit monitoring service.

 In its article, The Equifax Data Breach: What to Do, the Federal Trade Commission offers these steps to help protect yourself:

Check your credit reports from Equifax, Experian, and Transunion. You can get a free report once a year from each of the agencies by visiting annualcreditreport.com

I recommend staggering your reports: get one from Equifax now. In four months, request the report from one of the other agencies, and in 8 months request the report from the third. Repeat these staggered requests forevermore. 

Read your credit reports. If you spot accounts or activity you don’t recognize, visit identitytheft.gov to learn what to do.

Consider placing a credit freeze or a fraud alert on your credit files.

  • A credit freeze restricts access to your credit file. Most creditors look at your credit report before they approve a new account or loan. If they don’t have access to your file, they may not extend the credit, making it more difficult for a thief to open an account in your name. If you elect to do this, place a freeze on your file at each agency. There is a small fee to do so. The freeze remains on your file until you remove it.

Keep in mind:

  • A credit freeze does not prevent thieves from accessing your existing accounts. You still need to monitor them.
  • Any time you want to apply for a loan or a new credit card, or price new insurance, you will need to lift the freeze, for a small fee.
  • A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you. Fraud alerts temporary.

Monitor your existing credit card and bank accounts closely. I recommended checking weekly. The sooner you spot something, the sooner you can report it and, hopefully, minimize the damage.

File your taxes early, if possible. File your taxes as soon as you have all your tax documents. You want to prevent someone from filing a return using your social security number and collecting a tax refund. If you receive correspondence from the IRS, read it. Respond immediately. The IRS will contact you in writing, not by telephone.

I also have these recommendations:

Read the Explanation of Benefits from your medical insurance company immediately. Look for medical claims you did not make. You do not want to get stuck with the bill for someone else’s surgery. And, you don’t want a stranger’s medical history mixed up with yours. If you find incorrect information, contact your medical insurer immediately. 

Put a Google Alert on your name. “Google Alerts” is a notification service offered by the search engine company Google. You set up the system to search for your name in web pages, newspaper articles, and blogs, and send you an email when it finds it.  Although you need to have an account with Google to use Google Alerts, it is good way to learn if any criminal activity has been reported in your name. To set up an alert, go to google.com/alerts 

Sign up for account alerts. Available with many banks and credit card companies, you can sign up to receive notification emails or texts about activity in your accounts. This is early notification that someone may have unauthorized access to your credit card or bank accounts. To set this up, log on to the website and type into the search function “account alerts.”

Set up two-step verification for online account access. Also called two-factor authentication, more and more companies offer this additional layer of protection. Once two-step verification is enabled, when you log on to a site, you will need to enter a set of numbers that you receive via email or text. Should someone steal your password, the thief would need to have both your password and your computer or phone to access your account online. To set this up, log on to a website and type into the search function “two step verification,” “two-factor authentication” or “2FA.”

Because of the number of people impacted and the longevity of the stolen information, the Equifax cyber breach is quite serious. I encourage everyone to find an extra few hours in their week to take measures to protect themselves.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Are Your Finances Emergency-Ready?

 

As I write this blog, Hurricane Harvey is unleashing its fury along the coast of Texas and is moving into Louisiana. A record amount of rain has drenched the area. Thousands have been forced from their homes.

In my state of Vermont, six years ago Hurricane Irene hit our state. The speed and amount of rainfall overwhelmed the mountainous stream beds, causing severe flooding in many areas and forcing people from their homes.

It could be an ice storm, tornado or forest fire. Disaster can hit anywhere at any time.

Many of us have emergency plans including lists of family members’ contact information, designated rendezvous points, information about pets, and copies of prescriptions. You may have a disaster kit at the ready should you need to evacuate.

In this planning, have your considered your personal and financial documents?

There are different ways to handle your documents.

One is to create digital copies and put the copies on two thumb drives – one drive to keep in your safe deposit box, and another to take with you. You will need to keep your thumb drive and its contents secure.

Another option is to store your documents in the cloud using a service such as Drop Box or Box. Since your documents contain sensitive personal information, password protect your information with an extremely strong password. If you don’t have it memorized, have the password ready to go should you need to leave quickly.

Documents to scan and store include:

  • Bank and investment account numbers
  • Insurance policies
  • Estate planning documents including wills and trusts
  • Advanced directives
  • Mortgage, automobile and other loan papers
  • Car Titles
  • Car registrations
  • Drivers’ licenses
  • Birth Certificates
  • Marriage Licenses
  • Military discharge papers
  • Passports
  • Social Security cards
  • Health Insurance cards

Once you have your information scanned and stored, you will need to update it periodically. One way to remember is to make a future appointment with yourself in your calendar.

Once you have your critical documents gathered, you can probably scan them in about an hour. This hour of preparation could save you several hours of frustration should you ever need to vacate your home in an emergency and leave all your paper documents behind.

Click here to learn how to prepare a disaster kit.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.