Get Ready For Tax Season!

What to Do This Year to Lower Your Taxes

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Fall is here. It’s time for thinking about cooler weather, Thanksgiving, falling leaves – and taxes? With a new tax code in place, a few hours spent on your taxes now can produce benefits in April with the savings of both time and money. The following tips may be able to help you achieve those goals.

Organize Your Files – Which documents do you need to file your taxes? Start with last year’s tax filing and see how many forms still apply. List all the additions that you may require and gather all the supporting documents that you need to back up itemized deductions.

Don’t forget to include W-2 and 1099 forms for all sources of income, especially if any part of your income comes through freelance work. Other forms that may apply are a 1095 form to verify health care coverage purchased through the marketplace, 1098 forms for various forms of interest and tuition payments, and Schedule K-1s from any ownership interests that you have.

Account for Changes – Make sure that any life changes that can affect your tax return are properly accounted for. For example, if you changed your name via marriage or divorce, you must notify the Social Security Administration and your employer of the change. Otherwise, your tax return may not match up with Social Security records, causing problems in processing your return.

If you are using an Individual Taxpayer Identification Number (ITIN), check the expiration date so that you have time to reapply if necessary. In addition, unless you have a self-selected PIN from a prior year, you will need last year’s adjusted gross income (AGI) for ID purposes when filing electronically. If you don’t have last year’s form handy, retrieve it now from the IRS or your tax preparer to avoid last-minute panic.

Review Deductions and Credits Now – Take a few minutes to review the available tax credits and deductions to see how many apply – and then make sure that you have the necessary paperwork (forms, receipts, etc.) to claim them. The Schedule A instructions for the past year make a good starting guide for deductions. The IRS made this early release draft of instructions available as a courtesy on October 9, 2018, and believe they have incorporated all the latest changes, but caution that there may be more changes due to unforeseen issues.

Pay special attention to tax credits because they provide a dollar-for-dollar decrease in your tax bill (as opposed to tax deductions that only reduce your taxable income) and you do not have to itemize to claim them.

Make Financial Adjustments – Now is a perfect time to check your withholding amount. Did your income change significantly throughout the year? A big bonus or a one-time income boost could leave you with a larger tax bill unless you adjust your W-4 to withhold more during the rest of the year.

This is also the time of year to make other tax-saving moves, such as maxing out your contributions to all retirement accounts, making charitable contributions, and selling off losing investments to offset any investment gains.

Choose a Preparer – If you don’t plan to do your own taxes, make sure to research preparers now. You may even want to reserve an appointment time before year’s end, so they can help you with some of the topics listed above. Otherwise, you may be stuck scrambling to find a tax preparer at the last minute – and who trusts a tax preparer that isn’t busy in early April? “The number one thing is finding someone who is honest and has integrity,” agrees Betterment Head of Tax Eric Bronnenkant. “It’s someone whom you’re trusting with all of your personal financial information, so that provision shouldn’t be taken lightly.”

What else should you look for in a tax preparer? Advises Bronnenkant, “You want to find someone who has experience with someone in your situations. Let’s say you work at a company, and you have stock options and other types of equity compensation, you want to work with someone who has experience with those types of investment vehicles. Not everyone does. Or let’s say you travel a lot, so you are working in multiple states. So, having someone who understands how to allocate your income between all the states you work in is important, too.”

We know it’s hard to get motivated to think about taxes at this time of year. Just remind yourself how grateful you will be in April that you took these steps in advance, enjoying a smoother filing and a lower tax bill – or maybe even a larger refund.

Don’t give identity thieves the chance to file a fraudulent tax return in your name.

This article was provided by our partners at


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Scary Financial Facts

Because There’s Just Not Enough to Frighten Us This Halloween

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Are you ready for some Halloween horror stories? Forget Freddy Krueger, Jason Voorhees, or Michael Myers – we’ve got something really scary for you. Those three famous horror movie characters can’t compete with these three real-life financial horrors.

The Debt’s Coming from Inside the House! Get Out Now! – America’s national debt has topped a staggering $21.6 trillion – but your main concern is your own household debt. Unfortunately, America’s household finances aren’t in much better shape.

According to the New York Federal Reserve’s Q2 2018 Household Debt and Credit Report, aggregate household debt is $13.29 trillion – the highest collective debt ever. Household debt has been rising for the last sixteen quarters. Outstanding student loans alone have topped $1.5 trillion. Revolving debt – mostly credit card debt – hit $1.03 trillion.

Out-of-control spending can crush your finances. To prevent spending binges, make a realistic budget and stick to it. If you’re attempting to reduce existing debt, budgeting is even more important – you must have a surplus at the end of the month to pay down debt.

Sinking In Interest Charges – Beware the interest rates that eat your income. They sneak up on you, waiting until you’re ready to buy a home or put extra charges on your credit card – and then they attack. Your income is slowly consumed by interest charges, leaving you nothing to live on. If only you had kept your credit score high…

The fiends at the Federal Reserve have been slowly piling on 0.25% rate hikes – three in 2017 and three in 2018 to reach 2%-2.25% with one more hike expected before the year is out. They plan to raise rates three more times in 2019. Each rate hike eventually gets passed on to you. Can you keep your head above water, or will higher rates push you under?

Fight off increasing interest rates by paying off all bills on time and controlling your spending. Never charge more than you can afford to pay off each month. You won’t have to worry about credit card interest if you don’t carry a balance – and your higher credit will qualify for better loan/mortgage rates.

The Incredible Shrinking Credit Score – Who could be at the door this Halloween? Surprise, it’s you – or an identity thief pretending to be you, buying a hundred smartphones with a fraudulent account or twenty laptop computers on your MasterCard. If you don’t check your credit report regularly, you may not see the danger until it shows up as overdue bills and a ruined credit score.

A 2018 Harris Poll survey found that nearly sixty million Americans have been affected by some form of identity theft – around 18% of the U.S. population. According to Javelin Strategy & Research, approximately 16.7 million individuals were identity theft victims in 2017 alone, with an average loss of just over $1,000.

Whether they’re fraud alerts, credit freezes, or credit monitoring services, find a protection strategy that works for you – and use common sense protections like strong passwords, anti-virus software, and shredding of documents before disposal.

You may not see any trick-or-treaters dressed as identity thieves or high-interest rates (if you do, please give them extra treats for imagination). However, those financial monsters are scary because they’re real – and they cause real financial damage.

Take preventative action and you can avoid these horrors, or at least minimize them. Don’t be the financial equivalent of horror movie teens that wander out into the woods alone at night looking for their missing friends. You know how that works out for them.

This article was provided by our partners at


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10 Best Debt Consolidation of 2018

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Debt consolidation is a debt refinance method used to consolidate unsecured debt like student loans and credit cards into a single monthly installment. There are different ways to consolidate debt, the most typical one being an unsecured debt consolidation loan usually offered through major banks or debt consolidation companies. Other loan options are home equity lines of credit, credit card balance transfers, and direct or private student consolidation loans. As with any other debt instrument, there may be substantial pros and cons to taking out a debt consolidation loan. Before seeking debt consolidation, inform yourself about this and other alternatives such as debt management programs or debt reduction strategies. Debt settlement programs differ from debt consolidation as they negotiate directly with creditors on your behalf to reduce the overall amount owed. Deciding on the right debt reduction option depends on one’s financial goals and credit situation.

Debt consolidation could be a good option for those struggling with several types of debt like student loans, mortgages, car loans, overdue credit card payments, or medical bills, and who are looking for a way to pay off what they owe while avoiding bankruptcy. While consolidating multiple high-interest loans into a single, low-interest one could be beneficial for those able to obtain a better rate, lower monthly payments or both, this type of personal finance process could end up being costlier in the long run. When choosing a debt consolidation loan, make sure you are not substantially exceeding the duration of your previous loans, which could make you end up paying more towards interests than you would have done otherwise. If you have an inordinate amount of debt or have been in debt for a long period of time, then you may want to look at credit counseling programs or alternatives that could help you correct the behaviors that led you into debt in the first place.

Before opting for a debt consolidation loan, make a detailed list of how much you owe, how long it will take you to pay off those debts, and how much you will have paid towards overall interests. After determining these amounts, shop around for debt consolidation loans and compare how much you would pay in interest towards your current loans versus what you would pay for a consolidated loan. If a debt consolidation loan is right for you, pay off your other accounts as soon as you are able to and modify unhealthy spending behavior by, for example, limiting or ceasing credit card spending for the duration of your loan. Once you have opted for debt consolidation, you will have to make timely payments towards your loan in order to avoid further damage to your credit. Although it may not be an easy process, keeping a positive outlook and taking responsibility for your actions can be the most empowering way to regain your financial freedom.

Another important factor to consider when comparing debt consolidation options is whether the loan will be unsecured or secured by a form of collateral—which can be easier to obtain if your credit is affected. Opting for a secured loan, however, will put your assets in jeopardy and may result in a precarious fiscal situation if you are not able to keep up with your scheduled payments. Also, consider the interest rate you will qualify for as well as possible costs and fees such as early repayment penalties. Remember that if the principal is paid off quicker than it would have been without the loan, then debt consolidation can help boost your credit score in the long term. However, this may also extend the loan’s term significantly, in which case the potential savings are offset by paying more interest over time. Most importantly, there’s no shortage of questionable debt resolution services around these days. Make sure the company you choose is certified by the AFCC, IAPDA accredited, and FTC compliant, and always beware of providers that seem too good to be true.




According to statistical data collected by the Federal Reserve Bank of New York, as of October of 2017 U.S. household debt increased to 13 trillion in revolving and non-revolving credit, a 16% increase since 2013. Considering that credit cards and loans are now more accessible than ever and that the great majority of Americans earn barely enough to maintain their standard of living, it’s not surprising that debt in the United States has skyrocketed to an all-time high since the Great Recession. As the number of people with student loans, credit card, and subprime auto loan debt increases, so does the number of families living under the weight of financial hardship. If you are among the millions of people currently struggling to keep up with monthly payments, one of the options available to you is debt consolidation.

If you have already weighed the pros and cons of debt consolidation and have informed yourself about the credit implications of defaulting on this type of loan, the next step on your list should be to look for a lender or debt consolidation company that upholds consumer financial laws and meets certain minimum qualifications. For that reason, our editorial team has compared debt consolidation companies based on several factors, including compliance with federal regulations, employee certifications, and average consumer ratings and reviews.

BBB Rating

The Better Business Bureau (BBB) is a nonprofit organization promoting ethical business behavior and monitoring compliance by their 400,000 Accredited Businesses. Consumers wanting to make better-informed decisions and identify trustworthy businesses can find over 4 million unbiased customer reviews and complaints on

AFCC Membership

The American Fair Credit Council (AFCC) is a leading association of professional consumer credit advocates promoting and enforcing best industry practices among member companies. Through a strict code of conduct that upholds transparency and compliance with the Federal Trade Commission Regulation of 2010—that which prohibits debt relief services from charging up-front fees before settling consumer debt—, the association seeks to change the negative public perception of debt settlement companies.

IAPDA Accredited

The International Association of Professional Debt Arbitrators (IAPDA) is the leading certification program ensuring debt consultants, credit counselors, and consumer debt relief specialists receive proper training and meet a minimum standard of excellence. The company’s training and certification programs are recognized in all states and are in compliance with the Uniform-Debt Management Services Act (UDMSA).

FTC Compliant

The Federal Trade Commission (FTC) works to protect consumers by preventing deceptive and unfair business practices and promoting public access to accurate information. Through an amendment made to their Telemarketing Sales Rule prohibiting debt relief companies from charging fees before settling their customers’ debt, the FTC seeks to deter debt relief providers from targeting consumers in financial distress.



Most companies offering debt consolidation loans set requirements with regard to the amount of debt the client must have accrued before requesting a loan, the types of debt they are willing to work with, and, in most cases, the borrower’s ability to meet their financial obligations. While some debt relief companies set minimum amounts for debt consolidation—typically between $5,000 to $10,000—some merely require the debt to be unsecured. Unsecured debt refers to money you borrowed with no collateral, such as student loans, credit cards, and medical bills. Secure debt, on the other hand, requires collateral in the form of personal assets like your home or automobile.

Regardless of the type of lender you choose, whether a major bank or credit union, there will likely be certain minimum income and credit requirements such as a good debt-to-income ratio, sufficient monthly income, and other assets. Those with less-than-perfect credit scores may still qualify for a debt consolidation loan by offering the lender security through savings, assets or equity. If you have a poor credit score and your debt outweighs your income, you may need to resort to other alternatives like enrolling in a credit counseling program through a private service provider or nonprofit organization, or employing the services of a debt settlement/debt resolution provider.

Pricing & Fees


The Federal Trade Commission (FTC) has taken steps to protect consumers against companies that charge fees prior to settling or reducing a client’s unsecured debt. The 2010 FTC Telemarketing Sales Rule (TSR) amendment states credit counseling and debt settlement companies selling their services over the phone cannot collect fees or charges unless they successfully settle or resolve at least one of the consumer’s debts. They must also disclose the basic aspects of their services including how long it will take for the program to yield results, how much the consumer will have to pay for the service, how dedicated accounts work, and the potentially negative implications of using debt management services. It is illegal for a debt settlement company to misrepresent their services or make false claims about what those services are intended to accomplish.

FDIC Insured Deposits

Again, it is illegal for debt settlement and credit counseling companies to charge upfront fees as they can only be collected upon the settlement of the debt. However, some debt companies will ask their clients to place monthly fees—which typically amount to a percentage of the client’s total enrolled debt—into a dedicated account they can access once they have rendered their services. These funds are intended for negotiating with creditors and making a lump sum payment once a settlement is reached. FTC guidelines include a provision that states dedicated accounts can only be created if the account is maintained at an insured financial institution, the consumer owns the funds and interest and is able to withdraw them at any time without penalties, and the provider does not own or have any affiliation with or exchange referral fees with the company administering the account.



There are many kinds of debt relief services one can take into consideration before bankruptcy. The majority of the companies we feature will fall into three major categories: debt consolidation, debt settlement, and credit counseling. Each program will have different lengths, estimated debt reductions, and additional services offered.

Debt Consolidation

Debt consolidation involves taking different debts and consolidating them into a single loan or monthly payment. This option makes sense for people who want to simplify the process of making payments to several different lenders and those able to secure a lower interest rate or monthly payments through a debt consolidation loan. Consolidating debt does not diminish what is owed, so debt can return with a vengeance if the underlying problems that drove the individual to incur debt are not addressed.

Debt Settlement

Unlike debt consolidation, debt settlement allows consumers to lower the amount of their debt by negotiating with lenders and creditors. If you have fallen significantly behind on payments, lenders may be willing to reduce your debt and settle for a lower amount out of fear of losing their entire investment. Some potential downsides, however, are having to pay service and penalty fees as well as being required to pay taxes on the amount that was forgiven. Most notably, though, is debt settlement will always negatively impact your credit score.

Credit Counseling

Credit counseling services provided by professional credit counselors or debt specialists offer guidance and support for consumers needing help managing their debt. Credit counselors can also assist in the development of a budget and offer advice with regard to income and expenses, credit repair, debt consolidation, and bankruptcy.

How does debt consolidation work?

When you consolidate debt, you reduce the number of your monthly obligations to more than one creditor. Most of the time, this is done by taking out a debt consolidation loan, which you use to pay off other debts. This way, you only have to make one payment every month to your new lender instead of keeping track of several different debts. A debt consolidation loan can be secured, like a home equity loan, or unsecured, like a personal loan. With a debt consolidation loan, you may be able to get a lower interest rate than the rates owed on the debts you want to eliminate. Therefore, you may end up paying less for a debt consolidation loan than you would have if you tried to pay off all your debts separately.

Debt consolidation can also refer to a type of debt relief program. Under a debt consolidation service, you make a single monthly payment to the program, which then pays your creditors. The provider charges fees for the service, which will be added to your monthly payment. Keep in mind that certain kinds of debt are not eligible for management under these programs, such as secured loans, like mortgage and auto loans, or back taxes.

What is debt settlement?

Debt settlement is another form of debt relief. Under this program, the service provider will negotiate with your creditors to accept a lower lump sum payment to settle your debt. The program will require you to deposit a certain amount each month into an account, which will eventually be used to pay off your debt. There are many risks associated with debt settlement. First, since most debt settlement programs will tell you to stop paying the bills you are trying to settle, your credit could take a serious hit. Also, committing to depositing a specific amount of money, which could be large, for a long period of time may be too difficult in your financial situation. Finally, some creditors aren’t even willing to negotiate with debt settlement programs and may even sue you for repayment of the debt.

What is debt management?

Debt management is a form of debt relief that does not require you to borrow money. Instead, you work with a credit counseling agency which will give you advice on how to manage your money to pay off your debts. These programs focus on changing the habits that made you fall into a debt trap in the first place. There are also debt management plans (DMPs), which are somewhat similar to debt settlement programs in that you are required to make deposits into an account with the credit counseling agency. The agency then helps you prepare a payment schedule and uses the money to repay your creditors. They may even negotiate with your creditors to change the terms of your debt so your interest rate and fees are lower. Before enrolling in a DMP, however, make sure your creditors are willing to work with your credit counseling agency to fulfill the plan.

Can you consolidate debt with bad credit?

It is possible to consolidate debt with bad credit. However, the number of options available to you is limited compared to someone with good credit. Qualifying for an unsecured debt consolidation loan may be difficult, for one, since creditworthiness is one of the first things lenders look at. You may be able to qualify if you apply with a co-signer with a higher credit score than yours. If you default, this person would be responsible for paying back the loan. You may also be able to qualify for a secured loan by putting up a property or a vehicle as collateral; however, if you fall behind on the loan payments, you could have your home foreclosed on or your car repossessed. If you can’t take out a debt consolidation loan, you may still be able to participate in debt management or debt settlement. Both programs have risks, but one of them may work for you.

What is the difference between secured and unsecured loans?

When you take out a secured loan, the lender’s investment—i.e., the money you borrowed—is protected by a piece of collateral. Most often, this is a house with a mortgage loan or a car with an auto loan. If you stop repaying the loan, or even if you’re late, the lender has the right to take possession of the collateral to recover their money. In contrast, an unsecured loan does not need a piece of collateral. Lenders use your creditworthiness—how likely you are to repay the loan, as determined by your credit history—to decide whether or not they will lend money to you and how much. Secured loans are easier to get, since they imply less risk for lenders than unsecured loans. Interest rates on secured loans are also usually lower than the rates on unsecured loans. Although an unsecured loan may have higher interest rates, the lender does not automatically have the right to take your property if you fail to repay the money according to the loan terms.

Do debt relief programs affect your credit score?

The way your credit score is affected depends on the type of debt relief you undertake. For starters, every time you open a new account, be it a credit card or a loan, your score goes down a few points. Don’t worry: this decrease is temporary and your score should go back up after a few months, so long as you stay current with your monthly payments. Therefore, a debt consolidation loan should not affect your score negatively in the long term.

Debt management plans (DMPs) are another matter. Enrolling in a DMP will show up on your credit history, and some creditors may take it into account when deciding whether or not they should lend you money. However, it is not factored into your score, so you should not see a drop in the number, so long as you continue to make full payments on time every month.

Debt settlement, on the other hand, does have a negative effect on your credit history and score, because it implies paying less than what you really owe on your account. The higher your FICO score is, the farther it drops if you miss a payment or settle an account. This means someone with a score of 780 can lose between 125 and 145 points when settling a debt, while a person with a score of 680 only loses between 65 and 85 points. If you settle on more than one account, this negative impact is multiplied. However, if your debt is especially overwhelming and you are trying to avoid bankruptcy—which can truly decimate your credit score—the pros of debt settlement could outweigh the cons.

What do I do if I cannot consolidate my debt?

If you need to reduce your monthly payments on outstanding debts but can’t consolidate those loans, there are several options to consider. If you have a mortgage, you can look into refinancing it using the cash-out option. In this scenario, you borrow against your home for more than the balance of your existing mortgage and use the excess funds to pay off your high-interest debts. You can also consider transferring your credit card balance to another credit card that has a lower interest rate or contacting a credit counseling agency to analyze your finances and provide debt management advice. If your total debt has reached a point where no repayment plan is effective, then bankruptcy, although extreme, is your final option.

This article was provided to us by Consumers Advocate.