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Credit cards can be extremely helpful if used responsibly, but they can also hurt you if you don’t use them right. Wondering how you can use your credit card better? Check out this list of mistakes to avoid and what to do instead.

1. Not reading the fine print.

A lot of issues stem from not reading or understanding your credit card agreement. For example, if you try transferring you balance to another card without understanding the rules, you could end up owing more.

Instead: Resist the urge to automatically scroll to the bottom of the page and agree to your card’s terms. Make sure you know what you’re getting yourself into, from your card’s rewards program to fees.

2. Not using it.

Credit card companies don’t make as much money if consumers don’t use their cards. If you haven’t used your credit card in awhile, your credit card issuer could deem your card inactive and close your account, which could negatively impact your credit.

Instead: If you are reluctant to use credit but want to keep your card open, try placing a small recurring fee on it and paying it off immediately each time. Alternatively, swipe it every few months for an item you need to buy, like groceries.

3. Not paying on time.

Not paying your bills on time doesn’t just severely lower your credit score – it could also cost you monetarily, as your credit card provider may penalize you by charging a late fee and raising your interest rates.

Instead: If you keep forgetting to make payments, set up as many reminders as necessary to ensure your bills get paid. If you can’t pay on time because you don’t have enough money, try scrutinizing your budget to see where you can cut back and asking for a grace period, changing the due date or reduced minimum payment. Your credit card company may understand if you demonstrate that you’re working to remedy the situation.

4. Only making the minimum payment.

Simply put, paying the minimum each month could cost you a lot of money and take forever to pay off. Say you have a credit card with a $1,000 balance and a 14.95% interest rate. According to Credit Karma’s debt repayment calculator, if you only paid $25 a month, it could cost you an estimated $393 in interest and take you an astonishing 56 months to pay off.

Instead: Rethink what you pay monthly. If you need convincing to pay more, just take a look at your credit card statement – it should tell you how much it will cost you if you only pay the minimum.

5. Using all the credit you’re granted.

Excessively swiping your card isn’t just bad news for your wallet – it could also hurt your credit score. Many scoring models factor in how much of your credit limit you’re using because the more credit you use, the more likely you may not be able to pay everything off.

Instead: Monitor your utilization rate and make sure it never gets too high. A good rule of thumb is to aim for a rate under 30 percent. However, note that this doesn’t mean you have to keep a balance on your cards!

6. Taking cash advances.

Strapped for cash? Avoid using your credit card for cash advances unless it’s an emergency – with sky-high interest rates, upfront fees and no grace period, it could be a costly mistake. While it could be a better option than taking out a dangerous loan, like a payday, pawnshop or car title loan it’s still best to avoid if possible.

Instead: Consider other options, like applying for a short-term loan product, asking for a payday advance or borrowing from a loved one.

7. Closing it (for no good reason).

As mentioned earlier, closing an account, whether done by you or your credit card provider, could negatively impact your score. Unless you dramatically reduce your spending, closing a card (and saying goodbye to that credit limit) will probably increase your credit utilization rate. It could also lower your average age of accounts when the card falls off your credit report.

Instead: Exercise caution when considering closing any cards, as doing so could cause more harm than good.

8. Spending just to earn rewards.

If you have a rewards card, it can be tempting to spend just to earn that 5 percent cash back or those airline miles. However, if you end up buying things you don’t need just for the perks, it could cause you to spend more than you can afford.

Instead: When shopping, question why you’re buying each item and whether you really need everything you’re purchasing. If you don’t have a good reason, consider delaying your purchase. This could help prevent both impulse buys and faulty justification for shopping.

9. Ignoring your monthly statement.

We’re inundated with information these days, but one thing you don’t want to ignore is your monthly statement. Looking over it regularly can help you learn about changes to your interest rates and fees, remind you of your payment due date, help you spot erroneous charges quickly and more.

Instead: Regularly check your accounts, and make sure you know the state of each card you own. It could save you a world of trouble in the future.

10. Carrying a balance to improve your credit.

Carrying a balance on your credit cards because you can’t afford to pay off the entire amount is understandable. Carrying a balance in hopes that it will improve your credit score is a huge mistake and one of the biggest credit myths out there. You don’t need to carry a balance to build credit – the balance reported to the credit bureaus is from your last statement, not what is carried over to the next statement.

Instead: Pay your bills in full as often as possible. You don’t need to pay interest to have a good credit score.

For more information about taxes and your 401k plan contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Each year, the IRS sends millions of notices and letters to taxpayers for a variety of reasons. Here are ten things to know in case one shows up in your mailbox.

1. Don’t panic. You often only need to respond to take care of a notice.

2. There are many reasons why the IRS may send a letter or notice. It typically is about a specific issue on your federal tax return or tax account. A notice may tell you about changes to your account or ask you for more information. It could also tell you that you must make a payment.

3. Each notice has specific instructions about what you need to do.

4. You may get a notice that states the IRS has made a change or correction to your tax return. If you do, review the information and compare it with your original return.

5. If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment.

6. If you do not agree with the notice, it’s important for you to respond. You should write a letter to explain why you disagree. Include any information and documents you want the IRS to consider. Mail your reply with the bottom tear-off portion of the notice. Send it to the address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

7. You shouldn’t have to call or visit an IRS office for most notices. If you do have questions, call the phone number in the upper right-hand corner of the notice. Have a copy of your tax return and the notice with you when you call. This will help the IRS answer your questions.

8. Keep copies of any notices you receive with your other tax records.

9. The IRS sends letters and notices by mail. We do not contact people by email or social media to ask for personal or financial information.

10. For more on this topic visit IRS.gov. Click on the link ‘Responding to a Notice’ at the bottom left of the home page. Also, see Publication 594, The IRS Collection Process. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

For more information about taxes or help with the IRS contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

You can celebrate your mom even on a tight budget. 

This Mother’s Day, there are plenty of opportunities to wow your mom, wife or grandmother without breaking the bank. The point isn’t how much you spend, but how much thought you put into making her feel special.

In case you need a few ideas, here are 11 activities that don’t cost much (or cost nothing at all!) to consider:

Breakfast in Bed

This classic idea has spanned the decades for good reason. It’s a thoughtful way to wake up Mom and let her know how much she means to you. Plus, it’s impossible not to feel pampered when someone brings you breakfast in bed, even if it’s just cereal or toast. The fact that she didn’t have to make it is the best part!

Cook Together

If you’re sharing brunch, lunch or dinner at home on Mother’s Day, cooking it together is a fun way to spend the holiday. Or, you can bake a special dessert together. Let her pick the menu! As long as you plan everything, then she will love the gesture.

Gardening

Plants and flowers are a traditional gift to give on Mother’s Day. This year, take it a step further by spending the day with her in the garden. You can help her with some of the more grueling tasks like weeding or spreading mulch. Another frugal idea is to give her seeds instead of flowers and then plant them together. It’s much cheaper and can be a more meaningful gesture because it’s a shared experience.

Spa Day for Her, Cleaning for You

If the mom in your life is in desperate need of some rest and relaxation, search on a daily deals website like Groupon or Living Social for a discounted spa package. Send her off to get pampered, and then while she’s out of the house spend a few hours helping out. Maybe it’s just watching the kids while doing a few loads of laundry or the dishes, but to have those items checked off her list when she gets back from the spa will make her day even more restful.

Learn Together

Daily deals websites also frequently have coupons for classes and they might even have specials for Mother’s Day. Check out cooking classes or paint nights for fun, low-cost activities that will make for a memorable holiday together.

Visit a Museum

Museums often have free admission or require only a donation of your choosing. Spend the day exploring and learning together, or checking out an exhibit she has been eyeing. For pricier institutions, check their online calendar for “free admission” days and nights.

Picnic

If the weather is in your favor, pack your mom a surprise picnic and spend the day outdoors enjoying the spring weather. Check to see what you have in your kitchen already, and then splurge on her favorite beverage. Don’t forget a large blanket that is outdoor-friendly. Handling all of the logistics is a gift in itself.

Photos

Make sure your mom has the most recent photos of you and your family, especially if you have young children who are growing quickly. Whether it’s framing a nice photo for her house or helping her print photos and put together an album, this is a gift that can keep on giving all year long. It’s even nicer if she’s in the shots, too!

Game Night

Host a game night on Mother’s Day weekend with your family. Gather plenty of games and her favorite snacks and beverages. You could even create your own trivia game with fun facts about mom!

Volunteer for Her Favorite Cause

Does your mom have an organization that means the world to her? Organize a day to volunteer and help the cause. It won’t cost anything at all, and giving back is a great way to bring families together.

Take a Walk

Lastly, the simple act of taking a walk or a hike together is a completely free option for you to spend time with the mother figure in your life. Make sure to put your phones away and focus on talking to each other for a few hours. For $10 or less, treat yourselves to ice cream afterwards!

Spend time with your special lady, today!

Tomorrow, for more information about filing taxes, tax questions and your 401k plan         contact one of our offices:                                                                                                                     Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Too many people cash out their 401k plan without fully understanding the consequences. This can be an expensive mistake. Here’s what you need to know before you cash out.

First, Are You Eligible to Cash Out of Your 401k Plan?

If you are still employed by the company that sponsors your 401k plan then you will not be eligible to cash out of the plan. Instead, you can see if your plan offers either a 401k plan loan, or a 401k plan hardship withdrawal (not all 401k plans allow hardship withdrawals so you need to ask your plan administrator if your plan has this feature.)

If you are no longer employed by the company that sponsors your 401k plan, then you are eligible to get your money out of your 401k plan. You can cash out of the plan, or rollover your 401k plan balance to an IRA. If you choose to rollover your 401k plan instead of cashing out, then you will not have to pay taxes or penalty taxes: rollovers to IRAs are not taxable transactions if you do them the right way.

The One Reason Why You May Not Want to Cash Out of Your 401k Plan – Creditor Protection

Money in a 401k plan is creditor protected, and it is protected from bankruptcy. It is foolish to cash out a 401k plan to pay down debt if it is likely you may end up filing bankruptcy. The bankruptcy court cannot touch your 401k plan and creditors cannot attach the assets in your 401k plan.

Taxes on Cashing Out of Your 401k Plan

If you must cash out of your 401k plan and you have not yet reached age 59 ½ then the dollar amount you cash out will be subject to ordinary income taxes and a 10% penalty tax.

If you are not yet age 59 ½ it is usually required that 20% in taxes is withheld from any balance that you cash in, so for every $1,000 you cash in, you would receive about $800. The other $200 would be sent to the IRS. At the end of the year the 401k plan will send you a tax form called a 1099R that shows the amount of taxes withheld on your behalf.

When you file your tax return, you will include the amount of the 401k plan that is cashed in as income, along with other sources of income. It flows into your tax return on the first page, and based on your total income and deductions you will either owe additional tax or get a refund.

Check on 401k Retirement Age Rules Before You Cash Out

If you are between age 55 and 59 ½ you may be able to avoid the 10% penalty tax if you terminated employment no earlier than the year you turned 55.

If you are over age 59 ½ any amounts you withdraw from your 401k plan will be subject to income taxes, but not penalty taxes.

How to Cash Out of a 401k Plan

The first step to cash out of a 401k plan is to call the phone number that appears on your 401k plan statement and ask them to send you the paperwork to cash out of your plan. In some cases you may be able to do this online or over the phone, but most of the time you must fill out paperwork.

Sometimes a signature from a HR person or plan administrator at the firm that sponsored your 401k plan will be required. If you worked for a smaller company you may have to take this paperwork to them, or contact them yourself to get this done. If you worked for a large company this is often handled by the investment company that manages the 401k plan.

For more information about filing, taxes and your 401k plan  contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Keep these tax tips in mind throughout the year. You’ll be better prepared for next tax season, and you’ll also make better financial decisions.

Consult your tax professional before taking any major financial steps. Right before the 2014 tax-filing deadline, several people come to our offices with questions after they made major financial decisions, so it was too late to help them.

Some of them cashed out their IRAs, some of them sold a property in a short sale, others earned thousands of dollars from their online website without filing as a business—the list goes on and on. Call our office for help throughout the year and not just right before tax time.

Talk to your tax pro before you get married. Consider having the unromantic yet necessary tax and money talk with your fiancée before marriage, and get our tax pro involved. This can help ensure that you both start the marriage with open eyes and are able to deal head on with any tax, financial, or credit problems.

If you’re contemplating a divorce, include a tax professional in the discussion. Divorce attorneys may know a lot about family law, but they appear to know nothing about tax law. You should consult our office on issues such as who gets the tax benefits for the children each year and who gets which assets.

You may think you’re evenly splitting the money and assets, but some assets—such as stock, retirement accounts, IRAs and real estate—have heavy taxes associated with them when you sell them or cash them out. It’s important to understand the implications.

Have a business? Start your bookkeeping right away. The sooner you log your sales, mileage, travel, meals, and other expenses, the sooner you’ll know if you have to make changes to the way you do business. Are you undercharging clients or overpaying vendors? Is that why you’re always broke at the end of the year?

Also, be sure to set aside money for your estimated taxes so you don’t fall short when it’s time to pay.

For more information about tax planning contact one of our offices:                                   Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

It’s easy to sidestep withholding problems if you stay on top of what comes out of your paycheck and adjust it as necessary. Your goal is to claim all of the W-4 allowances you are entitled to so that your withholding will come as close as possible to your actual tax liability.

Check early, check often

You can change your withholding at any time, so check early and check often to make sure you are withholding the correct amount. When you get your first paycheck of the year, you can see what amount was taken out and multiply it by the number of pay periods to get an idea of what your final withholding will total.

Now that you have filed your taxes for last year, you’ll get a better picture of how precise your withholding calculations were. If they were on the mark, and your circumstances haven’t changed substantially, then you’re OK. But if you owed a lot or got a big refund, you need to adjust your withholding. Likewise, if you got married, divorced, had a child, your spouse stopped or started working, or you bought a house, you need to refigure the amount you had withheld.

Common reasons to adjust withholding:

1. Got married or divorced
2. Had a baby
3. Bought a house
4. Spouse stopped or started working
5. Added second job
6. Nonwage income (interest, dividends, inheritance, etc.)

Throughout the year, you also need to be aware of any income you get from sources where there is no withholding. This includes nonwage income, such as interest, dividends, capital gains or retirement plan distributions. If this increases dramatically, you need to increase your withholding amount or make estimated tax payments.

For more information about taxes and withholding contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

ax season is over. At this point, any unpaid taxes for 2014 will be treated as back taxes. If you do owe taxes for 2014 or for any year before that, you can pay them in monthly installments. Even those who filed for an extension, but could not pay their entire tax bill, an Installment Agreement can be requested.

There are different types of Installment Agreements, each plan based on the amount of tax debt owed. The less you owe in back taxes, the easier it is to qualify for an installment agreement. You can apply for an online Installment Agreement if you owe $50,000 or less in back taxes.

Some of the important points to consider before applying for an Installment Agreement are the associated penalties and interest, as well as the rules of the agreement. With an Installment Agreement, you get more time to pay your back taxes, but you will pay more because of penalties and interest.

The penalty for a late payment is charged at 0.5% each month on the amount of back taxes that remain to be paid.

Interest is charged at the federal short-term rate plus 3% for a year. It is compounded every day.

To reduce your penalties and interest, you can pay more initially so that your total back tax amount is lower. Also, if you can, pay the back taxes in as few months as possible.

Once you have reached an agreement with the IRS, you will be required to cover the minimum payments each month. Any tax refunds will be offset, or taken, to pay your tax debt.

If you fail to make a payment for any month, the IRS is likely to terminate your agreement. If you cannot make the minimum payment for a particular month, contact the IRS and inform them of your situation.

For more information about filing and paying taxes contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

The Internal Revenue Service recognizes that many people may be having difficult times financially. There can be a tax consequence to events, such as job loss, health care coverage, debt forgiveness or tapping a retirement fund. The IRS can help you meet your tax obligations.

File your tax return and pay what you can on time

If you cannot pay the full amount of taxes you owe, don’t panic. Even though penalties and interest accrue if you don’t file and pay on time, you can avoid or limit these charges by filing on time, by April 15. Pay as much as you can by the April 15 deadline, because the IRS charges failure-to-pay penalties and interest on any unpaid balance, which increases the amount you owe.

Taxpayers who owe, but can’t pay in full have several options for meeting their tax obligations. They can use the Online Payment Agreement application on IRS.gov if you owe $50,000 or less in combined tax, penalties and interest to request an installment agreement and receive an immediate notification, if they approve the request. An installment agreement allows you to make payments over time rather than paying in one lump sum. If you owe more than $50,000 you may still qualify for an installment agreement, but you will need to complete a Collection Information Statement, Form 433F. Otherwise, contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief, such as a short-term extension to pay, an installment agreement or an offer-in-compromise. Additionally, taxpayers who can’t meet the filing deadline can request an extension of time to file. However, an extension of time to file is not an extension of time to pay.

Keep in mind, if you experience a change in marital, parental or financial status in 2014, you may now be eligible for certain tax credits, such as the Earned Income Tax Credit. If you earned less than $52,427 in 2014, check to see if you qualify for the Earned Income Tax Credit, some workers could receive as much as $6,143. Eligibility for EITC depends on your earned income and family size, among other tests. However, single people and childless workers are also eligible. If you qualify, you must file and claim the credit to get it. The online EITC Assistant can help you calculate your eligibility with ease and accuracy.

Electronic Payment Options

IRS offers various electronic payment options to make it as easy as possible to make a full or partial payment with your tax return. You can make payments online, by phone using a credit or debit card or through the Electronic Federal Tax Payment System. Taxpayers who e-file their return may use the electronic funds withdrawal option for submitting an electronic payment. And, you can e-file before April 15, but schedule your payment for withdrawal on April 15.

For more information about filing and paying taxes contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

For the millions of taxpayers who will file in the next two weeks, the IRS offers the following reminders:

File electronically. Filing electronically, whether through e-file or IRS Free File, vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. And best of all, there is a free option for everyone.

Mail a paper return to the right address. Paper filers should check IRS.gov or their form instructions for the appropriate address where to file to avoid processing delays.

Take a close look at the tax tables. When figuring tax using the tax tables, taxpayers should be sure to use the correct column for the filing status claimed.

Fill in all requested information clearly. When entering information on the tax return, including Social Security numbers, take the time to be sure it is correct and easy to read. Also, check only one filing status and the appropriate exemption boxes.

Review all figures. While software catches and prevents many errors on e-file returns, math errors remain common on paper returns.

Get the right routing and account numbers. Requesting direct deposit of a federal refund into one, two or even three accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account.

Sign and date the return. If filing a joint return, both spouses must sign and date the return. E-filers can sign using a self-selected personal identification number (PIN). Attach all required forms. Paper filers need to attach W-2s and other forms that reflect tax withholding, to the front of their returns. If requesting a payment agreement with the IRS, also attach Form 9465 to the front of the return. Attach all other necessary schedules and forms in the sequence number order shown in the upper right-hand corner. Keep a copy of the return. Once ready to be filed, taxpayers should make a copy of their signed return and all schedules for their records.

Request a Filing Extension. For taxpayers who cannot meet the April 15 deadline, requesting a filing extension is easy and will prevent late filing penalties. Either use Free File (link again) or Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due April 15.

Owe tax? If so, a number of e-payment options are available. Or send a check or money order payable to the “United States Treasury.

For tax help or more information contact one of our offices:
  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,
Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600