How do you know which online bank to go with? We reviewed Monifi, a goal-based online bank account, to help you make your decision.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If youâve discovered while preparing your 2021 tax returns that you actually owe federal income taxes, your employerâs benefits program may help you reduce your taxable income and improve your quality of life. And if you have a side gig and find yourself owing FICA (Social Security and Medicare) taxes, we have a couple of tips for you, too.
Here are five tax-reducing options your company may offer.Â
Thereâs no better way to lower taxes today while saving for the future than by maximizing contributions to your employerâs retirement plan, whether itâs a 401(k), 403(b) or a 457 plan.
In 2022, you can contribute up to $20,500 to your account, or $27,000 if your 50 or older. Every penny you contribute on a pre-tax basis reduces your taxable income, year after year. And if your company matches some of your contributions, youâll get an added boost toward building the nest egg of your dreams.
If youâre enrolled in a high-deductible health plan (HDHP) at work, chances are your employer also offers a health savings account (HSA) option.
HSAs are funded with pre-tax contributions from your paycheck, up to a maximum of $3,650 per individual ($7,300 per family) with an additional $1,000 in âcatch-upâ contributions per person if youâre age 55 and older. Â
Your HSA grows tax free, and you can take tax-free distributions to pay for qualified healthcare expenses, including over-the-counter medications, medical equipment, dental expenses, physical therapy and even acupuncture and aromatherapy.Â
If you change jobs, you can take your HSA to your next company or transfer your balances into an HSA offered by a financial services company.Â
Companies that donât have HSAs often offer flexible savings accounts (FSAs) as an alternative.
You can fund your FSA with pre-tax contributions of up to $2,850 per year. As with HSAs, assets in your FSA grow tax free and you can take tax-free deductions to pay for qualified healthcare expenses.
The main difference between FSAs and HSAs is that you generally must spend all the money in your FSA by the end of the plan year. However, your employer may either give you up to 2½ months after your plan year ends to use the leftover money or allow you to carry over up to $570 to use in the new plan year.
Unlike HSAs, you canât transfer your FSA. If you change employers, you must either use the money in your FSA before you leave or forfeit the balance.
If you have children in daycare, or they attend preschool or summer day camp or participate in before- or after-school programs, a dependent care FSA (DCFSA) can help you pay for these expenses. You can also use it to pay for certain adult care expenses.
Like healthcare FSAs, your can fund your DCFSA with pre-tax contributions and take tax-free distributions to pay for dependent care. You can contribute up to $2,500 per year if you file an individual return or $5,000 if youâre married and file a joint return. Â
As with healthcare FSAs, you must use all of your DCFSA contributions by the end of the plan year unless your employer provides a grace period or rollover option. And, like FSAs, DCFSAs canât be transferred to another employer.
If youâre considering purchasing term life insurance to provide financial protection for your family, take a look at what your employer offers.
Many companies offer group-term life insurance that employees can pay for through pre-tax contributions.
But be careful. If you pay for more than $50,000 worth of life insurance coverage, the excess will be subject to FICA and federal income taxes. If you want more coverage, consider supplementing the insurance you pay for at work with another policy you purchase on your own.
If you earn additional income from your own business or you receive 1099 income as in independent contractor, youâll generally have to pay FICA and federal taxes on these earnings. Most people with this extra income make quarterly estimated tax payments. If you wait until you file your returns to pay these taxes you may get hit with late-payment penalties.
The good news is that you may be able to reduce your side-gig tax burden by deducting many of your own business-related expenses. These may include vehicle expenses, business-related cell phone and Internet services, meals with clients or prospects and some of your home office expenses.
Keep in mind that you must keep detailed records of all of these expenses in case youâre the unlucky recipient of an IRS audit.
In addition to helping you decide which tax breaks to take advantage of at work, your accountant or financial adviser can also help you identify other ways to help you reduce or maybe even zero out your annual federal and state tax bills.
One thing thatâs so satisfying is putting money into your bank account. Despite the cryptocurrency craze and talk of a cashless society, holding and keeping cash is still king. But you may be wondering, how exactly can I get my money into an account? These days, with all the mobile transactions and multiple account types, […]
The post Depositing Cash Into a Bank Account: 9 Different Ways appeared first on SoFi.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
When it comes to saving for your best financial future, youâve got lots of options â including CD ladders. A CD ladder, or certificate of deposit ladder, allows you to take advantage of the best parts of CDs (relatively high yield at a relatively low risk rate) while circumventing the worst parts of CDs (having […]
The post Your Ultimate Guide to Certificate of Deposit Ladders (CD Ladders) appeared first on SoFi.
If youâre in need of cash, you might wonder how to transfer money from a credit card to a bank account and whether itâs a good strategy to consider. Let SoFi help with that decision. Here, we will describe the nuts and bolts of this type of transfer and also provide alternatives to consider. Can […]
The post Transferring Money From a Credit Card to Your Bank Account: What to Consider appeared first on SoFi.
Setting up a budget can be daunting. So much of the advice seems to call for digging up impossible amounts of paperwork and receipts, only to invest hours in front of the calculator. Not exactly how you want to spend your precious free time! But, take heart: The 70-20-10 rule can help. A percentage-based, easy-to-apply […]
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Wells Fargo landed in hot water several years ago when it was revealed that employees had created millions of fraudulent accounts in order to make their sales targets. Increased consumer acceptance of online banking, where customers can expect better interest rates and mobile apps, has also posed a problem for Wells Fargo, whose core checking [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If youâre wondering whether a bank checks your credit when you open a checking account, the answer is typically noâ¦but thereâs more to the story than that one little word! Your credit score is probably top of mind when youâre considering this question. For good reason: You probably already know how important those three little […]
The post Do Banks Run Credit Checks for a Checking Account? appeared first on SoFi.
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. If youâre in the market for a personal loan â also called an installment loan â in 2022, expect to pay a higher interest rate [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.