Monday, January 30, 2017

Tax Form Secrets Revealed


Tax forms have started rolling in and your mailbox looks like a can of alphabet soup exploded in it! What do you need and where do you start?

This is a tough time of year for people who don't like paper. Starting at the end of January and continuing through March, taxpayers start drowning in paper. Sorting out what's important and finding a place to store it is a big challenge, and it becomes harder if you don't know what's what. 

Fortunately, it's easier to tell these forms apart than you might think. There are only a few types of forms you'll need to deal with, and most of them don't even need paper. Here are the four most common tax forms you'll see and what to do with them! 

1.) W-2 
This is the most common informational form you'll receive. It's a statement from your employer that contains your yearly wages, how much tax you've had withheld and how much you've paid (pre-tax) for things like health care premiums. If you have one job, this may be the only major tax form you get. 

It's also one of the most important forms. You'll want to keep it with other tax documents until it's time to file your taxes. This information - your yearly earnings and the amount of tax you've had withheld - are the most important factors for determining what your tax bill will be (or how big a refund you'll get). 

2.) 1099 
This is a series of forms identifying income from sources other than a contract job. Most common is the 1099-INT, which lists interest income. You may get one of these from any financial institution where you have an account.
If you freelance or work as a contractor, you'll probably receive a 1099-MISC. If you received unemployment or another source of government income, you'll get a 1099-G. If you had debt canceled this year, you'll get a 1099-C. There are a few other kinds of 1099 forms, but they all do basically the same thing.
You'll need to hold on to these forms, too. They document income that you haven't yet paid any taxes on. You'll need the amounts on these forms when you get ready to file.
3.) 1095 
These are relatively new forms that deal with health insurance. Form 1095-A is a statement about insurance purchased through a marketplace exchange. 1095-B is for private health insurance. 1095-C is for employer-sponsored health care coverage.
These forms are important if you get a health insurance subsidy through the Affordable Care Act. If not, you can go ahead and put this form into long-term storage. You'll be asked when you file if you had health insurance all 12 months of the year. The IRS receives a copy of this form to check your work, so you'll only need it if issues come up regarding your coverage.
4.) 1098
Two forms, the 1098 and the 1098-T, report tax deductible expenses. The 1098 form lists mortgage interest and points on your primary residence, while the 1098-T itemizes tuition and other expenses paid to an institution of higher learning. The 1098-T is used in a variety of places, including claiming the Lifetime Learning Credit and the Hope Credit.
Unfortunately, in order to take advantage of deductions relating to mortgage expenses, you'll need to itemize your deductions. Claiming the deductions listed on the 1098 requires you to forgo the standard deduction, which for most people turns out to be a bad idea. Unless you have a host of other deductions, or you bought or refinanced your home this year, claiming the standard deduction and filing the 1098 away for later will serve you best.
The bad news is you can't file your taxes and be rid of the whole mess until you get all of your forms together. You'll need to keep any W-2 forms, 1099 forms and your 1098-T form together until all of them arrive. Get a manila folder or a document envelope to keep them all in the same place. Keep that folder somewhere safe, and as soon as possible, file your taxes so you can put it into storage. Keep your returns for at least 3 years after you file. A paper copy of last year's tax return in your filing cabinet can make a world of difference!
If you do your taxes yourself, you may want to look at an online resource like TurboTaxDestinations Credit Union members can get a discount of filing this way.
Your Turn: How do you keep up with the paperwork requirements of your tax return? Have a magical filing system? Share your best organizational strategies with us in the comments!



Tuesday, January 10, 2017

Fitness For Your Body And Wallet: Shedding Pounds Without A Gym Membership


New Year's resolutions can be fantastic motivating tools, and many of us use that motivation to improve our health. Thirty-seven percent of Americans resolved to lose weight, while another 32% resolved to stay fit and healthy in the New Year. No one knows that better than the weight loss industry, which ramps up its marketing this time of year. You've no doubt seen offers for free months and other discounts at local and national gym chains. 

What these advertisements leave out is that gym memberships are still very expensive. Nationally, gym memberships average $58 per month. That's bad enough before you start adding in contract initiation fees and other upfront charges. If you want to get fit, but don't want to pay those exorbitant fees, there are a few strategies you can try. Give these budget- and body- friendly ideas a chance. It might help you along the path toward a happier, healthier 2017! 

1.) Diet

Honestly, it doesn't matter how much you work out if you're not eating well. You won't lose weight. You'll still also suffer the side effects of a poor diet, like low energy and high blood pressure. Trying to get healthy with just exercise is like trying to fix a heater by changing the thermostat. 

According to nutritionist Shawn Talbott, weight loss is 75% diet and 25% exercise. The biggest factor in losing weight is your basal metabolic rate (BMR), which is how much energy your body burns throughout the day. This is usually in the vicinity of 2,000 calories. Running a mile burns about 100 calories, or 5% of your BMR. Worse yet, exercise can have a paradoxical effect with a bad diet. After a vigorous workout, you're more likely to snack. It's easy to fall into the trap of thinking you've "earned" an indulgent reward after a run or bike ride. You can easily wipe out all the good you've done with a bowl of ice cream.
Use a calorie tracking app like Myfitnesspal to get a sense of where your calories are going now. You might be surprised at how much you can save with a few easy cuts! Diets don't have to be extreme or restrictive to result in real, lasting changes to your body.
2.) Body weight exercise
One of the biggest reasons people give for joining a gym is access to strength training equipment. It's true that cardio alone won't help as much as strength training. It's not true, though, that you need expensive machines for it!
Three simple exercises can help tone trouble spots and reshape your body. Planks work your core, arms and shoulders. Squats work your glutes and legs. Toe raises work your calves. You can find tutorials for these and countless variations online. The challenge is to pick a routine and stick with it.
Another direction for body weight exercise is yoga. You can find tutorials online for strength-building yoga you can do in your home at your own pace. This can be a lot less intimidating than a class because no one can see if you mess up. Lots of yoga poses work on muscle building and flexibility. These can help tone and shape your body, ensuring your weight loss focuses on fat, not muscle.
3.) Make your own groups
One appeal of a gym membership is the camaraderie formed by group exercise classes. The scheduling of a class forces accountability, and working together can make the exercise seem less taxing. You can get these benefits outside the gym as well!
If you have several friends also interested in fitness, start building fitness activities, like hiking, bike riding or running, into your regular social time. Instead of going out for coffee, go for a run together!
If you're on your own, you can still find others who share your fitness goals. Use sites like Meetup to look for exercise groups that work at your skill level. If you're completely new, now's a great time, as there will be plenty of other people also starting a new fitness journey. If you're looking to take your fitness to the next level, challenge yourself by joining an advanced running or biking group. You can get fit and make new friends at the same time, without spending a big chunk of change on a gym membership.
Your Turn: How are you going to meet your fitness goals in 2017? Share your best tips on how to beat the gym and get fit!