No matter how deeply you’re in debt, there’s always a way forward. However, to regain your financial footing, you’ll need to work with a professional. Here are seven signs it’s time to get help dealing with your debt.
1. You pay monthly expenses (bills and rent) and purchase essentials such as food and medication on credit because you don’t have enough in your bank account.
2. You take on new debts as a way to pay off old ones.
3. You continually draw on the money you’ve put aside for a home, retirement, or other future purposes.
4. You pay your rent or mortgage late or skip payments due to a lack of funds.
5. You’re living beyond your means by continually spending money on non-essential expenses.
6. You’re receiving an increasing number of letters, emails, and calls from creditors.
7. You have an unhealthy level of stress due to your financial problems.
Your best resource for overcoming debt issues is a reputable credit counseling organization, financial adviser, or lawyer.
The party is over for tax credits
The big tax perks after the pandemic are reduced this year. Parents won’t be getting checks, but they will still have a (smaller) credit to use against taxes owed.
The Child Tax Credit was boosted for the 2021 tax year to $3,600 for children younger than 5 and $3,000 for kids 6 to 17. For the 2022 tax year, the child tax credit will drop to $2,000 for all children 16 and under. Some low-income earners may receive a partial tax credit of up to $1,500. Children 17 years of age no longer generate a tax credit.
The Child and Dependent tax credit was also boosted in 2021 to a max of 50% of costs up to $8,000 per child (max 2 kids) but will drop in 2022 to a max of 35% up to $3,000 per child (max 2 kids). Last year, the credit was fully refundable, but for 2022 it’s non-refundable.
Further, tax deductions for charitable gifts will also be less generous. Many Americans depended on charities for food and other vital services when the pandemic was still in full swing. In response, lawmakers increased incentives to make cash donations, which are expiring. So if you’re used to giving, for better or worse, tax authorities may be taking more this time around.
The Earned Income Tax Credit was also expanded in 2021 but is set to decline in 2022. For the 2021 tax year, the qualifying age dropped from 25 to 19, but it’ll now return to 25. The maximum EITC credit for childless workers will also decline from $1,502 to $560.
2023 trend: arches
Keep an eye out for arches when planning home design and decorating projects for 2023. Their smooth lines, evocative of eastern ideals of space organization, promote inner balance and elevate your mood. Here are some ways to incorporate arches into your space.
Large scale remodel
If you’re planning a major renovation, consider including arches in the structure of your home. Turn boring thresholds into elegant arched entryways or install half-moon windows. For added drama, install curved wooden ceiling beams.
Small design features
Update the focal points in your rooms. For example, give your fireplace mantle a new look with an arch-shaped art piece. You could also create a curved headboard with backlighting to evoke the feeling of a romantic sunset.
You don’t have to invest in an extensive remodel to bring arches into your decor. Use curved molding to create a DIY wall feature. Explore yard sales and second-hand shops for vintage mirrors and furniture with arch details. You could also experiment with an eye-catching paint color by adding a geometric arch shape on an accent wall.
Talk to a design adviser at your local home improvement store for more ideas.
Payment apps will soon report on your income to the IRS
Making some side cash via the gig economy, maybe giving lifts through Lyft or slinging some goods on eBay? If so, you’ll want to pay closer attention during 2023.
The IRS plans to drop the 1099-K form threshold from $20,000 to just $600, owing to changes written into the American Rescue Plan Act of 2021.
That means third-party cash networks, such as Venmo, Cash App, or PayPal, must provide 1099-K forms to people getting money through their apps. It used to be you had to make more than $20,000 to get a tattle-tale 1099-K form from one of these apps. But now, the level is down to $600. Those cash apps will remind you and the IRS of just how much you are making from that side hustle.
In the past, you still had to report the income. If you have been playing it a little casually with the math, that’s over.
Many everyday people- clearing out the garage by selling stuff online, for example — could end up handling more paperwork and reporting more income. Folks using apps like DoorDash or Uber as side hustles will also likely be impacted. Before the threshold, the forms involved were largely limited to full-time drivers, professional sellers (say, a second-hand goods retailer on eBay), and others handling many transactions.
Income on the 1099-K form is subject to income taxes and the 15 percent self-employment tax, so it’s smart for taxpayers to plan ahead. Otherwise, they may lack the funds when the time to pay comes, increasing the risk of penalties. Meanwhile, some companies must also ensure they have the systems to generate and send reports to their clients.
Initially, the 1099-K threshold change was supposed to land for the 2022 tax year, but the IRS delayed it for a year. Good thing, too, as the American Institute of Certified Public Accountants warned that “The excessive reduction in the de minimis reporting threshold for third-party network transactions has created a significantly large reporting burden.” The organization further elaborated that with the IRS already facing an unprecedented backlog, the lowered threshold would result in more delays.
In December, IRS Commissioner Doug O’Donnell announced that the 1099-K reporting requirements would be delayed. Still, the threshold definitely will be lowered for the 2023 tax year.
Four steps to protect your online bank account
Online banking has made it easier than ever to manage your bank account from anywhere in the world. While convenient, online banking doesn’t come without risks. Here are four steps to take to protect your account.
1. Create a strong password
Use a passphrase incorporating upper and lowercase letters, numbers, and special characters. Avoid using personal information, such as your name and date of birth, to ensure your password is difficult for hackers to guess.
Changing your online banking password every three to six months is a good idea to lower the odds of your pass¬word being stolen or decoded.
2. Don’t use public Wi-Fi
Avoid using online or mobile banking while connected to public Wi-Fi. If a hacker taps into the unsecured network, they can access your personal information, including your bank account login.
3. Enable two-factor authentication (2FA)
Two-factor authentication provides a second layer of security when logging into your online or mobile banking account. For example, you can choose to receive a one-time code via text message or an automated phone call to verify your identity. This makes it difficult for hackers to unlock your account.
4. Monitor your account regularly
Consult your bank statements and review your transactions weekly. If you notice anything amiss, contact your bank immediately. If possible, sign up to receive notifications from your bank that instantly alert you of suspicious activity.
Although online banking can potentially lead to hacking and fraudulent charges, the above practices will help you stay safe.
Delicious alternatives to traditional wedding cake
If fruitcake isn’t your idea of the perfect wedding cake, have you considered serving something more reflective of your tastes? From flourless confections to savory takes on the traditional, there are plenty of ways to create a wedding cake to remember.
Imagine cheese wheels set on pillars in the style of a traditional wedding cake garnished with grapes, figs, and nuts. Another savory option is a tiered meat pie.
Rather than one large cake, why not have a showpiece of bite-sized confections? Macarons make elegant and delicious treats. Pull out all the stops with decadent single-serving wedding cakes individually decorated with marzipan and fondant.
A Scandinavian favorite, the kransekake — Norwegian for “wreath cake” — is made with almonds, confectioners’ sugar, and egg whites. It’s baked in molds and then stacked to create a tower of many thin layers.
A designer biscuit shop can bake and decorate bespoke cookies with messages or images tailor-made for the bride and groom. Imagine edible surfboards commemorating your first date or little bride- and groom-shaped treats. Make it extra special with personalized place marker biscuits.
Your local bakeshops may offer sampling sessions. Contact them early to ensure they’re available for your big day.
Why tax refunds may come a bit later in 2023
Waiting for a tax refund for your 2022 tax returns? For many, tax returns this year may end up smaller, and beyond that, payments could get delayed as well. Folks looking to get their refunds quickly should sign up for IRS direct deposits, which the Agency states are the fastest way to get your money. The IRS also notes that those without checking accounts still have direct deposit options.
Still, even if you sign up for direct deposits, the funds may come a bit later than hoped. Among other struggles, the Internal Revenue Service has been swamped with backlogged returns in recent years. Social distancing measures struggle to fill open positions, and tax policy developments, among other factors, have constrained the IRS’s ability to deal with its current workload.
During the COVID-19 pandemic, the IRS workforce shrunk. In recent months, a tight labor market has made it even harder for the Agency to fill vacant positions and expand its staff. Roles as a clerk or tax examiner start at only about $15 an hour, and many organizations competing for workers have been willing to pay more. In many places, retail and fast food jobs now offer wages competitive with what the IRS can pay.
In May 2022, it was reported that the IRS had sought to hire 5,500 processing staffers but fell 3,400 short. Yet even while shorthanded, the IRS has managed to work through a large chunk of its backlog. Still, the Agency relies on arguably outdated technologies, and the American tax code is already infamously complex. As a result, paperwork may continue to pile up.
Want to ensure your returns get processed ASAP? Make sure to double-check your math and eliminate any potential errors. Yet, with so many updates to the tax code this year, largely because pandemic-related stimulus measures expired, more folks may make mistakes. Unfortunately, even if your tax return is perfect, confusion elsewhere could slow down refunds.