If you hang out here, you'll learn lots of interesting things. Many of the big things are memorialized in the wiki / sidebar topics. Spend less than you make; pay your credit card bill in full each month; take the 401k match. You know these. We've also done other compilations, e.g. ways to work the system in your favor using the Saver's Credit, gift tax laws, capital gains tricks, and COBRA retroactivity. Or, from the other perspective, common mistakes to avoid, like taking out a loan to build credit, cashing out retirement accounts, or co-signing loans.
Here are some more small things that you might not know yet, and in some cases might even think that the opposite of these things is true:
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Looking for ways to get more than 1% on your cash on hand? Are you willing to do direct deposits and monthly debit transactions to get a higher rate? If so, look into offers such as LMCU's 3% interest checking account. 3% annual interest on balances up to $15,000. This one is open to anybody. Can you get 3% safely from your bank?
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What's your best deal on a cash-back rewards credit card? If you said 2% cash, that's a safe answer, but don't overlook the value of initial spend bonuses on new cards. Depending on your spending level and credit history, it's usually possible to net 4% or even more cash back for years at a time by getting one new credit card each year. For many people, opening a new credit card each year has a minimal impact on their overall credit, so think of it as another way to turn your credit into current income.
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Closing a credit card won't help your credit score, even if you mistakenly think it will lengthen average age of accounts. If you want to avoid an annual fee, you can do a product change to a card with no fee.
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If you have a high-deductible healthcare plan (HDHP), you should put money into an HSA even if you don't expect to have any out-of-pocket medical expenses. The money is tax-deductible like a traditional IRA, but with no income limits on the deduction, and can be withdrawn for any purposes exactly as with an IRA when you reach 65. Essentially, a traditional IRA, only better.
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You're self-employed. Are you deducting your health insurance premiums from your AGI, and do you make employer contributions to your own 401k? You could. You perhaps should. You can even roll a prior employer's 401k into your solo-401k and have the control of an IRA with certain unique 401k benefits (such as better Backdoor Roth tax treatment).
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Speaking if stupid 401k tricks, do you have 401k assets that exceed your annual income, but poor choices of investment? See if your employer offers a brokerage window. Most don't, but some do. This allows you to invest using standard brokerage account choices, in exchange for certain flat fees that are lower than high expense ratio funds for large 401k balances.
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If you somehow neglected to file federal income taxes for the last few years, but you had enough taxes withheld so you would get a refund, then you won't owe any penalties for late filing. You only have three years to collect your past refunds, though. If you did end up owing in any year, then there would be interest and penalties. But you won't go to jail in any event, unless you were doing something very, very bad in terms of outright fraud.
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Crooks take advantage of your lack of experience with payments when they seem to pay you by paypal or with a bad check, if only you then send them back some real money. Don't do that.
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This one is obscure, but of particular interest to the reddit community. Did the IRS take your money out of an account that you opened jointly with your parent as a minor, to satisfy a debt that your parent owed? Some people will tell you that they can do this, but, as it turns out, they can't. You own the money you put into a joint account in that situation. "Because minors in many situations cannot open bank accounts in their own names, the bank accounts list a parent's name, even when the children are the owners of the funds deposited. A levy on such an account to collect a parent's tax liability would be a wrongful levy, unless it can be shown that a federal tax lien encumbered the funds before they were deposited in the child's account." http://ift.tt/2tBQWW3
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Last but not least, one that I hope isn't unknown, but maybe not well enough known. If you don't contribute to a Roth IRA each year, you should have a real good reason for that. (Which could just be that you live paycheck to paycheck, of course. Or, you have no taxable employment income.) Are you maxing your 401k? Put the tax savings into a Roth IRA. Think you make too much for a Roth? Do a backdoor Roth. Saving for a house so you can't afford a Roth? Do the Roth instead as a way to save for the house, using appropriate investments for your timetable. Saving for college, so you can't afford a Roth? Do the Roth first.
Hope these are some tips you find useful; as always, questions welcome.
Submitted June 23, 2017 at 10:42AM by yes_its_him http://ift.tt/2rZ79rr
