It's THAT time again--TAXES!

Most of us are in the midst of getting our taxes done--collecting the necessary documents, deciding on how to get them done and either eagerly awaiting for a refund or dreading the amount due. I have vivid happy memories of getting a tax refund and even though financial experts would say that you're better off not getting a refund and having that money throughout out the year-- I still miss that thrill of unexpected money hitting my checking account. Sadly, I haven't gotten a refund in years so am trudging through the not so pleasant process of determining how much I owe and deciding how to file.  In the past I've filled out the paper forms, used TurboTax  and lately hired 2 different CPA's.

First, if you qualify, I highly recommend using a Volunteer Income Tax Assistance (VITA) site where you can have your taxes prepared for FREE. The Tax Preparers are volunteers who have passes a rigorous certification program and know what tax credits to look for. If you have a bank account, you can get your return directly deposited into your bank account in a few days. You can even jump start your savings goal by purchasing a savings bond with your return, or a portion of it. Check out VITA sites in Maryland through a client of mine, MD CASH Campaign.

If however, you do not qualify for the VITA sites, you have to decide whether or not to do your own taxes or hire someone. If you choose to hire a tax preparer, some states require them to have a license, so start with looking for the license first. Get references from friends and family and compare pricing from 2-3 preparers. I received a surprise last year from a CPA who quoted me one price for the taxes but gave me a bill for $200 more than the quote--certainly resulting in my not using that one again. I chose to use a CPA because I am a consultant and felt that doing my own taxes would be above my level of tax expertise. I also detest that box in the corner of various tax software that goes up and down with the amount that I owe or am due a refund--usually a very tense and stressful process until the number is finalized. However, after doing some research this year, I don't feel it was worth the price--original quote or inflated end cost--of using a paid tax preparer and am up to the challenge of DIYT (Do It Yourself Taxes).

I started with the easiest--our daughters tax return.  She's a college student who earned a meager amount but did pay federal and state taxes. I used the free IRS efile site from TaxAct and found it pretty straight forward and easy to understand.  The one question I couldn't find the answer to on TaxAct, I found on the IRS website. Total cost for hers was $14.95 because I paid to have the state filing prepared by TaxAct--I could have saved that money by going to our state website and filing there but felt $15 was worth it to not re-enter in the information.  My husband and I have spent 90 minutes and are almost done with our taxes through TaxAct for a cost of $54.95.  Fortunately, the amount owed is what we anticipated so the stress level here is well below the Tornado level of years past. Here's an interesting CBS news comparison of tax software and an accountant.

Does Your Valentine Have a Emergency Savings?

February is a good time to look at your relationship with your significant other and discuss your financial goals--not romantic granted, but an important part of the relationship.  Most couples may have a wide range of:

• Money Experiences--one may have been raised in a frugal family with all members contributing to finding ways to spend less money and the other raised with no discussion of finances one way or the other; 
• Money Habits--one may have a habit of giving generous gifts at the holidays and one may have a habit of being generous with extended family members throughout the year;
• Money Values--one may place a high value on giving to savings for the kids' college fund and one may place a high value on the style home they live in.

What needs to be discussed, often, is the joint financial goals and how their experiences, habits and values help or hinder those goals. Taking time to calmly discuss your goals and the steps needed to reach those goals will help alleviate those sometimes stressful conversations around money. Ck out this YouTube video  on how romantic an emergency savings plan can be!

Credit (Re) Building Tip--Secured Credit Card

Sometimes I think the "American Dream" in today's world is having a good Credit Score.  A Credit Score, which is based on information on our credit reports, determines if we get a loan, what interest we pay, our car insurance rate in some states and perhaps unfairly-whether or not we are offered employment.

One tip to either build good credit or rebuild credit is to get a secured credit card. Most banks and credit unions offer them. Basically, you take the minimum amount required, often $250-$300 to the financial institution and pay a fee for the card. The money is deposited into an account--you don't touch it and the financial institution doesn't touch it. That's what makes it different from a debit card that is connected to your checking account. Then you get a credit card with a spending limit of the amount in the account, without the option of going over the limit. That is what makes it secured--the financial institution has no risk--if you violate the terms of the agreement such as running up purchases on the card and not paying, then the financial institution can take the money out of your account and cancel the card.

The way a secured credit card helps to build your credit is that all the activity on the card is reported to the credit reporting bureaus on your credit report. If you manage the card well--pay on time and keep your balance under 30% of the available credit, it will help you positively build your credit. For a comparison of secured credit cards and more information, check out Consumer Action's Secured Credit Card Survey.

Joining A Health Club?

It's that time again--New Year's resolution time--if you're like thousands of other Americans, you might be thinking of fitness resolutions and contemplating joining a Health Club. I admire your goal of working out and encourage all of us to be active and healthy.  However, it's staggering how many consumers buy a gym membership with the good intention of using it but end up dropping out months later and spending hundreds of dollars for something they don't use. So before you sign that contract, take a few minutes to complete this Checklist:

1. I've checked my Spending Plan and I can afford the monthly fee
2. I've checked to make sure the Health Club/Gym is properly licensed
3. I've checked with my local consumer protection agency and the Better Business Bureau to see if there are any complaints 
4. I talked with current members to see if they're satisfied
5. I walked through the gym to see if the equipment is all working and the environment is clean
6. I have reviewed my calendar and scheduled work out time to make sure I will use the membership
7. I have read the contract and all the services mentioned by the sales staff are included
8. I have checked the cancellation policy

If you've completed the Checklist and you're totally satisfied that you will use the Health Club to help meet your fitness goals, then get going! One more note--try to avoid signing up for automatic payment for your membership fee. Those automatic payments may be challenging to stop if for some reason, you have a dispute with the company.  For more info, check the FTC's Health Spas: Exercise Your Rights

"Button Batteries" Warning

Do you know what a "button battery" is? Or how dangerous it can be if swallowed? It's aptly named--a small round battery the size of a button and is found in hundreds of children's toys, our remote controls and in those singing cards. You might think that because it's so small, it might not be a problem if a child swallows it--that it might just pass through.  Tragically sixteen children have died from ingesting these batteries, according to the National Capital Poison Center. If the battery becomes lodged in the child's esophagus, it can cause serious injuries in as little as 2 hours.

Children are very curious and often are able to take these batteries out of toys, greeting cards and remotes so tighten all the screws on the battery covers of their toys, put the remote out of reach and be sure to monitor children with the greeting cards. For more information and safety tips on button batteries, go to www.cpsc.gov.