Hidden Savings: Commonly Overlooked Tax Deductions

Tax filing deadlines are approaching…have you filed yet? To lessen the anxiety of the season, take this opportunity to explore overlooked deductions that can help lower your tax bill. While most people are aware of popular deductions like mortgage interest and charitable contributions, there are several lesser-known categories that can help you save. (Ready to check taxes off your list? File Free HERE.)  

Child and Dependent Care  

Did you pay for childcare while working or job hunting? If so, you likely meet the criteria. Typically, your child must be 12 or younger and considered your dependent. This credit also applies if you’re paying someone to care for a spouse or dependent (irrespective of their age) if they are incapable of self-care. In most instances, you’ll need to acquire the care provider’s social security number or taxpayer identification number and include it on your return.  

State Sales Tax 

If you live in a state without income tax, or if you’ve made significant purchases like a vehicle or boat, you may be able to deduct state sales tax on your federal return. This can be especially advantageous for residents of states like Texas or Florida, where there is no state income tax, but substantial sales tax may be incurred on large purchases. 

Job Searching 

Hunting for a new job? Related expenses may be tax-deductible. Costs such as resume preparation, travel expenses for job interviews, and even fees paid to employment agencies can be claimed as deductions. While there are limitations and criteria to meet, exploring this deduction can ease the financial burden that accompanies unemployment.   

Medical Expenses & Health Savings Accounts (HSAs) 

Besides the obvious healthcare costs, travel expenses to and from appointments, medically justified home improvements and even some alternative treatments may be deductible. Contributions made to your HSA are also eligible for tax deductions. Not only do the funds in your account grow tax-free when used for qualified health care expenses, but your contributions can also help lower your overall tax liability.  

Student Loan Interest Paid by Others 

There are instances where parents or others contribute to the repayment of a student loan. In these cases, if the individual is not claimed as a dependent on someone else’s tax return—and is legally obligated to repay the loan—they can still benefit from the tax deduction for the interest paid by others. This gives a valuable opportunity to families or benefactors assisting with educational expenses to alleviate the burden of student loan interest.   

Home Office 

The IRS allows taxpayers to claim a portion of their home-related expenses, such as mortgage interest, property taxes, utilities, and even a percentage of rent. The deduction is calculated based on the percentage of the home used for business, offering a practical way for self-employed individuals and remote workers to recoup some of the expenses incurred while conducting business from the comfort of their homes. 

Educational Expenses 

Whether you’re enhancing your skills for your current job or investing in a new career path, some educational deductions can maximize your tax savings and help ease the financial strain. The Lifetime Learning Credit and the American Opportunity Credit are two valuable options. These credits cover qualified education expenses, including tuition, fees, and course materials. 

Energy-Efficient Home Improvements 

If you’ve invested in energy-efficient upgrades for your home, such as solar panels, energy-efficient windows, or a new HVAC system, you may be eligible for tax credits. The Residential Renewable Energy Tax Credit and the Non-Business Energy Property Tax Credit can provide substantial savings. Not only do these improvements help the planet, but they can also boost your tax refund. 

Note that GreenPath Financial Wellness does not provide legal or tax advice, this information is intended for general guidelines only. Connect with your financial institution to see what tax resources they have available and check out these tips on how to allocate wisely if you’re receiving a tax refund this year: 

Make the Most of Your Money 

5 Wise Ways to Spend Your Tax Refund 

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

Data Privacy Week January 21 – 27, 2024

ACT 1st Federal Credit Union Announces Commitment to Respecting Data
by Becoming a 2024 Data Privacy Week Champion

This year’s initiative emphasizes educating businesses on data collection best practices that respect data privacy and promoting transparency

ACT 1st Federal Credit Union announced our commitment to Data Privacy Week 2024 by registering as a Champion. As a Champion, ACT 1st Federal Credit Union recognizes and supports the principle that all organizations share the responsibility of being conscientious stewards of personal information.

Data Privacy Week is an annual expanded effort from Data Privacy Day — taking place from January 21 – 27, 2024. The goal of Data Privacy Week is to spread awareness about online privacy among individuals and organizations. The goal is twofold: to help citizens understand that they have the power to manage their data and to help organizations understand why it is important that they respect their users’ data.  

TAKE CONTROL OF YOUR DATA
All your online activity generates a trail of data. Websites, apps, and services collect data on your behaviors, interests, and purchases. Sometimes, this includes personal data, like your Social Security and driver’s license numbers. It can even include data about your physical self, like health data – think about how a smartwatch counts and records how many steps you take.

While it’s true that you cannot control how each byte of data about you and your family is shared and processed, you are not helpless! In many cases, you can control how you share your data with a few simple steps. Remember, your data is precious, and you deserve to be selective about who you share it with!

Follow these steps to better manage your personal information and make informed decisions about who receives your data.

For more information about Data Privacy Week and how to get involved, visit
https://staysafeonline.org/programs/data-privacy-week/.

About Data Privacy Week

Data Privacy Week began as Data Privacy Day in the United States and Canada in January 2008 as an extension of the Data Protection Day celebration in Europe. Data Protection Day commemorates the Jan. 28, 1981, signing of Convention 108, the first legally binding international treaty dealing with privacy and data protection. NCA, the nation’s leading nonprofit, public-private partnership promoting cybersecurity and privacy education and awareness, leads the effort in North America each year. For more information, visit https://staysafeonline.org/data-privacy-week/.

About the National Cybersecurity Alliance

The National Cybersecurity Alliance is a non-profit organization on a mission to create a more secure, interconnected world. We advocate for the safe use of all technology and educate everyone on how best to protect ourselves, our families, and our organizations from cybercrime. We create strong partnerships between governments and corporations to amplify our message and to foster a greater “digital” good.  For more information, please visit https://staysafeonline.org.

You can learn more about safeguarding your information online with the FTC’s information on computer security, protecting your personal information, limiting unwanted calls, mail, and email.

NCUA’s Fraud Prevention Center

SCAM OF THE WEEK: An Early Tax Reminder From the IRS

Cybercriminals are preparing for the busiest period of the year, which is tax season.
It is important to remain vigilant and exercise caution before clicking on anything.

The US Internal Revenue Service (IRS) recently held the eighth annual Security Summit. The IRS concluded the summit with a reminder to stay alert during the upcoming tax season. Specifically, they warned taxpayers and tax professionals to watch for phishing and smishing scams.

Tax scams aren’t specific to the US. Around the world, cybercriminals are readying their phishing emails and text messages (smishing).

Handling your taxes is often a difficult task. So, bad actors use this sensitive topic to catch your attention or manipulate your emotions.

Follow the tips below to stay safe during tax season:

  • Know what to expect from your local revenue agency. For example, in the US, the IRS typically contacts taxpayers by mail, not email or text.
  • Always think before you click. Cyberattacks are designed to catch you off guard and trick you into clicking impulsively.
  • Use extra caution when handling tax documents. For digital documents, use password protection. For physical documents, keep paperwork in a secure location and shred anything that is no longer needed.

Stop, Look, and Think. Don’t be fooled.

Article provided by:

 

 

 

 

KnowBe4 is the world’s most popular integrated platform for awareness training combined with simulated phishing attacks. Let Keller Schroeder show you how KnowBe4 has helped thousands of organizations just like yours manage the continuing problem of social engineering.

KnowBe4.com

Budget, Learn, Grow: Free Financial Literacy Essentials

Budget, Learn, Grow: Free Financial Literacy Essentials

By GreenPath Financial Wellness

For many of us, 2023 was a challenging year in terms of navigating inflation, accommodating high-interest credit card rates, and deciphering headlines around student loan repayment. Staying on top of financial best practices is both time and energy consuming, and cost-free resources can go a long way towards alleviating stress.

If you want to end the year strong (or at least feel more prepared for what next year brings) you don’t have to game plan your financial picture alone. Our nonprofit partner, GreenPath Financial Wellness, offers a variety of free financial education courses that you can take online, anytime.

Haven’t had the opportunity to explore LearningLab+ yet? Here’s a snapshot of some of the current courses. The best part? You can walk away with some financial best practices in the time it takes to savor a meal or cup of coffee.

Homebuying 101

Course Length: One hour

Who Benefits: Anyone who is contemplating home purchase —a decision that is often laden with paperwork, processes, and industry jargon.

What’s Covered: This five-part course (divided into 10- to 15-minute-long segments) covers financial readiness, shopping for lenders, closing day, and the many steps in between.

Register Online

Making the Most of Your Money

Course Length: 10 minutes

Who Benefits: Those looking to create emergency savings, pay down debt, or save up for a large purchase.

What’s Covered: This single course provides a game plan and best practices on how to spend a lump sum, whether that’s a tax refund, work bonus, inheritance, or insurance settlement.

Register Online

Paying Down Your Credit Card

Course Length: 25 minutes

Who Benefits: Anyone seeking to get their credit card debt under control and feel confident about their chosen repayment strategy.

What’s Covered: An overview of debt repayment methods (including debt management programs and the snowball vs. avalanche methods) real stories from individuals tackling credit card debt, and an interactive worksheet to get you started. 

Register Online

Navigating Auto Loans 

Course Length: 10 minutes

Who Benefits: Those who are worried or concerned about car purchase and want to have confidence around financing. 

What’s Covered: An overview of financing options depending on your budget, the process for finding the best auto loans, and a confidence survey on next steps. 

Register Online

Forbearance and Other Mortgage Payment Options

Course Length: 10 minutes

Who Benefits: Anyone needing to examine their options on keeping vs. leaving their home and desiring clarity around industry terms.

What’s Covered: An example of a conversation with a mortgage servicer, a vocabulary list to have handy when discussing your mortgage, and advice on weighing the pros and cons of keeping or leaving your home.

Register Online

CheckRight

Course Length: 10 minutes 

Who Benefits: Those planning to set up a new checking account.

What’s Covered: An overview of account setup, the basics of good checking account practices, and a discussion of options for those who might have struggled in the past and are starting fresh with their account.

Register Online: English / Spanish

Explore these and other courses on LearningLab+, and don’t hesitate to reach out to your financial organization to see what educational resources they can provide to help you feel more confident as you head into 2024. And in the meantime, may you and your loved ones enjoy a restful, restorative holiday season!

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

Coping With Inflation? Be Budget Aware.

Coping With Inflation?  Be Budget Aware.

By GreenPath Financial Wellness

Inflation continues to put pressure on household budgets.

From groceries to gas, record-breaking inflation means the purchasing power of your money is decreasing each month.

Our partner GreenPath Financial Wellness offers you the following steps to keep “budget aware” to help navigate this period of high inflation, however long it lasts.

1.    Take inventory of your full financial picture. Has your household income changed? Have you adjusted your budget for rising groceries, transportation, or other expenses? Check your existing budget to see where you stand and where your money is going. If you don’t have a budget, it can help to create a simple spending plan or roadmap of monthly expenses. A good place to start is to use resources like a budgeting worksheet to track your monthly income against current expenses.

2.    Continue to build an emergency fund to tap into when unexpected circumstances arise like a medical expense or costly home repair. An emergency fund helps reduce the chance of taking on debt to cover an unplanned expense. It might be tempting to pause monthly savings as rising prices take a bigger bite out of your monthly budget, but resist the urge. Put savings on autopilot with each paycheck. Even a small amount will add up over time.

3.    Prioritize monthly spending in a time of rising prices. Rethink certain monthly expenses such as subscription or streaming services. According to researchers, the average household has 4.5 streaming services and spends an average of $55 on them per month. This may not seem like much, yet $55 a month adds up to more than $600 per year. If you’re trying to cut expenses in the face of higher prices, ditching underused subscriptions can be a good place to start. As essentials get more expensive, figure out your new baseline. Limit credit card use and curb discretionary spending (dining out, entertainment).  GreenPath’s Aligning Priorities workbook can help you make these decisions

4.    Monitor debt, especially as interest rates rise.  Paying off high-interest credit card debt saves you money in interest, improves your credit score, and frees up room in your budget. Choose a debt payoff strategy that works for your situation. Consider GreenPath’s Debt Management Plan which helps you pay off unsecured debt in 3 to 5 years. GreenPath can work with many creditors to bring your accounts current, lower interest rates, and eliminate fees.

5.    Shop smart. Research the best sales, coupons, and specials, especially on products that are low in inventory. Check dollar stores for deals on household items and stock up on those items where possible. Bulk retailers or wholesale clubs might be a good way to stock up on items in large quantities for a lower per-use cost. Strategically plan your higher-cost purchases.  Swap out brand-name items for generic as much as possible.

6.    Keep tabs on your credit history.   In times of rising prices, it pays to keep tabs on credit history, which is used to calculate your credit scores. The three-digit number of your credit score helps determine whether lenders approve you for new credit and what interest rates they offer. Annualcreditreport.com is a trusted “one-stop-shop” to check your reports from Experian, Equifax, and TransUnion – the three industry-standard credit bureaus. You can also work with GreenPath to review your credit history.

7.    Get independent guidance from a nonprofit financial counseling agency like GreenPath. Everyone who contacts GreenPath receives a free financial assessment with certified counselors who lend an emphatic ear. Counselors look at your entire financial picture to help you ease financial stress and uncertainty, through access to clear information and a personalized action plan.

8.    Stay Budget Aware. It pays to stay budget aware, especially as prices continue to rise. We encourage you to connect with a caring, certified GreenPath Financial Wellness counselor to get a handle on your specific financial situation.

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

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