Raising Money Through Crowdfunding? Don’t Forget to Include It on Your Taxes

My community pulled together recently to help a young father battling cancer for the second time. A local cupcakery held a fundraiser in his honor and donated $1 to his family for each cupcake sold on a particular day. The store was packed, the lines were long, and the cupcakes sold out quickly -- well, at least the triple-chocolate cheesecake ones did.

When it comes to raising money for a cause, what used to be as simple as putting out a donation jar has been made even easier -- you can ask people to donate right from their smartphones through crowdfunding sites like GoFundMe, GiveForward and YouCaring.

But does that help actually hurt you when it comes to tax time? As the recipient, do you need to claim the funds you raise through a crowdfunding campaign as income, or is that money considered a gift?

Who Gets Custody Of The Retirement Funds During A Divorce?

Like the car wreck you don’t want to look at, yet can’t turn away from--they are shocking, yet strangely intriguing.  No, I’m not talking about the leaked Ashley Madison hack list. I’m referring to the disturbing stories of financial burden imposed on those who have incorrectly distributed funds from a retirement fund due to a divorce.

Whether you’ve experienced it first hand, or been an innocent victim injured by verbal shrapnel, divorce can be a devastating event for any family. Not only can it fracture delicate relationships, it can also be financially debilitating for all of those involved. This is especially true if delicate care isn’t taken when it comes to the division of retirement assets.

Wait, you bought what? Where? Taking online shopping to the next level...

Death is an awkward topic for many people. Let’s face it, most of us don’t like to discuss the inevitability of our own demise. It seems like talking about it is avoided almost as much as gluten these days. Yet it is something we will all eventually have to face.  

Timing is key

Expressing your wishes ahead of time relieves a great amount of stress from the family. It goes without saying that discussing funeral plans with someone in good health is much easier than with someone knocking on death’s door.

I remember all too well having the painful conversation with my late husband after he was diagnosed with a terminal and aggressive form of brain cancer. 

As luck would have it, we had the talk just a few months prior when discussing his mother’s future desires. However, the desires one has when they believe they have another forty or fifty years may end up changing when that time-frame decreases to forty or fifty days. This is where some of the confusion, and stress, can begin for the family.

Detoxifying your budget

A few months ago I decided to do a body detoxifying cleanse. I’m sure you've heard about them and all the benefits they claim to produce.  They're suppose to remove toxins, increase energy and vitality, and help strengthen the body to fight off infection. In addition, you’ll get a flatter belly because it gets rid of the excess waste from your colon. Enticing, right?

The one I found required drinking a daily 64 ounce dose concoction of lemon juice, cayenne pepper, apple cider vinegar, maple syrup, and water for three days. Not this spicy-citrusy brew in combination with a sensible meal, but instead of anything else. Surely I can make it three days. Three days isn't that long, especially for a fully detoxed body, right? So I’m proud to announce my colon is now one-third cleaner than is was before starting this regimen. I guess- I’m not entirely sure how to gauge the results, so I’m just going to assume it worked. And yes, you read that correctly... one-third cleaner. I only made it one day-

Want to try a cleanse that you’ll actually have proof of the results, and is a little less bitter to swallow? How about giving your budget a 30-day detoxifying cleanse? I know just about all of us could benefit by a good purge from toxic spending…

5 Ways To Help Protect Your Credit

What should you do if your account gets hacked?

A while back my debit card got hacked. Yep, some loser got a hold of my card number. The assailant attempted to use it to purchase various computers and equipment, along with a Match.com membership.  And while some of the smaller charges hit my account, it was the fine people in the fraud detection department of my bank that blocked the other charges from hitting. 

Luckily the fraud was detected in time. Luckily the loser wasn't able to clean my checking account out. And while I try to be super careful when using my cards, sometimes the good guy just gets the short end of the stick. 

Going off the grid

So, how can you protect yourself against becoming a victim? Easy. Build a bunker, grow your own food, use solar energy, and only trade in gold bullion. However, if you're anything like me, this isn't quite a viable option. Don't get me wrong...if you're in the first category I mentioned, feel free to bring me cucumbers and berries from your garden. I love cucumbers and berries...bring a lot~ But for the rest of you, here are some precautions you can take:

How patiently waiting for your tax refund is better than eating expired meat

A while back I wrote in my blog about watching a few episodes of Extreme Cheapskates (don’t judge…). I also made clear to point out that I could undeniably, one hundred percent, without a doubt guarantee:

• You would not see me at the park picking unknown weeds for a salad;
• I would opt for Quilted Northern toilet paper in my bathrooms rather than cutting up old pieces of cloth, which I would later launder ;
• I would not ask other diners at restaurants if they were finished with their meals, and if I could have their leftovers; nor
• Would I boil a goat’s head for dinner simply because I could snag it for $1.17

I like saving a buck just as much as the next gal, but I have to draw the line somewhere, and that somewhere happens to be right in front of eating goat eyeballs. Let’s face it, the episodes were amusing. Do I think the stories may have been slightly exaggerated for our viewing entertainment? Probably so. Does it really matter all that much? Nope. The lesson I walked away with was the same: patience, in many capacities of life, can be beneficial. In these Cheapskate’s cases, they didn't mind things taking a little extra time as long as it saved a few pennies. So why do we?

Getting a loan on your money

This is particularly true when is comes to tax refunds. The average refund in 2014 was $3,116. Of those receiving refunds, one in ten taxpayers opted for a refund anticipation type loan. And of that ten percentile, half were low income wage earners. Why are the numbers so high for this particular group of individuals? Sadly, they are the ones who typically need the funds the fastest, and usually don’t have a bank account for a direct deposit.

Using a less expensive, do-it-yourself electronic service like TurboTax gives you the option to have your refund either mailed or direct deposited into your bank account. With a check usually taking anywhere from four to six weeks, most of us choose the direct deposit method. This may well decrease the wait time to around two weeks. However, without an account to deposit these funds into, you’re at the mercy of the good ole boys at the postal service.

Paying to speed things up

Most of the larger tax preparation services offer some type of an accelerated refund product, most commonly in the form of a prepaid card. They sweeten the deal by allowing their fees to be deducted from the refund directly so the customer is not on the hook for any up-front, out-of-pocket expenses. Simply sign on the dotted line, and in a no time at all you’ll be on your way to shopping bliss.

The price of impatience

So how much does this impatience cost the taxpayer in the long run? Well first you need to understand what the service they’re offering really is: it’s a loan. A pretty big one at that! Last year Americans paid $1.4 billion in interest for these tax refund loans. Just in case you missed it, that’s billion with a “B”. But let’s not stop there. Add another $500 million in application and processing fees, and jump that number up to almost $2 billion spent on, well, time. Two to four weeks of time to be precise. I guess Benjamin Franklin was right; “Time is money”.

Other options

Walmart is offering an alternative to the refund anticipation loan called Direct2Cash. Participating partners may offer the service, which costs up to $7, at the time of filing, and the provider may opt to not charge a fee at all. Once the customer completes the filing process, they receive a confirmation code via email. They can take that confirmation code to the Walmart Money Center or customer service desk, show proof of identity, and collect cold hard cash on the spot.

What are the benefits of this service versus the traditional paper check, or prepaid card?

• No check to get lost in the mail
• No check cashing fee (a 2% fee on a $3,116 refund is $62.32)
• Issuing of an actual paper check could result in an addition fee; often $20 more
• Prepaid cards can charge fees to access your funds (H&R Block Emerald Card charges a $2.50 per ATM transaction, and a $.95 per online/mobile bill pay transaction). In addition, the ATM owner may also charge a fee.

So what are the downsides to this too good to be true service? Well, for one they limit the amount of the refund to $7,500. However, if your refund is anywhere near that amount you’re giving the government an interest free loan…and we need to talk. Next, if you've filed a joint return both parties will need to be present to collect the funds. Fair enough. Also, I’m sure the participating tax preparation partner will have fees for their services. After all, we can’t expect them to work for free. But since this isn't an refund anticipation loan, you won’t be side-swiped by those fees. Oh, and the confirmation code does have an expiration date, but since you are already paying extra to expedite things this shouldn't be a problem. Right?

Plan for next year

You can always save yourself all of this trouble, and lots of money, by simply waiting for a paper check. Once you receive it you can use it to open a savings account so next year you won’t be in such a rush to get the money you need.

Your tax return is not an annual bonus. It's not "free money" that is worth losing a percentage of just to get a portion of it faster. It's your money that you overpaid the government throughout the year. As long as so many people treat it as that way, these fees will continue to chip away at YOUR hard earned dollars.

How important do you think it is that we stop thinking of a tax return as an annual bonus? Give your opinion in the comment section below.

Disclaimer: In case I haven't made it clear...consult a tax specialist. I'm not one. I don't hold myself out to be one. Don't sue me~ 

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Want to see more ideas about saving money? Check out my other posts on Fix Your Budget, and follow me on Facebook.

"Image courtesy of ddpavumba, published on 01 August 2013 Stock Image - image ID: 100188090  FreeDigitalPhotos.net"

Receiving free money can cost you a lot.

I tend to think of myself as a glass-half-full type of gal. I mean sure, I've had days where it seems like one thing after another, after another, after yet another has gone into the crapper, just like everyone else. And even though I've experienced my fair share of heartache over the years, I feel I've been dealt a pretty decent hand in life.

I try to pay it forward as best I can, whether by doing volunteer work or donating clothing and household goods to those less fortunate. I’ll even drop $1 into the glass jars while at the grocery store. And if a neighborhood kid is selling chocolate bars for a buck, heck, you better believe I’ll do my part. And it appears you guys are doing your part as well.

Getting Schooled On Student Loans

A few days before leaving on my trip to Germany, we received a call at the office from a local news station wanting to do an interview regarding student loans. Since Gary was out of town, and I'm a Certified Credit Counselor, I thought it only right to step up to the plate and help out.

Prior to the interview, I asked what the interviewer might want to know in case any specific details would be needed. One of the questions was fairly simple: Why are graduates having to live paycheck to paycheck upon finishing school?

The question sounds simple enough, right? The answer, however, is a bit more complicated. 

How much can you afford

I used the example of purchasing a vehicle. Before shopping around, someone has (or should) a pretty good idea of the monthly payment they can afford. Secondly, there are many financial calculators online that allow you to plug in that monthly payment amount, interest rate, and term to discover what purchase amount will fit into your budget.

So once you have the amount of car you can afford in mind, you can begin the car shopping experience. If your budget is in the $18,000 range, obviously you wouldn't want to begin that journey at the Mercedes dealership, but something a little more conservative. 

Car title rules that can drive you crazy

A few weeks back I wrote about the importance of getting your estate documents in order. If you missed it, check it out here... 

One of the things I mentioned was getting your property titled correctly. It is very common to have trouble changing the ownership of property, even if held jointly, upon the death of one of the parties.

Case in point: When we bought my new car a few years ago, we had the titled issued in both my husband's and my name. We had also requested to add, the right of survivorship option. This ensured that if either of us passed away, the ownership of the vehicle would transfer over to the survivor's name. Sounds easy enough, right? I thought so too...

After his death I spoke with my insurance guy who suggested I remove his name from the vehicle insurance policy. This would make it easier in the event of damage to the vehicle, leaving the check issued from the insurance company in my name only. I agreed.

All was trucking along pretty well, or as well as someone who just lost their husband could be expected, until I went to renew my tags. Here's where I got the brakes slammed on...

Your Credit Score...Give It A Raise!

Can't get a loan? Want to refinance your home but have been denied? I'm here to help!

First of all, we have to look at your "number". No, it's not like when you were dating and got asked for your "number". It's much more severe. This number is actually recorded for a long, long time, you can't lie about it, and everyone you come in direct contact with has it. 

It's your credit score. While we would like it to be a personal thing, like our liaisons, it's not. It's essentially the nakedness of our financial situation.  

Every time you borrow money it gets reported to at least one, and possibly all three main credit agencies. Think of it like a date that posts "at xyz with you" on Facebook. At first both sides of the date are happy and optimistic. (lendor and lendee.)

Then, after the passion on one side wears off (lendee), the dreaded "I'll call you" line gets thrown out. And when that call never happens, that's when the Facebook posts, and credit reporting, get really interesting!

Just like with the posts, your no pays, or slow pays, are recorded. In the dating world it's all of those one night stands or dates you never called. Your apologies only go so far. They are still "owed" an explanation (or as a lendee, a payment).  

While your number may increase when it comes to partners, it doesn't magically increase when it comes to finances. It takes time. It takes work. And it takes trust. Something you probably don't have much of with slow pays, nor the people you never called back.... (insert frowny face shaking finger left to right image in your head here).

To rebuild your reputation, at least on the financial front, look into a share secured loan. It's a great way to start, or restart credit. It's easy, and pretty much available at most financial institutions. It allows you to deposit funds into an account, place those funds on hold, and make payments while freeing up the "on hold" funds as you pay the loan down. I have seen these types of loans help quite a few people, and may also help you.

Credit takes time to build, and even less time to destroy, just like a reputation. Don't let a number define who you are. And just a piece of advice, make that call, whether it's to the horrific date you had, or the lendee you borrowed money from. Your honesty will go a long way.

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Want to see more ideas about saving money? Check out my other posts on The Money Diet, and follow me on Facebook. 

"Image courtesy of By Stuart Miles, published on 01 March 2014 Stock Image - image ID: 100240491 FreeDigitalPhotos.net".

Value and the Vatican

On a trip to Italy about 12 years ago, I witnessed a miracle. Ok, maybe it wasn't really a miracle. Maybe more of a friendly helping hand in a desperate time of need. My mom and I were visiting Vatican City, and we were desperate need of a few simple items...batteries, band-aids, and water...

The batteries were for our cameras. We were taking hundreds of photos, and although we had rechargeable batteries we didn't have a 220v charger...yes, this was our first trip to Europe. Band-aids were from the extreme walking we did, most of the time in fashionable shoes. Well, until we finally realized that being fashionable wasn't quite as important as being comfortable. I mean seriously, even though the shoes looked smoking hot, hobbling around like a one-year old just learning to walk wasn't that attractive. The water was because, you guessed it, we were thirsty, and the bubbly water just wasn't cutting it.