Tag Archives: taxes

Prioritize which bills to pay

April 17, 20193-bottom, Citizen Journalism, How-To'sBrenda Long, Child Support, Mortgage, taxesJoanne

By Brenda Long, Michigan State University Extension

Some bills are more important than others are. To aid your family’s decision-making process, consider the following questions on the University of Illinois Extension Getting Through Tough Financial Times website:

Do you feel you are buried under with debt from child support, back taxes, student loans or credit cards? You have some choices. After creating your spending plan, you need to decide which bills you should pay first and the amount you should pay. You are legally obligated to pay all your bills. However, you can determine the priority you need to pay and how much you should pay on each. You can work with your creditors, as they may be able to reduce some of your payments.

Do you owe child support, back taxes or student loans?

Failure to pay child support can be serious: you may be held in contempt of court, have your driver’s license revoked, have liens placed on your property, have your tax refund intercepted or be ordered to jail. You may be able to get the child support order modified. If you don’t get the order modified and fail to make payments, you are responsible for all unpaid support obligations plus interest. Contact Friend of the Court in Michigan or your county child support office for more information.
If you owe unpaid income taxes, the Internal Revenue Service (IRS) may seize your paycheck, bank account, house or other property. If you can’t pay the total amount due, contact the IRS to request a monthly repayment schedule. Also contact a reputable tax professional about other options.
Federal student loan payments can be deferred (no payments required) during periods of unemployment or financial hardship. You can’t qualify for a deferment once your student loan is in default. For more information on student loans, visit the Federal Student Aid, MyEdDebt.com and Student Loan Borrower Assistance. Interest you pay on student loans during the first 60 months after you begin loan payments may qualify as a tax deduction.

Do you have outstanding balances on credit card accounts? What should you pay first?

According to the National Consumer Law Center book on Guide to Surviving Debt,

Medium-priority Debts: Government student loans are medium-priority debts.
Low-priority Debts: Loans without collateral are a low priority. Collateral is property that a creditor has the right to take if you do pay.
“Unsecured” debts are a low priority and include most credit cards; attorney, doctor and hospital bills; and open accounts with merchants.
Do not move a debt up in priority because the creditor or collector threatens to sue you or to ruin your credit record; they may use threats as a tactic to get you to pay. Check your state debt collection laws for more information.

Do you make the minimum monthly payments on your credit cards? This will keep accounts current and avoid negative impacts on your credit report. However, paying only the minimum will increase your finance charges and extend the time it takes to pay off the balance. Compare and negotiate interest rates to ensure you pay the lowest rate. Stop using your cards until your situation improves. Contact a nonprofit consumer credit counseling service if you are having difficulty paying your bills. One such service is the National Foundation for Credit Counseling. Contact them at 1-800-388-2227.

Michigan State University Extension has released a toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at MIMoneyHealth.org.

Michigan State University Extension is a HUD-approved housing counseling agency has many MSHDA-certified housing counselors at multiple county offices to assist you by phone or through technology. Find the one staff person nearest you on the MI Money Health website. MSHDA certified Housing counselors may be located online.

To contact an expert in your area, visit the website, or call 888-MSUE4MI (888-678-3464).

Tax changes — of some sort — coming, expert tells chamber meeting

December 1, 20163-bottom, Hard News, Local Business, PoliticsBrent Karhoff, Donald Trump, Kentwood-Wyoming Chamber of Commerce, taxesJoanne

Brent Karhoff, of Hungerford Nichols CPAs and Advisors, speaking Nov. 30 to the Wyoming-Kentwood Area Chamber of Commerce’s Business Briefing Luncheon. (K.D. Norris/Now.WKTV.org)

By K.D. Norris

ken@wktv.org

Brett Karhoff, of Hungerford Nichols CPAs and Advisors, told Wyoming and Kentwood business leaders Wednesday that changes are likely coming to personal and small business taxes in the wake of the election of President-elect Donald Trump — but, he warns, don’t expect quick action.

“We have a new president, not a new tax law, yet,” Karhoff said, speaking Nov. 30 to the Wyoming-Kentwood Area Chamber of Commerce’s Business Briefing Luncheon. Despite having Republican control of the White House, the Senate and the House of Representatives, “Personally, I don’t think they will get it done in a year … maybe not even in this (2-year Congressional) term.”

In a discussion titled “The President’s Tax Plan: What will it mean to your business and family over the next four years?”, Karhoff detailed the existing Republican “A Better Way” plan — so-called the “Blueprint” — which proposes reducing the number of tax brackets; reducing tax rates on capital gains, dividends and interest income; and eliminating the Alternative Minimum Tax.

A key part of the Blueprint for personal taxes, he said, would be to eliminate all itemized deductions except mortgage interest and charitable contributions — pointing out that medical deductions could be on the block, something that could greatly impact seniors.

For business taxes, he said, a key point would include reducing corporate tax rate to 20 percent,

He also detailed some how some of Trump’s election season “contract” with taxpayers are similar or different from the existing Republican plan. (The contract is at donaldjtrump.com/contract)

Trump, according to his contract, would repeal the Net Investment Income Tax and, similar to the Blueprint, the Alternative Minimum Tax. It would also greatly increase the standard deduction for single and married taxpayers, more than doubling it.

For business taxes, Karhoff said, a proposed business tax rate of 15 percent could be good for small business, while a proposed one-time rate of 10 percent for repatriation of corporate profits held offshore could be good for large businesses.

While proposed tax reductions are made clear by both the Blueprint and Trump’s contract, Karhoff said, what is missing is how the revenue side of the federal budget will be balanced — “That may be the surprise in 2017.”

The bottom line for most Wyoming and Kentwood personal and small business taxpayers, Karhoff said, is that people should just watch and wait.

“It is probably worth paying attention to what is going on, what the Trump camp is planning,” he said. “Because I do think it will happen and you need to be prepared. (Changes) will come at some point and you need to be ready. To do that, there are some things you need to think about now, get all your itemized deductions into this year, maybe, into 2016, because in 2017 you may not be able to use them. You need to just watch and plan.”

It’s Tax Day! Do you know what your deductions are?

April 15, 20163-bottom, Educationapril 15, april 18, deadline extended, emancipation day, internal revenue service, irs, taxes, U.S. capital, Victoria MullenJoanne

By Victoria Mullen

Well, thanks to good ol’ Honest Abe, we have a couple of extra days to file tax returns this year.

As 99.9% of us already know, Tax Day is usually April 15, but because the date coincides with Emancipation Day—the Washington D.C. holiday that celebrates the end of slavery in the U.S. capital—this year, we’ve been granted a reprieve, until April 18. According to the Internal Revenue Service (IRS), D.C. holidays are considered federal holidays for tax-filing purposes.

Emancipation Day usually is celebrated April 16, the date in 1862 when President Abraham Lincoln signed the Compensated Emancipation Act, which freed about 3,100 slaves living in the District.

OK, so, goody, we have a couple more days to do what we all loathe doing. I know of absolutely no one who likes to pay taxes. Perhaps that’s because there are way too many rich people and corporations who don’t pay their fair share.

I’ve always thought that the IRS could take at least some of the sting away if each person were allowed to designate where we wanted our tax dollars to go. You know, like a checklist included with the 1040 form—we’d each check off where our individual dollars would go: Defense, Medicaid, Congress’s salaries (ha!), etc. At least that way, we’d feel more invested in the process and would be truly represented. It just seems fairer to me.

Perhaps one saving grace is that we can (in some cases) take deductions. All well and good, but that list needs some serious revising to give everybody a chance to lower their taxes.

Herewith are my suggestions.

Old meds. I don’t know about you, but there are times when I no longer have to take medication for whatever it was that ailed me because it ails me no more. So, there are numerous pill bottles in my medication drawer that are way past their expiration date. Seems such a waste. Sure, many communities offer “give back a pill day” (you know, return unused meds to a community center for disposal), but that doesn’t help reduce our taxes. Why can’t we claim a deduction for this?
Bad luck. This one is a no-brainer. There’s enough bad luck to go around the world for ages and ages. Or miles and miles. Whatever. A deduction for bad luck would serve to lift up the citizenry of every economic stratus. To make it bona fide, the IRS could require proof of that broken mirror, black cat, cast on your leg, or whatever. Photos should suffice. Of course, there will always be people who will take advantage of a good thing and purposely jinx their lives by living with five black cats, but I’m sure they’ll be in the minority.
Expired mayonnaise. Sure, you meant to use it. You had the best of intentions when you purchased it. You wanted to save money. It was a gallant effort, but you fell for that two-for-three jumbo con and purchased way more mayonnaise than you could ever hope to use in your lifetime. Did you save money? No. So there the jars sit, on your shelf, neglected, sad and lonely. I’d wager that they’re even dusty. Surely there should be a deduction for that.
Fur, lint, fuzz, dust bunnies and the like. You know the routine: No matter how often you brush Fluffy or Fido that fur piles up. Same with lint: You can clean the dryer’s lint trap til you’re blue in the face, but there will always be more. Fuzz, too. The stuff breeds. If you don’t live with cats, you can’t possibly understand how upsetting this is. You’ll vacuum. You’ll put the vacuum away. And the minute you close the closet door and turn around—poof!—there it is, a clump of fur, right in the middle of the floor where you just vacuumed not two minutes before. Where was it hiding when you were vacuuming? Why did it wait until you were all done before making its appearance? The nasty little thing did it on purpose. This happens to millions of people daily, we suffer for it and we ought to be able to claim a deduction for it.
Clothes hangers (on the floor). Seriously. Turn your back for a minute, and these things will multiply like rabbits. And they make you clumsy—even the plastic ones get tangled up. We ought to deduct something for each hanger that falls to the floor of its own volition. Because for each hanger that falls on the floor, there is a corresponding likelihood of throwing out your back trying to pick it up. A deduction could help pay for those back massages. Maybe we could add this to the Obamacare plan.
Tasteful body art. It’s important to qualify this puppy because we all know the world is ugly enough as it is, and there is some seriously awful body art out there. A deduction for fabulous body art would be a great incentive for people to beautify themselves and, by extension, their surroundings. Maybe we could have the National Endowment for the Arts offer grants to fund the education of aspiring tattoo curators.