Tag Archives: personal finances

5 Financially Savvy Ways to Use Your Tax Refund

Taxes

Getting your taxes done early not only takes one more thing off your to-do list but further allows you to start planning for the future. Working with your tax professional, determine how much your family may receive this year from a tax refund. No matter the amount, we recommend putting it towards your financial goals for the year. Here are some great strategies we’ve tried to get the best bang for our buck:

Max out your 401(k) or Traditional IRA contributions. If you aren’t taking advantage of one of these two accounts, we highly suggest opening one! These tax-beneficial accounts help holders accumulate and grow their funds without the burden of tax at the time of deposit. Each account, however, is limited by how much you can contribute. By allocating funds into these account types it may not only help you save for retirement, but also allow your money to mature throughout the years, with no additional effort.
Make an extra payment on your mortgage or student loan. Paying down your loan is always a great option when selecting financial goals. In the case of a mortgage, you earn more equity as you pay, while with student loans, you gain more momentum towards financial freedom. Instead of adding money to each monthly installment, we recommend creating one lump payment. By doing this you can create a single but large decrease in your principal amount owed, drastically reducing your associated interest as well.
Save for the 2017 holiday season. While holiday events, family gatherings, and memories are held dear, the burden of the season can pose potential problems for your personal finances. If you struggled saving last year, now is the perfect time to set aside funds for the holidays. Determine how much you need to pay for each aspect of your seasonal activities, and save as much as possible in a separate account from your tax refund. If additional funds are needed, automate your savings to transfer a specific dollar amount into this account each month.
Pay off outstanding credit card debt. With one of the highest interest rates, credit cards are notorious for taking years to pay off. If you want to make a dent in your debt, we recommend tackling one card at a time. Using your tax refund, see if you can eliminate smaller debts first, then with the remaining funds, begin paying down each additional credit card. By paying off the card with the least amount of debt first, you can begin to snowball your way to financial freedom!
Start saving for a vacation. Whether it’s a spring break, a summer adventure, or a fall festival, it’s never too early to start saving. Once you have determined a destination, you can then create a rough budget of the expected expenses. Depending on your refund you may be able to pay for the whole trip outright, or you may need to supplement the funds with some additional monthly savings. No matter how you choose to save, we recommend keeping your vacation funds in a separate deposit account so you’re not tempted to use them throughout the year.

If you still have questions on how to best use your tax refund, our personal bankers would love to help. At Iowa State Bank, we can assist you in coordinating all your accounts to help make the most of your money. Stop in and see us today!

The Most Common Phishing Scams and How to Avoid Them

Phishing is a common term for the unfortunate schemes hackers and online criminals use to lure users into giving their personal information. Typically disguised as familiar online activity, these scam artists have cleverly found several distinctive ways to attempt to trick YOU into handing over your private details. Be on the lookout for these common phishing scams next time you’re roaming the web!

Foreign Lottery Scam
With this tactic you generally receive an email informing you that you have just won the lottery of some far-away land! To obtain these exorbitant funds you simply have to send a small fee to cover the transfer cost. A simple online search will show that this thrilling lottery is no more than phony website with a long distance phone number. Typically if the sending address doesn’t look familiar, or if you have not applied to any foreign lotteries, it will be a dead giveaway that this email is just an attempt to get your information and your money.

Survey Scam
Do you like supporting the humane society or other animal organizations? This scam takes advantage of your online history and sends you a survey to submit your opinion on issues that matter to you. Instead of using your responses on animal treatment, this system discovers your email address, and other relative personal information, to hack your account and send out further spam emails.

Online Banking Scam
Most phishing schemes disguise themselves as something familiar, often as PayPal or even your personal bank. This particular scam typically indicates that some type of immediate action is needed, and your financial account is at risk. Before sending any type of reply communication, check the source of the email, and call your personal contact at the organization to see if the email is legitimate. If you question the validity of any portion of the email, delete it and call the company this con artist is attempting to masquerade as ASAP.

Clickbait
Social media has a hacking arena all its own. With links scattered across newsfeeds, it’s often hard to determine what is genuine and what is clickbait. Clickbait is a link generated using common controversial issues to get you to click on it. Once clicked, the link may switch to a Facebook login, where you login again. Unfortunately this false login page is a common maneuver by cyber criminals to get your social media login. Having this information, online criminals can now access your account and spam the people you are connected with.

If you think you’ve been a victim of an online phishing scam and your personal banking information has been compromised, call Iowa State Bank. We’ll help you watch for signs of identity theft within your personal bank accounts.

Shrinking Student Loans

Over 40 million Americans utilize student loans. Across the country that adds up to be over 7 billion dollars in national debt, second only to mortgages. Take another look into your finances with these student loan tips courtesy of Iowa State Bank!

Choose your loans wisely: Calculate the cost of the necessities – tuition, room and board, textbooks, and transportation – and sign loans that cover only what you need, even if you qualify for more. A part-time job or summer position can provide funds for added nonessential expenses. When possible, apply income from a part-time job to pay back a loan’s interest while you’re still in school to save hundreds on repayment when you graduate.
Increase your payments: If you’re on a 10-year installment plan, you’re paying a decade of interest on top of your original loan, adding more debt to your plate. When possible, pay back more than the minimum agreement each month and chop off extra time and interest. If you have multiple loans, direct your additional payments towards the loan with the highest interest rate. The faster you can pare down the principal, the less you accrue in exorbitant interest.
Make installments as often as you are able: With less time between payments for interest to accumulate, an accelerated payment plan can decrease your repayment term. By doubling your schedule of installments and making more payments over the same time period, you’re able to lessen the interest and pay your loan off sooner.
Track your interest: Motivate yourself with a continually updated track record of your current interest. The longer you have the loan, the more money you spend towards interest. Incentivize yourself by creating a cap for how much you want to pay in interest each year. Let that help guide you to make extra payments per year.

If you have questions on your student loan payments, or choosing the right option for your future education, call (641) 472-3161 or stop by today!

The Benefits to Filing Your Taxes Early

Spring is almost here and so is tax season! Get a head start on your filings this year with our quick and easy tips. Remember, the sooner you file your taxes the sooner you receive any potential deductibles!

File your taxes IF necessary.

After receiving your W-2’s from employers, determine if you need to file taxes, or if you are able to claim exemption. If you have had money withheld from your paycheck, you want to file taxes. As a general rule, if you’re single making over $9,750, or married and filing jointly making over $19,000, then yes you need to file your income taxes. There are however additional financial limits for head of household, widowers, and tax payers over 65. Once you’ve determined that you need to file the next step is choosing your manner of filing.

Choose the best medium of filing for you.

With so many options in filing your taxes it’s hard to decide which option is best for you and your family. If your household income is less than $58,000 the IRS provides free online filing software that can be used to file relatively simple returns. If you prefer to do the filing yourself and are well versed on potential deductions and other regulations, you can print out the tax forms mail your taxes straight to the IRS. If you’d like some added assurance in your filings, using a tax software or hiring a local tax consultant can be beneficial when you have a more complex tax filing, or want further education throughout the tax process.

Utilize your deductions.

Filing income taxes can at times feel like a run-around, however if done properly the outcome can benefit you greatly. Deductibles are an opportunity that many citizens take advantage of, allowing you to deduct various expenses from your taxable income, potentially bringing you to a lower tax bracket. Below are several simple ways you can utilize tax deductions.

Charitable donation deduction – keep receipts for any donation to a certified non-profit, even baked good donations may be deducted if the receipts are kept from the purchase of ingredients.
Relocation deduction – after moving 50 or miles away for a new career you are able to deduct the cost of moving expenses, storage, and travel expenses if you have worked there for 39 weeks or more. If you have not yet worked 39 weeks, but you will accomplish that number in the coming year, you may still file your deduction.
Mileage deduction – maintaining a rigorous travel log, may seem tedious, but it will pay off in the long run. If you’re driving for volunteer work, job-hunting, or doctor’s appointments you can deduct the mileage from your taxable income so long as you have your travel log and relative receipts.

Did you know nearly 20% of U.S. taxpayers wait until two week before the deadline to turn in their annual taxes? Don’t delay, stop by the bank today to see what options we have to secure your potential refund.