Do You Have to Pay Tax on Airline Miles?

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You’ve been earning rewards for signing up for a credit card or using it to earn airline miles.

Are those miles now considered taxable income?

You would think not, but some Citibank customers received a 1099-MISC for airline miles they were awarded for signing up for an account in 2011.  These customers are understandably upset as there was no clear documentation as to the impact of accepting the extra miles.

The Internal Revenue Service hasn’t been clear on how they treat airline miles, either.

Some reports say taxpayers who fail to include the reported 1099-MISC income will not be pursued by the IRS, but do you really want to chance an audit over 20,000 airline miles?

Are Airline Miles Taxable Income?

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Free Tax Day Snacks, Giveaways and Deals

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You got a few extra days this year to take care of your taxes.

Did you get them in or are you still procrastinating?

If you are really one of those last minute folks then you better make sure your return is in either electronically by day’s end or post-marked by the end of the day  on April 15th (expect the post office to be crowded).

To help everyone get over the tax-day malaise, there are a number of stores that are offering up free tax day snacks, giveaways, and deals.

Check them out:
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Tax Filing Deadline is This Week and Links

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The deadline to file your taxes is rapidly approaching.

This year you have until April 17th to file your taxes — or have them postmarked and in the mail.

 Even if you aren’t sure your taxes are correct and you need to file for an extension, you need to do it now.  And remember, when you file for an extension you still must pay any tax due.  Failure to pay your tax due by the filing deadline can lead to penalties and fees in the future when you finally get your taxes sorted out.

I filed my taxes last weekend because I owed some money and didn’t feel like dealing with all of the paperwork until then.  What about you?

Expecting a big tax refund?  Keep your finances straight and use it wisely with the help of these articles:

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Should I Climb The Corporate Ladder Or Start My Own Business?

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When it comes to accumulating wealth, there are 3 main ways to go about it.

  • One, you can work for someone else, get paid a salary and try to save some money with every paycheck;
  • Two, you can make your money work for itself by investing it wisely;
  • And three, you can start your own business and become your own boss.

The 3 choices above are not all equally effective.  In fact, I would say that investing your money wisely and starting your own business are the only truly scalable ways to make money.

First off, what do I mean by scalable?

Let’s take your day job as an example.  If you work for someone else, chances are you are either paid by the hour or paid a fixed salary.  As a result, since there are only 24 hours in a day, there’s is only a finite amount of money that you can possibly make in a given year.

Sure, you might get a small raise from year to year, but in reality you will never be able to make “life changing” money with just your day job.

Now I’m not saying that having a day job is bad.

After all, having a steady salary is an excellent way to make ends meet and pay the bills.  But the best way to expand your pool of wealth is by starting your own business and investing the money that you do accumulate.

The Trap Of Working For Someone Else

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6 Audit Red Flags the IRS Uses to Choose Which Returns to Audit

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red_flag

When it comes to your taxes, there are few things scarier than the prospect of a tax audit.

The good news is that most people aren’t audited.

Further, most audits are actually taken care of through the mail.  Many audits are routine, and require only that you send in a piece of missing documentation.

However, most people still prefer not to be audited at all.

As you prepare your tax return, consider the following 6 audit red flags that could lead to an increased chance of audit:

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Save Money by Bundling Insurance Policies

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Handwritten Insurance Claim Form with pen and calculator

How many insurance companies do you have?

Not just insurance policies, but how many insurance companies are you juggling?

If you are working with multiple insurance firms you might be missing out on significant savings that you can get by bundling your insurance policies.

Most Americans have several lines of insurance to cover various aspects of their lives: car insurance, homeowners or renters insurance, and life insurance are some of the most common policies.  Price shopping is common by consumers and often the lowest bid company wins.

But is that the best strategy?

How Does Bundling Insurance Policies Save Money?

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Bank of America Mortgage to Lease Pilot Program

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Although the foreclosure crisis is making far less headlines than it once did, it is still a big problem in America.

In fact, underwater mortgages are back to 2011 levels, currently at 11 million homes or 22.8% of all residential mortgages.

For those 11 million homeowners, an underwater mortgage represents an impossible financial situation to rectify because homeowners can’t sell their home but also can’t afford the payments and for most, it will likely be many years, at least, before they see the value of their home return if they see it at all in their lifetime.

When a homeowner can’t meet their mortgage obligation, the bank or mortgage lender holding the loan suffers because the bank still has to make the payment to the investors holding the loan.  These toxic loans aren’t draining the balance sheets of these large banks but it does affect profitability and that’s bad for business at a time when banks have underperformed the stock market since 2009.

For four years, banks have tried to get these bad loans off their books.
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“Negative” Jobs Report Dampens Stocks and Links

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The recent rally of the stock market stumbled at the end of the week with a release of a “negative” jobs report.

I say “negative” because the headlines you saw were things like “Negative jobs report dampens markets” and “Silver lining in poor jobs report”.

This left me confused and somewhat annoying with business and economy reporting.

The “negative” jobs report that is being referred to is one that says only 120,000 additional people were employed in the economy in March than there were in February.  That sounds like good news to me — it’s a positive number!

The “negative” aspect kicks in because the number for February hiring was 240,000.  So the reports read that hiring is slowing, which might be true, but you still added over 100,000 jobs into the economy.  That’s a good thing.  It would be time for a negative report if the number showed that fewer people overall were employed in the economy.

Wall Street can bounce up and down based on reports and spin on those reports. Don’t let that rattle you. Use these articles to keep an even-keeled.

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President Obama Signs STOCK Act – No Congressional Insider Trading

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If you’re a retail or individual investor you may feel like the little guy can’t win in the stock market.

The individual investor is a little fish in the vast ocean we call the world’s investment market and only the biggest of the investors can actually get ahead.

Many of us have said that in the past but we were hoping that it wasn’t true.  The market is supposed to be set up so everybody has the same information and although insider trading is difficult to police, some high profile cases over the past couple of years have made big investors a little less likely to share illegal information when others aren’t looking.

How does it make you feel to know that insider trading was not only legal, but your elected officials were taking part?

Thanks to the recent signing of the STOCK Act, or Stop Trading On Congressional Knowledge Act, members of Congress can no longer profit from insider trading. Continue Reading

In Honor of Financial Literacy Month: Back to Basics

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April is National Financial Literacy Month, and that means it’s a great time to reflect on your finances, and think about what we can be doing to improve financial literacy for our children, and for others around us.

One of the best places to start when it comes to improving your finances is the basics.

It seems unnecessary to go back to basics; after all, many of us feel like we have the basics down pat.  However, no matter how advanced we think we are in the world of finances, it never hurts to have a refresher on the responsible use of money.

Here are some of the basics to get back to during financial literacy month:

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