News for YOU!

Here are some ideas to help your money arrive quickly and safely, once you have submitted your federal taxes and expect a refund coming to you. Consider these safe ways to receive and manage your refund.

The Internal Revenue Service (IRS) Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. By assisting taxpayers to prepare their taxes, VITA/TCE providers assist taxpayers with identifying all the credits for which they are eligible, such as the Earned Income Tax Credit, which can lead to a large refund.

If you decide to get assistance with preparing your tax return and may not be eligible for the VITA or TCE programs, be sure to find a reputable tax preparer. While most tax preparers are recognized professionals who can be very helpful, it is important to understand a professional’s fees upfront and avoid scammers. Be wary of those promising large refunds or special inside knowledge of little-known tax credits and rebates, or those contacting you directly at your home or over the phone. Scammers make money collecting fees or stealing your personal information for later use. If you aren’t sure a tax preparer is legitimate, ask for a preparer’s tax identification number, PTIN, which all legitimate preparers must have. Also, ask the preparer for references. Learn more about choosing a tax professional and preparing to file your taxes on the IRS website.

The fastest way to get your tax refund is to have the IRS electronically deposit the refund into your bank account. This service is free, and it allows you to deposit your refund into as many as three separate accounts. While you can receive your refund in the form of a paper check, there are several advantages to direct deposit. Not only is it faster, direct deposit is also more secure. Refund checks sent through the mail can be lost, stolen, or returned to the IRS, if undeliverable.  If you don’t already have a bank account, this might be the perfect time to open one. The FDIC provides deposit insurance to protect your money in the event of a bank failure. Your deposits are automatically insured to at least $250,000 at each FDIC-insured bank.

 

An easy way to have confidence that your money is safe is to deposit it in a bank account insured by the Federal Deposit Insurance Corporation (FDIC). Getting banked can help you track spending, have proof of payment, and pay bills online or using a mobile app. If you hold a deposit account with an FDIC-insured bank, you are insured for at least $250,000. The FDIC provides information to help you determine whether you are dealing with an FDIC-insured bank and how to avoid fake banks and apps. 

Another option is to have the IRS deposit your refund onto a prepaid card. If you use a prepaid card, read the fine print and make sure you know how to deposit money onto the card and any fees involved. Cards differ in the types of deposits allowed, and also the process for receiving government deposits, and the fees charged for certain transactions. If you set up a new prepaid card account for your refund, you may be required to provide information to validate your identity, such as your Social Security number and date of birth. The Consumer Financial Protection Bureau (CFPB) offers resources to help consumers understand and choose prepaid cards, and the FDIC provides information that may be helpful in understanding whether the funds on your prepaid card would be FDIC-insured.

 If you choose this option, be careful with your prepaid card and personal identification number (PIN). If they are lost or stolen, you could be subject to replacement card fees or risks associated with unauthorized charges.

Whichever refund delivery method you choose, you can track the status of your federal tax return from the time the IRS received it by IRS Where's My Refund.

Be sure your refund is protected. If your personally identifiable information, such as your name, address, and Social Security number, is stolen, scammers can use your information to open credit card and loan accounts or file a fraudulent tax return in your name. This information also allows a thief to claim your refund. If you suspect that your information was stolen, contact the IRS by calling 800-908-4490 and visit the IRS website for identity theft resources.

 

Identity thieves have also been known to pose as IRS agents, providing fake names and IRS badge numbers. Some even create fake phone numbers that appear on your caller ID as coming from the IRS. These thieves often threaten people with audits, deportation, and other legal action or promise checks for unclaimed funds. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. Before acting on any phone call or email purportedly from the IRS, call the agency at 800-829-1040 or check its website for verification resources. IRS representatives can verify whether the IRS is, in fact, trying to get in touch with you. You can also report unsolicited emails by forwarding them to phishing@IRS.gov and following other instructions on the IRS website.

 

If you believe the contact was part of a scam, also report it to the Treasury Inspector General for Tax Administration (Tax IG) by calling 800-366-4484 or reporting the scam on the Tax IG website.

Tax refunds can provide a great opportunity to start a new savings account, contribute to your emergency fund, or reduce outstanding debt. Because you can split your refund, you are able to use each of these options.

 

Consider using your refund to start or supplement an emergency savings fund. Having emergency savings provides peace of mind when an unexpected need arises, such as a major car or home repair. The amount to set aside for your emergency fund will depend on factors such as your income, expenses, and the number of people in your household. A general recommendation is to try to keep three to six months’ worth of expenses in your emergency savings fund.

 

If you are carrying a credit card balance, think about using your tax refund to pay it down or even pay it off. To get the most from your money, it may make sense to pay off a credit card with a high interest rate, with interest compounding month after month. Going this route can help improve your credit history as you reduce your debt.

 

Making extra payments on your mortgage is another way to use your refund, saving you money over the long term. If much of your mortgage payment goes toward paying interest, using your tax refund to make an extra payment or two against the principal can go a long way to reducing the debt and overall cost of the loan.

If you are getting a tax refund this year, remember to take steps to keep your refund safe, know the refund options available to you, and consider different ways to make your money work harder for you.

 

 

Credit has become a part of our everyday lives. When used properly, it’s a powerful tool that can help you realize your goals like earning a degree or buying a home. But, when you use credit to purchase things you can’t afford, it can weigh down your budget and lead to sleeplessness, stress, and health issues.

 

If you feel burdened by credit card or other debt – or want to avoid debt in the future – there are some smart steps you can take:

 

• Know who and what you owe. The first rule of managing debt is knowing the type and amount of debt you have. For example, you may have a mortgage, student loans, and car payments. Record your outstanding balances, the interest rate charged, your monthly payments, and the remaining term on your loans. If you have credit card debt, know the balances you owe and the interest rates.
• Create a monthly budget. A monthly budget is critical to managing debt and achieving financial success. To create your budget, use online banking, your checking account statement, or a budgeting software/app to view your monthly expenses and income. Once you know your expenses, categorize them by “needs” and “wants.” Needs include your mortgage, rent, or utilities while wants include discretionary purchases, such as subscription services or vacations. Go through your wants and determine things you can do without and use the money you’ve freed up to pay down your debt.
• Set your debt payment strategy. One such approach involves paying down your higher-interest debt first. Another option is to pay off the smallest debt you have first. Whichever option you choose, stick to your debt payment plan.
• Put your credit cards on ice. As you work on paying down your debt, be careful not to run up new debt. If you use your credit card to pay for everyday expenses, pay off the amounts you charge. Remember the simple rule: Don’t charge anything you can’t afford to pay for in cash.
• Make your payments on time. Late payments can cost you – either in higher interest rates, costly fees, or both. So, make payments on time, every time.
• Consolidate higher-interest debt. Another option for paying off your debt is to consolidate higher-interest debt with a balance transfer offer. Just be careful not to run up debt on credit cards you pay off.

Stay the course

Getting your debt under control may seem difficult, but if you stay committed to your plan, you can do it!

 

 

All KS StateBank locations will be closed on Monday, February 17 in observance of Presidents Day. We will reopen during regular hours on Tuesday, February 18.

 

 

 

The new year is a great time to take a fresh perspective on your life and your goals. It’s why people often set financial resolutions, such as spending less money, saving more, or reducing debt. There’s actually a pretty easy way to help you accomplish all those goals: improving your credit score.

Your credit score can have a big impact on your life. It can help you qualify for the loan you need to reach your goals, such as buying a home or a car. It can also help you get the best interest rate, saving you a lot of money.
If you have a strong credit score, you are at an advantage, however, if you have a poor credit score or haven’t yet established one, you’ll want to work on raising it.

Here are five steps that can help you:

1. Pay your bills on time. Every time. The biggest factor that impacts your credit score is your history of making on-time payments. That’s why you should always pay your bills by the due date. Automating your bill payments and setting bill payment reminders can ensure you don’t miss a payment.
2. Reduce balances on credit cards and other revolving debt. If you have revolving lines of credit like credit cards or home equity lines, work on reducing your outstanding balances. That’s because revolving debt impacts your credit utilization, which is the percentage of revolving debt you use. Paying down your credit card balances will lower your credit utilization, which can increase your credit score.
3. Keep older accounts. If you have an older credit card you’ve paid off, you may be tempted to close it, but doing so can actually lower your credit score. To keep the lender from closing your account, use the card now and again to make and pay off small purchases.
4. Avoid applying for new credit. Sometimes it’s tempting to apply for a new credit card, especially when it comes with a perk like 20% off your first purchase or 50,000 airline miles. But each time you apply for a credit card, the lender will conduct a hard inquiry on your credit, which can lower your credit score. What’s more, those hard inquiries stay on your credit report for up to two years.
5. Regularly check your credit report for errors. Mistakes and fraud can happen, which can hurt your credit score. That’s why it’s essential to frequently check your credit report for errors. You can obtain a free credit report every 12 months from each of the three credit bureaus at AnnualCreditReport.com. If you spot errors, contact the credit bureaus to dispute them.

Your credit score is key to your financial health, so make sure you give it the attention it needs. There are many companies, websites, and apps to help you keep track of and boost your score.

Saving for emergencies, retirement, or other expenses can seem difficult, but there are some strategies that can make it easier. Saving can start with identifying your savings goals, finding unnecessary expenses to cut, and deciding where to put your savings. Start by asking yourself some of these questions.

Knowing why and how much you want to save can help you stick to a plan. For example, if you have a young child, ask yourself if you plan to help pay for college. Research indicates that children who have a college savings fund are more likely to go to college than those who don’t. Start by looking at “529 plans” sponsored by your state (typically with cost and tax benefits for residents) and compare them to other education-related savings options, such as a Roth IRA. Learn more about savings for college-related expenses in the Consumer News article, Thinking About Upcoming College Expenses?

Perhaps you have shorter-term goals, like to plan a vacation or wedding, or to make a large purchase for your home. Establishing the amount and timeframe within which you want to save can help you break down a larger amount into more manageable amounts to save over time. Learn more about how Savings Are Great for Short-Term Goals Too.

Review how much you spent in the last few months and consider ways to cut back. Start by reviewing recurring expenses, even small ones, and determine what you might be able to cut out, downgrade, or find a better deal on elsewhere. Visit How Money Smart Are You to create a monthly spending and saving plan. Determine what you can change to help you reach your financial goals. For example, try to pay less in interest. If you have multiple loans or credit cards, pay off the ones with the highest interest rates first. Regularly reviewing your credit report and correcting errors can result in considerable savings on loans and insurance policies. 

Our free online financial management tool, My Money, can help you set goals, create a budget, organize your personal finances, and track your savings. Look for My Money in your KS StateBank Online Banking account.

Am I saving money on a regular basis? Automatic transfers into savings on a set schedule can help you save money before you spend it. You can arrange with your bank to automatically transfer a certain amount from your checking account into a savings or investment account on a regular schedule. Automatic savings programs help to build an emergency fund or save for the future. For example, if you are paid every other week and put $20 into your savings account each pay period, that adds up to $520, plus interest, to your savings each year. Read more about how Starting Small Can Lead to Big Savings.

Financial experts generally recommend that you have at least six months of living expenses in a federally insured product, such as a savings account or a certificate of deposit (CD). Just note that CDs generally have a penalty for early withdrawal, so be sure to check with your bank on fees. The idea is to help you withstand a major reduction in income, such as from a job loss, or to pay for a major, unexpected home or car repair. To build your emergency savings fund, consider a combination of regular, automated deposits and any “windfalls” you receive, perhaps from a tax refund or a bonus at work.

Tax refunds provide a great opportunity to start a new savings account, contribute to your emergency fund, or reduce outstanding debt. The IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. By assisting taxpayers to prepare their taxes, VITA/TCE providers ensure taxpayers are receiving all the credits for which they are eligible, such as the Earned Income Tax Credit, and that can lead to a large refund. The safest and fastest way to get your tax refund is to have it electronically deposited into your bank account through the IRS Direct Deposit Program.

A traditional FDIC-insured savings account is a great place to put money aside for savings goals, as it allows you to withdraw funds easily and earn some interest. These accounts do not come with checks and the bank may limit the number of withdrawals you can make, which helps you avoid the temptation to spend your savings before you’re ready. You can even set up automatic transfers from your checking account to keep your savings separate. This separation helps to avoid spending your money frivolously.

Investments such as stocks, bonds and mutual funds can produce higher returns than bank deposits over many years, but the value of those investments are subject to fluctuations in the market. (Remember, non-deposit investments are not insured by the FDIC.) In general, the longer you plan to keep money invested and the greater your tolerance for risk, the more likely these investments can help you reach your targets. Visit Understand What It Means to Invest to learn more.

For many, the answer is “no” even when they think it is “yes.” Options to save include workplace retirement plans, and Individual Retirement Accounts (IRAs) offered by many banks and investment companies. As with other savings goals, it is important to understand why you are saving and how much you need to save. Financial needs change through all stages of our lives. Start by determining what your expected retirement income will be and compare it to the expenses and debt you think you will have in retirement. Read Saving for Retirement for more tips to consider.

Visit our Deposit Rates page to view the latest checking, savings, CD, and IRA rates.

Our offices will be closed on Monday, January 20 in honor of Martin Luther King, Jr. Day. We will reopen during regular hours on Tuesday, January 21