The Making Work Pay credit has many taxpayers confused, and for some, the confusion has led to the shock of smaller or delayed refunds. To help make sense and cents out of it all, TaxACT has provided the most essential information and tips for getting it right on your 2009 tax return.

Who qualifies and how to get it
The Making Work Pay credit replaced the 2008 federal stimulus checks for 2009 and 2010. Most taxpayers already received the benefit for 2009 through reduced federal withholding. You likely received an increase of $10 to $13 in your paychecks starting in April 2009. Even if you received this benefit in each paycheck, you’ll generally still need to claim the credit on your 2009 tax return. The credit on your federal return makes up for the reduced withholding throughout the year.

The refundable credit is worth 6.2 percent of your earned income, up to $400 for individuals and $800 for married couples filing jointly. If you don’t withhold federal taxes, you must file a federal tax return to receive the credit.

The credit phases out for married couples filing jointly with an modified adjusted gross income (MAGI) between $150,000 and $190,000, and for single taxpayers whose MAGI is between $75,000 and $95,000.

Why the credit means smaller refunds for some
When the federal withholding tables were adjusted for Making Work Pay, most taxpayers didn’t adjust their withholding. Although the IRS says the vast majority of workers withheld enough during 2009 and can still expect a refund, some may have had too little tax withheld, especially:

*Married couples with two incomes
*Individuals with multiple jobs
*Pensioners
*Dependents
*Some Social Security recipients who work
*Workers without valid Social Security numbers

As a result, these groups may receive smaller refunds or owe a small balance of taxes for 2009. If you happen to owe taxes because too little was withheld during 2009, the IRS may waive any estimated tax penalty if it relates to changes made to withholding tables.

Why the credit has delayed refunds
The same tax act that included the Making Work Pay credit included two provisions that reduce the credit amount.

Retirees, disabled individuals and Supplemental Security Income recipients receiving benefits from the Social Security Administration, disabled veterans receiving benefits from the Department of Veterans Affairs and those receiving benefits from the Railroad Retirement Board received a one-time economic recovery payment of $250 in 2009.

Government retirees who don’t receive social security can claim a one-time $250 refundable credit on their 2009 federal tax return.

Economic recovery payment and Government Retiree Credit amounts must be subtracted from any Making Work Pay credit amount. Many taxpayers have failed to do so, resulting in rejected returns and delayed refunds.

For example, if you’re eligible for both the Making Work Pay and Government Retiree credits, your $250 Government Retiree Credit will be subtracted from the $400 Making Work Pay amount. You’d still receive the full $400 through two credits, with $150 coming from the Making Work Pay credit and $250 coming from the Government Retiree Credit.

Get the credit right on your 2009 return
If you’re uncertain whether you received the $250 Economic Recovery Payment, verify that information before doing your taxes. Contact the Social Security Administration, Department of Veterans Affairs or Railroad Retirement Board.

Taxpayers filing Form 1040 or 1040A should figure the Making Work Pay Credit amount using Schedule M. If filing Form 1040-EZ, use the worksheet for Line 8 to figure the credit.

One of the surest ways to get the credit right is to use tax preparation software like TaxACT at www.taxact.com. Answer simple questions and TaxACT will figure your credit amount and report it on the correct line of the appropriate form. It will also identify other credits and deductions you may qualify for, and includes a maximum refund pledge. Best of all, you can prepare, print and e-file your federal return for free with TaxACT Free Edition.

Think ahead
Because the credit also applies for 2010, adjust your federal withholding if necessary through Form W-4, Withholding Allowance Certificate. Married couples filing jointly and individuals with multiple jobs should complete the W-4 dual earner worksheet.

Since the credit is being spread out over 12 months rather than nine months, your 2010 paychecks will likely be a few dollars less than last year’s. However, you’ll still receive the full credit amount you’re due.

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If you are still searching for that silver lining in the present economic doldrums, going back to school this year might be the remedy for you. Whether you are a first-time freshman or a returning student looking for a new degree to move your career forward, for many the timing could not be better.

College enrollment across the United States has risen more than 40 percent, according to an October report issued by the Pew Research Center that was based on data released from the U.S. Census Bureau. America is still witnessing not only record highs in unemployment rates, but also in setting college enrollment records during the recession.

Of course, the age-old dilemma still remains for most present and potential scholars: “How am I going to pay for college? If I’ve lost my job, or I’m still looking for a job, how do I start to fund my education?”

“Dedicated students who want to study can always find a way to make it happen,” says Tressa A. Brush, director of Student Financial Services at South University in Savannah, Ga. “After a student applies to college, the first place students should look for financial aid is with the U.S. Department of Education. Financial aid is available for those who qualify.”

As part of the American Recovery and Reinvestment Act of 2009, the Department of Education bolstered student financial aid resources for post-secondary education. Hope Scholarship Credits are widely used, and the moneys available via Federal Pell Grants for students who are eligible have been increased.

“When students begin looking for money to attend college, I provide them with many possibilities, but then, the real work begins. Students must begin conscientious and thorough searches for scholarships and loans. These searches can reap very positive results from public and private organizations,” Brush says.

In addition, the current outlook for interest rates on some federal college loans is favorable. The current rate has held at 5.6 percent since July 1, and the rate is expected to be even lower in July 2010.

“Funding, and sustaining funding, for educational endeavors can be a rigorous, but worthy task. If you do the work well, great payoffs can happen, and of course, the biggest payoff is the investment you will make by getting an education. Earning a college degree can lead you so much further on your career path,” Brush says.

Seeking financial aid for education? Where to start:

* Visit the Department of Education online, www.fafsa.ed.gov.

* Check out the benefits of your present workplace. Often, employers offer their employees tuition reimbursements. Ask your human resources department.

* Talk to your close friends and family. New trends indicate increasing financial assistance is coming through the benevolence of one’s own kin.

* Check with your local college’s financial aid office to research the availability of loans.

* Check with your local civic and non-profit entities such as the Daughters of the American Revolution, the Lions’ Club, and Elks’ Club for scholarship opportunities.

* Check out these other Web sites: www.finaid.org, www.fastweb.com, www.gacollege411.org, www.wiredscholar.com, www.usafunds.org, www.familiesoffreedom.org, www.rotary.org, www.ed.gov/finaid, www.collegeboard.org, www.salliemae.com, https://ugsp.nih.gov and www.nsdar.org.

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With many signs pointing to the beginnings of a recovery in the housing market, potential home buyers can still find plenty of selection, low prices and low interest rates. If you’re thinking of buying a home, now might be the right time, but before you contact a real estate agent or apply for a mortgage, your top priority should be checking your credit report to see if your credit is in good shape.

Credit – specifically misuse and misunderstanding of credit – spurred the housing crisis, many experts agree. The consequences have included tighter standards from lenders and the need for borrowers to better understand how to use credit wisely.

Interest rates remain low and those with good credit will be better positioned to take advantage of the opportunities currently available in this unique housing market. A good credit report and score can open doors for you in the real estate world, and empower you to secure the best loan and terms possible before you ever tour a single house. Being preapproved for an affordable mortgage can help you move quickly to secure a deal when you find the home of your dreams.

If you’ve already assessed your finances to determine how much mortgage you can afford, you’re ready for the next step – making sure your credit is in top shape to help you get the best possible loan.

Understanding your score and what it means

Lenders consider your credit score and your current credit report when deciding whether or not you’re a good credit risk. Your credit score is a number generated by using statistical models that factor in elements from your credit report. The number can change when information on your credit report changes and it’s calculated at the time a lender requests a copy of your credit report. Different lenders may use different scoring methods, so your score may vary from lender to lender.

Because credit scores are objective and are based on the information in your credit report, they are fairer than the old opinion-based ways of determining a person’s risk level. Your score is a prediction of your likelihood to repay debt responsibly, based on your past credit history and current credit status.

Before you begin contacting potential lenders, check out your credit report, which can be accessed online at Web sites like FreeCreditReport.com.

Know what’s on your credit report

Your credit report is the other major piece of information a lender will consider when deciding whether or not to give you a mortgage loan. Your credit report is basically a summary of your financial behavior, including how you’ve used credit in the past and how well you manage repaying debt. The information on your report comes from creditors, public records and other reliable sources, which report it to the credit bureaus through automated processes.

Credit reports generally include personal data such as variations on your name, your driver’s license number, Social Security number, birth date, current and past employers, and current and past addresses. You’ll also find a listing of your credit accounts, when each account was opened and your payment history for each. If you’ve been involved in court action like bankruptcy or monetary judgments, this information will likely appear on your report as well.

Your report will also show past requests for your credit reports (inquiries) that might come from lenders, insurers, employers or stores. Too many inquiries on your report might make potential lenders think you are trying to overspend, so think carefully before applying for new credit; inquiries stay on your report for two years.

Because your credit report changes every time you use credit, it pays to enroll in a credit monitoring product. Web sites like FreeCreditReport.com make it easy to track both your score over time and monitor your credit report, ensuring you know what’s on your report before a potential lender looks at it.

Buying a home is likely the largest investment you’ll ever make – one that will impact your credit for many years to come. Before you jump into the process of applying for a loan to buy a home, it pays to understand credit, review your report and know your score.

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The charges are coming in, complete with due dates, minimum amounts due and debt dollars adding up. Sure, you had a fantastic time over the holidays, but now it’s time to determine how you’ll be able to prepare yourself to begin the new year off right with your finances.

Consumers are in a financial crisis; they are well beyond treading water; they’re drowning in their debt, says Steve Ely, president of Equifax Personal Information Solutions. Overspending during the holidays will only worsen their debt burden and make getting out of debt seem like even more of an impossibility. That is why having a plan for getting out of debt- a plan that they can actually stick to- is so important.

Here are some tips that may help you get your debt under control:

Get your debt organized.
If you don’t know how much debt you have, or how much you’re spending on interest, you’ll never be able to get it under control. Equifax Debt Wise can help you to overcome one of the biggest challenges to paying off your debt- getting started. The Fast Pay Plan Wizard makes it easy because it automatically imports debts from your Equifax Credit Report so that you can easily select which debts to include in your plan. Your progress is monitored regularly and you’ll receive monthly updates of whether you’re on or off your debt payment plan.

This allows you to select the debts that you want to include in your plan. You determine how much money you have available to pay toward your debt each month, as well as whether you can afford to pay any additional money. The Fast Pay Plan Wizard selects a target account to be paid off first, and you pay the minimum balance- plus any additional amount you are able to over the minimum payment- while continuing to pay the required minimum payments on your remaining balances. Once your target account is paid off, the payments(including the first target account’s minimum balance) are then applied toward the next debt on your list. This means you’re still paying the same total amount of money each month, but the debt stacking strategy accelerates how quickly you can pay off your remaining debts. You follow this process as you pay off all of the different debts in your plan until you are debt- free.

Unlike other online budget and debt- reduction products, Debt Wise does not require you to import, synch or disclose the user names and passwords associated with your financial accounts to create a debt payment plan.

In addition, you will have credit monitoring, a commitment calculator estimating how long it will take for you to free yourself from debt based on the amount you are able to pay toward your debt, spend smart tools, four FICO scores each year and identity theft insurance.

Stop adding to your debt.
Paying down your debt doesn’t mean you’re going to be able to get out of debt unless you curb your spending. Create a budget for yourself, including your debt payments, and stick to it. In addition to your debt, add all of your required expenses like utilities, insurance, taxes and food costs. Also, to keep the January bills to a minimum next year, consider creating a savings account just for holiday presents, and contribute to it all year long.

Make cuts if needed.
As you start budgeting, you might find that your money isn’t stretching as far as you’d like. Look over your expenses and determine whether you can make cuts. Consider cutting back on cable or satellite services and cell phone extras, switching to generic brands of food and clothing, leaving your car at home and taking the bus or walking or biking, and selling items you don’t use. You might also decide you need to take on a second job to bring in a bit more money.

By getting a handle on your debt this year, you’ll be less likely to feel the squeeze of holiday debt after the decorations come down.

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NewswireToday – /newswire/ – Boston, MA, United States – Is Recent Credit Card Fraud Could Had Been Avoided? Identity theft is a serious crime. Some say that companies should not keep transactions records, others say they must, who to believe?

If you think your identity or credit card info have been stolen, here’s what you must do:

A/ Contact the fraud departments of any one of the three major credit bureaus to place a fraud alert on your credit file. The fraud alert requests creditors to contact you before opening any new accounts or making any changes to your existing accounts. As soon as the credit bureau confirms your fraud alert, the other two credit bureaus will be automatically notified to place fraud alerts. Once the alert is placed, you may order a free copy of your credit report from all three major credit bureaus.

* Consumers in the Western states B Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming B can order their free reports beginning December 1, 2004.

* Consumers in the Midwestern states B Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin B can order their free reports beginning March 1, 2005.

* Consumers in the Southern states B Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas B can order their free reports beginning June 1, 2005.

* Consumers in the Eastern states B Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia B District of Columbia, Puerto Rico, and all U.S. territories can order their free reports beginning September 1, 2005.

B/ Close the accounts that you know or believe have been tampered with or opened fraudulently. Use the ID Theft Affidavit when disputing new unauthorized accounts. ftc.gov/bcp/conline/pubs/credit/affidavit.pdf

C/ File your complaint with the FTC. The FTC maintains a database of identity theft cases used by law enforcement agencies for investigations. Filing a complaint also helps us learn more about identity theft and the problems victims are having so that we can better assist you.

D/ File a police report. Get a copy of the report to submit to your creditors and others that may require proof of the crime.

Source: Federal Trade Commission

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A payday loan can help someone through a one-time rough patch. But the amount that must be paid back can multiple fast, with interest rates so high it is impossible to keep up. With the current economy, more and more people are considering using these types of loans, but is it the right choice?

“If you are considering a payday loan or credit loan, do some research,” says Daniel Wesley at creditloan.com, a comprehensive Web site on personal finance. “When used wisely, these types of loans can be a valuable resource.”

How do payday loans work? Wesley explains the application process is very simple and you usually only need proof of employment and a checking account. You then determine the amount you need and write a post-dated check plus lender fees. The lender then gives you that amount and withdraws the amount from your bank account on the next day you get paid.

Sounds simple, but too often these types of loans become an ongoing problem for the borrower. Here is what you need to know to make the right decision about getting a payday loan:

1. Never borrow more than you need
These loans require no collateral, which means that the risk to the lender is very high. This often leads to high interest rates that increase the profit made by the lender. The bottom line is, don’t borrow more than you are able to pay back or you’ll be hit with huge fees. You don’t want to pay double or triple the amount you originally borrowed.

2. Do your research and find a reputable company
Just as you would when you take out an auto or home loan, check around to find the best interest rate for payday loans. Different companies offer different rates and terms. Be aware of hidden fees and penalties and always work with an established, reliable company. When borrowing over the Internet, be especially aware of scam artists.

3. Make a budget for the future
Sometimes emergencies come up and resources like payday loans can help families survive until the next paycheck. But if you find you repeatedly need a cash advance to get through the month, it’s time to set a budget for yourself and stick to it. Compare your spending to your monthly income and cut any unnecessary items to help ensure you don’t get caught owing more money than you make.

4. Deal with debt in the long term
If you continue to have problems with debt, it’s best to develop a plan for paying back what you owe. Contact a credit counseling service to see what options are available. Some will have a cost, so look for a service that is reasonable and will work with you to create a manageable plan.

“Payday loans are great life savers, if you use them sparingly,” comments Wesley. “Be smart about how much money you request so you know you can pay it back. If you continue to have problems, get financial advice from a professional.”

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A Jonesboro loan officer said regulations for home buying have since changed. Credit scores now need to be higher to make larger purchases.

“The tough situation that we’re running into is that they’ve raised the credit score guidelines where you used to could have low 600 credit score where now it’s mid 700’s or you’re going to have a tough time getting a mortgage loan,” said Bandi. “Where we used to could see a moderate credit score, now you have to have a great credit score and great people are having a hard time getting loans, even with great scores because of the guidelines.”

Wilcox said the Jonesboro area has been in an economic advantage over the last few years.

“Across the country, there are 4 big markets that crashed hard, and everybody has kind of related that back to us and we have in the last year felt a slow down, but we haven’t felt it like everywhere else has,” said Wilcox.

When asked if the housing market could fall again, Bandi said as long as lenders make responsible decision, then the market should remain stabilized.

“A year ago, you could be self employed and as long as you got a great credit score, you could get a loan and now that’s not the case. I mean now even with a great credit score, you have to have a great job, a two year history as far as your job goes and there are just a lot of new requirements and it’s gotten a lot tougher,” said Bandi.

Source: KAIT 8, Jonesboro AR

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You open your mail and to your surprise there is a check for $4,000 claiming you won a sweepstakes. Boy that money sure will come in handy right now. But wait, there’s a catch.

You’ve been instructed to wire a portion of the check to cover the taxes. You deposit the check and, after a couple of days, the bank gives you access to the money. A few weeks after wiring the money to supposedly cover the taxes, you learn that the check was counterfeit. Not only are you responsible for paying the money back to the bank, you may never be able to recover it from the criminal.

“This is just one of many ways that fake check scams work and savvy criminals are pursuing these types of crimes more frequently,” says Denise Jaworski of Western Union, a leader in money transfer services. “There is a misconception that when you deposit a check or money order, the bank confirms that it is good before allowing you to withdraw the money. This is an incorrect assumption and one that clever scammers are taking advantage of.”

According to the National Consumer’s League’s (NCL) Fraud Center, Fake check scams are the No. 1 type of reported fraud. These scams account for more than 40 percent of the complaints received by the NCL in 2008. According to Jaworski, these scams seem to be increasing throughout the financial services industry.

A telephone survey by the Consumer Federation of America, a nonprofit association of more than 280 pro-consumer groups, found the most common fake check scams are those involving lotteries (66 percent), grants (36 percent) and work-at-home opportunities (35 percent).

“Unfortunately with tough economic times, people are even more vulnerable to phony claims of sudden riches or ways to make money,” says Jaworski. “Western Union takes steps to help prevent these types of crimes, but the public is the first and best line of defense against fraud. Always be skeptical.”

Western Union and other concerned businesses have teamed with the Consumer Federation of America to help educate people about what fake check scams are and how to avoid becoming a victim. Here are seven tips for avoiding fake check scams:

1. When faced with an offer that sounds too good to be true, take a moment to ask yourself a few simple questions:
* Who is this person?
* Does this money really have to be sent immediately?
* If you received a lottery check, did you actually sign up for the sweepstakes?

2. Never agree to pay to claim a prize. No legitimate sweepstakes or lottery would ever send you a check or money order and ask you to send payment in return. If you really won, you would pay taxes directly to the government.

3. Never agree to pay for grants from the government or foundations. They don’t offer money to people unexpectedly or charge to get it. Most grants go to organizations, not individuals, and require a lengthy and extensive application process.

4. Never agree to cash checks and send the money somewhere as part of a job working from home. That is not how legitimate employers operate.

5. Never agree to wire money to anyone you have not met in person or known for a long time.

6. If it seems suspicious, get advice. Consult your state or local consumer protection agency, the Federal Trade Commission, the Postal Inspection Service, or another trusted source.

7. Remember that there is no legitimate reason why anyone who wants to give you a check or money order for something would ever ask you to send money anywhere in return.

Go to www.westernunion.com to learn more about how to protect yourself from fake check scams.

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If you’ve been paying attention to celebrity news, you’ve probably noticed several cases where courts are tied up with relatives and lawyers fighting over estates, children and money. One reason these cases take time – and money – to be resolved is because of the absence of an updated will.

No matter how young, healthy, wealthy or prepared for retirement you are, you can’t predict what will happen in the future. But you can make your wishes for the future known, especially those that involve your family after your death.

A last will could be the most important document you ever sign. Without one, the courts determine what happens to your assets – and your minor children – when you die.

“Individuals of all ages and stages in life need to think about and create a will so their final wishes are followed,” says Brian Liu, co-founder and chairman of LegalZoom.com. “Having a last will is very important for families. This protects loved ones and reduces – or even eliminates – confusion during a very difficult time.”

Here are three reasons everyone should organize a last will:

1. Children. If you have minor children, you need to specify guardians. A will allows you – and not court system – to determine who would best care for your children and raise them the way you would rear them.

2. Property. Recording your wishes for the distribution of your assets and property not only ensures that your decisions are honored but it can also help your family avoid destructive conflicts over these issues.

3. Final decisions. Grieving the loss of a loved one is hard enough to handle. Sparing your loved ones the stress and anxiety of determining how you would like to be honored and remembered can be avoided with a will.

Preparing a last will isn’t difficult, and services like LegalZoom.com make the process easier and affordable. LegalZoom helps you create reliable legal documents from your home or office. Simply answer a few questions online and your documents will be prepared within 48 hours. Your answers are reviewed for consistency and common mistakes, and the company guarantees your satisfaction.

By completing a last will online and keeping it updated, you can have all of your final wishes followed, and save your family plenty of stress.

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