Posts Tagged ‘credit’

Repaying Obama Tax Credit Might Happen

Sunday, May 10th, 2009

You may end up owing m0ney if you are getting the tax credit from President Obama and Congress.  How so you ask?  Easy.  There are some situations where if you are in a multiple income family (both spouses working, some have more than one job -like me), retirees who have federal income taxes withheld from their pension payments and Social Security (yes, the program isn’t gone yet) recipients with jobs that are still making taxable income.

There have been many articles saying this may happen but none explaining how specifically and what to watch out for.

1.  You need to first find out what your possible taxable income bracket will be for 2009.  Go to the irs website and look for the 2009 tax tables. 

2.  Take a look at what is being taken out for Federal taxes.  If the $800-900 extra bucks that you are looking to get back for the year isn’t helping, you need to make sure you set aside enough money to cover your tax liability for next year.

3.  Pay quarterly taxes giving some (if not all) of the $900 back so you won’t have problems when tax time rolls around. 

The planned expectation is that a lot of people will get smaller than expected tax refunds next year but the reality is that for a lot of people that have already calculated their taxes as close to year end zero liability as possible with a possible slight refund, they may end up owing some money.  That gets nasty if they haven’t any savings to cover your tax liability at the end of the year.  Despite what pundits are saying, you need to look at your own tax situation and see what you might look like if you are having $900 less in income tax taken out at the Federal level.  The State is another matter but isn’t important for this discussion.

Good luck and good planning.  Any questions?  Drop me a line or a post.  I might be able to help you with some of your planning.

May 10 2009

If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book, Practical Money Making, that is listed right after his paragraph in this very post.  There are some great suggestions and ways to survive the Depression we are in.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale.  

Have you read my book, “Bad Tax Idea, Good Tax Idea“?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!  Tax planning should be done year round and not just two weeks into January or later. 

Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

Kim Isaac Greenblatt

Repaying Obama Tax Credit Might Happen If You Don’t Have Enough Taxes Withheld

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Future of Credit Availability

Wednesday, October 22nd, 2008

Question for Kim from a reader: “How come the banks are getting money and they aren’t kicking it down?”

My answer: I think the banks are kicking money down, though they are doing it slower and with tighter regulations than before.  The best analogy I can think of is that the pendulum has been swinging to the side of what I would call fiscal conservatism or tighter money.  Cash was free and easy for years and just by virtue of having a mailing address you could get offers for credit cards, home loans, etc. Bank reps were turning a blind eye to compliance with regulations, limits as to how much somebody could qualify for a loan, and something as plain as having 20% down as a home down payment. Times have changed-and it may not be for the worse over the long run. A lot depends on how the new administration gets projects going to put people to work so they can get paid, but I am getting off topic and on my soap box here.

Cash still can be come by but it isn’t free and easy as it was ten or twenty years ago.  I have talked to a lot of people who have had their HELOCS cancelled and after an appraisal, they have had them reinstated.

Did anything change in their credit situation?  Probably not.  The property values were finally looked at realistically and the bank/lender used a realistic more conservative valuation method – versus the blind computer method that they used for years and that gave a true example that not everybody in America is upside down on their mortgage.

The same can be said for credit card issuance.  People are still getting applications for credit cards and lines of credit so the money appears to be there – it is just that the bar has been raised back to the way it use to be decades ago where they actually expect to have reasonable valuations and down payments before lending money for homes and some sort of track record before issuing credit cards.

I wouldn’t be surprised to see credit tighten for personal non-secured lines (like credit cards) though that may be superseded by interest rates going up once the economy finds a direction.  That may not happen though for a few years since it will take some time for the economy to sort itself out and in the meantime credit may be a tighter than it was before.

So the solution?  Try and keep a positive cash flow, save money and pay bills on time.  Eventually, you will get credit card offers and when you do, watch the interest rates and use them sparingly and not as sources of income.

Whether you agree with the bank bailouts or not, the profitable way of approaching credit in any of its shape or forms (credit card, HELOC, line of credit, etc) is to remember that the purpose of it is to jumpstart or help out something, not to be used as an income stream.  The money is borrowed – that means that sooner or later that cash has to be paid back.  If interest rates go up, and they will over time, you don’t want to end up paying more money than you borrowed among other things.

On a separate note, I’ve started working on my next non-fiction book.  The book has to do with personal finance.  Now, more than ever, we have to not only make sure our own financial acts are together but we need to make sure that our children are learning to budget and watch their money.

 I will give you more information as it develops.  If you have any ideas or suggestions for titles, please drop me a line or a post on the blog.

Kim Greenblatt

 

You are reading the profitable blog and Kim Greenblatt answers a reader asking when banks will kick down money.

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Profitable Credit Planning For Business and Your Credit Rating

Monday, July 28th, 2008

If you are planning on starting a business, or running one already, you know that you may need extra money to start up or expand.  That is where having credit comes in.  Credit is basically where a bank, a credit card company or some lending institution (or person) gives you money with the promise that you will pay it back with a fixed interest rate.

The factors that creditors look for are similar and they boil down to the following (thanks to the Federal Government and the Consumer Handbook for Credit Protection Laws for the source of this information):
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“What Creditors Look For
The Three Cs. Creditors look for an ability to repay debt and a willingness to do so–and sometimes for a little extra security to protect their loans. They speak of the three Cs of credit: capacity, character, and collateral.

Capacity. Can you repay the debt? Creditors ask for employment information: your occupation, how long you’ve worked, and how much you earn. They also want to know your expenses: how many dependents you have, whether you pay alimony or child support, and the amount of your other obligations.

Character. Will you repay the debt? Creditors will look at your credit history (see section on Credit Histories and Records): how much you owe, how often you borrow, whether you pay bills on time, and whether you live within your means. They also look for signs of stability: how long you’ve lived at your present address, whether you own or rent your home, and the length of your present employment.

Collateral. Is the creditor fully protected if you fail to repay? Creditors want to know what you may have that could be used to back up or secure your loan and other resources you have for repaying debt other than income, such as savings, investments, or property.

Creditors use different combinations of these facts to reach their decisions. Some set unusually high standards; others simply do not make certain kinds of loans. Creditors also use different rating systems. Some rely strictly on their own instinct and experience. Others use a “credit-scoring” or statistical system to predict whether you’re a good credit risk. They assign a certain number of points to each of the various characteristics that have proved to be reliable signs that a borrower will repay. Then they rate you on this scale.

Different creditors may reach different conclusions based on the same set of facts. One may find you an acceptable risk, whereas another may deny you a loan.”
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Basically, you need to have your financial act together when you are applying for credit. The consumer handbook offers information and the protections that are out there but you need to show that you can be trusted with other people’s money.

The weird thing is that the more you can be trusted and the more that you don’t need the money, the more that the financial institutions will try to loan you – or at least that was the case prior to the meltdown in the housing markets.

It is also a good idea to watch how much credit you need and read very carefully what the terms are of the lines of credit, the loans, etc. You need to know what would happen if they call the loan due immediately. You need to know when and where to go into your credit.

If you are starting a business, make sure that you have this in your business plan. If you are already in business, make sure that you research carefully what you will need to have.

Kim Greenblatt

Questions or comments? Let me know about them! Thanks for taking the time to visit and for more information or to get back to the beginning of the blog, go here.

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Posted in Business | 4 Comments »