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February 2017 E-Newsletter

 Planning for Student Loans

Student loan debt has become a hot topic, and with good reason. In 2006, U.S. student loan debt hovered around $600 billion; today, that number has skyrocketed to $1.3 trillion. By itself, that number isn't a bad thing - it means more Americans are going to college. However, the number of defaults is also approaching critical levels. Whether you've just graduated or haven't yet taken on any debt, there are strategies you can use to make your student loan story a success story.
Before School:
Create a Strategy
First and foremost, create a strategy early. The longer you have to save, the bigger the impact will be. However, if you're starting late, resist the temptation to pull from other savings like your retirement fund. Parents: never forgo saving for retirement in order to build up a college fund. There are many resources available to help students pay for college, but there's no such thing as a loan to retire.
Wisconsin College Savings Program
One great way to save money for college if you're able to start early is through the Wisconsin College Savings Program. This program, made up of the 529 EdVest and Tomorrow's Scholar college savings plans, enables consumers to save tax-free dollars to pay for future post-secondary education costs. You can find out more about the program from the Wisconsin Treasury website at
Scholarships and Grants
Applying for grants and scholarships should be part of every college-bound student's strategy. National grants include Pell Grants, Academic Competitiveness Grants and National SMART Grants, but local scholarships often have less competition. Civic organizations and religious institutions often have meaningful amounts of aid available to students willing to fill out an application. Don't forget to ask the school itself how you can maximize their financial aid package. If you've been accepted to more than one school, it might even be possible to negotiate for a better package.
Student Loans
Federal loans, whether subsidized or not, are a better option than private student loans for most consumers. Because federal loans are cheaper and have more flexible repayment options, students with financial need should always exhaust their federal options before looking to private loans. The Consumer Financial Protection Bureau has more information and resources on student loans available on its website at The most important thing to remember when applying for loans is to know how much you need. Having a defined "ceiling" in mind will help prevent you from taking on more debt than necessary.
After Graduation:
Get Organized
The first thing to do is to organize all of the information you have for all of your student loans. Make a list or spreadsheet that organizes important information such as the name of the loan, the lender, interest rate, total principal (amount due), monthly payment, and when repayment is scheduled to begin. Different loans may have different grace periods (the amount of time after graduation you can wait before making your first payment), so the first payment may be due at different times for different loans.
Stay in Touch with your Lender
Many recent graduates relocate. Make sure that your lenders know how to reach you! Updating your contact information is often as simple as visiting the lender's website and filling out a form. It's also a good idea to stay in touch in case you start having difficulty making your payments. This can happen due to unemployment, injury or medical condition, or other financial emergency. Lenders will work with you to adjust your payments or schedule, but you have to let them know first.
Consider Consolidating
A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. There are several pros and cons to consider, however. Consolidating often extends the repayment period, meaning while you will have a lower monthly payment, it will take you longer to completely pay off the loan. However, it can also provide an interest rate break (especially if you have any variable rate loans) and the single payment is more convenient and simpler to budget for. Seek expert advice if you're considering consolidation as a strategy.
Don't Forget Tax Breaks
Many recent college grads just beginning their student loan repayment aren't aware of the Student Loan Interest Deduction, which allows taxpayers to deduct up to $2,500 of the interest paid on student loans (depending on your income). The best part is, even if you do not itemize your taxes, you're still allowed to claim this deduction. How? Just watch for your 1040 form(s) to arrive - you'll receive one per lender - and follow the instructions on them.
If you are struggling to make payments or aren't sure your strategy is the best way for you to repay your student loans, seek the advice of a financial aid counselor at your alma mater or talk to your lender. Another good resource is, which has tools like repayment estimators and information on various repayment plans available for federal student loans.
Source: WBA Consumer Column E-Newsletter

 Five Tips to Prepare Your Small Business for Tax Season

Even if you're staying on track with your New Year's resolutions, every small-business owner has to prepare for tax season. The major deadline may be a month or two away, but it will approach faster than you think. Here are a few tips to think about as you begin your preparations.
1. Try bookkeeping online
For all the times a cashier asked you, “Do you need a receipt?” hopefully you said yes when it was for business. Now is the time to organize all of your receipts and records from last year, whether in paper or online, and keep them all together in case of an audit. If you find paper receipts cluttering your workspace, consider storing them online using nifty apps like Shoeboxed and Neat.
When it comes to taxes and the Internal Revenue Service, it's better to be safe than sorry, especially if your business is in its early stages.
2. Separate personal and business deductions
For small-business owners especially, make sure that your personal and business expenses stay separate. As you follow the Section 179 guidelines and divide up costs, check your personal bank accounts for any business expenses or employee reimbursements.
Remember to check for any changes in the rules for deductions. For example, business rates for standard mileage deductions went up last tax year to 54 cents per mile, an decrease of 3.5 cents from 2015. Another thing to note is the relatively new simplified option for home office deductions, in which home use for business can be calculated by square foot, not just percentage. Just be sure to know the limits of these deductions as they apply for your business.
3. Apply for an EIN
If this is the first tax season that you have employees or you recently restructured your business, you will need to get a new EIN. This is an employer identification number, a nine-digit number given by the IRS so your business can be identified consistently on taxes from you and your employees. Applying online will be the fastest way to receive your EIN.
4. Keep taxes for your employees and contractors straight
Distinguishing your employees from your independent contractors is crucial. Simply put, an employee's work can be monitored for what and how things are done, whereas a contractor's work can be controlled only when it's complete. For taxes, this freedom of action makes the contractor a self-employed worker who files a Schedule SE (Form 1090), or the self-employment tax.
For employees, payroll taxes include income, Social Security, Medicare and unemployment taxes. Employers withhold the first, withhold and pay the next two, and pay the last. Then employees can file their W-2s.
Since contractors don't have payroll taxes, mislabeling an employee as a contractor can look like tax evasion in the eyes of the IRS and result in serious repercussions. Employers can be charged with penalty fees and interest on the employee's payroll taxes.
5. Know the important dates
Your deadlines will depend on your business structure. For a sole proprietorship, the deadline to fill out a Form 1040 with a Schedule C is usually April 15 (but April 18 in 2017). For an S corporation, the deadline is a bit earlier. You have to complete the Form 1120S for income taxes and pay by March 15. For any shareholders, provide them with a Schedule K-1 (Form 1120S) so they can calculate share of income, deductions and credits.
If you miss the deadline, the IRS imposes a penalty fee of 5% monthly for late filing, up to a maximum of 25%. The total penalty is calculated from your deadline to the date you filed the tax return, so it's in your best interest to file your taxes.
Make sure to prepare your business for the inevitable, and you will glide through tax season with minimal stress.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 Using Equity Loans to Winterize Your Home

There are all sorts of ways to guard your home from the winter elements. Some are cheap and may even fall in the do-it-yourself category, like adding weather stripping and caulking.
Other endeavors, such as swapping out single-pane windows for energy-efficient double panes, or replacing a furnace, are beyond the skill set of most homeowners — and often beyond the balances in many savings accounts as well.
In that case, taking out a home equity loan or line of credit may be the answer. Here's what you should know before you do.
Take stock
If you know your home needs winterizing, it makes sense to get going on those projects in summer, or sometime before it gets really cold. It's a lot easier to work a caulking gun when your teeth aren't chattering or to have your furnace serviced when demand is down.
What's on your list? Many utility companies offer free energy audits and tips on improvements you can make so that your home doesn't lose heat so quickly, saving you money on your heating bill.
Drafty doors and windows may be something you or a handy friend can handle. For many homeowners, though, installing storm windows or storm doors and adding insulation to an attic — particularly if access is tricky — might start to push the envelope.

Hire a contractor
If you know your heater is reaching the end of its run, or your gas furnace's flame is burning yellow instead of blue, it's probably time to hire a contractor.
You can avoid headaches that come from dealing with unscrupulous or second-rate contractors by researching their backgrounds and reputations before seeking bids. Check government websites that compile licensing and business records, as well as consumer-oriented sites such as Angie's List, your local Better Business Bureau or, if you live in one of the many metro areas it serves, the Consumers' Checkbook.
It's usually a good idea to get at least three bids, and to ask for client references.
Decide how to pay for it
If you don't have enough savings to afford winterizing your home, look into taking out a home equity loan or home equity line of credit. Typically, both loans and HELOCs:
  • Carry lower interest rates, compared with, say, a credit card.
  • Are secured by the equity in your home; this means you can qualify for a bigger loan but also that you are using your home as collateral.
  • Allow you to deduct interest come tax time, under the IRS' home mortgage interest deduction.
And when evaluating whether to grant either type of loan, and when setting an interest rate, lenders are likely to weigh the value of your home, how much you still owe and your creditworthiness.
But there are significant differences. With a home equity loan, you receive your money in one lump sum, and the terms call for a fixed interest rate and repayment over a specific period of time.
By contrast, a HELOC is a revolving line of credit, similar to a credit card. You pull from it as needed, up to a specified amount. HELOCs also come with variable interest rates. You pay only on what you draw, but the rate may rise or fall from what it was when you took out the line of credit. Many HELOCs also come with specified draw periods, followed by a repayment period to pay back the outstanding balance plus interest.
Keeping warm in the winter is certainly a good reason to tackle a home improvement project. And because your home is probably your single most valuable asset, it makes good sense to keep it in top condition — to maintain or boost its value for resale, or to pass it along to your kids. For important big-ticket items, home equity loans are a reasonable route.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 Coulee Bank's Q-Tip: Scam of the Month: Locked PDF Phishing Attack

There is a phishing attack going on you need to know about. The campaign sends an email with the subject: "Assessment document," and the body of the email has a PDF attachment in it that claims that it is locked.
The message reads:  "PDF Secure File UNLOCK to Access File Content". If you click to unlock the document, a dialog box comes up that asks you to put in your email address and password.

If an email like that makes it into your inbox, do not click on anything, and definitely do not enter your email address and password. Follow the organization's procedure and if you are at your home, delete the email.
Remember, Think Before You Click!
Q-Tips are provided by Coulee Bank's IT Network Risk Manager, Quentin Fisher. He is always on the lookout for ways to keep our customers' information safe, here at the bank, and at work and home.

Coulee Investment Corner: Your Dollar at Work: 12 Months of Smart Saving Tips

Make 2017 "the year of the dollar" by trying some of these smart saving and spending tips all year long.
January - After-Christmas sales are a great way to stock up on holiday-themed products such as wrapping paper, candles, cards, and decorations. Most retailers reduce prices on these items by 50% or more. But don't stop there. Many specialty and gourmet food items, and items of clothing -- sweaters, hats, gloves, and scarves -- are put on clearance racks and sold for a fraction of their original price.
February - Getting a raise? Consider adding the extra money to your retirement savings plan and/or open a special account for next year's holiday shopping or your summer vacation.
March - March is considered a low-season travel month to Europe. That's the time of year when tourists are scarce, attractive destinations such as London, Paris, and Rome are quiet, and hotels and airfares are at some of their lowest rates.
April - If you are among the majority of Americans who get a tax refund, consider using that money to pay down credit card debt, to make an extra principal-only payment on your mortgage, or to build the foundation of an emergency fund.
May - The Department of Energy estimates that water heating can account for 14% to 25% of the energy consumed in your home. Lowering the temperature on your hot-water heater during the summer months will help cut costs. If you take a vacation, turn the temperature down further.
June - Vegetables fresh from our garden are less expensive than canned and frozen foods -- and healthier, too! Start small -- try a few tomato plants. (Don't forget to water and fertilize regularly!)
July - Play sports? Buy your equipment at used sporting goods stores. From catcher's mitts to surfboards, these stores sell their wares at a fraction of the original cost.
August - Cash in on summer clearance sales. Spruce up next summer's wardrobe or outfit yourself for a winter cruise. Also, start pricing next winter's cord of wood.
September - In September and October auto dealers try to clear their lots to make room for the next year's models. By haggling, you may be able to shave hundreds off a new car's sticker price.
October - The Department of Energy estimates that heating and cooling account for 50% to 70% of the energy used in the average American home. Schedule a heating and cooling system tune-up, insulate your attic, replace furnace filters, and have your chimney cleaned.
November - Many charities begin active fundraising during this month. Before sending a donation to your favorite charity, check it out with the National Charities Information Bureau or the BBB Wise Giving Alliance.
December - Have a few extra dollars to spare? Kick off 2018 by finding new ways to save and spend wisely.
Required Attribution

Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.
© 2016 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.

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