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March 2019 E-Newsletter

The 2019 Tax Deadline is Still April 15

(Unless you live in Maine or Massachusetts, where it’s April 17).

Filing after the deadline can cost you. The IRS can assess a failure-to-pay penalty worth up to 25% of your unpaid tax. And if your return is more than 60 days late, the IRS assesses a minimum tax penalty of $210 or 100% of the tax you owe, whichever amount is less.

But there are six more tax moves you must — or should — make by the tax deadline.

1.Make your first estimated tax payment for 2019

The IRS requires quarterly estimated tax payments from many people whose income isn’t subject to payroll withholding taxes, often independent contractors or those with investment earnings. You’ll need to figure your adjusted gross income, as well as your deductions and credits for the year. IRS Form 1040-ES can help.

The April 15 annual tax deadline is the first due date for affected 2018 earnings. The others were April 17, 2018, June 15, 2018, Sept. 17, 2018, and Jan. 15, 2019.

2.File your 2015 tax return (yes, 2015)

If you were due a refund in 2015 but didn’t file a return, you have until the April tax deadline to submit that old Form 1040 and claim your money. In 2018, the IRS had more than $1 billion in unclaimed refunds waiting for hundreds of thousands of taxpayers who hadn’t filed their 2014 federal returns. So if you haven’t filed your 2015 return, get to work! Miss this year’s tax deadline, and the U.S. Treasury gets to keep your money. 

3. Contribute to or open an IRA by the tax deadline

You have until the April tax deadline to contribute to an IRA, either Roth or traditional, for the prior tax year. The 2018 maximum contribution amount for either type of IRA is $5,500 — or $6,500 if you’re age 50 or older. If your traditional IRA contribution is deductible, earmarking it for 2018 could reduce your tax bill.

Even if you can’t deduct your contribution, designating it for the previous tax year can help you maximize your retirement account’s growth.

4. Contribute to your Health Savings Account

April 15 is the deadline to put money into an HSA for the 2018 tax year.

This medical account, available to individuals who have a high-deductible health plan, provides a tax-saving way to pay for out-of-pocket costs.

The 2018 limits are $3,450 for an individual HSA owner and $6,900 for a family.

5. File for an extension (but still pay)

You’ve realized you simply can’t finish your return by the tax deadline. Don’t panic. Instead, file IRS Form 4868. This will buy you six more months — until Oct. 15, 2019, for most taxpayers.

Remember that an extension only gets you extra time to file your return. You still must pay any tax you owe, or a good estimate of that amount, by the April tax deadline. Include that payment with your extension request or you could face a late-payment penalty on the taxes due.

6. File your state tax return

Most taxpayers also face state income taxes, and most of the states that have an income tax follow the federal tax deadline. Ask your state’s tax department for its due dates and how to get an extension, if necessary. And if you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, enjoy your totally state-income-tax-free status and focus on your federal filing.

The article 2019 Tax Deadline is still April 15 originally appeared on NerdWallet.

How to Stop Scammers Who Sound Just Like Your Bank

If you ever get a call from someone claiming to be a customer service agent at your bank, pump the brakes before answering any questions — even if they have the right caller ID. Using “caller ID spoofing,” scammers can make it look like they’re calling from your bank’s phone number.

Here’s the tipoff that it might be a scam: Banks typically don’t call you asking for personal information.

How to shut down a scam before it starts

One of the easiest ways to spot a scammer is that they reach out to you versus you contacting them, says Richard Crone, a payments expert and CEO of Crone Consulting, LLC.

“The best way to protect yourself is to say, ‘No worries, let me call you right back,’ and then you call the official bank number yourself,” Crone said. “Never answer any questions from a random call from anybody. There may be a call from someone legitimate, but more often than not, it’s nefarious.”

A legitimate representative from your bank will never take issue with you hanging up and calling the number on the back of your debit or credit card.

Crone says you can be even more secure by refusing to answer the call, text or direct message in the first place.

If you run into a case of caller ID spoofing, report the activity to the Federal Communications Commission. “Once a scammer makes contact, they can distribute and sell your number in the criminal underworld,” Crone said.

When something doesn’t feel right

In one recent case, a number that appeared to be Wells Fargo called a customer, Cabel Sasser, and the “customer service agent” told him that his account had been compromised. Sasser, an entrepreneur from Portland, Oregon, was told that he needed to replace his card and change his debit card PIN by typing the old one into his phone’s keypad. The “agent” had several accurate details from Sasser’s account, including the last four numbers of his Social Security number, but something didn’t feel right, he told USA TODAY.

Sasser said that he hung up and called the official Wells Fargo customer service number on the back of his card. It turned out his card hadn’t been compromised. As Sasser recounted the story on Twitter, he said, “I was just four key presses away from having all of my cash drained by someone at an ATM.”

Keep your banking information safe

So, if phone calls and texts seemingly from your bank are suspicious, how can you know if your bank account has been compromised? Here are a few tips:

Use your mobile bank app. “The best way for banks to reach out is through their official mobile app,” Crone said. “Apps have multiple authentication systems, logins and biometrics like Touch ID or face recognition. That’s your safety deposit box for interactions with your bank. It’s the safest way to communicate; you can be assured that it’s them, and they can be assured that it’s you.”

Set alerts for unauthorized account usage. When you enroll in your bank’s account alert system, you’ll be notified whenever a fishy transaction is made. Many banks also allow you to “freeze” the card so that it can’t be used unless you “unfreeze” it through the app or online.

Keep a password lock on your phone and on your banking app.  If you lose your phone, multiple passwords will help keep your information safe in case the phone is unlocked.

Don’t use public Wi-Fi to check your bank accounts.  Public Wi-Fi networks are more vulnerable to security risks, so use only a secure Wi-Fi connection to look at your bank accounts. If you must look at your accounts in public, your phone’s internet connection via cellular data is more secure than a public Wi-Fi network.

Beware of “shoulder surfers.” If you use only passwords — as opposed to biometrics — to keep your phone secure, make sure no one nearby is snooping over your shoulder to watch you enter your phone or banking app passwords. If that person steals your phone, they’ll have easy access to your money.

Change passwords frequently. How frequently? “As often as you can endure it,” Crone said. A strong password is complex, hard to guess and easy to remember. Consider making your passwords phrase-based — like a full sentence — and avoid using real words that can be found in a dictionary. Make it a combination of numbers, letters and symbols. If it gets difficult to keep track of, a password manager can help you maintain a record of your passwords across different sites and logins.

As scammers become more advanced, good security practices and vigilance are more important than ever for keeping your money safe. So rethink answering that call from your “bank,” and get well-acquainted with your mobile app.

The article How to Stop Scammers Who Sound Just Like Your Bank originally appeared on NerdWallet.

Coulee Bank's Q-Tip: Secure Your Home Network

Wireless networks have security risks beyond those of a typical wired connection: since anyone within range can potentially connect to your wireless access points, you should take extra security precautions when setting up your home wireless network. The methods listed below vary in their effectiveness, but a hacker will probably try to find the path of least resistance to break into a network. The more of these measures that you take, the greater the chance that someone will move on and attempt to locate a less secure network.

Stay up to date with patches and updates

As with any computing device, your router has special operating software called firmware. Most mainstream commercial companies will release patches or updates to that firmware. While these are not frequent, they can often fix security vulnerabilities in the hardware. You can likely check for updates in the router administration area. Any wireless router/access point (WAP) you purchase needs to have regular security updates available from the vendor. Vendors that have regular security updates include Netgear, Linksys, and D-Link. Another effective practice is to ensure all updates and patches are applied to the devices connected to the network. Gaining control of one device on the network, especially an older, forgotten machine, gives an attacker a foothold to move on to other, more valuable targets. If you're not using a computer or other device, turn it off, or at least disconnect it from the internet, if possible.

Choose a strong administrator password

Most routers require an administrator password to access the setup and configuration settings. However, the default passwords for these routers are generally weak, and some have none at all. You should change the default password to something strong. Once you have set up your wireless network, you will probably not need to use this password frequently, so you can use a very strong password without worrying about the difficulty of typing it in. If you do lose the password, you will have to reset the router to factory settings and set up your network again. You may wish to consider passphrase vaulting to store these passwords. Some routers will also let you change the administrator name; this is another good way to protect the security of your WLAN.

Disable remote administration

Many wireless networking routers offer the ability to allow administration of the router remotely, from anywhere on the internet. Unless you require remote administration and are very familiar with WLAN administration and security, it's a good idea to disable this feature. Otherwise, anyone connected to the internet could conceivably gain administrative access to your router and network.

Use encryption

For best security, you should enable or set an encryption password. All Wi-Fi equipment will support a form of encryption; you should choose the type that is most secure and will work across all the devices you need to connect. If possible, use WPA2 (Wi-Fi Protected Access). If you are using a home wireless network, you should choose WPA2 Personal. Some older devices may be unable to connect to a WPA2 network; in these cases, use WPA. There are still some old devices that may not even be able to connect to a WPA network, and will require WEP (Wired Equivalency Privacy). While WEP encryption is slightly better than none at all, WEP is not considered secure, and you should avoid using it. If you do need to use WEP encryption, be sure to choose a very strong password, and change it relatively frequently.

Change your default SSID Your SSID 

(Service Set Identifier) is the name of your network. Most commercial products have a default name (for example, Linksys routers are usually set to "linksys"). You should change this default name to a unique, robust name, preferably a longer one with letters and numbers. Your new SSID should not contain sensitive or personally identifiable information such as your name or address.

The 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, at work and home.

Talking to Your Kids About Money

In previous generations, parents and grandparents talked about “knowing the value of a dollar.” Attitudes and approaches may have changed, but it’s still useful for children to learn the importance of money in our daily lives and about your family’s values when it comes to money. Here are some tips for getting the conversation started.  

Focus on Values

Talking about money should include your family’s views on the best ways to use money. Explain to them that saving is important to you because, for example, it helped you pay for your college education or buy your home. If you strive to live on a budget and without debt, talk generally about how spending only what you earn helps you worry less and enjoy the money you have. If you make charitable contributions, tell your children about why those causes are important to you and why giving is meaningful. Even if a child isn’t ready for facts and figures, he or she can understand the decisions you make and the impact they have.  

Make it a Family Affair

As appropriate, include your kids in family meetings about budgeting and spending. While parents are the decision makers, children can join in celebrations when you’ve paid off a big debt or saved enough for a long-held goal. Explain how you’ve reached the goal—by cutting back on restaurant meals, for example—and why it was worth doing, like no longer having to make payments on a car loan.

Use Visual Aids

Consider showing your kids one of your monthly bills—for electricity or cable, for example—and explaining where the costs come from. Brainstorm ways to lower the bill by, say, turning off lights when you leave a room or cancelling a premium cable channel that your family rarely watches. Review the bill next month with your kids to see how your family’s choices have helped cut expenses. You could turn it into a game to see how much you can save as a team, with a set reward at the end, like a family picnic.

Give them a Chance to Earn

Whether it’s helping around the house or getting an after-school job, encourage your kids to make some money of their own. Once they do, talk to them about possible ways to use their earnings, whether it’s for an immediate goal such as a toy or trip to the ice cream store or a longer-term target, such as a cell phone. Discuss how spending now will mean it will take more time to reach a long-term goal. Getting this perspective can help them decide whether the short- or long-term goal is more important to them. Encourage them, too, to set aside some money for giving. Talk to them about what’s meaningful to them, like animals, the environment or some other cause, and about how much of their own money they’d like to commit to it. These conversations and experiences will give them a first-hand understanding of how money works and instill good money habits that can last a lifetime. 

Source: https://www.360financialliteracy.org/Topics/Spending-Saving/The-Basics/Talking-to-Your-Kids-about-Money

Business Corner: Small-Business Grants: Where to Find Free Money

Federal and state agencies, as well as private companies, offer small-business grants. Here's a list of resources to help you get started.

Federal small-business grants

Government agencies are among the biggest distributors of grants, supporting a range of enterprises from environmental conservation to child care services. The application process can be intimidating, but federal grants are great opportunities for small-business owners looking to grow.

Grants.gov

Grants.gov is a comprehensive, though daunting, database of grants administered by various government agencies. To learn more about available grants, eligibility and the process of applying, click on “Apply for grants” under the “Applicants” tab at the top of the homepage.

Small Business Innovation Research and Small Business Technology Transfer programs

The SBIR and the STTR are grant programs focused on research and development, particularly for technology innovation and scientific research. The programs help connect small businesses, universities and research centers with federal grants and contracts from 12 government agencies. To qualify, you must operate a for-profit business, have no more than 500 employees, and meet other eligibility requirements relating to type, size and ownership of the business.

USA.gov

Although you won’t find any federal small-business grants here, this official government website provides resources for starting or growing a small business, including a link to GovLoans, which provides information on all of the types of federal loans available for businesses.

State and regional small-business grants

Economic Development Administration: This U.S. Department of Commerce agency provides grants, resources and technical assistance to communities to support economic growth and encourage entrepreneurship and innovation. Each state’s agency helps businesses find financing (including state or regional grants), secure locations and recruit employees. You can search for regional offices and local resources at the EDA’s website.

Small Business Development Centers

Your local SBDC provides support for small businesses and aspiring entrepreneurs. They’re often associated with local universities or the state’s economic development agency, and many can help connect business owners with financing opportunities, as well as mentors and networking opportunities and training on basic business skills.

Corporate small-business grants

Many corporations and large companies have a philanthropic component that includes small-business grants. While some provide grants only to nonprofits servicing specific industries, some give to for-profit companies.

Specialty small-business grants

To help spread entrepreneurial success across demographics, many organizations focus their funding efforts on specific communities. 

We’ve put together lists of:
Small-business grants for women
Small-business grants for veterans
Small-business grants for minorities

Source: https://www.nerdwallet.com/blog/small-business/small-business-grants/

Coulee Investment Corner: Have a 401(k) From a Former Employer?

Here are some options for getting the most out of multiple retirement accounts. You may have had multiple jobs over your career, and left behind retirement account balances of critical building blocks for your retirement. Here is a short guide to your options of what to do with a retirement account left with a former employer:

Roll it over to an IRA

A rollover IRA allows you to continue any tax-deferred growth.
  • A direct rollover IRA helps you avoid current taxes and early withdrawal penalties.
  • You retain flexibility to select investments that fit your specific needs.
  • A rollover IRA allows you to consolidate your retirement assets in one convenient place when you change jobs or decide to retire.

Leave it in your plan
  • Leaving your account in your former plan lets you continue any tax-deferred growth.
  • As long as you don’t take money out before age 59½, you avoid federal income taxes and a 10% early withdrawal penalty.
  • You always have the option to move your savings to another retirement plan later.
  • You have continued access to your plan and its investment options, which may be perfectly suitable for your needs.
  • You may be protected from creditors.
  • You may benefit from lower fees than you would pay in other options.

Transfer it to your current qualified plan (401k, 403b)
  • Transferring your account to your current plan lets you avoid current taxes, early withdrawal penalties, and continues any tax-deferred growth.
  • Depending on your plan, you may be able to consolidate other retirement assets in one account.
  • Your current plan may allow you to borrow from your account (although this generally is not recommended). You may be protected from creditors.
  • You may benefit from lower fees than you would pay in other options.

You also have the option to take a withdrawal from your qualified plan account. Taking money now means you will have money right now, but it could come at a price of an early withdrawal penalty and taxes due.

Have more questions? Consult your benefits administrator or advisor for guidance on the option that’s most appropriate for your individual circumstances.

Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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© 2018 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

Securities offered through LPL Finanacial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Coulee Bank and/or Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.