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Coulee Bank

May 2018 E-Newsletter

Derailed by Tax Debt? Use These Tips to Get Back on Track

Tax season — and tax refunds — can be a financial lifeline for many Americans. But the season can pose challenges for those who owe money to the IRS.

Over 18 million Americans owed taxes in September 2014, according to the most recent data from the IRS. Meanwhile, an estimated 10 million face tax penalties each year, the IRS found.

Here are three tips to help you handle your tax debt to lessen penalties and properly resolve your obligation.

1. Act now
If you have a balance after crunching the numbers, make sure you still file. Ignoring your taxes will make the situation worse, says Michael Kay, a certified financial planner from New Jersey.

“You’ll need to pay the piper. There are no good alternatives,” Kay says. “The penalties for not filing can become criminal, so absolutely file, even if you don’t have the money.”

If you don’t file by the deadline, you could face a monthly penalty of 5% of unpaid taxes, up to a maximum of 25% of your balance, making your tax debt a lot worse.

You can file for an extension if you need more time to file. But you should still pay as much as of your estimated tax as possible by the April deadline to avoid interest and penalties.

2. Review payment options
If you can’t pay your taxes in full within 120 days, the IRS also offers options to help manage your balance:
  • Request a payment plan: A long-term payment plan, also known as an installment agreement, is best if you need more than 120 days to resolve your balance. Note that these payment plans can add penalties and interest to your debt and are only available if you owe less than $50,000, including penalties and interest.
  • Delay payment: You can temporarily delay payment on a tax debt if you can prove that paying the debt would prevent you from affording your basic living expenses. Eventually, the IRS will come knocking at your door for payment, though, and the debt will accrue interest and penalties.
  • Settle for less than you owe: The “offer in compromise” approach can help you resolve the debt with the IRS for less than you originally owed. You’ll have to prove paying the debt would cause financial hardship to qualify.
3. Get help
Tax debt can be tricky. Kay advises consulting a certified public accountant or financial planner to ensure you’re handling your tax situation in the best way possible.
“When it comes to tax prep and dealing with the IRS, you should absolutely work with a CPA from day one,” Kay says. “As far as a financial coach or planner, that might be helpful for them to see what opportunities they have in terms of their cash flow. Sometimes it helps to lay it out and see the bigger picture.”

More From NerdWallet Sean Pyles is a writer at NerdWallet. Email: Twitter: @SeanPyles.

The article Derailed by Tax Debt? Use These Tips to Get Back on Track originally appeared on NerdWallet.

 Teach Children to Save

Financial literacy is a skill that impacts everyone throughout their lives, yet many people are not exposed to essential money concepts until they become adults—sometimes after they've made serious financial mistakes. You can help by introducing the concept of saving and spending wisely to your children or grandchildren, and now's the perfect time. Here are some ideas on how to teach sound financial habits to the children in your life.
Read a Money Book
Does your child like stories? Pick up a money-related book (such as The Berenstain Bears' Trouble with Money or Alexander, Who Used to be Rich Last Sunday) and read it with them. Afterward, ask questions about the book that encourage your child to think about how they would save and spend money, and if they would do things differently than the characters in the story. 
Take a Field Trip
Are you stopping by your local bank branch soon to deposit a check or cash? Take your child with you and explain what you're doing. It's important for children to learn about the places they can save money, starting with their piggy bank and eventually depositing money into an account at a financial institution. If your child is old enough, you can also explain that banks pay their customers interest, so saving is a way to earn money, too! 
Monkey-See, Monkey-Do
Finally, use the old adage "monkey-see, monkey-do" to your advantage! If you model good saving and spending behavior for your children, they're more likely to follow in your footsteps and be good stewards of their own money later in life. This is especially true if you involve them in financial discussions in order to engage their interest. For example, before taking a family vacation, ask your child to help set their budget for toy/souvenir purchases. Another good activity is to have them help make the grocery list and compare prices in the store while shopping. 
You can find more ideas and educational money activities for children on, a website designed to connect you to the best financial literacy resources available. 
An archive of Consumer Columns is available online at

Business Corner: 11 Ways to Promote Your Business When You Don't Have a Marketing Budget

Promoting a business can seem daunting for small business owners who have little to no money in their marketing budget. Fortunately, in this digital age, it's easy to promote a business online without breaking the bank.
So how do you market your business when you don't have any spare dollars to spend on marketing? It can seem like you’re stuck in a vicious cycle, but if you use these 11 tips, you can garner increased attention for your business and bring in more customers (almost) without spending a huge sum.

1. Raise your community profile by getting involved in local events. This could be anything from sponsoring a local charity run so that your company name is on the T-shirts to donating your product or services as a prize in a local fundraising raffle.

2. Increase your local visibility. Place an entry in local paper business directories and online directories like Yelp or Yahoo. People frequently turn to online directories to search for a local service, and they pop up near the top of Google and other online searches too. Local advertising brochures are also inexpensive to advertise in and reach many consumers.

3. Share your knowledge. Everyone wants to get the inside info, which only the experts know. Sharing advice or skills helps get your name out to the masses. You could do this by:
  • Giving a free workshop or class
  • Providing tips or advice that you can offer as a downloadable page on your website
  • Writing an expert article for a local magazine or website
4. Speak directly to your market by giving a speech to your local community on a topic connected with your business. You can also appear as a guest on a local radio show to talk about your field of expertise. More people listen to the radio than you might think.

5. Maximize word of mouth. Don't be shy to ask your customers for referrals and recommendations. Many people are happy to tell their friends about the great job you did. Seek out enthusiastic quotes from delighted customers that you can use on your marketing materials.

6. Support the media. Subscribing to Help a Reporter Out (HARO) gives you a chance to respond to reporters looking for professional information and journalistic sources. It's a free way to get your name into local and sometimes national media.

7. Use promotions wisely. Giveaways – free samples of your new soaps, a free yoga session or a raffle to win free installation of new windows and doors – always attract attention.

8. Establish an online presence. Today, people are more likely to search online for a local plumber, so create a website with a blog so people can find you. There are plenty of free website builders that guide even novice website builders through the process.

9. Make the most of social media. Being active on platforms like Facebook, Instagram and Twitter is a great way to get your name out there. Having a Facebook page also makes it easier for people to recommend you by tagging you. I recommend following these three tips for your social media pages:
  • Connect with local influencers, businesses and community figures who are likely to use your services and recommend you.
  • Join Facebook groups that are relevant to your business and contribute helpful advice without self-promotion, in order to increase your reputation.
  • Choose the best platform for your business, e.g., Instagram for visual products, Twitter for B2B connections, Facebook for B2C and service industries, Pinterest for visual products and crafts, LinkedIn for B2B services, etc.
10. Use email marketing platforms to send reminders, discount coupons, advice and more to your customers and potential customers. Many email marketing services are free up to a certain number of recipients. They offer plenty of templates and advice to help you send engaging emails.

11. Create a Google+ profile through Google My Business so your business shows up in a Google search for local businesses. This strengthens your local SEO so you show up higher in Google searches, plus your business will appear on Google Maps results.

Tricks for increasing your marketing budget
Although it is possible to effectively market your business with zero budget, it's even better when you can allocate a little money to marketing. These four tips can help you add some more dollars to your budget.
  • Make the most of your tax deductions. If you're an independent contractor, there are multiple ways you can chip away at your final tax bill, which keeps more money in your pocket to spend on important things like marketing.
  • Do what you can to reduce business expenses. It's easy to fall into certain habits, which aren't always the most cost-effective. Every now and then it's good to review how much you're spending to see where you can cut costs.
  • Manage your cash flow. Ideally, you'll always have positive cash flow. Just in case, it's best to have three to six months of working capital on hand in an easy-to-access account in case of emergencies.
  • See if you can raise your prices. If you're smart about it, raising your prices will bring in more income without causing you to lose customers while also giving you more freedom with your marketing budget.

Coulee Bank's Q-Tip: Threats Undercover

Even the best security software can’t protect you from the headaches you’ll encounter if you click an unsafe link. Unsafe links appear to be shortcuts to funny videos, shocking news stories, awesome deals, or “Like” buttons, but are really designed to steal your personal information or hijack your computer. Your friends can unknowingly pass on unsafe links in emails, Facebook posts, and instant messages. You’ll also encounter unsafe links in website ads and search results. Use these link-scanning tips to check suspicious links. These couple of tips are free, fast, and don’t require you to download anything:
Hover Over the Link
Sometimes a link masks the website to which it links. If you hover over a link without clicking it, you’ll notice the full URL of the link’s destination in a lower corner of your browser.
Use a Link Scanner
Link scanners are websites and plug-ins that allow you to enter the URL of a suspicious link and check it for safety. There are many free and reliable link scanners available. But, how do you quickly and safely grab the URL without opening anything? Easy. Just right-click the link to bring up a context menu, then click Copy shortcut (in Internet Explorer), Copy Link Location (in Firefox), or Copy Link Address (in Chrome). If you are using Outlook, right-click the suspected link and select Copy Hyperlink. The URL is now copied to your clipboard and you can paste it into any search field. A powerful scanner can be found at which uses multiple tools from Google, Norton, SafeWeb, etc. to check for malicious sites hiding within any link.
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.

 Coulee Investment Corner: 529s and Estate Planning: What's the Connection?

Assets in 529 plans have grown significantly in recent years due to their college planning potential. But there's another side to 529 plans that may appeal to you -- potential estate planning benefits.1

First, a Few Basics
To understand how a 529 college savings plan may complement an estate plan, it's important to start with a basic review of how a 529 plan works. A 529 plan is a college investment program sponsored by a state government and administered by one or more investment companies. The underlying investment options typically are mutual fund portfolios -- "age-based" asset allocations that become more conservative as the beneficiary gets closer to attending college or static portfolios with predetermined allocations that remain consistent over time.
Note that the principal value of an "age-based," or "target date" fund, cannot be guaranteed at any time, including the target date, and may decline at any time. The target date in the fund is the approximate date when an investor plans to start withdrawing money.
Withdrawals are federally tax free (and state tax free in many cases) as long as they are used to finance qualified college expenses. Nonqualified withdrawals are subject to ordinary income taxes and a 10% additional federal tax. Eligibility to contribute to a 529 plan is generally not restricted by age or income.
The Estate Planning Angle
For tax purposes, a contribution to a 529 plan is considered a completed gift from the contributor to the beneficiary named on the account. A contributor, therefore, can potentially reduce the size of his or her taxable estate using a 529 plan. You may contribute up to $14,000 per beneficiary annually -- $28,000 per beneficiary if you contribute jointly with a spouse -- without triggering the federal gift tax. So, if you have three grandchildren, for example, and you maintain a 529 plan account for each one, you could remove $42,000 a year from your taxable estate, or $84,000 if you make the contributions jointly with a spouse.
If you want to reduce the size of your taxable estate more quickly, the IRS permits you to make five years' worth of gifts in a single year as long as you do not provide additional gifts to the beneficiaries for the remainder of the five-year period. In other words, you can accelerate your contributions and gift $70,000 per beneficiary as an individual or $140,000 per beneficiary if done jointly with a spouse. Keep in mind, however, that if you use this strategy, a prorated portion of the contribution may be considered part of your estate if you do not outlive the five-year period.
Regardless of whether you contribute annually or on an accelerated basis, a 529 plan may provide considerable flexibility as part of your estate plan. For example, even though the money in the account is considered a gift to the beneficiary, you maintain control over how it is invested. If the beneficiary does not attend college, you can generally name a new beneficiary who is a relative of the original beneficiary, such as a sibling or cousin.
If you're grappling with estate planning and college financing decisions that impact a growing family, you may benefit by familiarizing yourself with how a 529 plan could play a role in both of these key areas.
1Investing in 529 plan involves risk, including loss of principal. Before you invest in a 529 plan, request the plan's official statement and read it carefully. The official statement contains more complete information, including investment objectives, charges, expenses, and the risks of investing in a 529 plan, which you should carefully consider before investing. You should also consider whether your home state or your beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 plan. Section 529 plans are not guaranteed by any state or federal agency. By investing in a 529 plan outside of the state in which you pay taxes, you may lose the tax benefits offered by that state's plan. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary.

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