Money Management

Do you still need to file taxes for 2024? Tax Day is April 15, but most Americans are filing taxes early. See what this means for your tax return. [[{“value”:”

Tax season doesn’t have to be stressful and time-consuming. With tax software and other affordable tax filing options, many Americans can file taxes more quickly than ever before. A new survey from advertising technology company LoopMe shows interesting insights about how Americans are filing taxes in 2024, and what it might mean for the future of taxes.

Let’s look at a few findings from the LoopMe 2024 Consumer Snapshot: Tax Season Insights.

More Americans are filing taxes early in 2024

April 15 is the famous “Tax Day” deadline to file your federal income tax return, but that doesn’t mean you have to wait until Tax Day. Filing your taxes early can help you get your refund faster. And even if you end up owing money to the IRS, it often feels good to know that your taxes are done.

The LoopMe survey (taken in January 2024) found that most Americans plan to file their taxes early.

49% of people aged 35–64 said they were going to file their taxes “very early” (Jan. 1–March 15), and 27% said they would file “early” (March 16–April 14).Among younger taxpayers ages 18–34, 34% were planning to file taxes “very early” and 30% said “early.”Only 12% of taxpayers ages 35–64, and 14% of taxpayers ages 18–34, said they were waiting until Tax Day (April 15) to file taxes exactly on time.

If you’re struggling to complete your tax return by April 15, it’s not too late. You can file for a six-month filing deadline extension with the IRS. But try to pay any tax that you might owe by April 15, or else you will get hit with extra tax penalties.

Most Americans do not use an accountant to file taxes

Professional tax help can be beneficial for small business owners and people with higher incomes or complex tax situations. But many Americans do not hire an accountant or CPA to file their taxes. The LoopMe survey found:

42% of Americans self-file their taxes with an e-file service25% of Americans use an assisted service company to file taxes34% of Americans will file taxes through a CPA/accountant

The best tax software makes it easier than ever for most people to file taxes, often using a simple, interactive online questionnaire. You don’t have to fumble around with piles of paperwork and old receipts; tax software can help you understand the big picture of your tax return and maximize your tax refund.

The IRS provides a few options to file your taxes for free, if your income is low enough to qualify. In 2024, there is a new test program for IRS Direct File, a new option for some taxpayers in 12 states to file federal taxes for free directly with the IRS.

74% of Americans are happy with their tax filing service

The LoopMe survey found that most Americans are happy to keep using their current tax software or tax filing service. In fact, 74% of taxpayers told LoopMe that they chose their tax-filing service because they used it last year and were satisfied. However, nearly half of taxpayers told LoopMe that they were open to switching to a lower-cost tax service.

Sometimes it’s helpful to keep using the same tax software or tax-filing service year after year, because your previous tax data is stored in one place. This can help you avoid errors and save time by not having to re-enter numbers. Most people’s tax brackets don’t change dramatically from one year to the next. So unless you’ve had some big changes in your personal finances, staying loyal to your tax service can help you save time and money.

But if you’re not happy with how much your tax software or tax-filing service costs, or if you’re not having a good experience with filing taxes, you might want to shop around for a better option.

Bottom line

Tax Day is April 15, but it’s not a bad idea to file taxes early if you have all your tax forms and details ready to go. If you need extra time, you can get a six-month filing deadline extension from the IRS. Most Americans are filing taxes early so they can get tax refunds faster, and there is a wide range of low-cost or free tax software to make this happen.

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Stocks tend to deliver higher returns than CDs. But sometimes, it makes sense to play it safe. Read on to learn more. [[{“value”:”

When you’re saving for a far-off goal, it’s usually a good idea to put your money into stocks, as opposed to keeping it in cash in the bank. That’s because the stock market has a long history of delivering solid returns — much higher returns than savings accounts and certificates of deposit (CDs).

In fact, over the past 50 years, the stock market has averaged an annual return of 10%. But even recently elevated savings account and CD rates have only been about half that high.

As such, when I started saving for college around the time my kids were born, I decided to invest that money rather than keep it in the bank. I put some of that money into a 529 plan and some into a regular brokerage account with no restrictions attached. (With a 529 plan, your investments get to grow tax-free, but there can be steep penalties for taking withdrawals for non-educational expenses.)

But last year, I managed to save a chunk of money for my kids’ college. And I decided to put that money into a CD instead of stocks for one big reason.

It’s all about protection and diversification

When I put money into the stock market for my kids’ college accounts years ago, that made sense. At that point, college was a long way off.

But frighteningly enough, I have a middle-schooler now, which means college isn’t so far away. As such, it’s time for me to start keeping some of my college savings in more conservative assets. And CDs fit that bill.

With CDs, I don’t expect to earn the same return as I might from a stock portfolio. But the thing is, at this point, I need some of my college savings in cash in case a stock market downturn hits.

Because college isn’t so far away, I may not have time to ride out a down market. So by keeping some of my college funds in CDs, I’m basically guaranteeing that I’ll have some money available to pay my initial tuition bills should I be in a position where it’s not a good time to tap my stock portfolio.

Of course, I made sure to open a CD at an FDIC-insured institution. This way, I’m protected for up to $500,000 in deposits because it’s a joint account with my spouse. For an individual account holder, that limit is $250,000.

I also opened a 5-year CD because I expect the Federal Reserve to start cutting interest rates later this year. And once that happens, I anticipate that CDs will start paying less. So I wanted to lock in a CD rate of upward of 4% — which I did — while rates that high were still available, and for a longer period of time.

I won’t earn as much on my money, but that’s okay

I’m not going to share the amount of money I put into a CD. But to illustrate how much less I’m making with a CD versus stocks, let’s assume I made a $20,000 deposit. At 4.5% over five years, my balance should end up at about $25,000.

Meanwhile, a $20,000 investment in stocks at 10% over the next five years would give me a balance of a little more than $32,000. So in this scenario, you could say that I’m “losing out” on $7,000.

But I’m not really losing out, because I’m basically getting $5,000 risk-free. With stocks, I’m taking on risk. That risk can be more than worth it in the long run, but I’m not looking at the long run. I’m looking at having to pay for college about five years from now.

I still have the bulk of my kids’ college savings in investments. But in the next couple of years, I plan to shift some of that money out of stocks and into cash. I also hope to add to my cash savings for college purposes with my 2024 earnings.

When you’re saving for a milestone that’s far off, like retirement, taking on the risk of stocks absolutely makes sense. But as a general rule, I like to tell people not to invest in stocks if they’re saving for a goal that’s less than five years away.

I’m more or less within that window on the college front — which is shocking, because wasn’t I just bringing my oldest child home from the hospital and trying to figure out how to put on a diaper? But the reality is that I’m at a point in my savings window where I need to play things safe to some degree. So opening a CD is a move I stand behind.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Are you dreaming of becoming a digital nomad? Don’t neglect your finances. Find out what strategies digital nomads can follow to stay on budget. [[{“value”:”

Being a digital nomad is an ideal lifestyle for many who enjoy exploring the world. It can be exciting moving from place to place while making a living. If you’re new to this lifestyle or are exploring becoming a digital nomad, it’s essential to consider how your finances will change.

You want to take extra care to make decisions that make you feel financially secure in your daily life. Otherwise, you may feel added stress that can quickly make this alternative lifestyle choice less enjoyable. I’ll share a few cheap living tips for digital nomads to help you prepare.

Pack light

By packing light, you can save money and make it easier to travel between destinations. No one likes paying checked bag fees, but many airlines charge them now. These additional fees can add up if you fly between destinations often. If you have yet to start your digital nomad adventure, it’s wise to pack a simple wardrobe to stretch your travel budget further.

Get a credit card with no foreign transaction fees

If you plan to travel internationally as a digital nomad, you can save money by getting a credit card with no foreign transaction fees. Some credit card issuers charge 3% for every purchase made in another currency. The costs can add up quickly if you have a credit card that charges foreign transaction fees. That’s why having a credit card without such fees is wise.

If you use your credit card for everyday purchases and spend $18,000 yearly on purchases in foreign currencies, you’ll pay nearly $550 a year in extra fees. Budget-friendly digital nomads apply for travel credit cards without these fees. These credit cards can also provide valuable rewards and benefits that improve your travel experience.

Eat like a local

It can be exciting to try new foods when visiting new-to-you destinations. But if you go out to eat and drink for every meal, you can quickly deplete your checking account funds.

Digital nomads who eat like locals can better keep their spending in check. Consider buying fresh produce and other goods at farmer’s markets, and get familiar with the grocery stores in your neighborhood. Preparing some of your meals at home can help you stay on budget.

Dining out sometimes is OK — it’s part of the travel experience. But always keep your budget in mind. Otherwise, you may spend more than anticipated. If you need help following and setting a budget, check out our list of the best budgeting apps.

Don’t overpay for data or wifi

Many digital nomads need a reliable internet connection to do their work. If you plan to purchase wifi or use data on your mobile phone, ensure you’re not overpaying. You’ll likely overpay if you continue using your mobile phone plan from the United States while traveling abroad.

Airalo is one option for mobile data if you have a phone with e-sim capabilities. You can buy local e-sim packages to get access to more affordable data. You can also tether your laptop to your personal mobile phone hotspot through an e-sim package purchased through Airalo.

When looking at accommodation options, consider whether wifi is included if you plan to work from home. You can also explore other low-cost internet-access solutions, such as co-working spaces. But if you plan to use wifi a business provides, ensure you show your support, like buying coffee while working at a local coffee shop.

Join local groups on social media for insider tips

Social media groups are an excellent place to meet others with similar lifestyles. To keep your spending in check, you can join digital nomad groups to gather financial tips from experienced digital nomads. You can also join local groups to connect with people in your local community. Learning more about local activities, events, and businesses can help you make more informed spending decisions to keep more money in the bank.

Are you seeking additional financial tips to help you navigate the digital nomad lifestyle? Check out our personal finance resources.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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New cars look nice and have better features, but I’m sticking with my older, budget-friendly vehicle. Check out three reasons why. [[{“value”:”

Car commercials know how to make shelling out $30,000 or more seem tempting — sleek designs, high-tech features, and beautiful scenery that has you itching to get behind the wheel. But personally, I’m sticking with my 15-year-old SUV, at least until it breaks down.

I know one day I’ll probably have to get a different vehicle, but even when I do, I’m not coughing up the cash for a new model, no matter how many cool features it has. Here’s why.

1. Older cars are cheaper

The value of a new vehicle depreciates by about 20% during the first year, according to Kelley Blue Book, and a good chunk of this happens the moment you drive the car off the lot. By purchasing a car just one model year older, you can save yourself some serious cash.

It’s true that when purchasing a used vehicle, you sometimes have to sift through a pile of lemons to find a gem. But well-kept used vehicles without major issues exist, and that’s where I plan to focus my attention when I eventually get around to shopping for a new car.

If you decide to go this route, you may want to bring a mechanically inclined person along with you to inspect the vehicle for potential problems before you buy. And if any arise, weigh the cost of repairs with the purchase price to decide whether it’s worth it.

2. Older cars are cheaper to repair

You could argue that newer vehicles are less likely to need repairs than older vehicles, but all cars need maintenance eventually. And when they do, newer cars can be a serious pain in the wallet.

Those high-tech components you loved so much when you bought the car are pretty pricey, and there may not be that many mechanics in your area who know how to replace them. Those who do will probably charge you a premium for their services.

I’m lucky enough to have a live-in mechanic (i.e. my husband) who can handle most of my vehicle repairs. But for those of you without this option, you may want to do some research into how much common repairs on a new vehicle might cost you, so you can weigh this when making your decision.

3. Older cars cost less to insure

Vehicle repair prices influence insurance prices, so it shouldn’t be a surprise that newer cars cost more to insure than their older counterparts. How much more depends on several factors, including the vehicle’s make and model, the driver’s record, and their location. But it could amount to hundreds more per year.

Shopping around with some of the best car insurance companies can help drivers reduce their premiums, but it may not be possible to score a new car rate that’s as low as the typical premium on an older car. Raising the deductible could help cut costs even further, but then drivers face higher out-of-pocket costs in an accident.

It’s possible to get an idea of what the car insurance premiums will be on a new vehicle before buying it by getting quotes ahead of time. Compare these rates to your current auto insurance premiums and be honest with yourself about whether you can fit it in your budget.

RELATED: Cheapest Car Insurance Companies for 2024

You’ll probably want to do some price comparison no matter what type of vehicle you buy. But if you’re trying to go easy on your wallet, an older vehicle might be a better choice. Or if your current car is still working fine, hold onto it for a while. You could always wait until it breaks down to shop for a new (or used) car.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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I love Costco, but shopping in-store is the best way to take advantage of its deals. Learn why membership isn’t a fit for my online shopping habits. [[{“value”:”

Many people love Costco and claim the warehouse club helps them keep a ton more of their money in their bank account due to the great deals on offer. But while I’ve been tempted to consider a membership in the past, there’s actually one really big reason why I don’t feel like Costco membership would be the right choice for me in the end.

Costco.com isn’t the same as Costco warehouse clubs

The single biggest reason why I would not be interested in becoming a Costco member is because I do the bulk of my shopping online. I am just so much more comfortable sitting at home typing my credit card number into a computer than having to take my toddlers out to a real store where they can demonstrate their sometimes-less-than-satisfying listening skills to strangers.

And if you’re primarily an online shopper, like me, Costco is simply not going to save you money the same way it would if you visited the warehouse club. That’s because, as the company admits, any products sold online may be priced differently (and cost more) because of the need to cover shipping and handling costs.

Costco even warns that “when an item is available both online and in the warehouse, you’ll see the message, ‘Item may be available in your local warehouse for a lower, non-delivered price.'”

The price difference is often considerable, too. One Reddit user actually made a spreadsheet, demonstrating markups as high as 25.1% for a cotton bath towel purchased online compared with the same towel in store. That sheet showed an average markup of 11.2% on a mix of items ranging from slip-on shoes to Keurig coffee K-cups to paper towels to quinoa.

Paying a surcharge for shopping in the manner most convenient to me simply isn’t something I’m willing to do — especially when Sam’s Club charges the same prices whether you buy online or visit the store in person.

Should you steer clear of Costco due to the online surcharge?

If you’re primarily an online shopper like I am, joining Costco simply may not be the best bet for your personal finances. The whole point of becoming a warehouse club member is to benefit from the savings that bulk buying at the club can offer you. If you lose out on some of that savings just because you opt for the convenience of having items delivered to your house, then paying the membership fee probably isn’t worth it.

Instead, you could opt to join Sam’s Club, where you’ll be able to shop online without being charged extra. You can even become a Plus member of Sam’s Club for $110 (vs. the $50 cost of the basic membership) and you’ll get free shipping on virtually all items. Since the Plus membership also gives you 2% back in rewards as well as other perks, like free curbside pickup and discounts on optical and pharmacy items, you may find it’s well worth it.

It’s worth thinking about how you prefer to shop before you decide to join Costco. If you find that you’ll be visiting the warehouse club in person rarely or not at all, you may just determine that the Costco.com shopping experience just isn’t worth paying a membership fee for.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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