Money Management

There’s good news for Costco shoppers who use the site and also visit the store. Read on to see what it is. [[{“value”:”

For many people, joining Costco is a savvy personal finance decision. The savings you reap from the perks of your membership might more than make up for the cost of your annual membership.

Now when it comes to shopping at Costco, you have a choice. You could buy your items in person at your local warehouse club store, or you could buy them online and have them shipped to your door.

Of course, the problem with shopping on Costco.com is that you’ll almost always pay more for a given item than you will at a store, assuming it’s available both online and in person. A $20 bulk package of tissues, for instance, might cost just $18 at the store because with the online purchase, the cost of shipping is typically built in.

However, just because you’d rather buy a given Costco.com item at your local store doesn’t mean that option will exist. Costco’s online inventory can be more extensive than its in-store inventory, especially in certain categories. So you may end up getting stuck paying the online price for whatever it is you want by virtue of not having the item available locally.

But wouldn’t it be nice to know for sure that a given item is definitely available — or not available — at a store near you? Soon, you may be able to get that information easily.

A nice change is coming to Costco.com

Certain items on Costco.com are designated as online-only items. So in that case, if you want the item in question, buying it online and having it shipped is your only choice.

But in some cases, there’s the potential to save money by buying a given item at your local store instead of online. The problem is, what if you’re not sure you’ll be able to find that item locally?

Richard Galanti, Costco’s newly-retired CFO, recently said that the company is aiming to solve that problem. During the company’ most recent earnings call, he shared that soon enough, the company will have warehouse club inventory available online. And while that feature isn’t available yet, it should be available in the near future.

From there, you’ll be able to see if a given item is available at your nearby store. And then, you can decide whether it’s worth it to make the trip or not.

As Galanti explained, once this new system is fully set up, “If you look at something to buy online and we have it in the location or two in the ZIP code where you typically shop — in the location you would shop physically, we’ll let you know you can buy there. And in many cases, it will be cheaper if you go pick it up yourself because the online costs might be higher.”

It pays to shop at Costco in person, if you can

If you don’t have access to a car, then shopping on Costco.com may be worlds easier than shopping at your local store. But otherwise, there are benefits to shopping at Costco in person.

For one thing, you’ll generally incur a smaller credit card tab compared to shopping online. But also, you may be able to get a better sense of what you’re buying by seeing it in person.

Also, Costco is known for its free food samples. Trying those out can give you more confidence in the context of bringing home grocery items.

If you tend to do your Costco shopping online because you don’t enjoy crowded stores, you should know that weekday crowds tend to be lighter than those that tend to emerge on the weekends. Another good strategy is to get to Costco when the doors first open.

One downside of being the first person in the door is that you may be there too early to enjoy a variety of samples. But on the plus side, you might finish your shopping much faster.

It’s good to see that Costco is investing in improving its website experience. Getting to see what options you have for buying the products you need locally could result in a world of savings.

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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.Maurie Backman 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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A delay in your tax refund doesn’t automatically mean you’re in for an audit. Read on to learn more. [[{“value”:”

Many people wait until the very last minute to file their taxes. But there’s a big benefit to getting your tax return done early — having your refund hit your bank account sooner.

But what if you submitted your taxes weeks ago and haven’t seen that money hit yet? At first, you may be inclined to assume the worst — that the IRS has decided to audit your tax return. But in reality, there may be a very simple — and much less stressful — explanation.

Don’t assume the worst

The IRS will withhold your refund if it feels it needs to dig deeper into your tax return. But that’s not the only reason you may be experiencing a delay with your refund.

It could be that your refund is simply lost in the mail if you’re expecting a paper check. And if you signed up for direct deposit, it could be that you accidentally entered the wrong banking details when you filed your tax return.

Another reason not to jump to the conclusion that a late refund means an audit is in your future? Audit rates have been very low in recent years.

And even though the IRS was recently awarded extra funding through the Inflation Reduction Act to ramp up on audits, the agency is focusing on high-income individuals and corporations in expanding its audit practices. If you’re a typical taxpayer with an average wage, your chances of getting audited may not go up at all this year or in the coming years.

Just how low has the overall audit rate been? According to the U.S. Government Accountability Office, in 2019, the last year for which there’s data available, the audit rate was just 0.25% of all returns. And while audit rates were notably higher for earners with incomes of $500,000 or more, they were lower for filers with incomes between $25,000 and $499,999. So if you earn, say, $100,000, your chances of getting audited are pretty low.

Check up on your refund to see what’s going on

There’s no need to stress about the reason your tax refund is delayed when you may be able to get an answer by using the IRS’s “Where’s My Refund” tool. All you need to do is put in your Social Security number, tax-filing status, and refund amount, and the IRS should be able to provide you with an update.

If you see that your refund is being processed, it’s a good sign. And even if you see that there’s an issue with your tax return and you’re being advised to call the IRS, don’t panic. It may just be that the agency needs to verify some information before it can process your refund and send that money your way.

Of course, if you’re really worried about getting audited, one question you may want to ask yourself is, “Was I truthful and accurate on my tax return?” If the answer is yes, then chances are, your money is going to show up sooner rather than later, and you’re not going to have to deal with an audit at all.

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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.The Motley Fool has a disclosure policy.

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Rushing through your taxes could be disastrous. Read on to see why. [[{“value”:”

At this point, a lot of people have already submitted their tax returns to the IRS. In fact, as of early March, the IRS had already received upward of 54 million returns.

But tax returns aren’t due this year until April 15. So if you haven’t started yours yet, there’s no need to panic.

However, you also don’t want to wait until the last minute to start working on your taxes. If you’re forced to rush through the filing process, you could end up hurting yourself financially.

You don’t want to risk a mistake

Any time you put off a task you’re then forced to rush through, you run the risk of making a mistake. The same holds true for taxes. If you wait too long and find yourself up against the deadline, you might end up neglecting to claim certain credits or deductions you’re really entitled to. The result? A smaller tax refund.

Or, let’s say you owe the IRS money, but you forget to claim a tax credit that could reduce your tax liability from $3,000 to $1,000. That, too, hurts you financially.

Furthermore, if you’re rushing to complete your taxes, you might forget to report income, whether it’s interest in your savings account or earnings from a small freelance project you completed. Either way, failing to report income could result in your tax return getting audited — even if it was an honest mistake.

And while tax audits aren’t necessarily the harrowing experience you tend to see depicted on TV, they can be stressful and annoying. So why deal with one if you don’t have to?

Get started now

At this point, there’s still a good number of weeks left before 2023 taxes are due. So do yourself a favor and carve out time later this month or in early April to sit down with a good tax software program and get your taxes finished.

If you end up in a situation where it’s April 14 and you haven’t begun to start working on your taxes, don’t assume that rushing through the process in a single evening is your best bet. Instead, consider requesting a tax extension, which will give you six additional months to submit your return to the IRS without facing a failure-to-file penalty — a penalty that applies when you’re late with a tax return and owe funds to the IRS.

Now one thing a tax extension won’t do is give you more time to pay the IRS any money you owe. But if you really find yourself down to the wire, you can try to estimate your tax debt, pay that sum by April 15, and then take the time you need to work on your tax return in a calm manner.

Remember, it’s not the responsibility of the IRS to make sure you get all of the tax breaks you’re entitled to. So if you forget to claim a benefit you’re eligible for due to rushing through your return, you’re the one who’s going to lose out. It’s best to try to avoid that situation.

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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.The Motley Fool has a disclosure policy.

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Want to get the most out of rewards credit cards? A new Fed study shows that savvy credit card customers with high credit scores get the best value. [[{“value”:”

Have you felt like the world of rewards credit cards is only for an “exclusive” club of shoppers, where maybe you don’t belong? Or if you have some rewards credit cards, maybe you’ve wondered how to get the best deal from credit card reward points.

The truth is, a wide range of people can get benefits from rewards credit cards, not just the biggest spenders and higher earners. But if you want to get the best deal from rewards credit cards, it’s important to be a savvy customer with a good credit score.

Let’s take a look at what kinds of credit card customers tend to get the best deal from credit card reward points — and how you can join them.

How to get the most out of credit card rewards

First, let’s talk about what we mean by winning the credit card rewards game. If you’re a rewards credit card customer, you should try to:

Get more value (cash back, frequent flyer miles, free hotel stays, etc.) from the cards than they cost in annual fees.Avoid paying late fees and interest.Pay your credit card bills on time (or even early) to protect your credit score.

At their best, rewards credit cards should make your life better. They should help you unlock extra deals, discounts and value-added experiences from your everyday spending. But if you’re not careful, these cards can be risky — and cost more than they’re worth.

Are reward cards worth it? Example success story

Let’s say you have a travel rewards credit card that charges you an annual fee of $250, but the card offers $300 worth of free streaming subscriptions, cash back on restaurants, and a free membership to TSA PreCheck. Along with that, your reward points are worth more when booking travel.

With this card, you may be able to get hundreds of dollars per year of free travel and discounts that are worth much more than the $250 annual fee. Getting a good deal on rewards credit cards is not just a matter of what you pay, it’s the value that you receive.

Downsides of rewards credit cards

No matter what card you have, winning the credit card rewards game requires you to pay your bills on time, pay your balance in full, and avoid paying extra fees or interest to the credit card company. If you’re not careful or have some bad luck with your personal finances while using rewards credit cards, you might end up paying more than the cards are worth.

Let’s say you have a card that pays you 1% cash back and you spend $10,000 in a year; you’ll get $100. But if you carry a balance and pay $200 in interest, you actually lose money ($100) on that card. And if you make a late payment on that card, your credit score could take a big hit — raising your costs of borrowing in other areas of life, like auto loans or mortgages. Credit card rewards aren’t worth it if they cost you more money than you gain.

Credit card reward points success is not just about income

You might think the best rewards credit card experiences are only for the wealthy, right? Like it’s an exclusive velvet-roped VIP club. But the truth is, people of all income levels can benefit from credit card rewards — as long as they’re savvy about how to use the cards.

Research shows that people who are the biggest “winners” of the credit card points game are people with high FICO® Scores — not just people with high incomes. A 2023 study from Federal Reserve economists (titled “Who Pays for Your Rewards? Redistribution in the Credit Card Market”) tried to solve the puzzle of what it takes to get the best deal from rewards cards.

The Federal Reserve study found that financially “sophisticated individuals” who have higher FICO® Scores tend to get the best deal from rewards credit cards — they get a net gain of rewards from their cards that’s bigger than what they pay. But people the study described as financially “naive individuals” unfortunately are more likely to lose money on reward cards — people with lower FICO® Scores are more likely to pay more interest and fees than they gain in rewards.

People who get the best deal from rewards credit cards tend to have higher incomes (more than $79,000 per year) and “super-prime” FICO® Scores of 780 or higher. People who end up paying the most for their rewards cards also tend to have higher incomes, but lower FICO® Scores — that’s because they tend to spend more on their cards and end up paying more interest than lower-income customers do.

Bottom line

If you want to get the most out of your rewards credit cards, it’s important to understand the rules and read the fine print. Pay your credit card bills on time, or even early, and try not to carry a balance that will cost you money in interest. Being a sophisticated customer can help you get the benefits of your card without paying extra money.

If your credit score is not high enough to qualify for the rewards cards you want, you could apply for a secured credit card or use a credit-building product to boost your score. Or sign up for a credit-monitoring service to understand your credit report and learn how to build credit.

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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.The Motley Fool has a disclosure policy.

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