Money Management

Hello, Empire State residents! Keep reading to see how you can get extra time to file your tax return this year. [[{“value”:”

Living in New York can be pretty great. The Empire State has every kind of landscape you could want and easy proximity to New England, the rest of the Mid-Atlantic states, and even Canada. But in exchange, New Yorkers pay some of the highest income taxes in the nation. New York is ranked third for income taxes, according to TurboTax — the highest state tax bracket (of nine) is 10.9% for tax year 2023. Plus, you’ll pay additional local taxes if you live in New York City or Yonkers.

If you need some extra time to file your tax returns this year, read on. We’ll take a look at how to get it for New York, as well as for your federal return.

Get more time for your New York State taxes

If you’re worried about having to battle with the New York State Department of Taxation and Finance to get an extension, don’t be. Getting extra time to complete your tax return is just a matter of filling in the right form before the deadline.

How much time you get (and when your return is actually due) varies depending on the type of return you’ll be filing. An unincorporated business would need to file a partnership tax return, while estates and trusts file fiduciary tax returns. If you meet other special criteria, your filing deadline could be different.

The form to fill in for an extension is IT-370 if you’re an individual filer, or IT-370-PF for partnerships or fiduciaries, and you can find both on the Department of Taxation and Finance website. They’re short forms, too.

Don’t forget to ask the IRS as well

It’s also extremely easy to request an extension from the IRS for your federal tax return, so you might as well do that at the same time as when you ask New York State for one. Fill in Form 4868, and you’ll be granted an additional six months to file your federal return. Your new deadline will be Oct. 15, 2024.

Need more time to pay?

If you get an extension on filing your tax return, it’s important to remember that this doesn’t give you extra time to pay any taxes you might owe for 2023. If you know you owe taxes to New York State or the IRS, you must make payments by April 15, 2024 (or whatever your original return due date is). If you don’t, the penalties are the same for both — 0.5% of the unpaid taxes for each month you are late, up to a maximum of 25% of the taxes you owe.

Thankfully, you can also apply for a payment plan if your tax bill is beyond what’s currently in your checking account. For New York, you can request a payment plan through your Online Services account if you owe $20,000 or less (with 36 or fewer monthly payments). For the IRS, the amount owed to qualify for a payment plan online is higher ($50,000 or less for a long-term plan or $100,000 or less for a short-term plan) and you’ll have to create an account with ID.me.

No one really enjoys paying taxes, but thankfully, the taxation agencies for states and the federal government are not the boogeymen they’re made out to be. If you need more time for your return, or to get on a payment plan to fulfill your tax obligations, it’s pretty easy and straightforward to ask for it.

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You can save more money at Costco by earning cash back. Check out a few other money-saving tips you can use. [[{“value”:”

Joining Costco can help you reduce spending on groceries and many household items. Most people know that buying in bulk at a warehouse store can leave more money in their bank account since purchasing larger quantities of an item is usually cheaper.

But did you know there are ways to save even more when shopping at Costco that go beyond paying the lower bulk prices? Unfortunately, many people aren’t aware of all the ways they can keep their credit card bills lower when they hit up their local Costco.

Here are a few key money-saving opportunities you might be overlooking.

1. Buying Kirkland-brand products

If you haven’t tried Kirkland brand products, you’re missing out on one of the best saving opportunities at Costco. These products are at least 20% cheaper than the cost of name-brand products sold at warehouse clubs. There are about 350 of them on store shelves, many of which are manufactured by big-name national brands, and each of them has been subject to Costco’s rigorous quality controls.

There’s no reason not to swap out for the store brand if you care at all about having more money to put into savings.

2. Claiming cash back for Executive members

You can become a Costco member for $60 annually. But there’s actually a money-saving opportunity to be had if you spend a little more upfront to buy an Executive membership for $120.

See, as an Executive member, you’ll earn 2% cash back on purchases made at Costco in-store and online. The maximum award is $1,000 annually, and it’s paid out once each year three months before your renewal due date for membership.

If you spend more than $3,000 a year at Costco, you’d earn the money back for the membership fee and then some. You’ll effectively be getting a 2% discount on everything else you buy once you cover the cost of the added membership. And it’s pretty easy to spend $3,000 at Costco, especially if you take advantage of its travel deals.

Take a look at your Cotstco spending to see if you can benefit from this technique based on how much you usually spend.

3. Asking for price adjustments

Costco offers price adjustments within 30 days, so you may save a lot of money if you keep tabs on whether the prices of items are falling.

Of course, you probably aren’t going to obsessively track whether the cost of those bulk Cheerio boxes has dropped since you purchased them. But for big-ticket items, it’s worth monitoring. And if you buy something regularly and notice it’s gone on sale since you purchased it recently, asking for a price adjustment could help you keep a little extra cash in your personal finances.

4. Dining on ground beef chubs

Finally, if you’re a ground-beef eater, you can ask the butcher for a ground beef chub to save compared to Costco’s regularly priced beef. This is a 10-pound log of meat that costs less than the standard beef available on Costco’s shelves. You can reduce your spending and just freeze the meat at home in smaller bags for future consumption.

By following these five tips, you can get even better deals at Costco and enjoy the extra money you have — perhaps even by splurging on a special treat like a discounted gift card sold at Costco that you can use at your favorite restaurant.

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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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New investors often ask if they should invest in a lump sum or spread it out over time. Find out what the data says and how to choose the right strategy. [[{“value”:”

If you have some money saved, and you’re ready to get started with investing, you’ll face a common dilemma. You could invest that money all at once. This is known as lump-sum investing, and it gets you fully invested right away.

Or, you could invest that money in fixed increments. Instead of putting $3,000 into the market immediately, maybe you invest $1,000 a month. This is known as dollar-cost averaging.

New investors often wrestle with this decision. Neither option is a bad choice, but there is one that tends to perform better.

Lump-sum investing is usually the better choice

There has been plenty of research done on this subject, so we have an answer on which investment strategy is better. Lump-sum investing outperforms dollar-cost averaging about two-thirds (68%) of the time, according to Vanguard.

Vanguard measured results for each strategy using market data from 1976 through 2022. It compared one-year returns on a hypothetical $100,000 investment. Money was either fully invested from the beginning (for the lump-sum method) or over the first three months (for dollar-cost averaging). It ran 10,000 scenarios, using different asset allocations and time periods.

Vanguard found that “in most historical market environments, investors would have been better off investing the lump sum all at once.” This method outperformed dollar-cost averaging by a median of 1.2% to 2.2%, depending on asset allocation.

Dollar-cost averaging is a good alternative if you’re risk-averse

Even though lump-sum investing generally works out better, there is a valid reason to go with dollar-cost averaging.

Imagine that you’ve saved up $10,000, and you invest it all. Then, the market goes into a freefall. It loses 10% over the next few months, and your portfolio is now worth $9,000. Do you panic, constantly check your brokerage account, and consider cutting your losses? Or do you remain calm and remember that historically, the market has always recovered?

If the thought of losing money terrifies you, then you may want to go with dollar-cost averaging. The advantage with this method is that you’re more likely to avoid big losses. Even if the market declines after you invest, you haven’t invested all your money yet. You’ll still have cash you can use to invest at a lower price while the market is down.

Dollar-cost averaging is also a good choice after you’ve gotten your initial money invested. Investing shouldn’t be a one-time thing. To get the best results, it’s important to make investing a habit. Since dollar-cost averaging is simply investing a set amount regularly, it’s a great long-term strategy. You can likely set up automatic investments through your brokerage or retirement accounts so you don’t need to remember to do it.

There’s no wrong answer

Lump-sum investing and dollar-cost averaging are both good strategies when starting out as an investor. The difference in performance isn’t significant enough to make either the clear best choice, so pick whichever you’re comfortable using. The fact you’re investing is what’s most important, not the method you choose.

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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.
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Buyer’s remorse at the dealership is more common than you might think. Find out how to avoid overpaying by $20,000 or more. [[{“value”:”

The “car guy.” You know one. I know one. Mom knows one. They’re the go-to when your lease is up; when you’re in the market for a new car. They know the best deals and discounts. They’re a wizard in the dealership. It’s kind of their thing.

Unfortunately, not everyone has a car guy to snag them one-of-a-kind deals. Good news is, there are a handful of things you can do to keep prices low, even when the dealer is upselling you on those triple-double premium faux leather seats.

It’s like, yeesh. Simmer down, dealership dude, we get it.

Thing is, dealers sometimes use mental tricks to get buyers to spend more — a lot more. There’s a reason nearly 40% of car buyers had regrets in 2022, according to LendingTree. Before you buy a car, make sure you avoid the following logic traps that can hurt your personal finances.

1. “This or that”

Your dealer has shown you around, and you’ve heard the spiel. It’s decision time. The dealer asks you whether you want a mid-range model… or that. That is a beautiful, souped-up version of the boring ol’ base model. It’s got all the bells and whistles. It’s price tag? High. Very high.

Now, you’re stuck. On one hand, affordable is a-ma-zing. On the other hand, the cheaper option looks, uh, kinda ugly(?) next to the fancier model. Which do you choose? Maybe you pick the mid-range model because it’s cheaper. Or maybe you treat yourself to something fancy.

But the best choice is often neither. Dealers sometimes lump mid-range models with fancy ones on purpose. The idea is that once you focus on the pricier models, you’ll opt for something more expensive than the base model. You lose sight of all your options.

Be aware of this trick before shelling out for a spruced-up car. An affordable base model could save you thousands, especially when you factor in car insurance costs.

2. “I’ve already put so much time into it”

You’ve spent hours researching the perfect car, and then you spent a day lurking around your local dealership. It’s hot. You’ve been on your feet all day long, and the dealer has shown you pretty much every possible configuration of your dream car.

There’s just one, tiny problem: You dislike it. It looked better online; your friend overhyped it; driving it makes you carsick. For whatever reason, it’s not nearly as appealing as you thought.

However, you’ve spent so much time examining the car, you’re tempted to buy it regardless. It happens. There’s a phrase for this strange line of thinking: sunk cost fallacy, when you spend so much time or energy on something, you’re reluctant to give it up and start over.

Resist the temptation to buy a car because you’re fed up. I get it; I’ve been there. But a car isn’t a $1.50 Costco hotdog combo — it’s a purchase easily costing $20,000 or more. In mid-2023, the average new car price was $48,000; the average used car cost just under $27,000. In short: expensive.

When in doubt, sleep on it. The car isn’t going anywhere, and you might save yourself from making a regrettable purchase.

3. “It’s cheaper than the first offer, so it’s a deal”

It’s purchase time. You’ve seen all there is to see, and you’re ready to finance a car. Your dealer tosses out a number. After a bit of back and forth, you shave a couple thousand off the initial offer. Whoo! You’ve done it! You’ve snagged a deal! Or have you?

Car buyers tend to latch onto the first number they hear as if it’s “the real cost” of a car. But often, that’s false. Sometimes, dealers toss out unreasonably high numbers to start; even after you’ve shaved a couple of percentage points off, the car remains overpriced. Tricky, tricky.

This particular logic trap is known as anchoring bias, when someone relies too heavily on initial information when making a decision. It’s easy to fall for. But there’s an easy counter: research.

To avoid overpaying, collect a few price quotes on similar vehicles. That way, you create your own anchor (instead of letting the dealer do it for you). It’ll give you the confidence to walk away from a purchase — you know you could get better prices elsewhere.

And while you’re at it, collect more than one auto insurance quote. Some car insurers are better than others. Shop around to snag the best of both worlds; no car guy required.

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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.Cole Tretheway 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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Tax credits and deductions can help make owning a home more affordable. See if you qualify for any of these tax perks. [[{“value”:”

One thing you quickly realize after buying a house is that the initial purchase is just the tip of the very expensive iceberg that is being a homeowner. Everything from property taxes to home maintenance can bite into your budget.

On the plus side, many of those homeowner expenses also happen to have some associated tax perks. While some real estate credits and deductions are well-known — what remote worker hasn’t looked up home office deductions? — others may be less common. Here are a few worth exploring.

1. Residential Clean Energy Property Credit

Adding methods of producing clean energy to your property can be a great financial move in multiple ways. For one thing, your energy bills will (ideally) drop significantly, if not go away entirely.

Additionally, many popular clean energy improvements qualify for the Residential Clean Energy Property Credit. This is a 30% credit for certain qualified expenses, including:

Solar panelsSolar water heatersFuel cellsWind turbinesGeothermal heat pumpsBattery storage technology

The credit is a little narrow in that only the qualified items are included. Some structural improvements needed to install the qualified items won’t be included. For example, if you need to make changes to your roof to accommodate solar panels, that may not qualify under the current credit.

2. Energy efficient home improvement credit

This is another 30% tax credit (up to dollar maximums) that covers a few very specific home improvements that impact the energy efficiency of your property. These include:

Exterior doors, windows, and skylightsInsulation and/or air sealing materials or systemsNew central air conditionersNew water heatersNew furnace or hot water boilerHeat pumps and biomass stoves/boilersHome energy audits

To qualify, improvements need to meet applicable energy efficiency requirements. For example, exterior doors and windows must be Energy Star compliant.

Each type of improvement has a monetary cap. The credit for doors, for instance, is 30% of the cost or a maximum of $250 per door. Credit for a new furnace caps out at $600.

Additionally, there is an annual cap of $1,200 for building components and a $2,000 annual cap on HVAC components. (There used to be a lifetime cap of $500. This was changed Dec. 22, 2022.)

3. Home equity loan or HELOC interest deduction

Many homeowners already know that they can deduct their regular mortgage interest. But you may not realize you can deduct the interest from a home equity loan or line of credit.

There are a few criteria you’ll need to meet to qualify for this deduction. Arguably the most important is that how you use the loan will impact how much of the interest you can deduct.

For tax years 2018 through 2025, the HELOC or loan needs to specifically be used “to buy, build, or substantially improve the residence.” Interest on any of the debt used to pay living expenses or other debts is not deductible.

4. Medically necessary home improvement deduction

Right off the bat, I’ll warn you that this is a very persnickety deduction. However, if you need to make extensive changes to your home for medical reasons, you may be able to deduct some of those expenses.

Some examples of eligible improvements might include:

Entrance or exit rampsWidening doorways or hallwaysInstalling rails or support barsInstalling liftsLowering kitchen cabinets

Since this will be deducted under medical expenses, you’ll only be able to deduct expenses that are over 7.5% of your adjusted gross income (AGI). Additionally, you’ll need to subtract the value of any improvements that actually improve the overall value of your property.

Credits vs. deductions

One important distinction to make between the tax benefits on this list is that some are credits, while others are deductions — and yes, it’s very important to know the difference.

Tax credits reduce how much tax you owe. They’re taken right off the top of your tax bill. For instance, if you owe $1,000 in taxes, but have a credit for $500, you’ll only owe $500 in taxes.Tax deductions reduce the amount of your income that can be taxed. So, if your taxable income is $50,000 before deductions, and you have $20,000 in deductions, your taxable income will be $30,000.

If you want to claim specific deductions, like those above, you need to itemize your deductions rather than taking the standard reduction. This makes your taxes a bit more complicated, but it can be worthwhile if you qualify for a lot of deductions.

If all else fails, get a pro

Trying to figure out what you do and don’t qualify for can be a lot of work — almost like it should be someone’s full-time job. Good thing it is! If you want to be extra sure you’re getting everything you’re eligible to receive, hire an accountant. They can get you on the right track and help you find anything you may have been missing.

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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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Costco has so many products and services it can be hard to keep track of its best savings opportunities. Learn which five perks you might be missing out on here. [[{“value”:”

My experience as a Costco member can pretty much be summed up like this: “Woah, I didn’t know it sold that, too!”

Indeed, over the years, Costco has expanded its membership benefits at such a rapid rate it can be hard to keep up with all the savings opportunities. While the warehouse retailer is most known for its competitive prices on everyday items — from jars of peanut butter to gasoline — it has a plethora of other little-known services. Like the following five.

1. Cheap car insurance

If you want to save money on car insurance this year, you might get a better rate through Costco. While Costco doesn’t underwrite insurance policies itself, it can give members an exclusive discount through its partner CONNECT, which is backed by American Family Auto.

According to Costco, that extra discount helps most members save about $595.86 in the first year they switched to CONNECT. That’s about $50 of savings per month. This can be combined with other traditional discounts, like safe driving, paperless billing, and multiple policies, to help you save even more on your annual premiums.

2. Discounted gift cards

One of the easiest ways to get more value out of your Costco membership is to buy gift cards. Often, Costco sells bundles of gift cards for as much as 30% off the package’s face value. For a gift card bundle that totals $100, then, you might pay $69.99.

Right now, two of my favorite gift card packages are for Instacart ($100 of value for $79.99) and Southwest Airlines ($500 for $449.99). You can also find plenty of gift cards for restaurants, entertainment venues, and gaming consoles.

3. Haggle-free car buying

Costco members who are looking for a new or used vehicle can take advantage of Costco’s Auto Program. Basically, Costco pre-negotiates prices on cars at local dealerships, then helps members buy them without the hassle of haggling prices on their own. Plus, Costco members can get up to 15% off of parts, service, and accessories (maximum of $500 in savings per visit) at participating service centers.

4. Tires

If you need to replace your tires, always check Costco first. Costco frequently sells tires cheaper than other tire retailers. Not only that, but it often runs promotions when you buy a set of four, like $60 to $80 off certain tire brands. You also get free tire installation, plus a five-year roadside hazard warranty and lifetime maintenance service for each tire. These are often sold as separate services at other tire shops, but Costco will throw them in for free.

5. Moving truck rentals

Moving across the country — or even between cities within your own state — can get pretty pricey. But what most Costco members don’t realize is that they can get a 25% discount on a Budget Truck Rental through Costco. This can be as small as a cargo van or as large as a 26-foot moving truck that can move five to eight rooms. Getting 25% off your truck rental can help you save hundreds — if not a thousand dollars or more — on your next relocation.

If any of the five perks above surprised you, be sure to check Costco’s website or app periodically to see what other membership benefits you could be missing. With its vast selection of products and services, joining Costco can be a boon for your personal finances, helping you buy what you need at prices you can afford.

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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 positions in and recommends Costco Wholesale. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

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