Money Management

Filing taxes can be complicated when you own a business. Read on to see how you can make the filing season go more smoothly. [[{“value”:”

The 2024 tax season officially kicked off in late January. And 2023 returns are due on April 15 this year, which is the standard tax-filing deadline.

Filing taxes can be complicated even when you’re a regular old salaried employee. But if you own a small business, the process of filing a tax return can get a lot more cumbersome. So if this is your first year filing a small business tax return, here are some key moves to make right now.

1. Organize your records

The upside of being a small business owner from a tax perspective is that you get to deduct certain costs associated with earning a living. However, you may have to provide a lot of documentation to claim the right deductions, so now’s a good time to start organizing your paperwork and records.

Specifically, you’ll want to make sure you have records of:

Business purchases, from office supplies to licenses and feesBusiness-related travelPayroll expensesRent payments, if applicableEstimated tax payments you may have made to the IRS along the wayRetirement plan contributions, if applicable

2. Find help

Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, is a big fan of getting help with taxes across the board. “I almost always recommend people work with a tax professional rather than risk filing a tax return by themselves,” he says.

However, if you own a small business, it’s even more important that you find a good accountant to assist with your taxes. There are a lot of nuances and rules that apply to small businesses specifically, and you need to make sure you’re compliant to avoid issues with the IRS.

Perhaps you currently employ a bookkeeper to manage your business’s bank account. But that person may not be a CPA or tax professional, which means they may not be well-equipped to assist you in filing a small business tax return. If you’re not sure of your employee’s credentials, have that conversation sooner rather than later in case you wind up needing outside help.

3. Set money aside in case you owe the IRS

If it’s your first time filing taxes as a small business owner, perhaps you’ll end up with a refund. Or you could end up owing the IRS money. It’s hard to know.

In the coming weeks, you may want to cut back on business-related expenditures and instead funnel more money into your company bank account in case you end up with an underpayment on your hands. That way, you may be in a stronger position to pay the IRS what you owe directly and avoid the hassle of a payment plan and a tax debt hanging over your head.

Filing small business taxes has the potential to be stressful — especially if you’re new to the world of owning a small business. So do yourself a favor and get organized now. Gather your paperwork and line up help before the April 15 filing deadline gets much closer. Not having to rush through the filing process is another way to help it go more smoothly.

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Interest rates are up right now, so it’s a good time to have money in the bank. Read on for tips to manage your various accounts. [[{“value”:”

Inflation started rising in 2021 as consumers found themselves flush with cash due to generous government stimulus policies. To combat inflation, the Federal Reserve implemented a total of 11 interest rate hikes during 2022 and 2023. That drove the cost of borrowing up, which hasn’t been a great thing for consumers in need of loans, or those with credit card balances.

On a positive note, though, the Fed’s string of interest rate hikes had led to banks paying more generously. And these days, savings account and CD rates are pretty attractive.

If you have money to spare, you should take advantage of today’s higher savings rates. But it’s also important to manage your accounts wisely. To that end, here are three tips to employ.

1. Research rates

You may be comfortable with your bank and a big fan of its app or customer service. But today’s elevated interest rates aren’t going to be around forever. So if you’re looking to put money into savings or a CD, then it’s a good idea to research rates across different banks and see which are the most competitive.

Often, opening a new bank account takes just minutes. You usually need to enter some basic information like your name, address, phone number, and Social Security number. Also, funding a new bank account is usually easy, since you can often link to an existing one and transfer funds electronically.

It especially pays to research rates if you’re thinking of opening a longer-term CD. Now’s actually a pretty good time to do so, because the Fed seems to be done with rate hikes and is likely to start cutting rates pretty soon. Once that happens, you may not find the same competitive CD rates you’re seeing today, which is why now’s a good time to lock your money up for a longer term — say, 48 or 60 months.

2. Know when to choose a savings account over a CD, and vice versa

CD rates tend to be higher than savings account rates. But there are certain times when putting money into a CD is the wrong move, and you’re better off with regular savings. You should not put money into a CD that you’re earmarking for:

Emergency or unplanned expensesNear-term expenses, like a trip, furniture, or down payment on a carReally far-off goals, like college or retirement, since you’re better off investing funds you don’t expect to need for a decade or more

3. Ladder your CDs for more flexibility

Cashing out a CD before it comes due can result in a costly penalty, the exact amount of which will depend on your bank and the length of your CD. To avoid landing in a situation where you’re facing a penalty because you need the cash you’ve tied up in a CD, set up a CD ladder. That way, you’ll have funds coming due at different times during the year.

For example, let’s say you have $10,000 to put into a CD. You could divide that sum into four $2,500 portions and open:

One 3-month CDOne 6-month CDOne 9-month CDOne 12-month CD

This way, you have access to a portion of your cash every three months.

It’s a great time to have money in the bank. Make the most of your savings and CDs by sticking to these tips.

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Want the lowdown on the real cost of ownership for EVs and hybrid cars? See why electric vehicles and plug-in hybrids can be more affordable than you think. [[{“value”:”

I am a long-time owner of hybrid vehicles and plug-in hybrid electric vehicles. Over the past few years, my family has owned a Ford Fusion Hybrid, a Toyota Prius Plug-in Hybrid, and a Toyota Sienna Hybrid.

I love driving hybrids (especially my plug-in Prius) because they get great gas mileage — and when the plug-in hybrid is in full EV mode, it accelerates like a spaceship! In a world of economic crises and climate change, I feel like burning less gasoline is, in my own small way, helping live more sustainably and protect the environment.

If you’re thinking about buying an electric vehicle (EV) or hybrid vehicle, these cars have a few unique features that contribute to their cost of ownership. Let’s look at a few long-term lessons of owning hybrid cars and EVs.

1. You can save big money on gas with EVs

The Ascent’s research found that Americans spend an average of $2,148 per year on gasoline. Electric vehicles let you cut that number in half. Research from Chase Auto Finance shows that it costs about half as much to power a vehicle with electricity compared to buying fuel for traditional gas-powered cars. This means that an average EV might save you $1,074 per year ($89.50 per month) on gas alone.

If you’re not ready to commit to a fully electric vehicle, a plug-in hybrid like my Toyota Prius Prime can be a great solution. My car plugs into a regular power outlet in my garage and charges overnight. The first 20 to 22 miles that I drive are all on the electric battery, burning zero gas. Then when I run out of battery power, the gasoline-powered hybrid engine takes over.

My Prius Prime tracks its lifetime gas mileage, and last I checked, it was still receiving 199 miles per gallon. That’s because I drive it on battery power so often; a typical trip around town will burn almost no gasoline. I have to remind myself to burn gas! I have to actively try to empty my gas tank with this car, because it’s so easy to just not use gas.

But if you get 199 miles per gallon and you drive 10,000 miles per year, that means you only have to buy about 50 gallons of gas per year. As of Feb. 9, 2024, the national average gas price (according to AAA) was $3.166 per gallon. So that means, with a plug-in hybrid like mine, you might only spend $158 on gas per year.

2. Electric vehicle car insurance can be more expensive

Auto insurance prices have been surging in the past few years, and electric vehicles unfortunately will not necessarily save you money in this area. EVs are often more expensive to insure because they tend to sell for higher prices than gas powered cars and they have complex parts and expensive batteries that are costly to repair or replace.

However, not every EV is expensive to own. According to January 2024 research from Zutobi’s Cost Effective Cars report, the Nissan Leaf is the cheapest EV to run in the U.S. The total cost of insurance and fuel (kilowatt hours of electricity) per year for a Nissan Leaf is only $3,626. This is about 30% less than the cost of owning a typical gas-powered car, if you combine the average amount that Americans spend on gas ($2,148 per year) plus the average annual car insurance premium ($3,017).

Yes, some EVs are higher-priced and require more expensive insurance. But some EVs are compact, easy to charge in your garage, and less costly to insure. Getting a smaller, energy-efficient, fuel-sipping EV could save you significant money on the total cost of car ownership.

3. EV car parts aren’t always pricey

It’s true that if you’re in an accident, the repair costs for your EV can be significant. Not every body shop or mechanic is qualified to fix EVs, and the EV batteries can be expensive to replace. But some EV costs, like ongoing maintenance, are lower than they are for typical gas-powered vehicles.

For example, Zutobi’s Cost Effective Cars report found that the Tesla Model S had the lowest-cost car parts for essential repairs. Tesla Model S brakes, air filters, and car battery can be replaced for an average of only $170.40 (this is for the smaller, car-starter battery; not the more expensive EV battery).

Bottom line

I love my plug-in hybrid car, and while I’m hoping to not be in the market for a new car anytime soon, I’m pretty sure that my next car purchase will be a fully electric vehicle. But in case you’re not ready to make that leap yet (maybe you have range anxiety, can’t charge an EV at home, or don’t see enough functioning EV charger stations in your neighborhood), you might want to bridge the gap with a hybrid vehicle or plug-in hybrid.

Plug-in hybrid vehicles can also qualify for EV tax credits — up to $7,500 for a qualifying new vehicle, or up to $4,000 for pre-owned. I wish I could’ve gotten that $4,000 tax credit when I bought my (used) Prius Prime! Don’t assume that EVs and hybrid cars are “too expensive,” too hard to insure, or too fussy to fix. There are affordable EV and hybrid vehicles that can help you save money on gas and maintenance, with competitive pricing on car insurance, while enjoying a smoother ride and a more sustainable lifestyle.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends JPMorgan Chase and Tesla. The Motley Fool has a disclosure policy.

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Want to earn more yield on your savings in 2024? See why certificates of deposit (CDs) deserve another look. [[{“value”:”

I have a confession to make: until fairly recently, I didn’t see the point of investing in certificates of deposit (CDs). Over the years, I’ve written lots of articles about CDs and I understand how they work. But I felt like CDs didn’t have a place in my portfolio.

That’s because, for the past several years while interest rates were low, lots of banks were paying ridiculously low APYs on CDs. (Even now, as of February 2024, some big banks are still paying only 0.01% APY on standard CDs.) What’s the point of opening a CD if you have to: 1.) Lock up your money, and 2.) Not earn any yield?

But now that interest rates are higher and some of the best CD rates are 5.00% APY and above, I’m starting to see the appeal of CDs. If your financial goals are a good fit for committing your money to a CD, opening a CD in 2024 could give you an attractive APY and a safe place to let your savings grow.

Let’s see why CDs could be the “comeback kid” of banking products in 2024.

1. Interest rates might not be this high again

Trying to time the stock market is risky and often does not work. No one knows exactly what is going to happen in the future for any given stock, industry, or for the global economy. However, many economists and investing experts believe that the Fed is going to cut interest rates in 2024. These possible interest rate cuts might not happen in March 2024 or May 2024, but they could happen.

And if the Fed does cut interest rates, that means today’s best CD rates might be as high as they are going to get for the foreseeable future. Opening a CD today could help you get the highest possible APY on your savings.

For example, the best high-yield savings account based on The Ascent’s research is offering 5.32% APY. But the best 1-year CD is offering 5.35% APY. That means the best CD will pay you an extra 0.03% APY on your savings compared to the best savings account.

If interest rates go down by the end of 2024, savings account APYs will go down too. But if your money is in a CD, you will earn the same fixed rate of interest that your CD term promises, even if the Fed cuts interest rates. CDs can protect your savings against possible interest rate cuts.

2. CDs are a safe investment with FDIC insurance

CDs are generally considered to be one of the safest investments. If you put your money into a CD with an FDIC-insured bank (or NCUA-insured credit union), you get the protection of federal deposit insurance on up to $250,000 per qualifying account. This means that even if your bank fails, you will still get your money back.

All the best CDs recommended by The Ascent are with federally-insured banks and credit unions. If you’re concerned about recent bank failures, stock market volatility, or instability in the global economy, CDs can give you peace of mind.

3. CDs let you lock in a high APY for years

When you buy a CD, you commit your money for a certain period of time, or “term.” The best CD rates tend to be higher than the best high-yield savings account APYs, because the bank is paying you extra for committing your money to the CD. Especially if the Fed cuts interest rates, locking in a good APY on a longer-term CD could be a smart investment.

For example, as of today, the best 3-year CDs were paying 4.45% APY. Let’s assume that in the hypothetical near-future, the Fed decides to cut interest rates by 1%. That would mean that after the 1% rate cuts, the best savings accounts might only be paying 4.32% APY. Locking in a 4.45% APY on a 3-year CD today could let you earn more yield on your savings — guaranteed for three years — than the best savings accounts might offer in the case of future interest rate cuts.

Bottom line

I still probably won’t open any CDs in 2024, because I would rather keep my cash in a high-yield savings account. But if you want to earn the highest possible yield on your savings, and you’re not afraid to commit your money to a bank for a specific term of time, investing in CDs could be a smart move. Certificates of deposit are worth considering in 2024.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

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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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Eager to start investing? Read on for key moves to make first. [[{“value”:”

Investing money is a great way to grow a lot of wealth over time. And if you’re new to investing, you may be eager to get started this year. But before you begin to invest, here are three essential moves to make first.

1. Make sure you’re all set with emergency savings

Recent SecureSave data finds that 63% of Americans are not equipped to handle a $500 financial emergency. You really do not want to land in a similar position. So before you start to invest, make sure your emergency fund is all set.

At a minimum, you should generally aim for enough money in savings to cover three full months of essential expenses, like rent, food, and transportation. If you want to pad that sum to include extra money for home and car repairs, that’s not a bad idea. But at a minimum, make sure you leave yourself with enough money to pay your bills for about 90 days in case you end up out of work unexpectedly.

Of course, you could always tap an investment portfolio to drum up cash in the event of a financial emergency. But then, you run the risk of having to liquidate investments at a time when their value is down. That’s not what you want, because then you lock in a permanent loss — whereas an emergency fund can give you access to cash so you’re able to ride out market downturns.

2. Figure out what type of investment account to open

The purpose behind your desire to invest can help you determine which account to put your money into. If you’re investing for retirement specifically, then it could pay to choose an IRA. This way, you may enjoy some tax breaks, like tax-free contributions and tax-deferred gains.

If you want more flexibility with your money and aren’t necessarily investing solely for retirement, then a taxable brokerage account may be a better home for your funds. You’ll forgo some tax breaks, but your money won’t be restricted in any way. With an IRA, in exchange for the tax breaks you get, there can be costly penalties for removing funds before age 59 1/2.

3. Come up with a strategy

Buying stocks at random is generally not a great approach to building a successful portfolio. Instead, you should aim for a broad mix of stocks, but also, focus on stocks that offer some specific benefit.

Some people like to load their portfolios with growth stocks, which, as the name suggests, are stocks that are poised to take off. Other investors like value stocks, which are stocks whose current value seems lower than what it should be.

There’s nothing wrong with employing a combination of both. Either way, it’s a good idea to go in with a plan.

Of course, your strategy as an investor should also hinge on your personal tolerance for risk. You may decide that you don’t want to go too heavy on stocks because you won’t be able to sleep at night knowing how volatile the market is. In that case, a combination of stocks and more stable assets, like bonds, could be a smarter move.

If you’re feeling overwhelmed by the process of developing an investment strategy, it could be a good idea to sit down with a financial advisor. They may be able to help you assemble a portfolio that reflects your risk tolerance and is conducive to meeting your financial goals.

Starting to invest this year could leave you a lot wealthier 10, 20, or 30 years down the line. But check off these tasks before you start pumping money into different assets.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

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*Stock Advisor returns as of February 20, 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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