Money Management

More AAdvantage elite members will now qualify for free upgrades, even when flying on an award ticket. Find out more about this new elite status perk. 

If you’re a frequent flier who is brand loyal, achieving elite status with your favorite airline can be beneficial because it allows you to take advantage of extra perks that improve your flying experience. American Airlines has a new benefit available to all AAdvantage loyalty program elite members. If you’re already an elite member or are on your way toward becoming one, you’ll want to know about this perk.

More elite members now qualify for complimentary upgrades

On June 9, American Airlines made some updates to how complimentary award ticket upgrades work for AAdvantage elite status members. Previously, only select elite status members qualified for a free upgrade when traveling to select destinations on award tickets.

Now that’s no longer the case. All AAdvantage elite status members will be eligible for a complimentary upgrade when traveling to select destinations on an award ticket. A complimentary upgrade can be a win for your checking account and travel experience.

This benefit applies to American-operated flights within and between the U.S. (including Hawaii), the U.S. and Canada, Mexico, the Bahamas, the Caribbean, Bermuda, and Central America. Upgrades are valid from the Main cabin to the next class of service. Award tickets issued by partner airlines aren’t eligible for complimentary upgrades.

This perk will also apply to elite members flying with a companion. You and your companion will be upgraded if seats are available. If your companion is booked on a different reservation, you can link the reservations by calling American Airlines.

Keep in mind that all upgrades are based on availability. If a complimentary upgrade is confirmed to be available for your flight, you’ll receive an email confirming the upgrade. Now all elite fliers will be eligible for upgrades on cash fare and award ticket flights. Another change worth noting is award travel will no longer be prioritized below paid travel for upgrades.

If you’re an elite AAdvantage member, you can feel confident knowing that upgrade opportunities exist when flying with American Airlines, regardless of whether you paid the cash price for your ticket or used your American Airlines miles to book an award flight.

Elite status can provide value

This is great news, as elite AAdvantage members will get more value from being loyal fliers. If you like to travel and take flights often, you may want to consider working toward achieving elite status. You can track your progress by logging into your AAdvantage member account.

When flying with American Airlines, elite fliers enjoy benefits such as free checked bag perks, priority check-in, priority boarding, and status mileage bonuses. Exact benefits vary depending on your status tier level. Becoming an elite flier is an excellent way to upgrade your travel experience.

Before booking your next American flight, you may want to add one of the best American Airlines credit cards to your wallet. You can access additional perks and earn miles on your spending so you can get closer to your award flight redemption goals.

If you’re not an American Airlines loyalist, check out our list of the best travel rewards credit cards instead. A travel card with flexible earning and redemption options may be best for you.

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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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Daylight customers can either translate their funds before the end of June or receive a check in the mail. Find out how to find a bank that supports the LGBTQIA+ community. 

At the end of 2020, Daylight launched the first LGBTQIA+ banking platform in the U.S. It promised to break down some of the financial barriers faced by the community and give its members “the financial tools and products they need to live their best lives.”

Sadly, while the business achieved a lot, it will close its doors on June 30. It says all customer funds are safe and will be fully accessible for transfer until then.

What to do if you’re a Daylight customer

If you’re a Daylight customer, don’t panic. Your money is safe. Billie Simmons, co-founder and COO of Daylight told us by email, “We are working with each of our members individually to transfer the money from their Daylight balances before the end of June.” Watch out for communications from Daylight with more information.

If you’re not able to transfer your funds, Daylight will send a check for the balance in the mail. Simmons also stressed that all customer funds are covered by FDIC insurance. You may need to open a bank account with another company, but you shouldn’t lose a cent.

What happened at Daylight?

CEO and co-founder Rob Curtis wrote that the current high interest rate environment had made it difficult to implement the company’s mission. “Daylight had a great run paving the way for U.S. LGBTQ+ customers — we opened thousands of trans-inclusive debit accounts, supported thousands of prospective LGBTQ+ parents’ plans for their families,” he said in a blog post. “Ultimately, though, we couldn’t provide these services in a way that covered our costs — this is likely a job for big banks and I hope they pick up the torch and carry forward our legacy.”

Daylight has also been hit by allegations in the press of inappropriate behavior and mismanagement. An article in New York Magazine said three former employees had filed a lawsuit against Daylight accusing the company of age and wage discrimination, whistleblower retaliation, and fraud.

Putting those accusations to one side, this has been a challenging year for many financial institutions. The high-profile collapse of several mid-sized banks spooked customers and a lot of people moved their money to the perceived safety of bigger banks. This squeezed the deposit base of many smaller players, making it difficult to operate.

How to find LGBTQIA+ friendly banks

One of the reasons Daylight was founded was that traditional banks haven’t always been great at meeting the needs of LGBTQIA+ customers, to put it mildly. Indeed, a recent LGBTQI+ Economic and Financial (LEAF) survey found that more than 1 in 10 respondents said they’d experienced discrimination when using financial services. Things have started to change, but there is still a long way to go.

If you banked with Daylight and are wondering where to move your money, search for banks that actively support the community and have specific policies in place to prevent discrimination. It’s worth noting that a couple of big banks support true name initiatives, including BMO Harris and Citibank.

If you’re looking for a smaller bank, check out Amalgamated Bank, which says it is committed to environmental and social responsibility. It has supported several initiatives to champion LGBTQIA+ rights, and its employee handbook covers policy and support for gender transitioning individuals.

Don’t rule out credit unions. Element FCU offers savings and checking accounts, as well as other financial services such as loans and credit cards. Under the slogan, #ThePlaceYouBelong, it encourages people to use their chosen name and pronouns. “If coming out was easier than dealing with your bank, it’s time to make the switch to Element,” says its website.

Bottom line

Over a quarter of respondents to the LEAF survey did not have a checking or savings account — a statistic that shows how important Daylight’s services were for the LGBTQIA+ community. But don’t let Daylight’s issues stop you from finding an LGBTQIA+-friendly bank that serves your needs.

Some banks not only include inclusive policies in their mission and vision statements, but also back those words with actions. Combine that with low (or no) fees and services that will make your life easier, and you might be able to find a good replacement for Daylight.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Emma Newbery 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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If you don’t file your quarterly taxes before June 15, you’ll owe the IRS more money. Learn how to navigate quarterly taxes before the deadline. 

If you’re self-employed or own a small business and you expect to owe $1,000 in federal income taxes this year, then you have to pay estimated quarterly taxes. The next deadline for quarterly taxes is this Thursday, June 15. If you don’t pay estimated taxes by then — or you underpay — the IRS may penalize you. Let’s take a look at what happens when you don’t pay quarterly taxes and what you can do to remedy the situation.

What happens if you miss the June 15 deadline?

If you miss the June 15 deadline, the IRS will charge you a late penalty of 0.5% of whatever is due. For instance, if you miss paying an estimated tax of $4,000 on June 15, you’ll owe 0.5% of $4,000, or $20.

What’s more is that you’ll owe 0.5% for each month or part of the month you leave those taxes unpaid. The penalty caps off at 25% of your unpaid tax.

So if you wait until July to pay an estimated tax of $4,000, then you’ll pay a penalty of $20 for June and $20 for July. If you wait 50 months, then you would owe 25% of $4,000, or $1,000.

You can stop the penalty from accumulating by paying your estimated taxes as soon as you can, preferably before June ends. And no — you can’t roll this quarter’s taxes into next quarter’s payment. The IRS will still charge you a penalty, even if you pay double your estimated taxes by the next deadline (Sept. 15).

Does the IRS charge a penalty for underpaying your taxes?

Here’s another scenario: Let’s say you owe $4,000 in estimated taxes. You pay your quarterly taxes by June 15, but instead of paying $4,000, you pay $3,000. Would the IRS still penalize you even though you paid by the deadline?

Yes, yes it would. And unfortunately the penalty for underpayments can be just as severe as not paying at all.

If you underpay your taxes, you’ll owe the IRS interest on whatever you don’t pay. Right now, the interest rate for underpayments is 7%, which is applied to the unpaid balance. The IRS will send you a letter with the penalty amount calculated for you. You’ll then need to pay the balance by the due date, or risk having the penalty compounded even more.

Some taxpayers, however, won’t pay penalties on underpayments. Basically, if your tax situation falls into one of two groups, the IRS won’t hit you with a penalty:

You owe less than $1,000 after withholdings and credits. You’ve paid at least 90% of this year’s taxes or 100% of last year’s taxes, whichever is less.

For example, if your tax bill last year was $24,000, and you’ve paid at least $24,000 this year in estimated taxes, then you can breathe — the IRS will likely forgive an underpayment. Likewise, if you owe only $500 this year, then the IRS won’t penalize you for underpaying an estimated tax.

How to avoid quarterly tax penalties

The simplest way to avoid tax penalties is to set aside a fixed percentage of your income as you earn money, then pay whatever you’ve saved as your estimated quarterly tax. For instance, I always take 29% of whatever I earn as a freelancer and set it in a high-yield savings account. I never touch this money until it comes time to pay my federal and state taxes.

If your tax situation is more complicated than quarterlies, you might want to hire an accountant. They can help you get the numbers right and ping you when it’s time to make estimated payments.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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