Money Management

Tax-filers can breathe a sigh of relief.  

Many people use Venmo on a regular basis. If you’re someone who dines out frequently with friends, you may find that Venmo makes it easy to split those bills. And if you own a small business, you might use Venmo as a form of payment.

But the IRS is cracking down on payment apps when it comes to reporting. The reason? The agency is well aware that many businesses use it as a means of accepting payments, but those earnings can be hard to track.

Initially, the IRS was going to require payment apps like Venmo to issue tax forms for 2022 for users with $600 or more in payments for the year. But that change is now being pushed back by a year to give tax preparers more time to familiarize themselves with these changes, so it’s not something you have to worry about just yet.

Will you have to pay taxes on your Venmo payments?

Right now, payment apps like Venmo have to issue a tax form for anyone who receives total payments of more than $20,000 within the same year and also has more than 200 transactions. (It’s worth noting that some states have lower reporting thresholds, though.)

If you’re a Venmo user and you received more than $20,000 through Venmo last year, and had more than 200 transactions, look out for a 1099-K form. You’ll need it to file your 2022 taxes, which you’re filing this year.

However, the $600 threshold for reporting is only going to take effect starting with the 2023 tax year. So if you received $2,000 in Venmo payments in 2022 across 42 transactions, you won’t be getting a tax form for it.

Now, before you get alarmed about these new rules, one thing you should know is that while Venmo is required to send a tax form starting in 2023 for payments totaling just $600 or more, that doesn’t mean you’re going to have to pay taxes on that money. You’ll only be taxed if you’re being paid for a good or service you provided. If you put a $200 restaurant bill on your credit card and your three friends chip in $50 each by Venmo, that’s not a taxable transaction.

That said, it may be hard to know which transactions are taxable and which aren’t. That’s a big reason why the reporting requirements have been pushed out a year — to figure out a good way to distinguish between the types of transactions that tend to occur on Venmo.

An accountant can help you with this change

If you receive more than $600 in Venmo this year, you should expect a tax form from Venmo in 2024. But whether that means a higher tax bill depends on your situation. That’s why it may be a good idea to plan to get tax help in 2024 — even if you’ve never gotten or needed any before. This new Venmo reporting rule is certainly confusing, so engaging the services of an accountant is a solid bet.

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Get ready to see your bank account balance boom. 

A lot of people are starting off 2023 feeling as if they’re in catch-up mode. That’s because inflation wreaked havoc on a lot of budgets in 2022 and caused many people to deplete their savings accounts to cope with higher living costs.

If you’re eager to grow your savings in 2023, it helps to approach that goal on a month-by-month basis. And while cutting your spending is an obvious way to boost your savings, you might only have so many expenses in your budget you can slash.

But that doesn’t mean saving money this month is out of the question. Here are a few lesser-known ways to give your savings a boost in February.

1. Start shopping at dollar stores

Some people avoid dollar stores because they’re convinced the items sold there are too low in quality to be worth buying. In reality, there are plenty of solid items you can buy at your local dollar store, from school supplies to seasonal treats for upcoming holidays, like Valentine’s Day.

In fact, dollar stores commonly stock recognized brands in categories such as snacks, soaps, and cleaning products. So it’s worth taking a look around and seeing how much you stand to save.

2. Buy groceries in bulk strategically

Buying the right groceries in bulk could result in a lower credit card tab for food-related spending. But to be clear, you’ll need to be strategic when loading up on bulk items. For the most part, this means making sure any item you buy is something you eat regularly, have room to store, and are likely to finish before its expiration date.

You should also know that you don’t necessarily need to have a Sam’s Club or Costco membership to take advantage of bulk purchases. Your regular supermarket might stock certain items in bulk, so it’s worth looking around.

And also, don’t forget big-box stores like Target and even good old Amazon for nonperishable items like snacks, grains, and cereal. And if you’re buying bulk food items on Amazon, there’s a good chance you’ll meet the $25 order minimum to score free shipping even without a Prime membership.

3. Do more shopping at discount supermarkets

There are certain grocery store items that tend to be expensive that you also don’t necessarily want to buy in bulk, like produce. Because produce has a limited shelf life, you need to be careful not to purchase too much of it at once. But you can still save money on produce and other supermarket staples by buying them at discount supermarkets like Aldi rather than your regular go-to supermarket.

Now keep in mind that stores like Aldi may not have the most consistent selection of products — produce-related or otherwise. But if you’re willing to make the extra trip here and there, you may find that you’re able to save quite a bundle on the various items on your shopping list.

Saving money isn’t easy at a time when inflation is still soaring. But these tips could help you carve out more savings in February — and in the future.

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You don’t have to break the bank when you move. 

Moving can be a real hassle. It’s expensive, and it takes a lot of time and energy to get all of your worldly possessions to a new place in one piece.

Unfortunately, it’s also necessary. Many people move at least one, and often multiple times, over the course of their lives. Whether you’ve gotten a mortgage loan and bought a new house or are going to a new city for career or family reasons, you’ll need to be prepared to pack up and incur the costs associated with doing so.

Fortunately, there are some ways to make the process cost less. In fact, finance expert Dave Ramsey has outlined two possible tips that could help keep your credit card bills down during a move.

1. Get help footing the bill

The easiest and most direct way to save on moving costs is to get someone else to pay some of them for you. That’s why Dave Ramsey suggests checking into whether your employer will provide any relocation assistance.

Ramsey indicated that studies have shown most employees receive either full or partial payment for their move when they relocate for work. However, people in some jobs are more likely than others to enjoy this benefit.

“Keep in mind that how much your company is willing to reimburse you for your move may depend on your position,” Ramsey explained. “In general, companies are more likely to reimburse costs for executive or mid-level positions than entry-level jobs.”

Ramsey said to find out early on in the process what your employer will and won’t cover, as you could get help with things like travel costs when you go look for a new house; temporary housing until you find a place; security deposits; packing and unpacking; transport of your vehicle; and even closing costs or real estate agent fees.

“It’s important to know exactly what your new employer will and will not pay for so you know how to estimate your out-of-pocket expenses,” he explained.

If you are asked to relocate for work or if you are hired for a new job with an out-of-state company, it’s absolutely worth asking about what expenses will be paid for you. And, if your employer doesn’t offer this benefit by default, consider trying to negotiate for it in your compensation package.

2. Move less stuff

Dave Ramsey’s second tip will work for anyone, regardless of whether they have a company to help them pay for their moving expenses or not. It simply involves moving less stuff.

“Another way to save money on relocation costs is to sell some stuff!” Ramsey said. “We’re talking about that armoire you never found the right place for or that kayak that’s been gathering dust in your garage for years. Now’s the perfect time to get rid of that junk.”

As Ramsey explained, not only will you reduce the moving costs by not moving these unnecessary items, but you can also put the cash you collect from the sale towards covering your other moving expenses.

By following these two tips, hopefully you can reduce your out-of-pocket costs on the move so you have more money left to spend or save as you get settled into your new home.

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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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Even when interest rates are high, you could still lose out financially.  

You’ll often hear that it’s important to have money set aside for emergency expenses, like home repairs, car repairs, or medical bills. And the best place to put that cash is a savings account. That way, you’ll have access to it whenever you need, and you won’t have to worry about your principal contribution losing value.

But while it’s good to have a nice amount of financial protection from emergencies, you don’t want to make the mistake of putting all of your money into a savings account. Even when interest rates are higher like they are today, they might pale in comparison to the returns you manage to generate by investing your money in a brokerage account.

Don’t sell your money short

Putting your money into a savings account means keeping it safe. Investing, on the other hand, carries risk. But in exchange for that risk, you might manage to generate a much higher return on your cash than what a savings account will pay you. And in the long run, that could really make a difference.

These days, you might be able to score a 4% return on your money in a high-yield savings account. For a risk-free deposit, that’s not a bad deal.

But here’s something to consider. The S&P 500 index, which consists of the 500 largest publicly traded companies, generated an average yearly return of 11.88% between 1957 and the end of 2021, according to Investopedia.

Now, let’s be a little bit more conservative than that and assume your portfolio only delivers an average yearly return of 8%. That’s still a lot higher than the 4% you might get on the money you keep in a savings account. And that could make a world of a difference over time.

In fact, let’s say you have $10,000 in cash beyond what you need for your emergency fund. If you keep that money in the bank for 30 years and score an average annual 4% return on it, you’ll end up with around $32,400. But if you invest that $10,000 in a brokerage account and your portfolio delivers an average annual 8% return, in 30 years’ time, you’ll be sitting on about $100,600. That’s a difference of more than $68,000.

It pays to take on some risk

Any money you have earmarked for emergencies, or for near-term goals, like buying a car or home, should be kept in a savings account. But if you have money you’re trying to save for long-term goals, like retirement, then investing it could really be a far more lucrative choice.

And if you’re not good at picking stocks or you feel you don’t have the knowledge needed to do so, you can invest in exchange-traded funds instead. These allow you to put your money into the broad market so you’re not taking on the risk that comes with buying individual companies. And it may make you more comfortable with the idea of investing in the first place.

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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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