Money Management

If you missed the tax deadline, don’t panic. Read on to see what to do. [[{“value”:”

Lateness is something we all fall victim to from time to time. You might keep your friend waiting for 15 minutes at a restaurant because you forgot your credit card at home or got stuck in a last-minute meeting at work. Or you might show up late to work because your normal bus pulled away just as you were getting to the stop.

Similarly, you might end up in a situation where you’re filing your taxes late — meaning, after the April 15 deadline. That’s not the best situation to be in. But ultimately, it may not be such a terrible one.

The consequences of being late

When you file a tax return past April 15 and are due a refund, nothing bad happens other than you have to wait longer for that money to hit your bank account. But when you owe the IRS money and file your tax return late, you face two penalties:

A late payment penalty worth 0.5% of your unpaid tax bill per month or partial month your return is late, up to 25%A failure-to-file penalty worth 5% of your unpaid tax bill per month or partial month your return is late, up to 25%

This means that if you file your taxes after April 15 and owe $1,000, you’ll be penalized $5 per month or partial month your payment is late, and you’ll be penalized $50 per month or partial month your return is late.

What to do if you’ve missed the tax deadline

If it’s already past April 15, your best bet is to try to file your taxes as soon as possible. If you’re due a refund, you’ll get that money sooner. And if you owe money, you can minimize the penalties mentioned above.

One thing you don’t want to do, however, is file a tax extension. A tax extension gives you six extra months to file your tax return without incurring the failure-to-file penalty. But you must request that extension before April 15 for it to take effect. If you’re past that deadline, don’t bother asking for an extension.

With that said, some people have more time to file taxes past the April 15 deadline without needing an extension. If you’re a military member in a combat zone, you automatically get an extra six months to get your return to the IRS.

Residents of certain states impacted by severe storms or events earlier this year or last year have until June 17 to file their taxes. These include:

CaliforniaConnecticutMaineMichiganRhode IslandTennesseeWashingtonWest Virginia

Within these states, extra time may only be available to residents in certain counties. You may want to contact the IRS or a local tax professional if you’re not sure what filing deadline applies to you this year.

All told, it’s best to take action as soon as possible once you’ve missed the tax-filing deadline. But don’t automatically assume you’re in for a world of financial pain if you’re late. If you act quickly, you may end up with minimal penalties — and in some cases, you won’t even face a penalty 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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Buying a home this year feels like going to battle. Keep reading for a few tips from the front lines of the housing market. [[{“value”:”

Greetings from the trenches of the 2024 housing market — I’m buying a house this year, and it’s hard not to feel doomed. Not only are mortgage rates up, but housing supply is low. What’s a wannabe homeowner to do? Read on to find out.

1. It’s still a seller’s market

I hate to break it to you, but if you’ve been wishing, hoping, and saving the last few years, and are finally ready to pull the trigger on a home purchase, you are absolutely not alone. Unfortunately, the supply of homes isn’t sufficient to satisfy all comers — according to the National Association of Realtors, February 2024 saw just 2.9 months’ worth of homes for sale. To equalize the market between buyers and sellers, the supply would need to be higher — ideally, at least four months, and perhaps closer to six months.

2. Weigh all your mortgage options — and understand how much you’ll pay

If you’re a prospective home buyer, you probably already know that you’re going to pay a lot more for a mortgage than you would have in 2020 or 2021. As of this writing, the average rate for a 30-year fixed mortgage is 6.79%, according to Freddie Mac. The rate you get depends heavily on your financial profile, but even if you’ve got an exceptional FICO® Score, you’ll still be paying more than you want.

It’s incredibly important to dig into all your options for home loans. Depending on your life and financial circumstances, these might include:

An FHA loan (first-time buyers, those with less-than-stellar credit, or buyers with small down payments)A VA loan (active military or veterans)A USDA loan (for those buying in a qualifying rural area)

Even if you’re buying with a conventional loan, like I am, you still have options to explore. You can get a mortgage from a big online lender or a tiny local credit union — or any mortgage lender in between. And you have your choice of terms — the 30-year fixed-rate mortgage is an American classic, but you could get a 15- or 20-year term loan, or even an adjustable-rate mortgage (ARM).

3. Getting a mortgage pre-approval matters

Speaking of your mortgage options, it’s not enough to research and decide what type of loan to target. You should speak to some lenders and apply for pre-approval before you start your home search in earnest. Letting a lender put eyes on your real financial situation will give you peace of mind that you actually can, you know, buy a house.

Imagine how disappointing it would be to dream about the day you get your keys, start house hunting without pre-approval, find a perfect house, then talk to a lender and learn that the mortgage rate you qualify for makes monthly payments unaffordable. Or worse — you can’t actually be approved at all, due to your existing debt, income, or credit score.

Save yourself some grief and get your finances vetted ahead of time. And if you find out that buying isn’t a good idea for you from a financial standpoint, you’ll gain insight into how to fix the problem. Maybe you need to increase your income to afford mortgage payments, or pay down some current debt to improve your debt-to-income ratio and get approved to borrow.

The other reason for pre-approval is a direct result of this competitive market. If you find the perfect home for you, and want to make an offer, you can do so quickly and confidently if you already know a lender is likely to give you final approval. Note that a pre-approval isn’t a guarantee that the loan will be yours, but assuming nothing major has changed with your finances and you’re not targeting a home that you can’t afford, it’s certainly a strong possibility.

4. Save as much money ahead of time as possible

This last one is a biggie. Buying a home is expensive — it’s likely to be the biggest purchase you’ll ever make. You’ve got to cover the down payment (and while there are $0 down mortgage options, it’s generally a good idea to put something down on a home purchase to give yourself some home equity from the start). Plus, there are closing costs, inspection costs, and more. And even after the ink is dry on all the paperwork you’ll sign at closing, the bills don’t stop. Now you’ve got a house to maintain, and all the expenses that go with it.

How do you cope? Save as much money as you can before you start the process. I started saving to buy a house near the end of 2022, knowing that the soonest I’d be looking to buy was early 2024. And I hit my initial savings target and then just kept saving — and I’m still saving. I’m glad I gave myself this much financial runway, and it’s making me feel better about buying a house again, after my disastrous first experience with homeownership.

Buying a home in 2024 is like running the gauntlet — there’s potential pain and pitfalls everywhere you turn. Keep these points in mind to give yourself the best chance of success, and good luck.

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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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Don’t want to leave your loved ones with debt? Read on for a way to avoid that fate. [[{“value”:”

Many people routinely take on debt. You might sign a mortgage to buy a house, finance a car with an auto loan, and rack up some charges on a credit card that you don’t pay off for quite some time.

But while it’s one thing to subject yourself to debt, it’s another thing to put your loved ones in a position of having to pay it off in your absence. Unfortunately, 46% of Americans expect to pass on debt to their loved ones when they die, according to data from Policygenius. And among people who expect their loved ones to inherit their debt if they die, 21% have no life insurance coverage.

If you don’t want to burden your loved ones with debt in the event of your passing, then it pays to put life insurance in place. It’s especially important to do so if you’ve taken on debts jointly with another family member.

It’s all about protecting the people you care about most

Whether your loved ones will be responsible for covering your debts upon your death will depend on the circumstances involved.

Often, remaining family members are not responsible for paying off the debts of relatives who have passed. If you have a credit card account in your name only, and you die with a $4,000 balance unpaid, it’s not a given that your surviving spouse or children will have to pay it off. However, what is likely to happen is that the money to satisfy that debt will come out of your estate.

But still, if you’re worried about your loved ones getting stuck having to pay off your debts, then it pays to put life insurance in place. And it’s especially important to do so if you have debts jointly with another family member. In that situation, your surviving relative will generally have to cover the remainder of that debt on their own.

For example, let’s say you and your spouse bought a house together. If both of your names are on the mortgage, your spouse will generally have to repay that loan upon your passing. So in that case, it could pay to buy a term life insurance policy with enough money to not only provide your spouse with some income in the event of your passing, but also enough of a benefit to satisfy that mortgage balance in full.

Shop around for affordable coverage

If you’re already grappling with debt, then you may be hesitant to spend money on life insurance premiums. That’s yet another expense your income will need to cover.

However, you may be surprised at how affordable a term life insurance policy is. And you can also, if need be, limit your coverage to debts you owe jointly with a loved one.

Let’s say you have 10 years left on a mortgage you signed jointly with your adult son, and the balance on that loan is $250,000. What you may do in this case is simply take out a 10-year, $250,000 term life policy. There’s no need to get a $1 million policy if your son is gainfully employed and doesn’t rely on you for income.

Of course, the amount you’ll pay for life insurance will hinge on not just the amount and length of your coverage, but also your age and health. But it could be a good idea to buy that coverage so you don’t leave someone you care about in the lurch in the context of lingering debt.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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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