Tax-Filing Tips, and What You Should Know About Tax Refund Loans

Written by the Indiana Bankers Association

It’s that dreaded time of year again: tax-filing season. Throughout January, your employer, bank and other financial entities have supplied you with the documents you’ll need to knock out your 2011 tax return and put the IRS in your rear view mirror for another year. Before you get started putting all of the numbers in each of the little boxes, or running out to the pop-up tax-preparing business down the street, make sure you follow these tips for a safe, secure and accurate return. 

Don’t get ripped off–Tax-filing season is like Christmas for cyber criminals. They often set up dummy websites and send official-looking e-mails, hoping that you’ll fall into their trap. The IRS will never ask for detailed financial information such as PIN numbers, passwords or secret information for credit card, bank or other financial accounts. In fact the IRS never initiates contact with taxpayers via e-mail to request any kind of personal information. Any e-mails that look like they come from the IRS should be forwarded to phishing@irs.gov, then deleted. Do not respond! 

Keep more of your refund–Many tax preparers offer tax refund loans or other immediate refund programs. Each offer comes with a cost, as the tax preparer takes a percentage of your return off the top for the convenience of getting your refund faster. These offers play upon the assumption that the IRS is slow in issuing returns, but that’s not necessarily the case. Most returns can be accepted by the IRS electronically via the e-file program, which enables your full refund to be deposited directly into your bank account within seven to 14 days. 

You can file for free–Nearly 70 percent of Americans qualify for free tax filing using software or forms provided by the IRS. If you earned less than $57,000 in 2011, find out which free options are available to you by visiting www.irs.gov/freefile. 

Get IRS assistance in Spanish–The tax-filing process does not have to be burdensome for Spanish-speaking Americans. The IRS offers resources in Spanish at www.irs.gov/espanol. Assistance in Spanish also is available via phone-to access, dial 800-829-1040, then press the number 8. 

Don’t forget your kids at tax time–Having children makes you eligible for many special tax considerations beyond the $1,000 tax credit per child. The money that you spend for someone to take care of your children in order for you to work or look for work (day care, afterschool care, nanny) often is tax-deductible. Also make sure that your tax preparer knows if you have gone through the process of adopting a child in 2011, as many of those expenses can help decrease your tax liability. 

Report those tips–Although tips might feel like “free money,” they are, in fact, taxable. The IRS is on the lookout for people working in service-industry jobs-where tips are common-who fail to report their tips. Your tax return should include a total of all cash tips you receive directly from customers, or a reasonable estimate of how much you received during the past year. For future years, keep a daily log of your tip income to make sure that you do not over- or underestimate. Because April 15 falls on a Sunday this year, Uncle Sam has extended the 2012 tax-filing deadline by two days to Tuesday, April 17.

2012 Crop Insurance Update

Penny Kinser, Vice President and Agribusiness Specialist

Crop insurance remains a hot topic in 2012. With all the weather issues in 2011, it is more apparent than ever that crop insurance is a vital part of risk management for farming operations.  Many producers realized how prevented plant acres and late planted discounts actually apply to their crop insurance policies.  Communication regarding crop insurance is no longer a once or twice a year thing.  We saw nearly every type of claim available during 2011.  A strong and continuous relationship between the agent and the producer is a must with the continued changes in the agriculture industry. 

Many improvements continue to be added to the crop insurance coverage. I have listed a couple of the changes for 2012 below:

TA-APH Yield Endorsement

MarkleBank strives to stay up-to-date with the latest in crop insurance. Beginning with the 2012 crop year, producers purchasing crop insurance for corn and soybeans will have the option to use the trend-adjusted actual production history (TA-APH) yield endorsement on their crop insurance policies, rather than the standard actual production history (APH). With this endorsement, most producers will be able to increase their yields used when calculating their guarantee. There is a need for this adjustment given the numerous changes in seed genetics and the substantial increase in producer’s potential production that has been seen during the past 10 years.  This is a big boost to the producer’s risk management plan because producers have been unsatisfied with the historical APH information that has been used to determine the guarantee for their crop insurance.

The Risk Management Agency (RMA) has assigned a TA-APH trend rate based on the National Agricultural Statistics Service’s (NASS) county yields.  They also put in controls for weather and spatial considerations.  If a producer farms in more than one county, he or she can choose one county or multiple counties. The producer can also choose one crop or all crops since it is set up on a county/crop basis.  The qualifications for the endorsement are pretty simple: a producer will qualify as long as the crop is located in a county where RMA offers the TA-APH endorsement and it has had at least one actual yield during the last four years.  If a producer has less than four years of actual production history the breakdown would be: 3 years of actual yields in the last 12 years will equate to 75% of the trend adjustment, 2 years of actual yields in the last 12 years will equate to 50% adjustment, and one year of actual yield in 12 years would be a 25% adjustment. 

The TA-APH yield adjustment factors are made on a county basis and are added for each year of production history – up to 10 years maximum.  A few of the factors determined by RMA are as follow:

Based on a Revenue Protection (RP) Policy

                                                      Corn                Soybeans

            Wells County                     1.73                 .48

            Blackford County              1.88                 .57

            Huntington County           1.71                 .47

            Jay County                        1.85                 .57

            DeKalb County                  1.63                 .42

 The TA-APH yield endorsements are available in 2012 and can be used on Yield Protection (YP) and RP policies for corn and soybeans at all levels except the catastrophic or CAT level of 50%. Group Risk Income Protection (GRIP) or Group Risk Plan (GRP) already utilizes TA-APH yields for policy guarantees.

The election to utilize the TA-APH yield endorsement must be made by Sales Closing Date which is March 15^th for this area.  Each producer should look at their individual plan and see what works best for their operation.  If you have any questions I would be more than happy to sit down with you and see what best fits your needs.

Coming Soon

Very soon producers that obtain their crop insurance with MarkleBank will be able to go online and see their policy information.  They will be able to view policy and actual production history information.  All claim and payment information will be included as well.  As soon as this is available I will contact you to complete this process.

Measurable Goals: Be Smart

A New Year’s resolution is a commitment that a person makes to a project or the changing of a habit. A New Year’s resolution can also be thought of as a goal for the New Year. Setting goal’s for the coming year is a wise idea. To track your goals and know when you are achieving them, make sure your goal statements are “SMART”:

 Specific: The goal should be precise and explain what you hope to achieve.

 Measurable: The goal is clear and can be evaluated.

 Attainable: The goal is realistic, yet offers a challenge.

 Relevant: The goal is meaningful and important to your business or personal life.

 Time-Bound: The goal has a time frame and includes a completion date.

 To say, “I will spend more time with family,” is not a SMART goal because it is not specific and has no time frame. A SMART statement for this goal may be: “every Sunday, I will spend the day with my family.”

Paying Only the Minimum on Your Credit Card?

by Debbie Darnell, Financial Education Director

42% of Indiana adults only pay the minimum payment on credit cards (FINRA Investor Foundation)

The advantage and convenience of credit cards allow us to have what we need or want, now, instead of later.   To benefit from the advantages of using credit cards, be smart about how you pay the credit card bill when it arrives each month.  By only paying the minimum balance each month, an $1150 credit card balance could take 8 years to pay off.  Are you paying more than you planned for your credit card purchases because you are only paying the minimum payment?  You can make savvy payment decisions by using the information provided below:

Read your credit card statement each month.  Credit card companies are now required to display information on periodic statements showing you how long it would take to pay off the existing balance – and the total interest cost – if you paid only the minimum due.  They also have to display the payment amount and total interest cost to pay off the existing balance in 36 months (3 years).

Try out different payment scenarios.  The true cost of paying the minimum credit card calculator is available on the www.bankrate.com website.  You can try out different scenarios to see how much the minimum payment or a payment of your choice will cost you.  

To use the calculator, input your credit card balance amount, the interest rate on your credit card, choose how your minimum payment is calculated (your account agreement or monthly statement should contain information about how your minimum payment is calculated), and the amount of a fixed payment you could make each month.   The calculator will generate a table showing how many months it will take to pay off your balance.   The table will also show the amount of interest paid.

Pay as much as you can.  Any amount you can pay over the minimum payment will reduce the balance—even if it is only a few dollars more a month.

24 Hour Telephone Banking – Better Than an APP

By Judy Lynch, Floating Bank Teller

             Have you ever been out and about and wondered what your checking account balance was? Maybe you forgot to make a payment, and are unsure if there is enough money in your account to pay with a check. Don’t have a fancy cell phone with all the latest gadgets? If you can make a phone call: you can check your balance from anywhere at any time.  MarkleBank offers 24-Hour Telephone Banking.

There are three numbers that you need to know to do telephone banking

• The telephone banking number
• Your account number
• Your personal identification number (PIN)

All MarkleBank customers have access to the 24-Hour Telephone Banking system by calling 758-0111 locally or Toll-Free at (888) 758-2844. First time users of the system must enter their account number and the last four digits of their Social Security Number (SSN) as an initial Personal Identification Number (PIN). They may then change their PIN.

Telephone access includes balances and transaction history as well as the ability to transfer funds between MarkleBank accounts. No fees are involved with any telephone transfers when using the telephone banking system.

            There is no need to be nervous about using this system as you cannot mess-it -up! You are able to start over at any point. It is safe, secure and practically fool-proof.  Enjoy the versatility of this system. The best part is that it does not cost a thing, unlike the data fees on those fancy cell phones!

Protect Yourself From Identity Theft

More than 10 million Americans become victims of identity theft each year. Thieves will steal names, Social Security numbers or credit card information to commit fraud or other crimes. Personal information is as good as gold to criminals, who will go to any means to get it. 
It is astounding how easy it is to obtain the needed information without breaking into a building. Thieves may go “dumpster diving” by rummaging through trash looking for bills or other paper with personal information on it. Or they may use “Phishing” techniques, pretending to be financial institutions or companies while sending spam or pop-up messages, to obtain personal information from unsuspecting victims. 
Many ID theft cases originate with “shoulder surfing,” watching from a nearby location while the victim punches in a telephone calling card or credit card number, or eavesdropping on a telephone conversation involving a credit card transaction. 
The Internet is an inviting place for criminals to obtain identifying data, such as passwords or banking information. Many unsuspecting consumers fall prey to spam requests, which are unsolicited e-mail messages that promise benefits in exchange for identifying data. 
The identifying data can be used for false applications for loans and credit cards, fraudulent withdrawals from bank accounts, or obtaining other goods or privileges. 
To avoid becoming a victim, consumers should be guarded with personal information. The Office of the Indiana Attorney General recommends the following precautions:

• Minimize the amount of personal financial information you carry. Do not carry your Social Security card or a government-issued card with you, unless you need it. Only provide your Social Security number (SSN) when absolutely necessary.
• Memorize passwords and PIN numbers. Do not carry them.
• Keep financial information in a secure place in your home or bank safe deposit box.
• Shred documents before throwing them away. Purchase a cross-cut shredder to better protect your information. * Do not give sensitive information to unsolicited callers. Legitimate businesses will not make unsolicited calls asking for your bank account numbers. Caller ID information can be spoofed, so do not rely on the name and number that is on your box. If in doubt, hang up and dial your vendors directly.
• Shield your hand when entering your PIN at a bank ATM, store checkout or when making long distance calls with a calling card. This habit prevents security cameras, cell phone cameras or people near you from acquiring your PIN. Shred ATM slips.
• Pick up new checks or credit cards at your bank, rather than having them delivered to your home. Do not have your driver’s license number printed on your checks.
• If your bank or credit card statement does not arrive on time, call to make sure it was sent to the proper address. Also contact the post office to see if a change of address has been filed in your name. A thief may steal or divert your statements to hide the theft and use the documents as “proof” of new identity.
• When traveling, keep all personal belongings locked in hotel safes/safe deposit boxes, or keep them with you. Personal belongings include prescription bottles, which display personal information.

By taking the above precautions, you can save yourself sleepless nights trying to remedy the ID theft harm, not only to your credit report, but to your good name and reputation.

For more information, visit the Identify Theft Unit of the Indiana Attorney General’s website at: www.in.gov/attorneygeneral/2853.htm.

Insuring A Good Harvest

Written by Penny Kinser

We are all aware of the adverse weather conditions that have hit our farming communities this year and we do not know what the new farm bill will bring us.  Not knowing if the Direct, Counter Cyclical and/or Acre Payments will disappear: it is more important than ever to get our safety net and risk management in place. A few things to remember:

Choose the Level, Structure and Plan That Best Fits Your Operation

• Knowing you commodities breakeven price will help in choosing a level.
• Tying your marketing strategies and your crop insurance plan can be a good enhancement to your operation.
• Different levels can be chosen for different crops.  Knowing your input costs can be important when planning ahead.
• Hail insurance doesn’t only cover hail but can also cover wind, green snap, fire and grain in transit or in the bin.

Make Sure You Have a Plan for Harvest

• Make sure you have a plan to keep units separate if you have optional units and you are storing in the bin. This could include combine monitor records, weigh wagon slips and certified scale tickets.  It is always a good idea to keep a log sheet of all grain going into the bin and where it came from.
• Enterprise units are a little less complicated than optional units, but it is still a good idea to maintain farm records in the event you may want to switch. 
• As soon as you think you may have a claim turn it in.

Now more than ever, it is important to have a plan to minimize your risk against as many variables as possible.  Please let me know if I can help you with your crop insurance needs or if you have any questions.

From Mortgage Pre-Qualification to Closing

The Top 9 Credit Don’ts

Buying a home is the single biggest investment that most people will ever make. It’s a big deal, so it pays to do your homework and get it right. Mortgage lenders typically require much documentation, and are very particular about stability, income, and liabilities. For this reason, many factors can disqualify a potential borrower. However, a rejected mortgage loan application can be avoided by adhering to the following tips.

 1. DON’T APPLY FOR NEW CREDIT OF ANY KIND.  Including those “You have been pre-approved” credit card invitations that you receive in the mail or online.  Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately.  New credit also brings a credit score down.  Depending on the elements in your current credit report, you could lose anywhere from x –xx* points for one hard inquiry.

 2. DON’T PAY BILLS LATE.  Stay current on existing accounts.  Under the new FICO scoring model, one 30-day late can cost you anywhere from xx – xxx* points, and points lost for late pays take several months if not years to recover.

 3. DON’T PAY OFF COLLECTIONS OR CHARGE OFFS during the loan process.  Unless you can negotiate a delete letter, paying collections can drop a credit score by xx – xx* points immediately due to the date of last activity becoming recent.  If you want to pay off old accounts, do it through escrow – at closing.

 4. DON’T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS.  In the matter of fact, DON’T charge on credit cards at all if possible during escrow.  This is the fastest way to bring your scores down xx – xxx* points immediately.  Try to keep your credit card balances below 30% of their available limit at ALL times during the loan process.  If you decide to pay down balances, do it across the board.  Meaning, pay balances to bring your balance to limit ratio to the same level on each card (i.e. all to 30% of the limit, or all to 40% etc.)

 5. DON’T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS.  It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in 4.  If you want to save money on credit card interest rates, wait until after closing.

 6. DON’T CLOSE ACCOUNTS.  If you close a credit card account, you will lose available credit, and it will appear to the FICO that your debt ratio has gone up.  Also, closing a card or installment account will affect other factors in the score such as length of credit history.  If you HAVE to close an account for DTI – plan ahead of time.  DO NOT close credit cards until after closing.

 7. DON’T ALLOW ANY ACCOUNTS TO RUN PAST DUE – EVEN 1 DAY!  Most cards offer a grace period, however, what they don’t tell you is that once the due date passes, that account will show a past due amount on your credit report.  Past due balances can also drop scores by xx* points.

 8. DON’T DISPUTE ANYTHING ON YOUR CREDIT REPORT once the loan process has started.  When you send a letter of dispute to the credit reporting agencies, a note is put onto your credit report, and when the underwriter notices items in dispute, in many instances, they will not process the loan until the note is removed and new credit scores are pulled.  Why?  Because in some instances, credit scoring will not consider items in dispute in the credit score – giving false data to the lender.

 9. DON’T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM.  This includes the not-so-obvious things like co-signing on a loan, changing a name or address with the bureaus.  The less activity on a report during the loan process, the better.

 Bonus Tip: STAY IN CONTACT WITH YOUR MARKLEBANK MORTGAGE & REAL ESTATE PROFESSIONALS.  If you have a question about whether or not you should take a specific action that you believe may affect your credit reports or scores during the loan process, your MarkleBank mortgage or real estate professional may be able to supply you with the resources you need to avoid making mistakes that could drop your credit scores or possibly, cause you to lose the loan. 

 *Because every situation is unique, we have intentionally left blank how much each “Don’t” could affect your score.

 This article was written for people who are applying for a new mortgage loan. Some of the things it says not to do, would be something you might want to do if you were not applying for credit.

MarkleBank Encourages Customers To Create A Budget

Simple Steps to Check Writing and Recording

Written by Judy Lynch, Floating Bank Teller

The “scary-land” of check writing is really not that mysterious. Follow these simple steps and you’ll be writing checks and recording them like a pro.

The Check

No matter which style of checks you have chosen, each has the same basic information to be filled in: date, payee, amount (in numerals and words), memo (optional) and the signature.

Date:  Put the current date when you are writing the check, including the year. It does not matter whether you use numerals (e.g. 1/01/11) or the written form (January 1, 2011). Either way is correct and acceptable.

Pay to the order of:  This is the line on the check that tells who will receive the payment. It is always best to start clear to the left of the line, immediately after the printed “Pay to the order of” words. Doing this will prevent someone from adding an additional name on the line to alter the check.

Amount: After the “Pay to the order of” line is a space with a printed dollar sign. This is where you should write the amount of the check in numerals. Write legibly so there is no question what the check amount is.

The next line is long with the words “Dollars” at the end. This is where you write the amount of the check in words. Start clear at the left of the check. Capitalize the first word. For example, a $53.24 check would be written as: Fifty-three 24/100 (the cents are written in numerals as a fraction). Draw a line from the fraction to the printed “Dollars”, so nothing can be added to alter the check. Make sure both amounts match. If there is a difference, the written out words is the one the bank will honor.

Memo: This line is optional, but can be used to clarify what the check is for. An example:  birthday present, graduation, loan number xxx, etc.

Signature: This line is extremely important as the check is not valid unless the authorized person has signed the check on this line.

 The Check Register

It is important to always know how much money is available in your checking account. To avoid penalties – you do not want to write checks for more than the balance in your account. The check register is the tool to help you keep track of your money. The register is simply a booklet that has space to record the check number, date, transaction description, payment amount, deposit amount and balance.

Number: (If you are recording a check.) Simply write the check number of the check you are writing, this is located on the check in the upper left hand corner.

Date: Record the date of the transaction. This applies to written checks, debit card purchases, deposits or any other type of transaction.

Transaction: This is where you can record who the check is written to and the reason for the payment or deposit and where it came from.

Payment amount: Record the amount the check is written for.

Deposit amount: This is where you record the amount of a deposit into your account.

Balance: Here is where you keep a “running” balance of your account. Always record the amounts you deposit and the checks written out of your account. Of course, you will add the deposits and subtract the checks from the balance. Do this as each amount is recorded to help you keep track of your account.

Writing checks and keeping a check register are skills worth learning. We are always here to help you if you have any further questions. Enter the land of check writing with these tips and soon you will be a check writing pro.