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5 Common Credit Myths

Credit Myth 1: “Going over the balances on your credit limits is okay, because after all, the credit card company authorized the purchase.” 

This myth seems like it has its origin story as a rationalization from a compulsive spender, doesn’t it? Regardless, it’s not true in any way, shape or form. What will ultimately show on your report is the amount of credit that you used versus your credit limit.

Credit Myth 2:  “As long as you pay off your credit card balances, your score will go up.”  

The reality is that if your credit card is maxed out, you’re paying on it will just affect your payment history and mostly like it will remain the same.  As you pay credit cards down, then your score will get better, as your utilization rate goes down.  But just paying on time, in and of itself, will not make your score go up.

Credit Myth 3: “Types of Credit don’t matter, it’s all the same.” 

Actually, the credit scoring system gives more weight to some types of credit providers better than it does to others.  They give better weight to an American Express than they do to a sub-prime Visa or MasterCard.  They give more weight to Visas and MasterCards by predominant national banks that they do to furniture store cards, or gas cards, or department store cards.  They feel that consumer are desperate if they can’t attain a major credit card, therefore, they give more weight to the major credit cards.

Credit Myth 4: “Paying off an old collection or charge off will increase your credit score.”  

This is a huge myth, and it’s contagious because it makes sense. Really, though, what will happen is that as soon as you pay off an old collection or charge off, the “date of last activity” becomes more recent, and therefore they get to report that item for another seven years!  As accounts get older, they affect your credit score less and less.  Now, I’m definitely not saying that you shouldn’t pay off old debts, but it’s an important detail and something to be concerned about.     

If you’re most concerned about your credit score, then paying off debts prior to obtaining any other type of loan or mortgage will certainly hurt you greatly because they will be re-aged, and it will affect it as if it just happened yesterday.  The recency of any derogative item has a great affect on how it affects your overall credit score. 

Credit Myth 5: “Using debit cards will help to build your credit.” 

Nope. This, too, is completely false.  Debit cards are just like your bank account, they do not get reported to the credit reporting agencies in any way.

At La Familia Multiservices, we will work with you to repair your bad credit and will help you raise your credit score. We really want to help people repair their credit and we do so in a very professional way that is really personable.  We will assess your credit and let you know where you currently are and where you should be. Our credit repair specialists will help you set goals and then do what we can to help motivate you to achieve those goals. 

For details regarding credit repair please call us at 305-762-1818

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Can You Build Credit with a Debit Card?

A Debit Card Cannot Help You Build Credit

Purchases made with a debit card do not help you build credit. When you use a debit card, the funds are automatically taken directly from your checking account, so it is essentially a cash purchase.

Banks do not report debit card accounts to Experian, Equifax, TransUnion, or the other credit reporting agencies.

How to Begin Building Credit

In order to build a strong credit history, you will need to demonstrate your ability to manage credit wisely. If you are just starting to establish credit and do not yet have any credit accounts, here are a few ways you can begin:

  • Apply for and open a credit card account. 
  • Consider opening a secured credit card. Most banks report secured cards to the credit reporting agencies, so you may be able to use the account to begin building credit right away.
  • Ask a family member to add you to their account as a joint account holder or an authorized user. 

To take the first steps to credit repair, please contact Roxana at 161 NE 97th Street, Miami Shores, Fl or call 305.762.1818

Source: Experian

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What Is the Highest Credit Score Possible?

The highest credit score possible depends on the credit scoring system being used. There are many different scoring systems available, and the range, or scale, can vary from one system to another. For example, some credit scoring systems may have a scale that goes up to 850, while others might go up to 900 or 950.

Try Not to Focus on Achieving a Perfect Score

It will be difficult, if not impossible, to get a perfect score because there is always some risk associated with repaying the debt as agreed, such as getting sick or having an unforeseen accident.

Credit scores reflect the information in your credit report. To get good scores, you must take care of your credit report. Instead of focusing on the number, work to maintain a good credit history. You will probably never get a perfect credit score, but that shouldn’t be your goal.

Instead, your goal should be to make your credit report as strong as possible. Doing so will ensure that all of your credit scores will qualify you for the best rates and terms offered by any lender.

For more detailed information about your Credit score and Credit repair please speak to our tax specialist by calling 305-762-1818.

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Identity theft and Credit repair

Recovering from identity theft is rarely an easy task. Victims reported in 2004 that after dealing with creditors, collectors, the credit bureaus, and law enforcement agencies, resolving the problems associated with identity theft took an average of 330 hours of work.

One of the more frustrating aspects of recovering from identity theft is often times the process of disputing the identity theft related items on your credit reports. La Familia Multiservices makes this process easier by helping you dispute these questionable negative items while you focus your attention on taking care of other matters…

For more detailed information about your identity theft and credit repair please speak to our tax specialists by calling 305-762-1818.

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Taxes Filed but Where’s my Money?

 

You have filed your taxes with your accountant and now the waiting game begins, you ask. “When will I receive my refund?”.

Great question! This is the reason we file our taxes, to get a refund check to help out with finances: a new car, a new house, maintenance on your current car or house, or a nice family vacation.

There are two options you have when filing your taxes, the old school paper filing method, or the modern e-filing method. In order to receive your refund as fast as possible the best method is to e-file. This sends your tax information directly to the IRS, no waiting on the mail to arrive, get sorted, opened and processed. This also avoids the possibility of the paperwork being lost.

Once the IRS receives your information, according to their website, processing for e-filing takes on average 21 days to process as long as you have submitted all the required information. Any missing or inaccurate items will cause a delay in your refund.

Additionally, another way to speed up the process of receiving your refund is by signing up to have your refund direct deposited into your bank account. This allows the IRS to electronically deposit the funds into your account so there will be no need to print and mail a paper check to you. Printing and mailing takes additional time, which will delay the time it takes to receive your refund.

The IRS will allow you to split your refund across 3 different accounts. Following are different account types and methods of receiving your refund from the IRS:

  • Direct Deposit into a personal or business, savings or checking account
  • Treasury Direct®,
  • Traditional, Roth, or SEP-IRA
  • Savings Bonds
  • Paper Check

As digital technology continues to advance, the IRS has created some tools available on their website to keep you up to date, and avoid calling and waiting for hours to speak to someone for simple information. Introducing, Where’s my refund?, a new tool on the IRS’s website that allows you to get up to date information regarding your refund. Information becomes available 24 hours after e-filing, and 4 weeks after you mailing your paper return (all the more reason to e-file). You can also download their mobile app IRS2Go to get the information directly on your mobile device. The information is updated once every 24 hours. The information you need from you return to track your information is:

  • Your Social Security number
  • Your filing status
  • Total dollar amount of your refund from the tax return you filed.

In the event you do not have Internet access, you can call 800-829-1954 to receive status information over the phone.

When accessing the Where’s My Refund portal, the tool displays three different stages of processing of your refund:

  • Return Received
  • Return Approved
  • Refund Sent

For more detailed information about your Tax Refund please speak to our tax specialists by calling 305-762-1818.

 

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What to do if You Can’t Pay Your Tax Liability

You have filed your taxes for the year and instead of receiving a refund you owe the IRS tax money but cannot pay it back. This is a very unfortunate situation but one that is not uncommon. Don’t panic the IRS has a couple of different options to assist you in paying your taxes.

1.Request an Extension of Time to Pay

Contact the IRS to request an extension of time to pay the tax. If granted, the IRS will give you 120 days to make a payment with no additional fees, however, interests and penalties will apply to the full amount of the tax liability until it is paid in full. This is the quickest and least costly option the IRS will provide. You can also file for an extension through FORM 1127 but your taxes must be filed on time.

2. Request an Installment Agreement

Another option offered to you by the IRS to assist your in paying back your taxes is through an installment agreement. This give you the ability to pay the debt back over 6 years, which gives you a lot more time than an extension of time to pay. FORM 9465 needs to be submitted when you file your taxes to request the installment agreement. You should receive a response within 30 days of filing your application. You can make payments by:

  • Direct debit from a bank account
  • Payroll deduction from your employer
  • Via check or money order
  • Through the Electronic Federal Tax Payment System
  • Via Credit card by phone or internet
  • Via Online Payment Agreement

The fees associated with the Installment agreement are: A one time installment fee of $225 or $31 if debited from your bank account. To restructure or reinstate an existing installment agreement, the fee is $89. You are able to set the amount, dates, and frequency of the payment but we advise you to plan accordingly so you will not default on the agreement.

3. Offer in Compromise

If you are unable to pay your taxes because of losing your job or your business is failing the final option is to request an Offer in Compromise from the IRS. This is only if you will not have the ability to pay the tax liability within the foreseeable future or based on the timelines in the options listed above. The OIC will allow you to pay a reduced amount of what you owe that they agree to as full payment of your tax liability. Qualification for the OIC require you to have all filing and payment requirements current and not participating in any bankruptcy proceedings.

Please contact us today for help with repaying your tax liability at 305-392-0339.

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Do you qualify for any Tax Credits?

Tax credits are great! They reduce the amount of tax liability on your refund allowing you to receive a higher refund or pay a lesser amount of tax. There are seven types of tax credits available as follows:

  • Earned Income Credit
  • Child and Dependent Care Credit
  • Adoption Credit and Adoption Assistance Programs
  • Excess Social Security and RRTA Tax Withheld
  • Retirement Savings Contributions Credit
  • First-Time Homebuyer Credit
  • The Premium Tax Credit

Earned Income Credit is a refundable tax credit for individuals who worked the  previous year for a low or moderate income below $53,505. For the full details regarding eligibility for the EIC Tax credit please contact us directly.

Child and Dependent Care Credit is a tax credit provided if you paid expenses for child care to allow you and/or your spouse to work/look for work. The credit is a percentage of work-related expenses paid to the provider for the care of your child/children.

Adoption Credit and Adoption Assistance Programs provide a tax credit for qualified adoption expenses for the child/children and exclusion on income from employer assistance.  Qualified adoption expenses include:

  • Reasonable and necessary adoption fees
  • Court costs and attorney fees
  • Traveling expenses
  • Other expenses directly related to the legal adoption of the child/children

The maximum amount for the 2016-year per child is $13,460.

Excess Social Security and RRTA Tax Withheld This is a rare instance when your employer withholds too much Social Security Tax or your Railroad employer withholds too much RRTA tax. In the event this has happened contact your employer to have them adjust the tax for you. If they are unable to do so please contact us to assist you.

Retirement Savings Contributions Credit Contributions that you make to an eligible retirement fund may qualify you for a tax credit.  Tax credits vary depending on filing status and adjusted gross income, to see if your contributions qualify please contact us directly.

First-Time Homebuyer Credit You may be eligible for a tax credit for purchase on a home that is considered your primary residence from years 2008-2011. Eligibility depends on the year in which the home was purchased. Federal employees and members of the military are eligible for specific benefits upon eligibility of the credit. Please contact us to see if you qualify.

The Premium Tax Credit offers a tax credit to low to moderate-income families who purchase health insurance within the marketplace. This tax credit is refundable and has the ability to make premium payments directly to the health insurance provider. Please contact us directly to inquire about your eligibility.

If you feel that any of the above tax credits apply to you please don’t hesitate to call us at 305-400-8237 to determine your eligibility as well as help with ALL of your tax needs.

by La Familia La Familia No Comments

10 Tips to do Today to Increase your Refund for Next Year

 

  1. Change your tax status at work. W-2 employees should review your allowances that you claim at work on the W-4 form you fill out during the hiring process. The higher the number the less tax is taken out. This also means your refund will be  smaller. Reducing the number will cause more tax to be taken out but will lead to a larger refund at the end of the year.
  2. Track all of your deductions.  Keep track of everything that is tax deductible over the course of the year. There are several smart phone apps on the market that will make it easier and less amount of paper work to track your deductions but its still a good idea to keep a folder over the course of the year and refresh it every tax season.
  3. Find a better paying job. A higher income will increase your refund at the end of the year but here is the tip. You may be able to deduct expenses related to job seeking such as travel, meals, resume preparation, and career counseling service if they exceed two percent of your income.
  4. Learn new skills. The costs of any classes at the college level are eligible for tax credits of 20% of the cost of tuition. Why not take some time to learn new skills you have always wanted: carpentry, welding, or even a foreign language.
  5. Donate. Tax season is over and spring-cleaning has arrived. Get rid of old items you don’t use anymore by donating to charities. These acts of kindness are tax deductible, which will allow for a larger refund next year.
  6. Buy Property. Property investments are beneficial from a tax perspective as the mortgage interest and property tax deductions will increase your refund.
  7. Switch to Solar Energy. Solar energy is extremely helpful to the environment as you harness energy naturally from the sun. The government is now giving tax credits up to 30% of the cost of solar energy equipment. No better time to switch than now.
  8. Fund your retirement account.  Contributing to your retirement account is another opportunity at increasing your tax deductions, which will lead to a higher
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Calle Ocho Festival Miami 2017

Visitors from around the globe came by Little Havana to be a part of the largest Hispanic street festival in the Southeastern United States. Little Havana vibrated with the hip-shaking rhythms of Latin music from salsa to hip-hop, including street performers and eight dedicated stages. Event-goers joined street dancers or create their own conga line as they bring the music to life; enjoy hundreds of international food kiosks simmering with Latin flavors, sample products from national brands and more. We are thrilled to have been a part of the Calle Ocho​ Festival 2017. #calleocho #calle8 #immigration #taxpreparation #creditrepair #tax #taxes #taxservice

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The Early Bird Gets the Worm – Er, the Refund

Here at La Familia Multiservices, we have one thing in mind: you. As a dedicated tax firm with a proven record of success, we pride ourselves on helping all of our customers – individuals, small-to-medium businesses and large corporations alike – get the biggest tax returns possible. (And we’re pretty proud of it, too.) From preparing and filing your tax returns, to handling any liabilities that might pop up along the way, we’re here to make the process both easy and effective. And with tax season already upon us, there’s no time like the present to get started.

While many taxpayers like to wait until the April 15th deadline to file their returns, waiting ‘til the last minute can often make life a little harder. Here are just some of the reasons why filing your 2016 tax returns now might actually benefit you later:

You could get your tax refund early.
Think about it. It’s common sense: filing your tax returns early means an early tax refund, as well. Paper returns can take weeks, so take our advice and e-file your taxes with a direct deposit to your bank. In most cases, you’ll see your refund as soon as 10 days from the time you filed online – which means you could go on that long-awaited shopping spree in February, and not April.

You’ll have more time to pay the IRS.
Many taxpayers will file their taxes and find that have a balance due to the IRS. These payments aren’t due until tax day, April 15th, so submitting your returns in January will give you roughly three months to save until you’re able to pay them off. That’s much less stressful than having, say… three days.

You’ll get the information you need to make important financial decisions.
Our taxes determine a lot of things: like what kind of mortgage we can get, how much money the government thinks we make, what financial aid we qualify for, and the list goes on and on. In fact, when you try to buy a house or apply for financial assistance for college tuition, one of the first things you’ll need to show are your tax returns from the previous year. If you anticipate a big financial decision in the near future, file your taxes early – it will give you a head start on that process.

Filing early helps prevent tax identity theft.
As much as we try to avoid it, tax fraud does happen, and it’s an absolute pain to deal with. When your tax identity gets stolen, that means that 1) someone is trying to steal your tax refund, and 2) you usually have to go through a long, drawn-out process that could delay your refund for weeks, or sometimes, even months. These scammers aren’t new to the game and often get the job done earlier in the season. By filing your taxes in January or February, you have a better chance of evading this issue, and as a result, getting your refund quickly and easily.

Got questions? We’ve got answers. For more information about filing early, or to find out how to get started, contact La Familia Multiservices at one of our locations.

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