Tax-Saving Planning Tips
As tax filing season begins for 2016 we are reminded how we could have effectively lowered our taxable income. Start your 2017 tax planning with some helpful tips.
Donate to your Favorite Charity
Along with helping others, charitable donations are a great way to lower your taxable income. Take the time to sort through old clothes, and other belongings that you no longer use or need. Clean out your food pantries and find some local food drives. Make sure you keep your receipts; they will be needed for tax purposes.
Health Savings Accounts
Individuals under age 65 and covered by a high deductible health plan may establish an HSA (Health Savings Account) which allows participants to save money for the payment of health care expenses on a tax-preferred basis. HSA distributions are generally tax-free if they are used to pay for qualified medical expenses. Distributions made for any other purposes may be taxable. Please contact your health care provider for more information about high-deductible health plans and HSA accounts.
Annual Gift Tax Exclusion
Consider gifting to reduce some tax burdens. In 2016 you could have gifted up to $14,000 to each person, and to as many individuals as you want, without triggering the gift tax. That amount stays the same in 2016. In addition to the annual exclusion amounts, you can also give charitable gifts, gifts to a spouse, gifts of educational expenses, and gifts of medical expenses without triggering the gift tax.
Retirement Savings One of the best ways to lower your tax bill is to reduce your taxable income. You could have contributed up to $18,000 to your 401k or similar retirement savings plan in 2016, which remains the same for 2017. Money contributed to the plan is not included in your taxable income. If you don’t have a retirement plan at work, you can invest in an IRA. You can contribute up to $5,500. Depending on your income, you may be able to deduct some or all of your IRA contribution.
Who Can Help Me?
With the overall objective of minimizing your taxable income, there are some great tax planning tactics that can help you for 2016.
Take this time to speak to a financial professional along with your tax advisor to help minimize your tax burden in the coming years.
You have many choices when searching for help in reaching your goals. In particular, the financial professionals here at your credit union will work closely with you to clarify your retirement goals, help you develop and implement a plan, and provide ongoing advice in pursuit of those goals.
Interested in Learning More?
Contact Tiffany Yee at (626) 441-7151 ext. 241 or explore the Retirement and Investment Services Website
* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. ‘The Credit Union’ has contracted with CFS to make non-deposit investment products and services available to credit union members.
Your peace of mind is important to us. Prior to 2008, an individual account was insured up to $100,000 by the National Credit Union Share Insurance (NCUSIF) and the Credit Union purchased an additional $250,000 coverage through a private insurance company, American Share Insurance (ASI). The Emergency Economic Stabilization Act of 2008, signed into law on October 3, 2008, increased federal insurance coverage through NCUSIF on individual accounts to $250,000. On July 21, 2010 the coverage was made permanent. After analyzing the effects of this increase on the total membership less than 1% were not adequately covered under NCUSIF. As a nonprofit cooperative we strive to serve the needs of the membership and use funds entrusted to us wisely. The low percentage of accounts uninsured doesn’t justify the cost to continue the additional private ASI excess insurance coverage. Therefore effective January 1, 2017 this coverage will end.
The good news is there are many vesting options to add additional insurance coverage to your account that we would be happy to discuss with you. The NCUSIF fund is backed by the full faith and credit of the US government, just like the FDIC fund for banks. It is just a separate fund.
PFCU remains strong and well-capitalized. We continue to receive 5 Stars (highest rating) from Bauer Financial at www.bauerfinancial.com. Your money is safe at PFCU.
Does your Credit or Debit Card look a little different?
PFCU recently began sending out EMV Chip Cards to our members with VISA® Credit Cards, and will soon begin issuing them to our members with Debit Cards. Just what are these cards, and how do they differ from the cards we’re all used to? One big advantage is a decrease in risk from data breaches like those that occurred at Home Depot and Target recently.
Check out this helpful video.
Here is some helpful information on the cards from our Ann Davidsom, VP of Risk Consulting at our partner, Allied Solutions:
Chip Card Facts for Consumers
• For cardholder protection, the mini computerized chip on the card uses a dynamic card verification value (dCVV) that changes with each transaction. This will help prevent fraudsters from being able to perform a subsequent card authorization.
• Make your chip card the payment of choice to help reduce the risk of card fraud.
• Protect your card or card number from unauthorized activity and don’t let your card out of your possession.
Using Chip Cards
1. Check to confirm your card has chip technology.
2. If your card has a chip on it, don’t swipe the magnetic stripe if the point-of-sale device is chip enabled.
3. Look for the card insert below the PIN pad on the card reading device to insert your chip card into.
4. Once your card is inserted, do not remove it until the sales associate or the machine says it’s approved.
5. If you were assigned a PIN with your chip card, enter your PIN after you have inserted the card. Remember, do not pull your card out until the transaction is approved.
6. If a PIN is not assigned to your chip card, insert your chip card and allow the sales associated to perform an authorization.
7. Swipe the card on the card reader if the merchant’s device is not chip enabled.
As new technology is introduced, PFCU will integrate it into our products and services to keep our members safe.
We’ve been doing it since 1935.
When your PFCU ATM card has a VISA® logo on it, it is referred to as a “Debit Card”. The money comes out of your PFCU Checking account and not a line of credit attached to the card (Unless you have a PFCU Overdraft Line-of-Credit, which will kick in if you run short on funds.) An actual Credit Card is a loan with specific terms, interest rates, and fees, which you can access as-needed by using your plastic card. Here is where the terms “Debit” and “Credit” can get confusing, though. It’s not quite apples and oranges. When using their PFCU Debit Cards, members are often asked “Debit or Credit”? While the transaction goes through either way, one requires a PIN and the other a signature. An actual Credit Card is always processed as a “Credit” transaction and is usually processed using a signature rather than a PIN. A Debit Card can be processed as “Debit” or “Credit”. Choosing “Credit” can bring you extra protections on your purchases, such as a greater ability to return items. Remember, though, that places like hotels, gas stations and rental car companies may place a security hold on a good portion of your funds, which can tie up your checking account for days. For this type of transaction, an actual Credit Card is usually best. Also, when you are traveling, it is good to use your PIN a few times in a new area to establish that you are there. Our stringent security system sees signature-based transactions in a geographical area where you don’t usually transact as red flags. You can also call us at (626) 799-0882 to let us know you will be traveling. We’ll note your account for our security team.
So, even though you might choose “Credit” when completing a Debit Card transaction, you are really only choosing to have VISA® process it rather than the ATM network. See a companion article “Millenials Rethink Credit Vs. Debit” for another angle to this discussion.
Home buyers often focus on obtaining the lowest possible rate on a 30-year loan, but most mortgage loans are used for only three. Cash out transactions for improvements, additions, repairs, weddings, tuition and major purchases occur with great frequency. If you think you might refinance for any reason anytime in the next seven years, read on.
Lower Rates, Flexible Terms – Today, most Adjustable Rate Mortgages (ARMs) are “hybrids.” They start out at a fixed rate for the first 3, 5, 7 or even 10 years. During this time, you save on interest cost, and even though your payment is less, you still pay more toward principal.
Inside Information – Lenders give you a discounted rate up front because they know the rate will float with the market later on. If you sell your home or refinance again prior to that happening, it’s their loss. You have the advantage here because you control the timing of your next step.
Managed Risk – One way to prepare for the possibility of a higher rate and payment later is to pay extra principal each month to reduce your balance faster. If the rate ultimately adjusts up, your balance will be lower and the payment change will be less as a result. As well, you would already be accustomed to paying more.
The Bottom Line – A fixed rate loan provides the certainty that it will never change. A hybrid ARM provides a guaranteed savings but for a limited period of time. The best way to decide is to balance your expectations for using any particular loan with the peace of mind that can come from being assured of stability, even if your time frame changes.
Either way, we’re here to help you explore the pros and cons and to come to a conclusion that’s uniquely right for you.
Whether you are purchasing or refinancing a home, call us now at (626) 799-0882 or 1-800-445-PFCU to get started on the best mortgage loan solution for you.
The Credit Union motto is people helping people, and PFCU has been doing just that since we were first founded by employees of the City of Pasadena back in 1935. Over the years we have grown to serve dozens of businesses and organizations in the SGV. Our partners include many of the key organizations that consistently make the SGV such a great place to live and work. We serve organizations such as Union Station Homeless Services, Rosemary Children’s Services, The Girl Scouts of Greater Los Angeles, Art Center College of Design, The Los Angeles College of Music, Pasadena Museum of California Art, The Pasadena Chamber of Commerce, The San Gabriel Chamber of Commerce, and many more. We have gained a reputation for providing quality financial services to our community and have taught thousands of individuals of all ages financial literacy information such as budgeting, proper use of credit, saving strategies and much more. In fact, we have teamed up with award-winning children’s financial literacy expert Sam Renick, creator of the lovable Sammy Rabbit character, to teach more than 7,000 girls about saving, budgeting and goal-setting. PFCU is the 2014 Pasadena Chamber of Commerce Corporate Citizen of the Year and winner of the “It Takes a Village” Award from the San Gabriel Chamber. We have been named “SGV’s Best Credit Union by readers of thirteen local newspapers in 2015. PFCU also volunteers to prepare and serve a meal at the Union Station Homeless Services Family Center once each quarter. Our PFCU Paws for a Cause Wiggle Waggle Walk team has raised thousands of dollars to help the animals at Pasadena Humane Society and SPCA over the years. We help out at Police and Fire Department events for the cities of Pasadena, South Pasadena, San Gabriel and Sierra Madre. We participate in the Earth Day Festival, NATHA’s (Neighbors Acting Together Helping All) Lincoln Village Festival, each year. We are a sponsor of the San Gabriel Mission Fietsa, The Altadena Sheriffs Summer Concert Series, The Spark of Love Toy Drive, Monte Vista Grove’s annual dinner, just to name a few. Our new Pasadena FCU and YouTube channel is helping us spread the word about Credit Unions and the way to make smart financial choices. We educate the community through this blog, our PasadenaFCU Facebook page and our Twitter account. Enjoy this video from our participation in the recent National Night Out Festival in Kings Villages https://youtu.be/qR3Q4_0DJZk
“You have cancer.”
These have to be three of the scariest words that anyone could ever hear. Thankfully, the volunteers of the American Cancer Society (ASC) are working relentlessly to create a world where no one will ever hear those words again.
ACS is a nationwide, community-based voluntary health organization dedicated to eliminating cancer as a major health problem. Globally, with more than 3 million dedicated volunteers (the largest volunteer health organization in the United States) ACS is making a difference in the fight against cancer. They are helping people stay well, helping people get well, finding cures and fighting back. No cancer-fighting organization has such a comprehensive mission.
In our community, ACS is helping people through the diagnosis, treatments and survivorship of cancer. ACS is there to support patients and families in everything from lodging, to rides to the treatments and in providing community support. ACS hosts programs and services to help people with cancer and their loved ones understand cancer, manage their lives through treatment and recovery and find the emotional support they need. Best of all, it is all free. However, this can only be possible through donations and volunteers.
ACS has many fundraisers throughout the year with many ways for the community to get involved. One of the big fundraising events is Relay for Life. Relay for Life is an event that gives everyone in the community a chance to Celebrate the lives of people who have battled cancer, Remember loved ones lost and Fight Back against the disease. It is a 24-hour event where Relay for Life teams camp out overnight and take turns walking or running around a track. Relay for Life opens with a very powerful survivor walk that celebrates their victory over cancer. There is also the touching Luminaria ceremony where Luminaria bags and candles are lit to honor the loved ones who have passed or are fighting the disease. This year, Relay for Life of Pasadena will be held at Maranatha High School in Pasadena (located at 169 St. John Avenue, Pasadena, CA 91105). It will begin on Friday, May 23rd at 6:00 p.m. and end the following evening on May 24th at 6:00 p.m.
Each year, more that 4 million people in over 20 countries take part in this global phenomenon and raise much-needed funds as well as awareness to save lives from cancer. If you would like to be a part of this amazing event, please consider creating/joining a team.
If you are not able to participate, please consider donating, because saving lives starts one team, one participant and one dollar at a time. www.relayforlife.org/pasadenaca
Occasionally, stories hit the news about robberies at ATMs, such as this one which occurred in Arcadia, CA. PFCU cares about our members’ safety. We all love the convenience the machines provide, but we urge everyone to use precaution when using any ATM.
The following suggestions may be helpful:
• Prepare your transactions before arriving at the ATM
• Protect the secrecy of your personal identification number (PIN)
• Never enter your PIN at any ATM that does not look genuine, has an unusual device attached, or is operating in a suspicious manner
• Use your body as a shield when entering your PIN
• Resist the temptation to write down your PIN or share it with a friend. You may be liable for transactions done with a PIN you share. Stop by our branch and select a PIN you can easily remember, but which could not be guessed-no birthdates, addresses or sequences like 1234.
• At night, be sure the ATM, walkways and parking area are well lit
• Don’t display your cash, instead stuff it into your pocket or handbag as soon as the transaction is completed
• When using a drive-up ATM, make sure all the car doors are locked and windows are closed. Keep the engine running and remain alert to your surroundings
• Be very cautious of anyone loitering around the machine, especially at night
• PFCU offers 30,000+ surcharge-free ATMs, including those located in 7-Eleven, Costco and California Walgreens Pharmacies. By using a machine inside, you are reducing the risk of being robbed. Many of these locations even have security guards onsite.
• Consider getting cash back from your debit card at a grocery store. There is no fee and you are receiving the funds from a cashier.
• Choose ATMs with visible security cameras or which are in high traffic areas.
• Stay alert. Look around you as you transact. Criminals generally like to prey on unobservant individuals.
• If you are with friends or family, encourage them to walk to the ATM with you rather than staying in the car.
• Plan ahead. Most merchants and restaurants take credit and debit cards, so perhaps you don’t actually need cash to begin with.
You can also walk into more than 5,000 Co-Op Shared Branch locations nationwide to transact safely in a branch. You’ll need to have your ID and PFCU account number with you.
Check out the locations tab of our website for information on convenient phone apps for finding branches and ATMs and even making deposits and transfers on some Smartphone models.
The Safety and Security tab of our website is full of great information and is updated regularly. We also Tweet and post alerts on our Pasadenafcu Facebook page as they occur. We’ve been standing strong for our members since 1935. Your money is safe at PFCU.
There are constant variations on how cyber thieves are trying to access and exploit the confidential information of people innocently maneuvering the web. It makes sense to be skeptical of any e-mail, posted link, private message or inquiry. Cyber thieves aim to gain your trust and get you to let your guard down. This allows them to place spyware and malware onto your computer, learn important data about you that lets them access your accounts and private information, and trick you into unintentionally giving them money. Attachments such as .zip files are notorious for acting like a Trojan horse to deliver malicious files to your computer. Make sure you know what you are clicking on at all times. Just because an e-mail appears to be from a well-known company, don’t assume it is. Inspect the URL closely for variations in the name, or contact the company by typing in the correct website yourself, or calling them at the number you have on file for them. A little diligence can go a long way.
Be sure to “Like” our Pasadenafcu Facebook page, follow us on Twitter, check our PFCUandyou.com blog, and check the Safety and Security tab of our website for info on the latest scams. Don’t enter personal information such as passwords, social security number, account numbers, answers to security questions and financial information into e-mails you receive. Go to the website YOU have for the organziation or call them. E-mails that would ask for information like that are most certainly “phishing” for ways to exploit your trust. In this case, healthy skepticism can save you headaches and more.
DDoS attacks are mentioned more frequently in the news these days, but what are they? The initials stand for “Distributed Denial of Service” and refer to cyber attacks which are performed by harnessing thousands of personal computers through spyware and malware and instructing them to navigate to a specific website, overloading the server and resulting in the website being inaccessible to legitimate users.
While there may be any number of motives for such attacks, the goal is to render the targeted website useless for as long as possible. When there are hints of a pending attack, it is best to be proactive. Internet rumors have indicated that a possible large-scale DDoS attack on American financial institutions might occur on Tuesday, May 7, 2013. As a precaution, anyone who transacts business on financial institution websites is encouraged to refrain from doing so on that day. Plan ahead and schedule online transactions in advance if possible. If you need to transact on that day, consider physically going to a branch or calling the institution.
Generally, it is not a good idea to wait until the last minute to schedule an online payment or transfer. Always look ahead and schedule transactions well in advance to give yourself a cushion in the event of unforeseen roadblocks. You’ll also have peace of mind, which is a great benefit of thoughtful planning. PFCU’s Online Banking and Bill Pay, for example, allow you to schedule one-time or recurring future payments and transfers and have options for all sorts of convenient reminder texts or e-mails. The internet is a valuable tool in communication, organization, and information-gathering. Just be careful not to rely on it to the extent that you can be affected by temporary interruptions in service. Always have a backup plan.
There are more Safety and Security blog articles here. To get fraud alerts as soon as we communicate them, “Like” our PasadenaFCU Facebook Page and/or follow us on Twitter @Pasadenafcu. The Safety and Security tab of our website is a great place to read up on internet safety, too.