The Child Tax Credit Explained

Tax (Photo credit: 401K)A very important tax money saver for families is the Child Tax Credit. It's one the most beneficial components on a tax return because it gives an actual credit of $1000 for every child you have under 17. But to be eligible for the credit your child must qualify and there is income restrictions. According to Publication 972 there are 11 things you must consider.

1. Amount. With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under age 17.
2. Qualification. A qualifying child for this credit is someone who meets the qualifying criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence.
3. Age test. To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2011.
4. Relationship test. To claim a child for purposes of the Child Tax Credit, the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
5. Support test. In order to claim a child for this credit, the child must not have provided more than half of his/her own support.
6. Dependent test. You must claim the child as a dependent on your federal tax return.
7. Joint return test. The qualifying child can not file a joint return for the year (or files it only as a claim for refund).
8. Citizenship test. To meet the citizenship test, the child must be a U.S. citizen, U.S. national or U.S. resident alien.
9. Residence test. The child must have lived with you for more than half of 2011. There are some exceptions to the residence test, found in IRS Publication 972, Child Tax Credit.
10. Limitations. The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies by filing status. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000. In addition, the Child Tax Credit is generally limited by the amount of the income tax and any alternative minimum tax you owe.
11. Additional Child Tax Credit. If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim the Additional Child Tax Credit.

For more information go here for a .PDF of Publication 972, Child Tax Credit.

How To Effectively Complain Online

Image via WikipediaBefore the option of the Internet the only way to complain to big companies was to write letters, go to the Better Business Bureau, or just tell everyone you know. You may have gotten really mad and wrote your state agency or even Washington.

Good news, those haphazard days of complaining are over, we now have the Internet to do our work. Consumer Reports, the consumer review magazine, says "Whether it's a slap happy review of your new flat-screen TV on Amazon or a scathing critique of a car dealer on Yelp or Facebook, there are plenty of online outlets where you can post your opinions. And companies are paying attention."

Today most websites have sections where customers can leave reviews of their products or services. Companies are hoping you will share your wonderful experience with them, but many people are writing about their dissatisfaction. Companies closely monitor these feedback pages and usually contact the dissatisfied customer to try to make things right. If you ever bought something on Ebay.com or Amazon.com and noticed the ever so important feedback comments, you can see how an online reputation is more important than a real world one.

Use Good Practices.

When complaining online whether it be a companies website or a consumers rights forum, the key to success is to be business like and not emotional. If you want to get results you should state your issue in a clear and succinct way. Using profanity and slurs to ridicule a company will not gain you any constructive attention. Convey your problem in a way where the company sees you as a valuable customer with a reasonable complaint. Companies don't want to look bad in front of other companies or potential customers. These companies know that your complaint is becoming part of the Internet record and will be available by anyone that does a search of the company in question.

When you post your complaint on the Internet and the business sees the unfavorable comments, it is possible for them to file lawsuits against the complaining parties. Even Consumer Reports has been sued for unfavorable reviews from company Sharper Image. Sharper Image lost the law suit. Consumer Reports said, " The suit was in response to a critical review of the company's Ionic Breeze Quadra air cleaner that appeared in the magazine. Sharper Image was required to pay $525,000 to cover Consumers Union's legal costs."

In many states, there are laws banning such lawsuits to protect the rights of the complaining parties. Mark Goldowitz, founder and president of the Public Participation Project and a lawyer who defends clients against SLAPP suits in California says, "No matter what the laws are in your state, consider the potential repercussions before you post critical or embarrassing comments."

Bottom line, get it right when complaining online. Remember whatever you post online will probably always be online.

Best Places to Get Started with Online Complaining

1. Try the biggest sites first to get the most exposure. Social media websites like Facebook or Twitter are good places to start. Most companies have a web presence and that's where you should start you effort. Mention the companies name and a brief comment about the problem.

2. Companies websites. Most all companies have a customer service or consumer section specifically for customer complaints. There you will find a place, either a comment section or a forum, where you're able to enter a description of your problem. Be polite, business like, and respectful when leaving comments. There is no faster way to get deleted than when a slur or profanity is present. Remember you are trying to get help, not make it worse.

3. Forums and Consumer Help Websites. Search online for your specific complaint. You may find many others have the same problem as you do. As you search you will find specific websites that deal with your special complaint. Try searching for terms like "-company- problems", "-company- lawsuits", or " -company- complaints".

Many places are available to start your online complaints.

• AirlineComplaints.org - Airline-related complaints or suggestions for improvement. Includes airline contacts.
• Amazon.com - Reviews and ratings of products and Amazon merchants.
• Angie's List - Reviews and ratings of local services and health professionals. Pay site, though nonmembers can submit reports free.
• ApartmentRatings.com - More than 1 million apartment reviews and ratings.
• Avvo.com - Reviews and ratings of lawyers and doctors. Includes library of legal and medical topics.
• Charity Navigator - Charity watchdog organization with user reviews and ratings of nonprofit organizations. Includes tips and donor resources.
• CNET.com - Discussions of electronic products, services, and companies.
• Complaints.com - Complaints about products, services, companies, and professionals.
• ComplaintsBoard.com - Complaints about products, services, companies, and professionals. Includes news and resources.
• ConsumerAffairs.com - Reviews of products, services, companies, and professionals. Includes news and resources.
• The Consumerist - Reviews and complaints about products, services, and companies. Includes news and consumer tips. Site owned by Consumers Union, publisher of Consumer Reports.
• Edmunds.com - Reviews and discussions of cars and car-related products and services. Includes dozens of subject-specific message boards.
• Epinions.com - Ratings and reviews of products and services.
• MeasuredUp.com - Reviews of companies and professionals. Includes tips and contacts.
• My3cents.com - Reviews and complaints about products, services, and companies. Includes consumer tips.
• PissedConsumer.com - Reviews and complaints about products, services, companies, and professionals. Includes consumer tips.
• RateMDs.com - Reviews and ratings of doctors and dentists. Includes access to medical-board records and top 10 lists.
• RipoffReport.com - Complaints about services, companies, and professionals. Includes consumer tips.
• TripAdvisor.com - More than 45 million reviews and ratings of hotels, restaurants, attractions, vacation rentals, cities and towns, and more.
• TrustLink.org - A Better Business Bureau site with reviews and ratings of companies and professionals. Includes scam alerts.
• Yelp.com - Reviews and ratings of local companies and professionals.

Remember your trying to accomplish something with your complaining, don't use the resources of the Internet to just blow off steam. If the business responds to your efforts and contacts you, be sure to reply. The company would not reply if it did not care about the customer. If things are worked out in a amicable way be sure to got back online and use the same effort you used in complaining to note that your issues have been addressed and are now satisfied.

3 Solutions To Reduce Your Money Stress

Image via WikipediaLife gives us an abundant amount of things to worry about. We worry about our kids, jobs, spouses, families, and just about everything else. According to the American Psychological Association, Americans number one worry is money. We think way to much about our debts, budgets, and especially our investments.

Stressing and worrying about your money causes you to make mistakes when you need to plan and supervise your finances. You need to find ways to reduce this worry.

1. Budget

The number 1 reason for money stress is you don't know how to handle your finances. You don't know how much money is coming in and also where it's all going. To fix this you first have to set up some structure of organization. It's no shame to be unorganized, most people are and it shows with their poor financial actions.

You need to set aside some time in a quiet place with all your bills, statements, check stubs, and pen & paper. At the top of the sheet write monthly budget. That's right we are going to make the dreaded budget for the month. At the top of the page list your total income for the month. Then list down the page all your expenses that you need to pay for the month. Don't forget to list expenses that you need to pay like once a year bills. List home insurance, property taxes, etc. Divide the bill by 12 and list the amount you need to save each month to meet the future payment.

Sit back and go through the list. You will see how much you make and where it is all going. Doing this process every month gives you a road map to ease any anxiety about your money. Any problems or issues will become apparent and then you will be able to address them. Worrying about your finances will cease to be a cause for concern.

2. Retirement  

Retirement is the number two cause of financial stress. When worrying about retirement do you picture yourself living in your children's garage surviving on cashing in aluminum cans. As we get older this worry seems to increase. Also when the stock market takes a nose dive and we see are portfolios drop by half the stress levels go through the roof.

Investing in general is a risky business at best. Appreciation of your portfolio is never guaranteed and if you like roller coasters you are a perfect candidate for the stock market. The first move to worrying less about retirement is having some money saved in the first place. That's why part of your budget has to include a monthly contribution to a 401k or IRA.

The other part of reducing the stress of retirement is having your investments diversified according to you risk tolerance. Having all your money in a narrow choice of investments only will lead to you losing money and causing worry. You need to find a balance between stocks and bonds. Also being very diversified in these to groups is important. With bonds you need long term, medium term, and short term. With stocks you need to diversify with international, small cap, large cap, etc. A great source for building a low stress, well diversified portfolio is financial advisor Paul Merriman. Check out his website at www.fundadvice.com.

3. Life

The last thing to do if you want to reduce stress is to take a break from your finances. After you set them up and become organized put them aside and live your life. Seek out new friends and experiences. Money isn't everything. Life is passing you by if you keep on the worrying track.

How To Save Money On Your Coffee Habit

Image via WikipediaAmericans love their coffee. According to Coffee-Stastics.com , the United States is the foremost coffee-drinking country in the world. Americans are responsible for drinking down over 400 million cups a day. Sometimes I think I'm to blame for at least half that.

Coffee lovers listen up: It may be time to re-evaluate your morning jolt. Time Moneyland recently reported that Starbucks is raising prices because of increased costs for fuel and coffee beans. A "tall" (Starbucks version of a small) order of numerous coffee drinks now costs 10 cents more than last year in many parts of the U.S., including Atlanta, Boston, Dallas, Washington D.C., and New York. Not a lot as a percentage but it can add up over a year. This news comes on top of price increases instituted in 2011 by many other coffee shops.

Is their a way to tone down your coffee habit while still getting your caffeine fix?

Let's take a look.

Stop Ordering Specialty Drinks.

Those with a latte addiction should read over at Yahoo Finance that a daily $4 latte adds up to roughly $28 a week, which is the equivalent of about $120 a month and $1,460 a year. Think of all the things you could do with that cash. Making the switch to a simple cup of brewed coffee can cut your spending by nearly half.

Order a Smaller Size.

Reduce your spending further by ordering a smaller serving size. You'll still get your caffeine fix but save roughly 50 to 75 cents a day, depending on prices at your local coffee shop.

Use Your Own Cup.

Many coffee shops, from large chains to local independents, are trying to save money and reduce costs. And cutting down on disposable cups is a good way to reduce waste. Starbucks , for one, encourages customers to use their own travel mug by offering a 10-cent discount -- an easy way to offset that 10-cent price hike.

Make Your Own.

Making coffee at home is an even better way to save money. Need proof? An analysis conducted by Daily Finance that pitted a $2.29 Starbucks "grande" (medium) regular coffee against the (approximate) 17-cent cost of brewing a cup at home found the annual savings amounted to $835.85. This doesn't take into account the newest method in home brewing -- the pod, which makes quick, convenient single-serving cups but raises the per cup cost by 40 to 50 cents. Still, that's cheaper than stopping by the coffee shop every morning, although the pods aren't particularly environmentally friendly.

If you're looking to start making your own cup o' Joe, you'll have to make an upfront investment in a coffee maker. Not to worry - the expense is recouped many times over in the first year alone.

Stop the Habit Altogether.

If you're really serious about saving, forget all these suggestions on how to cut coffee costs. The best way to curb spending is to quit coffee for good. Granted, it's not easy -- if it were, no frugal consumer would be stuck with a coffee habit. The best way to quit while minimizing or avoiding withdrawal symptoms is to wean yourself gradually. Sip from smaller cups each week or try going half regular and half decaf until you can go without entirely. Once you break the habit, you might try green, black, and red rooibos teas, which all offer the same richness as coffee with much less (or no) caffeine.

I won't be doing that.