When Don Foss started his career as a car salesman, he recognized early on that most of his prospective customers had shaky credit, leaving them with few options for financing to buy a vehicle. So in 1972, he started subprime auto lending company Credit Acceptance Corporation to fill that void. He knew lending money to buyers with low credit posed an inherent risk, and he knew the business couldn’t solely be focused on closing sales. It had to excel at collecting loan payments too. “I began to realize that, even as I worked as hard as I possibly could at selling cars, we would have to do better on the collections side,” Foss said in 2009, reflecting on how he’d managed to grow and sustain a business that had provided financing to low-credit car buyers for nearly 40 years. It certainly ended well for Foss, who stepped down last year, netting $128 million upon retirement by selling off his company shares. Indeed, over time, the collections side of the business has … [Read more...] about How a Subprime Auto Lender Consumed Detroit With Debt and Turned Its Courthouse Into a Collections Agency
Help with income tax debt
You likely have financial plans and goals of your own for 2019, but if you’re married or partnered up, getting on the same page with your other half is one of the most important things you can do to get your finances on your chosen track. You might schedule check-ins periodically, or be planning to talk openly with your partner at some unspecified point in the future. But why put it off? For Kiplinger, Lisa Brown, a certified financial planner, makes the case for doing so on Jan. 1. On the first day of each year, Brown writes, she and her husband sit down to plan for the year ahead. This lets them accomplish two things, she writes: It helps us balance our family planning activities while providing a quick review of our current investments. On one hand, it’s fun to consider a trip to Disney or a Caribbean cruise for our family vacation. On the other hand, we check on the progress of our cash and investment accounts to make certain we’ll have enough money to live … [Read more...] about Make a New Year’s Date to Talk Finances With Your Spouse
Penalty for Late Payment of Income Taxes An H&R Block employee in Des Plaines, Ill., helps Senada Imsirovic (left) complete her tax return on April 13, 2006. Tim Boyle/Getty Images Back in high school, when you turned in a term paper late, your grade was probably reduced by your tardiness. The Internal Revenue Service operates on the same principle. Even if you only need an extra week to file your return, use Form 4868 to file for an extension. A week may not seem like much, but you're better off avoiding the late penalty. U.S. taxpayers who live and work abroad have an automatic two-month extension to file their tax returns, putting their filing deadline at June 15. They do not have to file Form 4868, but when they file their returns in June, they must include proof that they do indeed live and work abroad. Note that for this extension, Puerto Rico does not count as "abroad." The IRS also extends an automatic 180-day extension to military personnel serving in combat … [Read more...] about How Filing Tax Extensions Works
Criticism of Tax Rebate Plans Learning to Repeat Past MistakesPolitical commentator Glenn Beck toys with the idea of issuing pre-paid debit cards rather than tax rebate checks. He points out that though this process proved disastrous when victims of Hurricane Katrina chose to use them on frivolous items, that same frivolous mind-set might help pump cash into the economy now. Another benefit: By putting an expiration date on the cards, people will have to spend them more quickly than they would a check or miss their opportunity. [Source: Beck] So can tax rebates help to prevent a recession? Not necessarily. Many economists and political commentators think they merely delay an inevitable recession or even hurt countries in the long run. Here's a rundown of some objections: The rebate boost might act as a temporary delay for a downturn, like a pain reliever that wears off after a few hours. If individuals do spend their check quickly, a sudden increase in demand will shoot up and … [Read more...] about Can tax rebates really prevent an economic downturn?
One benefit of joining the military is the pension you will receive after 20 years. How is it taxed? videodet/iStock/Thinkstock When you choose a life of service with the United States armed forces, you make a lot of sacrifices. One of the benefits, however, is your military pension, which you receive upon retirement after active duty beyond 20 years. This means if you joined the Armed Forces at 20, you could potentially retire around age 41. Of course, there are going to be tax concerns, but if retirement is looming on the horizon, we can help you get informed about your options. The size of your pension depends on your pay grade, but it lasts a lifetime. If you retire after 20 years, your pension is a percentage of your basic pay. But if you remain in the military for 40 years, your pension is 100 percent of your basic pay. Additionally, military pensions increase each year to adjust for cost of living. There are three different programs of retirement [source: Military.com]: … [Read more...] about How is your military pension taxed?