That’s a question I get a lot from sole proprietors and other small business owners. The trick is that most information about small business taxes reads like it aimed at larger businesses, specifically, those that have employees. However, the same IRS tax rules that apply to those small businesses apply to entrepreneurs running their own single person business or small family business.

It’s an important question because small business expense deductions can lower your overall tax rates and move you down a bracket on the tax tables.

When Can You Deduct a Business?

There is really one simple test that a business must pass to be tax deductible: Is there a profit motive?

For the IRS, the sole determination of whether something is a hobby, or a legitimate, tax-deductible business, is whether or not you are doing it for profit, instead of for fun. Of course, it wouldn’t be the IRS without hundreds of pages of rules, regulations, and numerous publications sorting out just what is a deductible profit motive.

There is a somewhat legendary tax law case where a man claimed his golf expenses as business deductions. Unlike other situations where a separate business might have a way to deduct some golf expenses, this person claimed that the golf itself was his business. His profit motive was that professional golf pays players and his golfing efforts were dedicated toward that end.

There can be no doubt that some people do make money playing golf. Big names make millions of dollars, but hundreds of other lesser known players make thousands of dollars each year, and you can bet that the IRS taxes every bit of it as income. Those players can, and do, deduct expenses relating to their golf play without drawing any additional IRS scrutiny. However, the person in this case was not on the PGA tour, or any professional golf tour, nor had he made any income from playing golf. The IRS denied that this was a business, and ruled it was a hobby and therefore not deductible.

To the Tax Courts!

This story has a happy ending for the taxpayer. IRS rulings and decisions on matters relating to the tax code can be appealed to the Tax Court. A judge there ruled that the taxpayer’s efforts were a legitimate, if unprofitable, business and that he was entitled to normal business deductions. The ruling was made, in part, because the golfer ran his efforts like a business. He kept meticulous records, he had business plans, and, perhaps most importantly, he routinely competed in the qualifying tournaments that could lead to an income producing spot in a professional golf tournament. Just because he didn’t qualify, didn’t mean he wasn’t trying. After all, an advertising business won’t land every client it pitches either.

For most small business owners, it isn’t quite that complicated, or interesting. If you really think of it as a business, and you really think that you can make money doing it, then it probably counts as a business. However, if you’re going to be making business tax deductions on your Schedule D, you want to make sure that your small business counts as a business and that its deductions are allowed, without going to Tax Court to prove it.

How to Qualify for Business Tax Deductions

Earn a Profit

The easiest way to prove you have a profit motive, is to make a profit. Even the most leisurely, hobby-like, endeavors become unquestionable businesses when you make money doing it. In fact, there is an IRS rule stating that an effort is automatically considered a business and not a hobby if it makes a profit in any three of the five proceeding years. So, if during the last five years you were profitable in at least three of them, the IRS will not dispute whether or not your business has a profit motive.

Beware of misinterpretations of this rule. Many people get confused and think that your business MUST make money in three of five years to qualify. That is not true. The 3 of 5 rule is just one of many ways to establish a profit motive that makes your small business deductible. Also, note that the three years do not have to be consecutive. A profit in years 1, 4, and 5 counts just as much as 3, 4, and 5.

Have Income

The IRS prefers that your business efforts are profitable. Profits mean income, and income means taxes. However, the reality is that not all businesses are profitable. Still, most businesses do have some income. Otherwise, they probably aren’t very good businesses. That income, whether it adds up to a profit or not, can go a long way in showing a profit motive.

The best income is income reported on a 1099 form. That means that another, presumably legitimate business, is paying your business for goods or services.  That means that they also consider you a business, and therefore, maybe the government should too.

If you sell actual goods, then the reports you file with the State for sales tax purposes can fulfill the same role as a set of Form 1099s.

The trick to income is that it needs to be both regular and substantial if you want to use it as proof of a profit motive. If you only earn $500 in January and then deduct thousands of dollars throughout the year, that won’t look as good. You’ll need to find another way to prove your profit motive.

File the Paperwork

Legitimate businesses have forms and paperwork they have to file. Most small businesses have an EIN from the IRS. Many others also have to file some paperwork with their State. The forms to create your business entity, such as an LLC or S Corporation, are further evidence that you have created a legitimate business. In the State of Colorado, for example, businesses are required to pay $25 to file a Periodic Report each year. That expense is not only a business tax deduction, it’s more evidence that your business is more than a hobby.

If you plan to sell physical goods, a sales tax license is a likely requirement. Otherwise if you get audited you can expect a question along the lines of, “How can you say you expect to sell stuff and make a profit if you don’t even have the sales tax license that allows you to legally sell the goods?” — Not fun, but another way to establish your qualified business.

Keep Records

As the example of the golfer shows, sometimes just keeping all the paperwork, emails, and other documentation is all it takes to establish a business profit motive. If you have no income, your documentation of how you go about trying to get income will go a long way.

A freelance writer, for example, who can produce emails, proposals, rejections, and other documentation showing an ongoing effort to land clients will have little trouble establishing the profit motive. A writer with a single query letter on the other hand might have trouble meeting the regular and on-going parts of the definition.

Be Boring and Do Nothing Else

Although not officially criteria in any way, it can help to have a boring business. Certain sole proprietorships attract more scrutiny. The aspiring pro golfer, for instance, seems to be having a lot of fun in his business. The more an activity tends to be thought of as a fun hobby, the more eyebrows it may raise when trying to claim it as a business, while delivering loads of gravel is less like to be a fun hobby.

Finally, when you have a steady, full-time, well paying job, claiming a small, unprofitable, fun, side business can be a tougher sell. A freelance web developer with income, but whose deductions leave him with no profit at the bottom of Schedule D will make a much better case for thousands of computer related deductions than one with no business income, but another job that looks like the “real” income for the taxpayer.

Take Reasonable Deductions

Certain businesses have high start-up costs that might leave even the savviest, profit-minded, entrepreneur with years of losses to deduct. Businesses with physical locations often fall in this category with the business owner not only generating a loss, but owing some loan payments as well.

Otherwise, most sole proprietorships start out lessor expenses in some proportion to their income. Deducting a new laptop makes perfect sense. Deducting a new laptop, an iPad, a new printer, phones, business trips, and much much more for a small, recreational type business, when you have no records, no profits, and another job that provides a sizable income, may look too much like a way to just avoid paying taxes.

Take Your Small Business Deductions

In the end, the best sole proprietor business tax strategy is to take every single deduction you can find. Along the way, run your business like a professional, and you shouldn’t have any trouble. That means keeping records and filing the right paperwork. Don’t think you can’t, or shouldn’t, take legitimate tax deductions because you aren’t earning a profit.

Deduct every dollar you can, because the IRS will tax every dollar it can when you do start making a profit.

If you have spent more than a few minutes on Twitter, Facebook, or Threads reading posts from investors, chances are you have come across O the stock symbol for Realty Income Corp. So why are people so captivated by O, and why do they insist that O is a great investment for virtually anyone?

Let’s start with what is O stock and what company is this anyway?

What Is Realty Income Corp?

Realty Income is the largest triple-net REIT in the country. A REIT is a company constructed as a trust of real estate holdings. It has over 15,000 properties, mostly of the retail establishment type. But that’s not why everyone is crazy about O. As is so often the case, the popularity comes courtesy of a very deliberate marketing strategy.

O bills itself as “The Monthly Dividend Company.” Therein lies its distinctive trait that lets it stand out in a crowded marketplace. While most companies pay dividends quarterly, or even annually, O pays dividends every month. There is nothing magic about monthly dividend payouts. Instead of holding onto the cash and making a larger payment each quarter, the company makes a smaller payout each month, but never let nuance get in the way of a good story.

Is O a Scam?

If buying and holding and waiting for a couple months while nothing happens seems unsatisfying, O putting cash into your account every month is a nice tangible benefit that you can see right away. O is not a scam. There is no trickery or fine print creating a different payout schedule that captures investors unaware. O really does pay dividends every month.

How Much Does O Pay Each Month?

Recently, the annual dividend yield for O was 6%. That works out to around half a percent per month. So, if you own $1,000 worth of O, you should earn $5 each month. Build that investment up to $10,000 and you can earn $50 each month. At $100,000, you could be earning $500 each month. If you are counting on some compound interest, don’t worry. You’ll see a variety of cents deposited each month as well.

So, Why Is O So Popular?

Investing is one of the best ways to build wealth in America. However, it can take time. In some cases it may seem like you aren’t getting any results at all, and it can be difficult to just take it on faith that you are doing the right thing. On the other hand, O provided a nice, predictable, monthly payout that you can actually see working. On social media you’ll see people bragging about their monthly payment from O. It’s hard not to want to play along too.

Is O a Good Investment?

Is O really a good investment? Should I invest in O?

The answer is, like so many things in personal finance, it depends. It depends on your goals and it depends on your other investments. It is important to remember that as a REIT, O isn’t really a company in the standard sense of the word. It’s more like a giant pool of real estate that you are investing in. The corporate wrapper around the real estate investment is insignificant in the value of O stock.

On the other hand, it is impossible to value slow moving assets like real estate on a real time basis, so much of the stock’s movement is based on news that may or may not affect the long-term value of O, or the amount of its monthly payout. It’s also important to remember that as a slow moving investment, recovering from down periods or difficulties in the real estate market can take a while.

Really, as an investor in O you are buying the monthly payment more than the Realty Income company. However, so long as you hold your investment, the price fluctuations have no effect on you or your annual dividend yield. Selling O stock, however, can result in significant losses if the timing doesn’t work out. As a pure dividend play, O is not a growth stock. It pays out its growth monthly. If you aren’t reinvesting, you should not expect a lot of capital appreciation from O.

Over the long term, O stock basically maintains the same value, offering a 0% return (plus dividends) if your timing is right. Of course, specific time periods could result in the best of both worlds, some very nice capital appreciation along with a high dividend payout. If you own O and can dictate your own holding period by having plenty of capital invested elsewhere, you can do very well investing in O. Imagine buying in at $55 and just waiting, collecting 6% paid in monthly installments for as long as it takes to go to $65. – A 20% gain for earning 6% APY is nothing to laugh at. But you need the time, and so does O.

Is O a Dividend Stock?

While O does pay dividends, it really is more of an investment in real estate than in the stock market. As such many finance types say that O is not a dividend stock in the way that people usually mean when they talk about dividend investing.

Warren Buffett Buy and Hold Strategy

Once upon a time, Warren Buffett was quoted as saying that his favorite holding period for investments was “forever.” Of course, that was taken a bit out of context and leaves out the fact that in many ways, when Warren Buffett and Berkshire Hathaway want to hold an investment forever, they buy the whole company. Buffet’s company bought Geico, Burlington Northern, Dairy Queen and numerous others including my personal favorite Acme Brick Company.

What Warren Buffett actually advises to anyone who asks how to invest is to buy an S&P 500 index fund and leave your money there forever. This is actually very good advice. Few investors beat the S&P500 on a consistent basis. In fact, most mutual funds do not beat the S&P 500 over a period of few years or more, and it’s even worse than it seems as the worst mutual funds are silently swept into “successful” mutual funds to hide their track records in the wreckage of poor memory.

Of course, just buy the S&P500 is no way to sell magazines, financial products, financial services, financial plans, mutual funds, ETFs, or even brokerage accounts. Even if it were, most people WANT to invest some other way. They want to believe that they are the exception to the rule. They want to believe that there is a secret investing strategy that will make them richer, faster. And so it goes.

But every once and a while you want to throw Warren Buffett and his believers a bone. So, in its August 2000 issue of Fortune Magazine, the company published an article titled 10 Stocks to Last the Decade. Not surprisingly, that article doesn’t seem to show up in any online searches, but the article Kiplinger wrote about that article in 2010 is still online, so we get to have some fun, without figuring out how to search old magazines at the library. (I’m doing that next. This article was born of research for a freelance investing article I’m working on. But, when life gives you the lemons for a sweet blog post, write the lemonade… or something.)

Not All Buy and Hold Is Bad

Now, not all buy and hold means buy and hold forever, and I am not advocating fast, frequent trading. I say as often as my fingers are willing to type that the best investing strategy for the long term is a diversified portfolio built to your time frame and risk tolerance with annual or semi-annual rebalancing. This is 100% true. Always. Lick it. Stamp it.

But, today, we come to mock buy and forget. Truth be told, buy and forget works wonderfully for a diversified portfolio. When I was a financial planner, as a percentage, the people who opened their 401k accounts then completely forgot about them or ignored them altogether ended up with far more money than people who “did something,” with their 401k plan investments. It turns out that for all their faults, a 401k plan with a handful of diversified options, built up over 30 years via modest contributions (and even better some matching) ends up producing a sizable nest egg for precisely the reasons that Warren Buffett says to invest in the index. When you forget about it, you can’t mess it up. Grab any software, website, or program you like, and graph 30 years of the S&P 500 and you’ll see why. Not even so-called “lost decades” matter much over a 30-year period.

The fatal flaw in Fortune’s article lies in the title. Ten stocks. Just ten. Ten is not diversified and as it turns out, winners today aren’t always winners tomorrow, and especially in the early 2000s, fraud is always a possibility.

Forget Buy and Forget

So, what were the 10 stocks to last the decade, and why was there such spectacular failure?

First, as we just pointed out above, 10 stocks is not diversified enough. Even great companies can slip up. Even great companies with great products and execution can find themselves left behind by a changing world. As Danny Devito says in Other People’s Money, “The last company making buggy whips probably made the best damn buggy whip you ever saw.”

Second, as a financial publication, Fortune needs to show its readers a little something. After all, if they just do the same thing as everyone else or repeat what is already common knowledge why would you buy and read Fortune. There is a scene in the show Billions where an analyst says that he thinks Apple might be a good investment. Axe mocks him by saying he doubts anyone is paying them huge fees for a recommendation in Apple. Fortune could have recommended GE, 3M, Coca-Cola, and so on, but that isn’t extra information, or inside knowledge, or whatever.

Third, even when picking a set it and forget it portfolio, the writers at Fortune couldn’t resist loading up on tech. The article decided to recommend two companies in four categories, finance, media, technology, and telecommunications. If you’re paying attention and processing information, and not just reading it might strike you that three of the four categories are more or less tech. Here is your final diversification plug. Where is manufacturing, medical, or services?

Fourth, this isn’t really fair. If you’ve been around for more than one bull market, you may remember that 2000 to 2010 wasn’t necessarily the best days of the stock market. The S&P 500 return for the 2000 to 2010 decade was actually -9.4%. Even so, there were still some spectacular failures contained in this list of buy and hold forever stocks.

What Were the Stocks to Invest in for a Decade?

Now that we’ve had our veggies in the form of a bit of literary financial analysis, let’s have our dessert.

In the Finance category, Fortune picked Charles Schwab and Morgan Stanley.

In the Media category, they picked Viacom and Univision.

In the Technology category, they picked Broadcom and Oracle.

In the Telecommunications category, they picked Nokia and Nortel.

Then, to round it out, they picked Genentech (medical) and Enron (energy).

So, the 10 Stocks to Last a Decade were:

• Broadcom
• Charles Schwab
• Enron
• Genentech
• Morgan Stanley
• Nokia
• Nortel
• Univsion
• Viacom

Ouch.

Enron flamed out in an account fraud scandal so big it took Arthur Anderson with it. Going to zero so fast not many had time to get out without dramatic losses. 2010 would have been way WAY too late.

Morgan Stanely (MS) would, like all other Wall Street firms, get crushed in the housing market crash of its own creation. Trading at over $100 a share when the article was published and $30 per share when the decade ended. Holding a little over two decades would have got you back to even.

Nokia was one of the biggest (maybe the biggest) cellphone manufacturer when Fortune recommended it as a stock so strong and dominant that it would obviously be a great investment for the next decade. Class, can anyone tell us what happened in 2007 that shattered Nokia’s world? Anyone? Apple and Steve Jobs happened when they released the iPhone in 2007. At the same time Blackberry was eating up market share for the non-believers in touchscreens. Microsoft bought Nokia’s mobile phone business in 2014, long after 2010 would have been a terrible time to still own Nokia stock.

Broadcom: If you’re young enough you might know Broadcom as a solid tech company operating today. Bzzt. Sorry. Thanks for playing. Fortune was talking about 2000 Broadcom (BRCM not AVGO). This one might have been a little too much buzz for a more thoughtful article. Broadcom only became a public company two years earlier in 1998 and its main business was buying other companies. That can be a tough business especially when your company’s main competitor is Qualcomm. This all proved to be moot, however, when that short track record turned out to hide “back-dated stock options.” An investigation would eventually lead to indictments and $2.24 billion worth of expenses, oh and it turns out overstating income and understating losses. A judge dismissed charges against company executives not because they weren’t true, but because of “witness intimidation.” By then, the cat was already out of the bag. Broadcom got bought out and made part of AVGO in 2015.

Univsion: In the late 1990s and early 2000s, there was this wave of research into things like bellwether states, and demographics, and so on and so forth. This most certainly played into the selection of Univision with the prevailing theory that the Hispanic population was booming and therefore, anything aimed at them was easy money. But, where there is easy money, there is competition. Telemundo began bidding on the same shows and stars as Univision. Win some lose some, but 50% of a booming market isn’t the same. Throw in some executive feuding, and this definitely wasn’t an investment to take your eyes off of.

Nortel: Man, was this stock a swing and a miss for a list like this. I don’t know when exactly this article was written, but Nortel’s peak was in September 2000, one month after the article was published. Its stock fell from $124 to $0.47 ($CDN) just two years later. The company finally filed for bankruptcy in 2009, making it TWO OF TEN stocks on this list to be worth zero after a decade.

Alright, what’s left?

Genentech: Genentech was a company when I was a financial advisor in the early 2000s. It had like two drugs that were “cancer cures” or treatments. Back then I didn’t know enough about cancer to know or care much about the different kinds. What I do remember was its clever DNA stock symbol and several of my clients made money investing in it (some with me, and some on their own). Then it gets bought out. Back in 1990 Roche bought a majority state in Genentech. In those days, you left some of the company behind so you could take advantage of a huge stock price move if they discovered a miracle drug or had amazing trials. In 2006, Genentech bought Tanox which I don’t remember at all, and then in 2009 Roche bought out the rest of Genentech which I vaguely remember. According to the Kiplinger article Genentech was the only stock that was profitable as of 2010. I’ll have to take their word for it, because another company picked up the DNA ticker symbol making it hard to track down historic stock pricing.

Oracle (ORCL): This article wasn’t the only buy these stocks forever kind of article that came out. I remember several and maybe I’ll go look up some of those later. I also remember that those kinds of articles frequently had two “forever” companies in them, Cisco (CSCO) and Oracle. Cisco was the dominant networking provider of the day and Oracle was the dominant database provider of the day. Not only dominant but the only respected database provider. Microsoft had SQL Server but among techies and database administrators, Oracle was the real database, and SQL Server was a toy. (Fun story – During my systems administrator days I sat in a meeting where they discussed among other things where to put a new database that was needed. Without blinking, all the DBAs around the table said Oracle. Then, someone said we need it by next month, or something like that. And, without blinking, they all changed their answer to SQL Server.) — My guess is that Oracle stock was down at this point more as a result of the recession that came from the internet bubble popping. It was already on its way back up ($32 from $42 10-years earlier). But, if it wasn’t knocked off its pedestal yet, it would be soon, not because of Microsoft or any other corporate competitor but because of MySQL, an open-source relational database. You see, Oracle was as big of a bully as possible when it came to licensing and fees. Even touching Oracle cost a company millions. You can’t run a startup by dumping all of your money into your database licensing fees. Open-source Linux servers plus open-source database software and you were off and running. Why switch? Oracle wasn’t any better or faster and you were just paying millions of dollars for technology handcuffs. A few more years and NoSQL would emerge as both better, and open source. All of that said, Oracle is still a publicly traded company today.

Charles Schwab (SCHW) – The last company on the list is Charles Schwab. Like Oracle, they are still around as a publicly traded company. They were a discount broker back then, and they are discount brokers now. Unlike some of the other companies on this list they were never overwhelmed by the markets or technologies. They were likely added to this list thanks to the rise of internet trading and investing. Ironically, 2000 was the year the internet bubble burst and many of those “investors” and day traders were about to disappear back into their 401(k)s and mutual funds after getting clobbered, especially in over-inflated, or even fraudulent tech names. Back in 2000 everybody had “a friend’s cousin” who was day trading and making hundreds of thousands of dollars from their home over dialup internet. Like most urban legends it wasn’t really true for most people. Unfortunately for its spot on this list, SCHW was down 53% in 2010 compared to 12.5% for the S&P 500. You would have to hold until the fall of 2016 to break even if you bought when this list came out.

Stock Picking Advice Is Often Very Wrong

Whenever I have time I try and look at previous investing advice whether its from companies, financial websites, or analysts. There is never enough time to properly write up every so-called guru out there who “called” whatever event they have chosen to cherry pick from their career in order to establish their so-called credibility. My all time favorite was Abby Joseph Cohen who became popular by being the only analyst who “correctly” called the ever increasing stock bubble without fail, only to never call it popping, nor ever calling a down year after that in her enitre career. We’ve looked at Jeremy Grantham, and I still have the book around here where the Motley Fool was two guys who had this amazing stock picking, you don’t need any professionals, reputation all pinned directly on having bought and held AOL stock all the way up the stock bubble…. and all the way down when the website that had published numerous stock portfolio recommendations suddenly decided that they wouldn’t do that anymore because the point was to do it yourself anyway. Their increasingly terrible history laid bare had nothing to do with it, of course. (Ironically, the Motley Fool website will once again gladly pick stocks and even charge you money to see its super-amazing, no public track record, picks.)

The reality, as ever, is that picking stocks is difficult because picking the future is difficult. Do you think technical analysis showed an internet bubble ready to pop? Do you think any analyst correctly predicted the erratic events of China’s economy? Terrorist attacks? Political changes? Here at Finance Gourmet we know the answer after decades of hanging around the markets and its press.

As always, the best strategy for long-term investing is to buy and hold a diversified portfolio with regular rebalancing and continuous investing. Diversification prevents you from being wiped out by a single stock like Enron, while regular rebalancing keeps you from getting wiped out by a sector or portion of the economy or markets. Dollar cost averaging plus compound interest are the greatest allies of any investor.

If you are looking to invest check out my: Stash vs Acorns vs Robinhood vs Betterment vs Wealthfront article.

Originally published 01/11/2025 on FinanceGourmet.com

About the Author

Brian is a former Certified Financial Planner and current financial writer with decades of experience in the investing, finance, and banking industries. He currently owns no positions in any of the stocks mentioned above, even the ones that still exist today. However, that can change at any time without notice. This article may not be updated frequently (or ever) so information, especially any stock prices or news events, may no longer be current. Always do your own research and consult your financial and tax professionals. This is not a recommendation to buy or sell securities. Brian is no longer a financial advisor and does not hold himself out to be one.

When filing income taxes, taxpayers can choose to either itemize tax deductions, or take the standard tax deduction amount. The IRS adjusts how much the standard deduction is each year based upon inflation. The 2025 standard tax deduction amount is a bit higher than the 2024 deduction amount for most taxpayers because of inflation.

Capital One Rewards Catalog 2023

Remember, even though you will be filling your taxes in early 2025, those tax returns are for the year 2024, so use the 2024 standard deduction amount on taxes you work on in the first quarter of 2025. When you file your taxes in early 2025, those taxes are for your income and deductions in 2024. Alright, now that we’ve beaten that horse to death, let’s get to some numbers.

2024 Standard Tax Deduction Amount

For use when filing your taxes in early 2025.

As usual, there are different deduction values depending upon how you file your income taxes.

• Single and Married Filing Separately 2024: $14,600
• Married Filing Jointly 2024: $29,200
• Head of Household 2024: $21,900

The annual gift exclusion increases to $18,000 for 2024 up from $17,000 in 2023.

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2025 Standard Deduction Amounts

Just the way the math worked out this time around, the 2025 standard tax deduction amounts are nice round numbers.

Single and Married Filing Separately 2025: $15,000 up $400
Married Filing Jointly 2025: $30,000 up $1,800 from 2024.

2023 Standard Deduction Amounts

For use when filing your taxes in early 2024.

If you are curious, the 2023 standard deduction amount has been released by the IRS. These numbers will be used when filing your 2023 taxes in early 2024. These are NOT the deduction numbers used while filing 2022 taxes before April 15, 2023.

Single and Married Filing Separately 2023: $13,850 up $900
Married Filing Jointly 2023: $27,700 up $1,800 from 2022.
Head of Household 2023: $20,800

The annual gift exclusion increases to $17,000 for 2023.

2024 Standard Deduction Over 65 Chart

Also, the 2024 standard deduction for the blind chart

The chart refers to the checkboxes on Form 1040 in the Standard Deduction section with the subheading Age/Blindness. You get one check mark for being born before January 2, 1959, giving you the standard deduction 2024 over 65 amount. You get another checkmark if you are blind. If you are married filing jointly, your spouse also has the same checkmarks. So, if you and your spouse are over 65, you get two boxes checked. If both you and your spouse are over 65 and one of you is blind, then you have three boxes checked, and so on.

Itemize or Use Standard Tax Deduction

Itemizing isn’t really what it used to be under the newer TCJA tax law.

Instead, taxpayers will need to file one, or more, of seven additional schedules that go along with Form 1040 in order to itemize deductions in 2023, 2024, and 2025.

For example, Educator expenses, Health Savings Accounts, moving expenses, IRA deductions and Student Loan deductions are all found on Schedule 1. You’ll need Schedule 3 for Child and Dependent care expenses. Schedule 4 has both Self-Employment tax, and where you’ll need to report taxes if you have a nanny.

All reputable tax software calculates how to still make your deductions (if they add up to enough) and will fill in the appropriate schedules for you. They continue to improve Credit Karma free tax returns. Other tax preparation software includes TaxCut, TaxAct, and TurboTax. — Now is the time to start watching for tax software specials. They always throw out good deals in the holiday shopping season that disappear come the new year.

If doing taxes by hand, then, find the big deductions first, and see if they provide anywhere near the amount necessary to bother filling out the various forms and schedules. For example, you will need a mortgage with a principal balance remaining near $525,000 at 5% interest to generate $29,200 of interest necessary to make itemizing more advantageous. If you are still holding on to a 2% or 3% mortgage, you’ll need even more. Unless you have some other big, itemized deductions, most people need to get 80% or 90% of the way there with their mortgage interest.

Other large deductions include medical expenses, but only if they exceed 7.5 percent of your income, and property taxes.

Deductions Without Itemizing

Some deductions are available without itemizing, such as the child tax credit.

Penalties for not cashing matured savings bonds.

Other common tax deductions will require additional forms beyond the basic 1040: educator expenses, health savings account deduction, moving expenses, IRA deductions, student loan interest, and tuition and fees.

Standard Deduction with Small Business

It is still possible to take the standard deduction if you own a small business. Many small businesses file a Schedule C to report income and expenses related to the business. Various businesses can have large deductions (and income) including the home office deduction.

How To Actually File Your Taxes

The IRS keeps threatening to have a useful, free, do it yourself, online tax filing system. So far, it only worked for people with simple taxes. If you’re an entrepreneur or freelancer, you should probably just get some tax software to help you out. I always get TurboTax Home Business because I don’t need the payroll stuff in TurboTax Business, but I do need all the home office deduction calculations in the Home Business version which isn’t available in the Deluxe edition. It’s confusing, but if you know what you need you can just check the descriptions and buy the right version for you. If you don’t know what you need, buy Standard or Deluxe and Intuit will be more than happy to charge you some money to upgrade to the right version if you run into something you can’t do on the cheaper ones.

Other Tax Information

Here is how to get an IRS tax transcript and information on what happens if you don’t file your taxes on time.

Update: As of July 2024, the interest rate on the Marcus High-Yield Savings Account is 4.40%.

Update: As of 10/11/24, the interest rate on Goldman Sach’s Marcus High-Yield online savings account is now 4.10% after recent rate cuts by the Fed.

High Yield Savings Worth It Again

After a few years decades of the Fed running along with near zero interest rates yielding high-yield savings account earning only a few cents more, online high yield savings accounts are back. With interest rates up over 3% for the first time in a long while, watching that monthly interest payment hit is a whole lot more fun now.

As someone a little older and with more finance experience the return to 6% mortgages and savings accounts paying at least a few percentage points feels like normal. However, it’s been over 20 years since the Fed Funds rate was this high, so this might all be new to you if you are in your 30s, or younger.

While the cost of your borrowing has gone up, whether it’s mortgages, credit cards, auto loans, or personal loans, taking out a loan is more expensive. This is the flip side. As always, the people who have money, make money, and if you have enough to throw a few thousand into a high-yield savings account, online or in-brick, it’s time to start earning interest on your emergency fund and other short-term savings monies.

If you try the ol’ Marcus account here, for example, at 4.40% and drop your $30,000 of emergency savings in there, you can expect to earn over $100 in interest PER MONTH. No more waiting forever for compound interest. See it right before your very eyes.

Sometimes, something as simple as a savings account can be a quick way to improve your personal finances. However, banks and credit unions of all sizes have been slow and deliberate increasing their basic savings account interest rates. Will an online high interest savings account help you, and who are the banks with high interest savings accounts?

Today, we are going to do a Marcus Online Savings Account review to show you how.

High Interest Savings Account Online

One of the most common tricks for online banking is to only offer the high-interest rate on only part of the balance, say the first $500 or even the first $5,000. The remaining balance earns a much more mundane online savings account rate of interest.

For example, the Farmers Insurance Credit Union offers a high yield checking account with an eye-popping 4% interest rate. But, before you transfer your account, note that the highest interest rate only applies to the first $5,000, subject to several criteria including a minimum $1,000 per month direct deposit, and a minimum number of debit card transactions each month.

This Red Rocks Credit Union Reverse Tier Checking interest rate is a bonkers 10%! But… only on the first $2,000.

Check out the Credit Karma reviews.

Marcus Goldman Sachs Online Savings Account

Goldman Sachs has traditionally catered to high-net worth individuals and their investing needs. For many services, you’ll need a million-dollar minimum to even talk to someone. Recently, however, the company has reached into the standard retail world with Goldman Sachs Marcus brand online banking. And, as a company used to dealing with big dollar amounts, they aren’t going to limit your high online interest rate to a small portion of your balance. There is a limit to how much you can deposit, it’s a million dollars.

I’d love to think that lots of multimillionaires are reading this personal finance site for advice, but my guess is that most of my readers can fit comfortably under the million-dollar account limit

Marcus Personal Loan Review (A quick, mini one)

You can also get a Marcus personal loan for $3,500 up to $40,000. These loans are fixed-interest personal loans with no sign-up fees, and no prepayment penalty, so if you need a personal loan, this is as good a route as any. You can also get a discounted personal loan interest rate by signing up for autopay. They give you a 0.25 percent discount. They also offer a quirky little feature where if you pay on-time every month for 12 months, then you can skip one month’s payment and they won’t charge you interest during that month. Basically, your loan term just gets extended one month for free.

Marcus Savings Account Review

First, let’s start with the basics. This Goldman Sachs savings account is provided by the Goldman Sachs Bank division of Goldman Sachs. As a member FDIC bank, all funds in Marcus online banking are FDIC insured up to the usual limits of $250,000 per person, or $250,000 per owner (or $500,000 total) for joint accounts.

What about Marcus online savings fees?

What is Rakuten?

The Marcus savings account doesn’t come with any unusual fees. There are no monthly fees, and no minimum balance fees either. (Technically, you have to have at least $1 on deposit to earn the full interest rate.)

There is no Marcus ATM card or Marcus savings debit card available with the account, so obviously, there are no ATM fees or card fees either. There are no Marcus savings account fees for transfers. However, your bank on the other end of the transfer might charge its own fees.

Once, the interest rate was 2.0 percent on every dollar. Here at the beginning in 2024, the rate is is quite a bit higher than most regular savings accounts.

Marcus Interest Paying Questions

• How often does Marcus pay interest? Like most savings accounts, Marcus posts your interest monthly.
• When does Marcus pay interest? Just because Marcus only posts interest to your account once per month, that doesn’t mean they only “pay” interest once per month. Like most savings, Marcus compounds (pays) your interest daily. So, even though you don’t see being paid interest on say the 18th, if you closed your on the 19th, your final balance would include 18 days worth of interest that you couldn’t see online or in the Marcus app.
• What day does Marcus pay interest? Marcus credits your interest on the last day of the month, so the 30th, the 31st, or the 28th (and in less common circumstances, the 29th).

There is no minimum balance and no maximum other than the account limit. Currently, Goldman has a Marcus maximum balance limit of $1,000,000. Most regular money market and bank accounts are paying around 1% interest these days. That means this high-interest savings account is still much higher than your local bank or credit union savings interest rate.

See my Acorns review.

After that, all the Marcus savings account cons are just the usual negatives attached to dealing with savings accounts and online banking.

Per federal banking law (Thanks, big bank lobbyists!), you are only allowed up to six withdrawals per month from any savings account. Since it is an online bank, you need to transfer your money to another financial institution to get full access to it. ACH transfers to and from your Marcus account will take a standard 3 to 5 business days depending on which bank is on the other end of the transfer.

There is a maximum withdrawal from Marcus savings accounts of $125,000 using the online banking interface, but higher amounts can be achieved by calling the bank. The Marcus FDIC limit offers the same FDIC insurance as other banks.

Is Marcus Savings Worth It?

As an overdraft account, or for your emergency savings, Marcus probably isn’t a good fit. It just takes too long to get access to your money if you need $1,000 right now.

However, as a place to put your cash reserve, the high-interest Marcus account is a good financial tool. A high rate on your whole balance, and full FDIC insurance, makes Marcus a comfy place to park three to six months of living expenses, while letting that money still grow.

Marcus will not replace your “regular” bank, but it does offer a lot of upsides for savvy users with sizable savings.

Marcus bank APR: 4.4% APY

Marcus is FDIC insured as Goldman Sachs Bank

Important:

This article discusses information that was current on the day it was published. In the time since then there may have been significant changes including the current interest rate on the Marcus high-interest savings account. Check the website for current data, or better yet, drop a note requesting an update.

How You Can Earn 10% Interest On a Regular Savings Account

A small credit union in Colorado is offering member 10% interest on what they call a Reverse Tier Savings Account. Whereas most savings accounts or money market accounts pay you higher and higher interest rates based on having more money in the account, this Reverse Tier Savings Account flips that paradigm on its head.

So, how does that work? It works just like any other account that pays a different interest rate based upon how much money you have int he account, except it pays the most on the lowest balance.

From $0 to $2,000, this account pays 10% interest.

When you go over that lowest balance tier, the interest rate drops to a still very respectable 3.50% interest.

From $2,001 to $5,000 this second tier pays 3.50% interest. If you put in even more money, you reach the third tier which, in following with the backwards theme, pays even less interest, just 0.30%!

• From $5,001 to $10,000 it pays 0.30%
• From $10,001 to $50,000 it pays 0.25%
• From $50,001 and above, it pays a lowly 0.10%

If this seems absurd, you’re not wrong, but it is very clever from a marketing standpoint. Any list of high-interest rate savings account is going to include one at 10%, and the credit union’s own marketing can have 10% interest in huge letters. Even if you aren’t looking for a new bank, you might give that number a second look.

The sweet spot is $5,000, where you’ll earn 10% on your first $2,000 and then 3.5% on the next $3,000 for a total blended interest rate of 6.75% interest on the overall account.

Very High Interest Rates On Very Small Amounts

This kind of marketing gimmick is not uncommon, but it is seldom presented in the manner. Rather, most financial institutions offer, in big, bold, giant letters a huge interest rate, and then in much smaller letters point out that the offer only applies to a limited amount of money. Whenever you see some high interest rate that is obviously not sustainable, a limitation of this kind always applies.

In a way, the Reverse Tier Savings account is really no different functionally than the standard version. Essentially, this offer is for 10% interest up to $2,000 with an add-on bonus of 3.5% interest for the next $3,000. Keeping any additional money in this account would be financially irresponsible. If nothing else, this same credit union offers 4.50% interest on a 4-month CD.

Before you ask, Red Rocks Credit Union is NCUA insured, which is basically the same thing as FDIC insured, except for credit unions instead of banks.

Can I Join Red Rocks Credit Union?

Of course, like all credit unions, to take advantage of a Red Rocks Credit Union Reverse Tier Savings offer you have to be a member of the credit union. And, like most credit unions it has several ways to qualify as a member, from living in certain areas in Colorado to working for certain companies. And like virtually all credit unions there’s a loophole way into membership. In this case a one-time donation makes you a member of a charitable organization which, wouldn’t you know it, members of that charity are eligible to be credit union members.

Is The Reverse Tier Savings Account Worth It?

You’ll be hard pressed to find many places paying 10% interest on any amount of money. Also, while it says the rates can change at any time, the 10% rate is not an introductory, or temporary rate. The Red Rocks credit union has online banking and you can transfer money back and forth electronically, and if you’re in Colorado, it’s a full brick and mortar bank. If you’re willing to put in the effort it can’t hurt. Even the 4.5% 4-month CD is a pretty decent deal. This is definitely a good on to consider adding to your money management portfolio.

Every so often, tax loss harvesting seems to show up in various marketing literature like it was just invented. The funny part is that tax loss harvesting has been around for a long time. In fact, it’s less important today than it was before Bush the Second cut long-term capital gains tax rates to 15 percent. So, what is tax loss harvesting, and how is it important to the average investor?

Understanding Tax-Loss Harvesting and Capital Gains

To understand tax loss harvesting, you first have to understand capital gains taxes. Income taxes apply to most forms of income. However, the profits made from the sale of certain types of investments — for our purposes, stocks, bonds, and other equities — are taxed differently. These taxes are known as capital gains taxes. The easiest way to understand it is by example.

Capital Gains Example

If you buy $10,000 worth of Apple stock and then sell it a few years later for $20,000, then you have made a $10,000 profit. This profit is a form of income known as capital gains. The original investment amount, or purchase price, is known as the basis. The basis may be adjusted depending on several factors, but that is outside the scope of this article. You only pay taxes on the difference between the basis and the sale price. In our example, taxes are owed only on the $10,000 profit, not on the $20,000 sale proceeds.

There are a few important details to grasp here. First, no matter how much paper profit you have in an investment, it is not taxed until you sell. So, even when your Apple stock is worth $38,000, you owe no taxes until you sell the investment. Note this is different from the dividends the stock pays, which are taxable in the year they are paid, even if you reinvest them. Dividends cannot be offset using tax-loss harvesting.

How Does SoFi Mortgages Work?

Capital gains are taxed at one of two sets of rates. If you hold the investment for less than one year, this is called a short-term capital gain. Short-term capital gains are taxed as ordinary income. In other words, if you are in the 30% tax bracket, you would pay taxes at the 30 percent rate.

If you hold the investment for longer than one year, then it is a long-term capital gain. Long-term capital gains are taxed at a rate of 0% or 15% depending upon your income. This is how wealthy people pay such a low tax percentage. If most of your income comes from investments, then most of your income is taxed at 15 percent no matter how high your income is.

The final thing to understand about capital gains before you can understand tax-loss harvesting is that you can offset capital gains income with capital losses of the same type. Again, an example is the quickest way to understand.

Let’s say that you make that $10,000 profit on your Apple investment. Now, let’s say, that in the same year you sell your Dubious Company stock. If you bought Dubious Co. at $20,000 and your holdings are worth $12,000 when you sell, you have lost $8,000. That amount is a capital loss.

Now, you can offset that $10,000 capital gain with the $8,000 capital loss, and now you will only owe taxes on $2,000 of capital gains.

Tax Loss Harvesting Defined

So, what exactly is tax-loss harvesting? In the example above you happen to have $8,000 in losses to offset your $10,000 in gains. If you did that intentionally, specifically for the purpose of generating a loss to use to offset your gains, then that is tax-loss harvesting. Congratulations. You’re already doing it.

Generating losses in order to offset gains is tax-loss harvesting.

The last thing to understand is that IRS rules prevent you from buying an investment that is substantially the same as the one you sold for 30 days. In other words, you can’t sell IBM shares, and then buy back those shares within 30 days, or the loss doesn’t count. This is called a wash sale and is disallowed as a capital loss.

Advanced or Hybrid Tax Loss Harvesting

Let’s say you don’t want to wait 30 days to reinvest in Dubious Company stock. While you can’t rebuy Dubious Company, you can buy other investments that might give you similar exposure. For example if it were Intel (INTC), you could buy a NASAQ index fund or ETF. That would give you some exposure to tech in general.

If you wanted to get more specific, you could try a semiconductor ETF like SMH or FTXL, both of which have plenty of Intel inside (see what I did there?). You can’t buy futures or options of the same company, that is literally the definition of subtantially the same. I like the way you think, but unfortunately, you aren’t the first one to get there.

Most investment advisors, or financial planners add this next step, buying a replacement investment that is similar enough to the same to keep your portfolio invested like it was before you sold something for a loss, without triggering the wash sale rules. This is very easy with mutual funds or ETFs, and pretty easy with most stocks, assuming that you are managing your portfolio as a whole. And, of course, it can trigger some nice little commissions, or at the very least make it look like they are doing something for that 1% annual fee they are charging you.

Who Needs Tax-Loss Harvesting

Now we are ready to really understand tax-loss harvesting and how it works, and why it sounds so great on paper, at least.

Individual Stocks

If you only own stocks that you want to own because you have done your research, and you really believe in those specific companies, then tax-loss harvesting may not make much sense at first. If you really believe in GE stock, then selling it for tax purposes doesn’t make sense. (In fact, many financial experts advise clients to ignore tax ramifications and just do what is right for your money while letting the tax chips fall where they may.) The reality is that unless something major happens during those 30 days, the price may not have moved that far from your sell price, so a big slow moving stock like GE might be a good option for tax-loss harvesting, and you move your basis up while you are at it.

Most professional tax-loss harvesting happens away from a company’s earnings announcements for this reason. You won’t want to not own your shares of GE when the company announces it tripled its profits. In fact, if you ever notice your financial advisor harvesting tax losses at earnings time, you may question their competency.

Mutual Funds and ETFs

The easiest tax-loss harvesting is on mutual funds or exchange-traded funds. It is very easy to replace most funds or ETFs with something similar. In fact, with index funds, it is very, very easy. Even for tax purposes, a Vanguard S&P 500 index fund is not the same thing as a Fidelity S&P 500 index fund. So, if you have a loss on one, you can sell it, bank the loss, and then buy a different fund, or better yet, an S&P 500 ETF. You still have essentially the same investing exposure during the next 30 days.

Do You Really Need Tax-Loss Harvesting?

As with many financial services and products, the science and finance behind tax-loss harvesting is legitimate, so tax-loss harvesting is not a scam. However, that doesn’t mean that it is useful or helpful for all investors. In many cases, it is nothing more than a gimmick, a way to make one investment advisor or another seem special, and not something that will actually help your finances.

When Tax-Loss Harvesting is Not Worth It

You do NOT need tax-loss harvesting in non-taxable accounts, because you do not pay capital gains taxes on those funds, ever. This should go without saying, and very often, it does. If your investment portfolio mainly consists of an $800,000 401k rollover account, tax-loss harvesting is not useful for you.

Commissions and fees may be generated by the selling and buying of investments to generate tax losses to harvest. This makes tax-loss harvesting a losing proposition for most accounts where you pay a commission, a mutual fund load, or other fee. This is especially important to watch for with mutual funds.  Always get the full cost of the transaction in writing ahead of time. Remember to compare it not to the amount of the loss, but the amount of the tax it will save.

For example, if you have a $50,000 investment in a mutual fund that you can sell to generate a $10,000 loss, the tax savings is roughly $1,500 at 15%. If you have to pay a 3% load to buy a similar mutual fund, you’ll pay $1,500. In other words, you won’t actually save any money. In general, tax-loss harvesting works best for people paying a deep discount commission, or zero commission, on trades, or for those who pay an all-in-one annual fee. If you are paying 1% of your total investment portfolio (with no trading charges) then the cost does not change.

Another factor is that in order for tax-loss harvesting to be worth it is that you have to have enough losses, and enough gains.

Remember capital gains losses can only be used to offset capital gains, except for $3,000 worth. In other words, if you have $20,000 of losses and no capital gains, you can only deduct the $3,000 in that year. While you can carry forward losses to future years, you need to decide if the future possibility of a tax offset is worth the expense and effort now. Even if you have a lot of taxable money invested, if you aren’t selling you aren’t generating gains, and those losses aren’t necessary.

As always, remember to calculate not only the percentage, but the real dollar amount. Tax-loss harvesting isn’t usually worth it until you are talking about a taxable invested portfolio of well over $100,000, with gains over $10,000. (Remember, your 401k and IRAs are already immune from capital gains, so don’t count them.)

In the end, tax-loss harvesting isn’t very useful for basic investors with less than at least six-figures in taxable investment, except in extreme cases. Just do the math to see if it is worth it in your specific instance.

If you do have a large portfolio and your capital gains taxes are taking a bite, then do check with your advisor to see what they are (or are not) doing about harvesting tax losses for you.

Investing platforms that might work for you

• Wealthfront
• Stash
• Robinhood
• Acorns
• Grifin

Sources:

IRS Form 1040 Schedule D

Author

By Brian Nelson – Brian is a former Certified Financial Planner and financial advisor. He writes for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or tax advice. Please note that material may not be updated regularly and that some of the information may not be current. Consult with your own tax professional when making decisions regarding your tax situation.

Westerra Credit Union 90th Anniversary CD

Westerra has been around since 1934, which is bonkers. I didn’t even think they had credit unions by then. Be that as it may, the company is making a splash with an outlandish 5-month 9.0% APY CD.

Of course, 9% comes with some fine print. In this case, the CD has a maximum deposit of $3,000 and those funds have to be new money to the credit union. Still, 9% on $3,000 is a lot better than 2.5% on $3,000 in some savings account, or even 4.5% in an online high-yield savings account. And you get local, physical locations to go with it just in case you ever need to talk to someone in person, get a cashier’s check, or even get something notarized.

High Interest Rate Hook

Of course, the point of the highest interest rate CD in Colorado (I didn’t look, but probably) isn’t to shell out cash. The credit union hopes that by opening a new account to earn 9.0% on that CD, you’ll look around and maybe notice something else you like. They have a more normal 4.50% 13-month CD without the $3,000 cap.

You can also get interest on your checking — if you direct deposit and use your debit card — and they have a Money Market Select account which is just a money market account, but you get 4.0% if you have 10 card swipes each month. Obviously, a little carriage fees and even credit card interest can offset some generous deposit accounts.

Other local credit unions do similar things. The smaller Red Rocks Credit Union will give you 10% interest via their “Reverse Tier Savings Account.” Unlike your typical account where depositing more money qualifies you for higher tiers and higher interest rates, the Reverse Tier Savings Account starts with its highest rate at the bottom. So, from $0 to $2,000 you earn 10%. After that you move to the next tier where $2,001 to $5,000 earns 3.5%.

You get the idea.

For credit unions new members are all about new opportunities to draw in a few more deposits, which they can match against more loans, and the circle of life continues, all without having to skim off the top to generate a profit for those pesky shareholders.

Get Some Credit Union Loans

Like bigger banks, credit unions make their bread and butter on loans. Unlike bigger banks, credit unions have to pretty much stick with matching loans to deposits, so attracting new members is critical to being able to provide members attractive loan rates whose interest keeps the lights on, and the promotional ideas spinning.

Westerra will happily provide you with a debit card. A little income with every swipe, plus members like depositing money when they know they can get it back quickly if they want. I’m sure they really love to hand you credit cards as well. Not only do you get some of those sweet swipe fees but collecting credit card interest is where the big money is. The best part is, that unlike say auto loans or home equity lines of credit, people — even savvy credit union members — understand that credit cards come with higher interest rates. Bigger earnings, with no ill will.

Win/Win!

What makes it such a huge deal for my friend is that those offers often include beer and wine, and often for a few bucks at a time, so that can add up. But does that make Ibotta a legit deal for others, or is Ibotta a scam that takes more than it gives? Let’s dig into is Ibotta legit.

What Is Ibotta?

Ibotta is an app for either Android or Apple. You can also use it online via the webpage. It works a lot like many grocery store apps where you go through a list of coupons and select which ones you want to use. However, unlike my King Soopers app, or Safeway app, the offers on Ibotta are rebates, not coupons. In other words, while the coupons take 50 cents off of my grocery bill, the Ibotta rebates have no effect on the cost of my groceries. Instead, they go into an account that I can withdraw as cash.

Stash vs Acorns vs Robinhood vs Betterment vs Wealthfront

Ibotta is a publicly traded company based in Colorado. It trades under the symbol IBTA on the NASDAQ stock exchange. (Ibotta still loses money and thus pays no dividend, so it doesn’t really fall into my research universe.)

How Does Ibotta Work?

So, what is Ibotta and how does it work?

Once you download and install Ibotta, you open the app on your phone and choose to “unlock” offers. Basically, this is the same thing as adding a coupon to your grocery app. Unlock is weird terminology, but it means that you can now get that rebate. Rebates are sorted by store, although it seems there is a lot of overlap. The list of stores has most of the big ones. There’s the Kroger, King Soopers, Vons, BJs, plus Target, Costco, Sams, and so on.

Once you pick which store, you touch the “Unlock” button to add the offer into your account. Then, you go to the store and buy the item. When you get home, you have “Verify” your purchases. For some stores, you can link your loyalty card and skip the whole scanning and taking receipt pictures part. However, that list isn’t as big, and my local stores aren’t ones that can be linked.

There is also an Ibotta Sam’s Club scan and go where you can link your Ibotta account to your Sam’s Club card and automatically match up any rebates that you purchase for. I am not a Sam’s Club member, so I haven’t been able to test this for my review.

To verify a purchase on Ibotta, you first scan the bar codes of the things you bought. Then, you scan the receipt that has those purchases on them. You want to scan all the bar codes first, then scan the receipt once you are ready.

How To Send Receipts to Ibotta

My first question was how I scan a long receipt in Ibotta. As it turns out, Ibotta is well aware of the fact that receipts can be pretty long. To scan a long receipt in Ibotta, you just start at the top and take a picture of as much of the receipt as you can fit. Then, once you have OKed that picture, you click the plus button to add another section of the receipt. Repeat as necessary. One of my recent grocery receipts took six pictures, so just keep going until you reach the end.

When you are finished, it totals up what you inputted and then you have to wait up to 24 hours for them to verify your purchases and credit your account. My first submission was reviewed, and money credited to my account in just over an hour.

You can also get credit for buying things via the app like gift cards or

How Do I Get My Money from Ibotta?

Ibotta lets you link either a PayPal account or a Venmo account. You have to have a minimum of just $2.00 to get your cash, so that’s pretty easy to hit.

Once your money is in PayPal or Venmo, you just transfer it into your linked bank account, or use your PayPal card to withdraw it from an ATM.

Is Ibotta Worth It?

The crux of any Ibotta review has to be is Ibotta worth it or is Ibotta a scam and waste of time. If you can get Ibotta Sam’s Club Scan and go to work, the reward to effort starts to go up.

So, does Ibotta really work? Here in the Denver area, King Soopers and Safeway both offer grocery apps that allow you to add electronic coupons to your card. It’s a great way to get coupon savings without having to find, cut out, keep track of, and remember to use coupons.

Before I go shopping, I add the coupons to my shopper’s card for anything that I buy, whether I plan to buy it that trip or not. The idea is that if I do buy something and there is a coupon for it, I’ll get it. That’s great, and over time, I’m sure it saves me a fair amount of money.

I subscribe to the idea that you should only buy what you were going to buy anyway. So, when there is a coupon for 50 cents off of Frosted Flakes, which is a good deal, because I’m going to buy those anyway. But a coupon for $1.00 off of 4 boxes of Lucky Charms isn’t such a good deal because I don’t really eat that.

The one trick to Ibotta isn’t a scam so much as a detail you need to pay attention to. Some of the deals expire, and it doesn’t matter if you already unlocked it. You have to verify it first. So, the whole Ibotta scam thing isn’t really true.

In the end, my average grocery receipt never has more than a few dollars’ worth of coupon savings. So, while I every penny counts, it’s not like my life is any better because I paid $142.97 for groceries instead of $144.38.

That brings us to Ibotta. Ibotta has plenty of the same kind of offers you see everywhere else. There is a 75-cent rebate on Charmin, for example. But it also has some bigger, and more interesting rebates. Again, if you stick to the mantra of only buying what you buy anyway, then, there is no way for Ibotta to harm your spending. And, if you do hit on some of these offers, you can actually make some money from Ibotta’s cash back style offers.

Right now, there is a 75-cent rebate on Charmin, a $1.00 rebate on trash bags, $1.00 off of kitty litter, 50 cents off of any bananas, any eggs, and any milk, plus $2.00 on Mike’s Hard Lemonade. All of these are things I was going to buy anyway. So, I will get $6.25 in rebates for just these few items. That’s a pretty good deal.

For maximum impact, I might not withdraw my money for a while. With savings interest rates low right now, it doesn’t exactly hurt anything to let this build up to say $20, or if I really got going maybe $50. Then, I could use the funds to make a purchase I wouldn’t have spent the money on, or if you need, maybe make an extra credit card payment.

(Beware: There is an inactivity charge. I lost $20 over a six-month period when I wasn’t using the app. When I came back that money was gone.)

In the long run, I’m not sure how worth it Ibotta will be. In the beginning, every single rebate is there for the taking, but over time you use them up, and I haven’t been using the app long enough to know how quickly new ones come in. However, the effort isn’t that much, and if you are buying your normal items, then it’s like finding free money. The above transaction will take me less than 10 minutes total to process, making it a nice return on my time for $6.

You can sign up for Ibotta using this link. If you do, I get $5, and you get $10 so it’s a win-win for both of us.

I’d go ahead and recommend trying Ibotta. It’s basically easy, free money.

Ibotta Bonuses and Teams

Ibotta currently offers various bonuses. Good start up boosts are a good way to earn more. For example, I used my friend’s code like above, and I got a $10 bonus for the first rebate I submitted. If I redeem 5 more rebates within 30 days of signing up, I get another $2 bonus.

Then, you can do teams. I haven’t messed with this yet, but the idea is that by linking with your friends you can earn other bonuses. For example, there is a bonus where you earn an extra $0.50 if you redeem 6 rebates in the month AND your team earns $6.00 worth of total rebates during the same month. I suppose the value of this depends on who your friends are.

If you are wondering whether to be worried about the Equifax hack from 2017, the answer is yes. You should be worried. However, you do not need to panic. How ever bad the Equifax hack of 2017 was, there were plenty of doozeys on its heels. So many, in fact, that any one of them likely caused more damage. Still, those who do not study history are doomed to repeat it.

Get Some Credit Monitoring

By now, you should probably have some rudimentary credit monitoring whether it comes through a free credit score service like Credit Karma, or from your bank, or one of your credit cards. You’ll want to read all of those emails more closely from now on. It you see something that isn’t right, contact the credit issuer right away to let them know about fraud, as well as call the credit bureaus.

You can go check if your information was some of the affected, however, even if you check now, check again in a few weeks. The ALWAYS find more accounts were affected than they originally thought after they bring in experts and begin devoting resources to investigating what happened.

What Should I Do About the Equifax Hack?

You should probably write a letter to your Congressman and Senators demanding they do something. It’s time to come up with a new way to uniquely identify citizens for credit purposes. You should also be able to freeze and unfreeze access to your credit report for free. – Hey good news, past article, you can now freeze and unfreeze your credit report at all three credit bureaus. And you don’t even have to jump through hoops like sending a snail mail letter asking to freeze your credit. You will want to watch out for “free” trials that end up hooking you to pay for stuff you may not want or need.

Next, if you don’t do it already, you should get your free annual credit reports on a spread out, rotating basis so you can compare what is on it now, with whatever might get put on it in the future. Even though there are a lot of ways to get a look at your credit report for free, your free annual credit report is still the best way to ensure you are getting all of the data, straight from the horses mouth.

• Try ordering one in May, one in October, and one in February where you want to be sure there are no surprise shopping accounts or trade lines opened in your name over the holidays.

Equifax is offering free credit monitoring but that isn’t as big of deal as you might think. The reality is that they will just send you a notice that something change on your credit report. It is still on you to do something with that information.

Should I Freeze My Credit?

Maybe. Yup. Times have changed. Identity thieves aren’t just a group of crooks working together out of a house. Organized crime has moved in, and even North Korea engages in identity theft to generate dollar based income and move it out of the country. Credit Bureaus no longer charge you to freeze your own credit report (isn’t that big hearted of them?), so the only thing you lose is time, and add a bit of hassle, but it is way better than the alternative.

The credit bureaus used to make it difficult to freeze and unfreeze but now you can do it online. You’ll need to create a free account and then navigate around non-free offerings, but otherwise freezing your credit is pretty simple.

Should I File a Fraud Report?

This can be like a credit report freeze-lite. You contact one credit reporting company and tell them to put a fraud alert on your report. By law, they are required to notify the other two credit bureaus, but you may as well notify all three of them.

A fraud alert is a huge red flag and reputable lenders will not extend you (or hackers) any credit while there is a fraud report on your credit. The downside is that if you legitimately need someone to access your credit report, you’ll have to get the fraud report taken off first.

Fraud reports last 90 day unlike a credit freeze that can be thawed instantly and even temporarily before automatically refreezing. A credit freeze is preventative. A credit fraud report is when you’ve already been hi.

What If My Credit Card Number Was Exposed?

If your actual credit card number was exposed, Equifax will notify you by mail. They may also notify the credit card company. Either way, if you learn your number was exposed, call your credit card company right away and ask for a new card with a new number. Tell them why. They’d rather not be liable for any fraudulent charges on your credit card either.

Sources:

As always the Consumer Financial Protection Bureau is a great resource for information about banking, lending, and credit reports and credit scores.