Posts Tagged 'tax'

American Family Voices: wrong on Interchange

American Family Voices doesn't know quack

We got a funny fax the other day from American Family Voices, a lobby group that’s looking to enact Interchange reforms that could hurt our debit card program.

Here’s the fax. Pretty goofy, right? So goofy that it relies on that ol’ banker trick of trying to paint credit unions as do-gooder banks. AFV is trying to do two things at once: dig up the outdated banker argument, and – at the same time – spin it to fit their Interchange views.

It’s a bunch of quack. Here’s the full text of the fax we got:

If it walks like a bank, talks like a bank, and quacks like a bank… it should be TAXED like a bank.

In 1934, Congress gave not-for-profit credit unions tax-exempt status due to their unique role as lenders of last resort for the poor and underserved.

But today, credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.

So why are these not-for-profit credit unions crying wolf about common sense interchange swipe fee reform?

Credit unions are carrying the water for credit card giants VISA and MasterCard— and the big Wall Street banks that helped cause the financial crisis.

It’s about protecting profits.

Interchange fees cost small businesses and consumers $48 billion every year.

If credit unions want to play with the big boys—and share in their profits—then Congress should tax them like banks.

Today, American Family Voices took out an ad in Politico to tell Congress that credit unions should no longer receive special treatment… and to make sure to pass the Durbin Swipe Fee amendment into law.

We’ve already made our position on Interchange clear, and we can argue about the merits of that all day long. But tying us together with the “big Wall Street banks that helped cause the financial crisis”?

I don’t think so.

Credit unions are tax-exempt because we’re member-owned, we have a volunteer board of directors, and we still serve the underserved. We don’t take the money we make and give it to stockholders or investment groups; we give it back to our members.

AFV claims that “credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.” Well of course not – is growth a bad thing? Credit unions have grown partly due to customers’ disgust with big banks, but our industry is still dwarfed by the for-profit banking industry.

There’s nothing “common sense” about the Interchange reform that lobbyists like AFV are calling for. It’s not going to lower costs for consumers, and it may end up costing them more due to changes in debit card policies if this thing goes through.

Running a debit card program costs money, and Interchange helps credit unions like us pay for the system. You don’t get your electricity for free; you have to pay a power company to deliver that electricity to your home because the delivery costs money. Same with card programs. We hire in-house service employees to help you with your American 1 card questions, and we use Interchange to help pay their salary. And provide security. And provide convenience and a no-annual-fee debit card. Debit card programs don’t run themselves.

Groups like AFV, however, say that we make too much off Interchange fees, and that Interchange fees should only pay for the transmission of the account information. But that’s like paying for just the electrons that cross the power lines. What if a power line goes down? What if a transistor explodes? What if your entire town loses power? Who pays for that?

The only water we’re carrying is for our members. Visa and MasterCard can take care of themselves, and certainly Wall Street big banks can flex their own political muscles. We don’t need or want to help them. American 1 looks out for our members’ needs, first and foremost.

No quacking about it.

Be sure to write or call your local Congressional representative (including Senators Carl Levin and Debbie Stabenow in Michigan, plus local U.S. Representatives Mark Schauer, Gary Peters – who serves on the committee involved – and Mike Rogers) and let them know, as a member, you oppose Sen. Richard Durbin’s Interchange Amendment to the Restoring American Financial Stability Act.

Electronic tax statements are here

A heads-up for e-statement subscribers: your 2009 tax documents are now posted within the system.

To view your tax documents, log in to A1@home, and from the Account Summary screen head to the History tab at the top, then click “e-statements.” You should see a link that says “Get my e-statement.” Click that, and the “Tax Notices” link will be at the top of the pop-up screen (see above).

However, if you signed up for e-statements after January 25, 2010, you may not receive an electronic notice for your tax forms. You may get them in the mail. If you don’t see your tax documents in the e-statement system in the next day or so, look to your real world mailbox after January 31.

Not signed up for e-statements yet? You should be! You can can get all your documents faster than by regular mail – including tax forms!

Stimulus bill Q and A

The New York Times has a fairly comprehensive question-and-answer post on the stimulus bill President Obama signed into law earlier this week.

While there are tons of possible questions and scenarios that could apply to you and your family, the Q and A gives broad answers to help make sense of the whole thing. It covers everything from Cobra to the new tax credit and changes to the Alternative Minimum Tax.

If you’re feeling really brave, you can read the stimulus bill in its entirety on House of Representatives’s site.


Don’t see your tax form? Here’s why



Some members have wondered where their American 1 dividend tax form is. It’s tax season, after all, and if you’re like me, you want to get them done and over with.

If you don’t see your tax form online or you didn’t recieve your form in the mail, there may be a few reasons. You will not receive your tax form if:

  • You earned less than $10.00 in dividends
  • You paid less than $600.00 in interest on a real estate type loan
  • If we don’t have a correct address on the account and a tax form was mailed (it gets sent back to us)

Forms were sent on January 28, so if you don’t see it among your e-statements or you haven’t received anything in the mail, chances are you won’t get one.

Hope that helps!


Traditional vs. Roth IRAs: what’s the difference?

As the Motley Fool says, there are actually 11 different kinds of Individual Retirement Accounts (IRA), but we’ll stick with the most popular: Traditional and Roth IRAs.

The main difference we’ll focus on is tax-deferred versus tax-exempt savings.

A Traditional IRA means you pay taxes when you withdraw your funds at retirement, but you will qualify for a tax deduction on the money you contribute to the IRA. So say you make $30,000, and you contribute $2,000 each year to your Traditional IRA. Come tax time, you’ll pay taxes on $28,000. That’s tax-deferred savings.

Roth IRAs, on the other hand, let your savings grow tax-free. You pay taxes on contributions (In our $30,000 income case, you pay taxes on the full $30,000 even though you contributed $2,000 to your Roth IRA each year). But when you start withdrawing funds when you retire, you pay no taxes on them. That’s tax-exempt savings.

Got it? So with a Traditional IRA, you take the tax hit come retirement. With a Roth IRA, you take the tax hit now, but your retirement funds come out tax-free.

Now, you could opt to do both, but check with your tax advisor to see how things stack up.

There are a few other differences between a Traditional and Roth IRA. Investopedia has a good article on the contribution, income, and age limits that IRAs stipulate. The good news is you can start an IRA for just $50, and can contribute up to $5,000 annually ($1,000 more if you’re 50 years old or older – they call those “catch-up contributions”).

Young Money has an IRA calculator, where you can compare the tax rate situation.

As with any retirement decisions, be sure you talk either choice over with your financial advisor. American 1 provides both kinds of IRAs. You can stop in to any branch to find out more.


“Do I have to pay back my tax rebate check?”

No.


You don’t have to claim it on your 2008 taxes, you don’t have to pay it back in any way – it’s essentially “free money.” The economic stimulus checks won’t reduce your tax refund – if you get one – next year, either.

I know, I know. It’s hard to believe. But it’s a “thanks for being an American citizen” check, one that the government hopes you will put to “good use” on the economy. However, there are better things to do with your tax rebate check, as we’ve learned.



ScamWatch: IRS warns of tax rebate scams

The IRS has posted new warnings about phone and e-mail scams, both tied to this year’s economic stimulus payments and tax season, by fraudsters seeking to acquire taxpayers’ financial institution account numbers and other sensitive data.

In one of the scenarios, people have been contacted by phone and told by the caller that they need to provide their account numbers in order to get the stimulus payments. But IRS isn’t calling or e-mailing people for this information; it’s making the payments based on information in taxpayers’ tax returns.

In another case, people are receiving an e-mail with a link to a form where recipients are told they must provide information to receive their payments by direct deposit. IRS says the senders are probably really trying to get recipients’ personal and financial information so they can clean out their accounts. And taxpayers that want to receive tax refunds, or stimulus payment, by direct deposit are already instructed to provide the required information on their tax returns, it notes.

//Source: NAFCU, via IRS

ScamWatch: Keep safe this tax season

With tax season and the news of the upcoming tax rebate checks, it’s important to safeguard yourself against fraud and scams. Here are a few tips to help keep you safe. Continue reading ‘ScamWatch: Keep safe this tax season’

Tax rebate information available.

Looking forward to your tax rebate this summer, but unsure of the timing or amount?

Look for more information at the Internal Revenue Service’s “Economic Stimulus Payment Information Center” at irs.gov. They also provide a handy rebate calculator that helps you determine how much you’ll get back. About.com has put together a reference site with links to many informational articles and sites, so check that out, too.

We ran an article in our April quarterly newletter about useful things to do with your check, including:

  • Save for a rainy day
  • Pay down high-interest debt
  • Keep up with maintenance on your vehicle
  • Pay a little extra toward your retirement with an IRA
  • Make long-awaited home improvements

The best thing? Be smart about it. Don’t waste an opportunity to get some things done, financially, that you’ve been putting off.

Also, check out the tax rebate FAQ we posted.


American 1 Federal Credit Union