09 Apr

Organize Your Records and Save on Taxes

According to the Government Accountability Office, an estimated 2 million taxpayers each year overpay their taxes by failing to take all their entitled deductions.* If your tax records are disorganized, you could be missing out on ways to save on your tax bill.

In addition to helping you save money, getting your records organized can make tax filing quicker and easier. Just follow these steps:

Step 1. Label three folders. Can’t be easier, right? Just label one folder “income,” one “investments” and another “expenses and deductions.”

Step 2. Start sorting. Go through your pile of receipts and documents. Put everything that shows earnings (W-2 forms from your employer, dividend and interest statements from deposit accounts, tip statements, etc.) into your income folder.

Investment statements showing interest, dividends and investment purchases and sales, as well as information about capital gains and losses, should go in the investments folder.

Put receipts for charitable donations, unreimbursed medical expenses, mortgage interest statements, property tax statements and any other deductible expenses in your expenses and deductions folder. Not sure if it’s deductible? Visit www.irs.gov and search for Tax Topic 500 for more information on deductible expenses.

If you work from home, you may be eligible to deduct home office expenses. In that case, include copies of utility, phone and Internet service provider bills, as well as household repair bills and rent or mortgage payments. To learn more, download Publication 587, Business Use of Your Home, at www.irs.gov.

Tip: If you place receipts and documents in their corresponding folders as you receive them throughout the year, rather than waiting until tax season, you’ll save time.

Step 3. Compile any other information you will need to file your return, including:

  • Social Security number
  • Account number(s) for directly depositing your refund
  • Previous year’s tax return
  • Password if using online tax preparation software

E-File for Quicker Refunds

Once you have your information compiled, e-filing can help you complete your return, avoid common errors and get your refund faster, especially if you choose direct deposit. To learn more and find out if you are eligible for free e-filing, visit www.irs.gov/efile.

* Source: Government Accountability Office, www.gao.gov
Website not belonging to this organization is provided for information only. No endorsement is implied.


According to the IRS, taxpayers who use e-filing and direct deposit may receive their refunds as quickly as 10 days after filing. You can choose to have your refund directed to a maximum of three financial accounts. For direct deposit to your Navigator Credit Union account, please provide our routing number 265377950 and your 13-digit account number.

09 Apr

Avoid Major Headaches When Naming Minors as Beneficiaries

Naming children as beneficiaries or contingent beneficiaries of an insurance policy, retirement account or payable-on-death account seems a natural way to provide for those you love. But special care must be taken to ensure that, should the children inherit as minors, the money provides for them in the way you intend.

Minor Difficulties

Because minors cannot legally hold substantial assets in their own names, complications arise when they inherit large sums. The way the inheritance is handled in such cases depends on the type of account and the amount of the inheritance, but one of the most common solutions is the court appointment of a guardian to administer the inheritance for the minor. Unfortunately, in such cases problems may arise that work to the disadvantage of the child you are hoping to take care of.

  • Appointing a guardian may take months, delaying the time when the money becomes available for the minor’s support.
  • Court costs and attorneys’ fees will diminish the amount of the inheritance.
  • The appointed guardian may not be the person you would have chosen and the court’s choice may cause tension and quarrels within your family.
  • The guardian must get court approval for financial transactions and submit to annual accounting, which can make accessing the money cumbersome, time-consuming and expensive. Plus, the court’s decisions may result in the funds not being made available to your child as you would have wished.
  • At age 18 or 21, depending on state law, the child will gain full control over the inheritance regardless of their maturity and financial good sense.

Finding a Best Practices Solution

One of the most effective ways to ensure that a minor gets the most benefit from an inheritance is to create a trust for the child and name the trust as the beneficiary of your life insurance policy, retirement account and the like. With a trust you can:

  • Avoid probate so that the money becomes available to the child with less delay.
  • Have a trustee of your choosing manage the assets for the minor. The trustee does not have to be the child’s legal guardian, or even a relative. And you can change your trustee selection at any time if circumstances change.
  • Establish the terms of use for the assets, such as a college education.
  • Choose to have the child gain control of the assets when they are older than the age of majority and may be more likely to have the good judgment necessary to handle the inheritance responsibly.

Keep in mind that tax considerations, family circumstances and creditor protection also play a role in choosing the best estate planning tools for you and your loved ones. To learn more about trusts or which estate planning tools are best for your situation, talk to one of our estate planning professionals. To make an appointment, call 228-474-3427 or visit www.navigatorcu.org.