Preparing for Tax Season

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Preparing for tax season can feel overwhelming, but it doesn’t have to be. With the right planning and advice, you can make the process smoother and maximize your returns. At First Financial, we’re here to guide you every step of the way, whether you’re filing as an individual, a couple, or a small business owner. Plus, take advantage of exclusive member discounts to make this tax season your most successful.

1. Preparing as an Individual

Filing your taxes as an individual doesn’t have to be overwhelming. Start by gathering all necessary tax documents, such as W-2s, 1099s, and other relevant income statements. Double check that you’ve received all forms for your accounts – including savings, investments, and retirement. Utilize tools like First Financial’s online banking to access financial statements and other important documents. Consider tracking charitable donations, student loan interest, or medical expenses to maximize your deductions.

2. Preparing as a Married Couple Filing Jointly

For married couples filing jointly, communication is key. Sit down with your spouse to review all income sources, deductions, and credits you might qualify for. Common credits for joint filers include the Earned Income Tax Credit (EITC) and if you have children, the Child Tax Credit.

Discuss future financial planning as a team. Maximizing retirement contributions or taking advantage of education-related tax breaks could save you money now while setting you up for success down the road. Filing jointly often provides higher income thresholds for deductions, so do your research and take full advantage of these benefits.

3. Preparing as a Small Business Owner

Small business owners have unique tax considerations. Begin by organizing all receipts, invoices, and business-related expenses from the year. Key deductions include office supplies, travel expenses, and even home office deductions. Use accounting software or work with a tax professional to ensure accuracy.

If you’re self-employed, don’t forget to account for estimated quarterly tax payments made throughout the year. Staying organized and proactive can help you avoid penalties and make the filing process smoother. Organize documents throughout the year in a labeled file binder or cabinet so everything can be easily found when filing.

Exclusive Member Discounts

First Financial is here to help you file your taxes early with exclusive, member-only offers on tax services.

  • TurboTax: Save 20% and file confidently from the comfort of your home. TurboTax guarantees the maximum refund and provides access to tax experts to assist or file for you.
  • H&R Block: Save up to $25 with an H&R Block expert. Get the largest possible refund or your money back, with expert help available in person or remotely.
  • PLUS: After filing through one of the above ways, enter the Love My Credit Union Rewards Tax Time Sweepstakes for a chance to win $10,000 after 4/15/25. Don’t miss the opportunity to also win a monthly prize of $1,000 throughout tax season!*

General Tips for a Successful Tax Season

  • Check All Accounts for Tax Statements: Ensure you’ve received all necessary tax forms – including those for bank accounts, mortgage interest statements, investments, and retirement accounts.
  • Organize Your Documents Early: Staying organized helps streamline the filing process and reduces stress.
  • Plan Financially with Your Partner: Open conversations about maximizing deductions and credits can help everyone save.
  • File Early: Avoid the last-minute rush and reduce the risk of identity theft by submitting your taxes early.

Maximize Your Tax Season with First Financial

At First Financial, we’re committed to helping you make the most of tax season with exclusive member discounts and financial resources. Don’t forget to subscribe to our First Scoop Blog for ongoing financial advice and strategies to keep your finances on track.

*TurboTax Offer: Visit http://turbotax.intuit.com/ for TurboTax product guarantees and other important information. Limited time offer for TurboTax 2024. Discount applies to TurboTax federal products only. Actual prices are determined at the time of print or e-file and are subject to change without notice. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. Intuit, TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. H&R Block Offer: H&R Block Offer: void if sold, purchased, or transferred and where prohibited. No cash value valid at participating U.S. offices only A new client is an individual who did not use H&R Block or Block Advisors office services to prepare their 2024 tax return. Discount valid only with or for preparation of an original 2024 personal Income tax return. Coupon must be presented prior to completion of initial tax interview. Discount may not be combined with any other offer or promotion. Expires October 15, 2025. OBTP# 13696-BR ®2024 HRB Tax Group, Inc. All tax situations are different. Not everyone gets a refund. See hrblock.com/guarantees for complete details. ©2024 Love My Credit Union Rewards Sweepstakes: NO PURCHASE NECESSARY. Legal residents of the 50 United States (D.C.) 18 years or older who are members or employees of a U.S. credit union. Ends 4/15/25. To enter and for Official Rules, including odds and prize descriptions, visit https://taxservices.lovemycreditunion.org. Void where prohibited.

Things You Can Do for Your Future as the Year Unfolds

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What financial, business, or life priorities do you need to address now that it’s a new year? Now is an excellent time to think about the investing, saving, or budgeting methods you could employ toward specific objectives, from building your retirement fund to considering an estate strategy. You have plenty of choices.

Remember that this article is for informational purposes only and not a replacement for real-life advice. The tax treatment of assets earmarked for retirement can change, and there is no guarantee that the tax landscape will remain the same in years ahead. A financial or tax professional can provide up-to-date guidance.

Here are a few ideas to consider:

Can you contribute more to your retirement plans this year? In 2024, the contribution limit for a Roth or traditional individual retirement account (IRA) remained at $7,000 ($8,000 for those who made “catch-up” contributions). Your modified adjusted gross income (MAGI) may affect how much you can put into a Roth IRA. With a traditional IRA, you can contribute if you (or your spouse if filing jointly) have taxable compensation. Income limits are one factor in determining if a traditional IRA contribution is tax-deductible.1

Once you reach age 73, you must take the required minimum distributions from a traditional IRA. The IRS taxes withdrawals as ordinary income, and if taken before age 59½, they may be subject to a 10% federal income tax penalty.

Roth 401(k)s offer their investors a tax-free and penalty-free withdrawal of earnings. Qualifying distributions must meet a five-year holding requirement and occur after age 59½. Such a withdrawal also qualifies under certain other circumstances, such as the owner’s passing. Employer match is pre-tax and not distributed tax-free during retirement. The original Roth IRA owner is not required to take minimum annual withdrawals.

Make a charitable gift. You may be able to claim the deduction on your tax return, provided you follow the Internal Review Service guidelines. The paper trail can be important here. If you give cash, you should consider documenting it. A bank record can demonstrate some contributions, payroll deduction records, credit card statements, or written communication from the charity with the date and amount. Incidentally, the IRS does not equate a pledge with a donation. If you pledge $2,000 to a charity this year but only end up gifting $500, you may be able to only deduct $500.2

Consult your tax, legal, or accounting professional before modifying your record-keeping approach or strategy for making charitable gifts.

See if you can take a home office deduction for your small business. You may want to investigate this if you are a small business owner. You might be able to write off expenses linked to the portion of your home used to conduct your business. Using your home office as a business expense involves complex tax rules and regulations. Before moving forward, consider working with a professional familiar with the tax rules related to home-based businesses.

Open an HSA. A Health Savings Account (HSA) works like your workplace retirement account. There are also some HSA rules and limitations to consider. In 2024, you were limited to a $4,150 contribution if you were single; $8,300 if you had a spouse or family. Those limits jumped by a $1,000 “catch-up” limit for each person in the household over age 55.3

If you spend your HSA funds for non-medical expenses before age 65, you may need to pay ordinary income tax and a 20% penalty. After age 65, you may need to pay ordinary income taxes on HSA funds used for non-medical expenses. HSA contributions are exempt from federal income tax – however, they are not exempt from state taxes in certain states.

Pay attention to asset location. Asset location is one factor to consider when creating an investment strategy. Asset location is different from asset allocation, which is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss.

Review your withholding status. Should it be adjusted due to any of the following factors?

  • You tend to pay the federal or state government at the end of each year.
  • You tend to get a federal tax refund each year.
  • You recently married or divorced.
  • You have a new job with adjusted earnings.

Consider consulting your tax, human resources, or accounting professional before modifying your withholding status.

Did you get married? If so, it may be time to review the beneficiaries of your retirement accounts and other assets. The same goes for your insurance coverage. If you are preparing to have a new last name, you should get a new Social Security card. Additionally, retirement accounts may need to be revised or adjusted.

Are you coming home from active duty? If so, go ahead and check on the status of your credit. Check on any other orders that you might have pre-empted, too.

Consider the impact of any upcoming transactions. Are you preparing to sell any real estate this year? Are you starting a business? Might any commissions or bonuses come your way in 2025? Do you anticipate selling an investment held outside of a tax-deferred account?

Vow to focus on your overall health and practice sound financial habits in 2025. And don’t be afraid to ask for guidance from a professional who understands your situation. The First Financial Investment & Retirement Center is here to help. You can call or email the financial professionals in the First Financial Investment & Retirement Center at 732-312-1534, mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

Sources:

  1. TheFinanceBuff.com, August 10, 2023
  2. IRS.gov, June 5, 2023
  3. IRS.gov, September 5, 2023

The Digital Economy and the Reinvention of Side Hustles

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Side hustles existed long before the COVID-19 pandemic, typically born out of a need to supplement income as opposed to pursue a passion that previously felt out of reach. Before the emergence of rideshare or grocery delivery platforms, one might have supplemented their income by reselling used items at a garage sale or offering their lawnmowing or pool cleaning services to a small circle of friends or neighbors. The pandemic, coinciding with the growth of platform-centered businesses, created the perfect storm needed to not only propel side hustles back into the spotlight – but shine them in a new light. Not only could you pursue something you are genuinely passionate about, you could also make some money doing it. Although the pandemic is thankfully behind us, one thing remains certain — side hustles are here to stay, and they look much different than ever before.

What is a Side Hustle?

A side hustle is generally viewed as a means of generating extra income outside of your primary job. However, a more modern definition suggests that in addition to that – a side hustle provides flexibility and the pursuit of personal passions. For some, flexibility and pursuit of passion might be immeasurable in comparison to supplementary income — causing side hustles to be pursued out of choice rather than necessity.

And Why are They so Popular?

Many factors have come into play to increase the popularity of side hustles among the general population, such as:

  • Digital Economy and Technological Growth: The definition of digital economy is constantly evolving, but generally refers to humans and technology working together to generate business. For example, ridesharing apps like Uber or Lyft have created a market of people willing to provide an on-demand car service to consumers and becoming connected via an app.
  • Generational and Attitude Shifts: Young workers such as those in Gen Z, are one of the few generations that have increasingly experienced an entirely remote or hybrid school and work environment. Additionally, due to recent economic conditions – many young workers have been faced with a difficult introduction to the job market and have been turning to dynamic workplaces to meet their needs. Lastly, younger generations especially tend to put a greater emphasis on well-being and mental health, which might be better afforded by a side hustle if done the right way.
  • Cost of Living: Let’s face it — living is more expensive than ever before. Especially for those living paycheck to paycheck, a side hustle might be an attractive option to bridge the gap between saving for what you need and saving for what you really want.
  • Identity Builder: Side hustles can act like a tattoo of sorts — offering onlookers an insight into one’s interests and passions. It’s a great conversation starter, too.

2025’s Most Popular Side Hustles

The rapidly growing and advancing of technology and digitization has created many opportunities for individuals looking to bring their passions to the right market. Here are some popular side hustles worth considering if you have skills or passions you’re looking to capitalize on in the new year:

  • Freelancing: Freelancing refers to offering your work or services on a per-job or per-task basis, allowing you to potentially work on multiple projects for multiple clients. Whether you have a knack for writing or a passion for computer code, there could be someone out there requiring your services. Some popular platforms to connect freelancers with clients are Freelancer and Upwork.
  • Platform-Based: There has been a rise in platforms that connect consumers with people offering on-demand services, such as Uber or Lyft for ride sharing, DoorDash or GrubHub for food delivery, and Instacart for grocery transport. There’s even a platform called Rover for those animal-lovers who want to pet sit or walk for fun, and earn a little money while doing it. These platforms afford you flexibility when you work by allowing you to create your own schedule. If providing goods to people is more your thing — Etsy and eBay are platforms that allow you to sell various new, used, or handcrafted items to people around the globe.
  • Content Creation: Many individuals have created a side hustle out of posting relatable content on various digital platforms. You have to find your niche — what type of content you would like to provide your potential audience with. Whether you would like to post relatable content about your family or relationship, or tell the world all the fun facts you have up your sleeve, someone might want to watch your content and certain platforms will pay you to post it. Creating content can help you form partnerships with your favorite brands, too — if they want you to represent their product or service.
  • Affiliate Marketing: Affiliate marketing typically refers to content creators and brands working together to promote products or services. These brands gain access to a representative who promotes their product or service to an audience of people willing to listen. An individual can get paid for affiliate marketing in various ways, one of which is when you refer a member of your audience to the brand you are promoting and it leads to a sale. There are many affiliate programs out there — you just have to do your research and make sure it’s right for you!

First Financial is here to help if you are looking to take your passion-project turned side hustle to the next level. Whether you’re looking to start with the basics, or your business has become more established over the years and you’d like to learn more about financing with a Business Loan – we’re here to support your business every step of the way. If you’re ready to take the next step, don’t hesitate to contact business@firstffcu.com, visit us at a local branch, or call 732.312.1500.

First Financial Member Spotlight: Michael Balsamo

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For more than 20 years, Michael Balsamo has trusted First Financial as his banking partner. As a seasoned realtor with a deep commitment to his clients, Michael values the personalized service and support he experiences every time he walks into a First Financial branch. “Whenever I walk into a branch, everybody says hello and makes me feel like a member of their family,” he shares. With a special appreciation for the Toms River branch, Michael often works closely with Branch Manager Brian Lang and his team, who he says consistently provide “top-notch” service.

As a full-time real estate agent with REMAX Revolution, Michael’s clients depend on him to recommend reliable mortgage solutions, and First Financial is at the top of his list. In addition to mortgage services, Michael finds First Financial’s online banking tools essential for managing his day-to-day transactions. “I pay my bills online, and if I ever have a question, their 800-number support is always helpful,” he says. First Financial’s blend of convenience and reliability allows him to bank wherever and whenever he needs to, making it easy to stay on top of his finances.

Reflecting on his long-standing relationship with First Financial – Michael confidently shares, “I would never think of banking with anyone else. It’s been over 20 years, and I’m never going to leave.”

We’re honored to be part of Michael’s financial journey and are committed to providing him with exceptional service. Be sure to check out his video interview below.

How to Join First Financial

If you live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties in NJ, you’re eligible to become a First Financial member. Businesses in Monmouth or Ocean Counties and our community partners are also eligible for membership. To join, simply open a savings account with $5 — it’s that easy! Once you’re a member, your immediate family can also sign up. To get started, call us at 732.312.1500, email info@firstffcu.com, or stop by any of our local branches.

Recovering From Holiday Spending

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The holiday season is a time of joy and celebration that often comes with financial challenges. Many of us find ourselves overspending on gifts, travel, or festive gatherings – leaving January feeling even more stressful. If holiday expenses have taken a toll on your budget, don’t worry—you’re not alone. Here are some practical steps to help you recover and get your finances back on track in the new year.

1. Make a Debt Repayment Plan

The first step to recovering from holiday spending is to assess the damage. Once you know how much you owe, create a realistic debt repayment plan. Start by identifying how much you can afford to pay toward your debt each month. For instance, if you overspent by $1,000 – aim to pay $200 monthly for five months.

Budgeting is key to achieving this goal. Contrary to popular belief, a budget isn’t about restricting your spending – but rather guiding it to align with your priorities. Use tools like First Financial’s Home Budget Calculator to create a customized plan that helps you regain control of your finances without feeling overwhelmed.

2. Consider Debt Consolidation

If you’re juggling multiple balances, debt consolidation can simplify your finances by combining various debt into one manageable payment. To help you consolidate holiday expenses, First Financial is offering a limited-time Holiday Loan promotion through January 15, 2025. Members can borrow up to $2,500 with rates as low as 9.99% APR and terms up to 24 months.* With same-day approvals and no pre-payment penalties, this loan can help you pay off holiday debt quickly.

If our Holiday Loan isn’t on the right timeline for you, First Financial also offers competitive Personal and Consolidation Loans as well as Personal Lines of Credit. Our representatives can help match you to the option that’s right for your financial needs. Get started by filling out our quick website inquiry form or calling 732-312-1500, Option 4.

3. Utilize Your Cash Back Rewards

If you used a rewards credit card for holiday shopping, now is the perfect time to redeem your cash back. Apply these rewards toward your next credit card bill to lighten the load and ease your financial recovery. Using cash back strategically can take some of the pressure off while you get your spending and saving habits back on track. It’s tempting to hold onto these rewards and let them grow, but don’t be afraid to use them when you need them!

4. Go on a No Spend Diet

For a short-term financial reset, try a no spend challenge. Commit to spending only on essentials like groceries and bills for a month or longer, if you can. Trimming unnecessary expenses allows you to save more and pay down debt faster. Zero discretionary spending is not sustainable long-term, but a no spend month can help you restrain your spending habits in the future.

5. Boost Your Income

If you need extra cash to tackle holiday debt, consider finding ways to increase your income. Pick up additional hours at work or start a side hustle, even a short-term income boost can make a big difference. Popular side gigs include virtual tutoring, pet sitting, delivery driving, or freelance writing. Keep reading our First Scoop blog, we’ll be featuring a post on side hustle ideas in the coming weeks.

Remember, this doesn’t have to be a permanent commitment. A few months of extra income can go a long way toward eliminating unwanted debt and regaining financial stability.

Recover Smarter with First Financial

Recovering from holiday spending may feel daunting, but with a clear plan and the right tools – you can regain control of your finances.

For more tips on money management and reducing debt, call us at 732.312.1500 or visit a branch today. Don’t forget to subscribe to our First Scoop Blog for ongoing financial advice and strategies to keep your finances on track.

*APR = Annual Percentage Rate. APR as low as 9.99%, terms up to 24 months, minimum loan amount is $500, and maximum loan amount is $2,500. Loan payment example: A $1,000 Personal Loan financed at 9.99% APR for 24 months, would have a monthly payment amount of $46.14. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. One holiday loan open per member. Refinance option for prior holiday loan is available, see credit union for details. Maximum dollar amount able to borrow is based on creditworthiness and loan term. 

Financial Resolutions You Can Stick to in the New Year

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The New Year is a time for fresh starts, and what better way to begin 2025 than with resolutions that set you up for financial success? Whether you’re looking to pay down debt, grow your savings, or gain better control over your finances, these actionable resolutions can help you stay on track.

1. Create a Budget You Can Stick to

A well-crafted budget is the foundation of financial health. It helps you track your spending, identify areas for adjustment, and stay focused on your goals – whether you’re saving for a big purchase or paying down debt. Keep your budget realistic – instead of attempting drastic cuts, look for small ways to save, like switching to a less expensive grocery store or canceling unused subscriptions. Use First Financial’s Home Budget Calculator to identify where your money is going and where changes can make the biggest impact.

2. Review Your Credit Report Regularly

Your credit report is a vital tool for understanding your financial health. It details your credit history, including payment records and account balances, and can help you spot errors or signs of identity theft. Take advantage of the free annual credit report available from each of the three major bureaus (Equifax, Experian, and TransUnion) via AnnualCreditReport.com. Keeping an eye on your credit report ensures you’re prepared for any financial goals in the year ahead, like buying a home or securing a loan.

3. Build an Emergency Fund

An emergency fund is your safety net for unexpected expenses, like medical bills or emergency repairs. Aim to save 3-6 months’ worth of living expenses in a separate account from other savings. Start small and contribute regularly to grow your fund over time. A dedicated rainy day fund reduces financial stress, keeps you on track with your money goals, and ensures you won’t have to dip into your savings or investment accounts.

4. Maximize Employer Offered Benefits

Many employers offer financial wellness benefits that go beyond your paycheck. From retirement plans to student loan assistance, these perks can help you build wealth and reduce financial stress. Take full advantage of your compensation package by participating in employer matched retirement contributions, exploring wellness stipends, or accessing provided financial advisors. Every employer is different, but ask around and do some research on what is available to you. A dollar saved today can help secure your financial future.

5. Use a Rewards Credit Card Wisely

Credit cards offer valuable rewards and protections when used responsibly. Opt for a cash back or points-based card and use it for everyday purchases, but try to pay off the balance in full each month to avoid interest charges. First Financial’s Visa Cash Plus Credit Cards provide cash back and uChoose Rewards, which can be redeemed for travel, merchandise, gift cards, and more.* Credit cards can also be a safer choice than debit cards since they aren’t directly connected to a checking account. It can be much easier to recover funds used for fraudulent purchases than if a thief had gained access to your checking or savings account.

6. Consolidate High Interest Debt

High interest debt – such as credit card balances, can hold you back financially. Consider consolidating or refinancing this debt into a personal loan with a fixed interest rate and predictable monthly payments. First Financial offers competitive rates and flexible terms with personal loan options to help you simplify your repayment strategy.** By consolidating your debt, you can save money on interest and focus on paying off balances faster.

7. Reassess Your Insurance Policies

The start of a new year is an excellent time to review your insurance coverage. Changes in your lifestyle, financial goals, or your home’s value may require policy adjustments. From homeowners to auto and life insurance, ensure your coverage meets your current needs. First Financial can help you find options that protect your assets while supporting your overall financial plan.

8. Align Financial Goals with Your Partner

Money management as a couple requires teamwork. Sit down with your partner to discuss individual goals and create a shared financial plan. Regularly review your progress together to ensure your plan adapts to life changes and priorities. Open communication about finances strengthens relationships and ensures you work toward a shared vision for the future.

Make 2025 Your Best Financial Year Yet

Sticking to financial resolutions doesn’t have to be difficult. By setting realistic goals and using the right tools, you can make meaningful progress toward financial stability and success. For more tips or to explore our products and services, call 732.312.1500 or visit a branch today. Don’t forget to subscribe to our First Scoop blog for ongoing insights to help you reach your goals in 2025 and beyond.

*APR varies up to 18% for purchases, when you open your account based on your credit worthiness. The APR is 18% APR for balance transfers and cash advances. APRs will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of $10 or 3% of the total cash advance amount—whichever is greater (no maximum), Balance transfer fee of $10 or 3% of the balance—whichever is greater (no maximum), Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. A First Financial membership is required to obtain a Visa® Credit Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Your First Financial Visa® Cash Plus Credit Card will earn cash back based on your eligible purchase transactions. The cash back will be applied to your current credit card balance on a quarterly basis and be shown cumulatively on your billing statement. Unless you are participating in a limited time promotional offer, you will earn 1% cash back based upon eligible purchases each quarter.

**APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. Personal Loan repayment terms range from 12 to 60 months, and APRs range from 10.24% APR to 18% APR. Minimum loan amount is $500. Loan payment example: A $2,000 Personal Loan financed at 10.24% APR for 24 months, would have a monthly payment amount of $92.51. A First Financial Federal Credit Union membership is required to obtain a Personal Loan or Line of Credit, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.