In addition to your monthly car payment, you’ll likely be shelling out for ongoing costs like gas, car insurance and regular maintenance.

Your monthly loan payment

While some people may pay cash for their vehicle, many opt to finance the cost by taking out an auto loan.

The larger your down payment, the less money you’ll need to borrow. Making a down payment can also reduce your monthly payment and the total amount of interest you’ll pay on the loan.

The longer you stretch out your loan period, the lower your monthly payment will be. But with a longer loan term, you’ll pay more in total interest.

Additional costs of owning a car

Car insurance

Car insurance is required in most states. A variety of factors, including your driving history and age, can influence the cost of your car insurance. The combined average car insurance premium in the U.S. was $1,189 annually, or just over $99 per month, in 2018, according to the National Association of Insurance Commissioners’ Auto Insurance Database Report released in 2021.

Fuel

The Bureau of Labor Statistics found that consumers in 2017 spent an average of $1,968 per year, or $164 per month, on gas, other fuels and motor oil.

Maintenance

In 2017, AAA found that, on average, new vehicles cost $1,186 each year to maintain and repair.

Other potential costs 

Additional costs to consider can include …

• Vehicle registration fees — These fees may be annual or biennial. Some states charge a flat registration fee, while others use factors like your car’s age or fuel efficiency to determine your fee.
• Vehicle property tax — Some states also charge a vehicle property tax, based on your car’s value.
• Parking — Depending on where you work and live, you might need to factor parking costs into your budget. Parking costs vary by city.

Bottom line

The advertised price of a vehicle is just one consideration when calculating the total cost of owning a car. Expenses like car insurance, gas and maintenance can drive up your monthly costs. Before you buy, do a little research to get a sense of potential costs and to help make sure you can stick to your car budget.

In the three weeks ending April 4, 2020 alone, Ohio unemployment claims were nearly double the total number of claims filed in all of 2019.

If you’ve lost your job because of the coronavirus pandemic, you can apply for Ohio unemployment benefits that provide financial assistance. Here are some things to know.

• How do unemployment benefits work in Ohio?
• How can I qualify for Ohio unemployment benefits?
• How much might I get?
• How can I apply?
• How will I receive my payments?
• When do my benefits end?
• What if my claim is rejected?
• How has COVID-19 affected Ohio unemployment benefits?

How do unemployment benefits work in Ohio?

The Ohio Department of Job and Family Services oversees the state’s unemployment insurance benefits program through the Office of Unemployment Insurance Operations. When you lose your job, you should apply for benefits as soon as possible online or by phone — there’s no option for in-person applications.

If your claim is approved, you can receive unemployment benefits for up to 26 weeks a year. But states may choose to revise their benefits in times of economic crisis, and the federal government may help fund extended state benefits during such times.

How can I qualify for Ohio unemployment benefits?

To qualify for unemployment benefits, federal guidelines say you must be unemployed through no fault of your own, like if you were laid off because of a lack of available work.

But each state also has its own eligibility requirements that you must meet in order to qualify for benefits.

In Ohio, you must meet four criteria to establish eligibility for unemployment benefits.

1. You are fully or partially unemployed when you file your application. Being fully unemployed means that you’ve done no work and earned no wages. You’re partially unemployed during a week if your employer let you go before the end of your regular work week, or reduced your hours and pay, leaving you earning less than your weekly unemployment benefit amount.
2. You worked for at least 20 weeks during a base period (more on the base period shortly) for a company that’s covered by Ohio unemployment insurance. If you file in 2020, you must have at least an average weekly wage of $269 before taxes and deductions during this base period.
3. You’re unemployed through no fault of your own. It’s not your fault you’re out of work if your employer laid you off because of a lack of work, eliminated your job or closed the business. But if your employer fired you for a reason, such as poor performance or violating company rules, you might not qualify for benefits. If you can demonstrate that you quit your job for a good reason, such as unsafe working conditions, you may qualify for unemployment benefits.
4. You’ve spent enough time working at a covered business since the last time you filed a claim. If this isn’t your first time filing for unemployment compensation, you’ll need to have worked and earned a certain amount of wages for at least six weeks since the end of your last claim.

How much might I get?

As with most states, Ohio’s formula for calculating your weekly benefit amount can seem a little confusing. Let’s walk through it and look at an example.

The calculation of your weekly benefit amount will depend on your earnings during what’s referred to as your base period. In Ohio, the standard base period is the first four out of the last five calendar quarters before you file your claim. So, for example, if you file in May, your base period would be January through December of the previous calendar year.

The formula for your weekly benefit amount is half your average weekly wage during your base period — up to maximum amounts based on the number of qualifying dependents you have.

Here’s how to find your average weekly wage.

1. Add up all the wages you earned during the base period
2. Divide that number by the total number of weeks you worked during that period
3. Divide that amount in half

In Ohio, the minimum weekly benefit amount is $135. Here’s a snapshot of the maximum unemployment benefit amounts in Ohio for 2020.

Again, because states may change their benefits during times of crisis, it’s possible these maximums can change during recessions or other economic crises. 

How can I apply?

You have two ways to file an application for Ohio unemployment benefits.

• Online — File any time online at unemployment.ohio.gov. Click on the red “apply for unemployment now” button and follow the instructions.
• By phone — Call 1-877-644-6562 or TTY 1-614-387-8408 to reach an agent for assistance. Regular hours are Monday through Friday from 8 a.m. to 5 p.m. Eastern time, excluding holidays.

You’ll need to provide the following information to apply for unemployment benefits in Ohio:

• Social Security numbers for yourself, your spouse and any dependents you’re claiming
• Your name, address, telephone number and email address
• Names and dates of birth for your spouse and any dependents you’re claiming
• Your driver’s license or state ID number
• Name, address, telephone number and dates of employment with each employer you worked for during the past six weeks of employment
• The reason you became unemployed (you’ll need a reason for each employer)
• Alien registration number and expiration date if you’re not a U.S. citizen or national
• Your regular occupation and job skills

If you were employed out of state, have worked for the federal government or are separated from military service, you’ll need to provide additional information.

How will I receive my payments?

Three weeks after you file, your first payment should be issued, though it can take up to four weeks to receive the payment. You should file for benefits weekly during this time. And you won’t get paid for the first week that you’re eligible for benefits — that’s a state-required waiting week.

You have two options for receiving payments: direct deposit or debit card. A direct deposit can go into a checking or savings account, so you must provide the bank name, address, account type, routing number and account number.

Alternatively, you can receive payments on a U.S. Bank ReliaCard Visa debit card, which you can use to make purchases and withdraw cash at an ATM. Withdrawals at U.S. Bank or MoneyPass ATMs are free, but you may be charged a fee at other ATMs.

Are Ohio unemployment benefits taxable?

Unemployment compensation is taxable income that you must report to the IRS. When you file for Ohio unemployment benefits, you can opt to have taxes withheld from your benefit amount, which could help you avoid a big tax bill when you file your tax return.

When do my benefits end?

While the duration may be extended during a national economic crisis, under normal circumstances you can receive up to 26 weeks of benefits per year. But you’ll need to file weekly claims and meet these ongoing requirements to keep receiving benefits.

• Be willing and able to accept suitable work every day you claim your benefit — For example, if you begin school and it impacts your ability to accept suitable work consistent with your prior training and experience, you may no longer be eligible for unemployment benefits.
• Actively seek work — Generally, you need to be actively looking for a job, although there are some exceptions.
• Participate in re-employment activities by the eighth week after filing your claim — Not showing up for a Reemployment Service session or activity could cause you to lose benefits.
• Accept suitable work if it’s offered to you (or have a good reason for declining the work).

Report any money you received, such as severance pay or vacation pay. If your gross earning is less than your weekly benefit amount, you can still receive benefits, but they’ll likely be reduced.

What if my claim is rejected?

If your unemployment benefits application is rejected and you disagree with the decision, you have the option to appeal within 21 days. Here’s what to include in your appeal.

• Your Social Security number
• The date and identification number of the determination you disagree with
• Reasons you disagree (evidence, documentation or witness statements can be added)

You can submit your appeal online at unemployment.ohio.gov between 6 a.m. and 6 p.m. Eastern time daily or by mail or fax with the processing center listed on your determination notice. During the appeal process you should continue to file unemployment claims for the weeks you’re unemployed because if the appeal is ruled in your favor, you may only get payments for weeks that were properly claimed.

Bottom line

Unemployment benefits are a temporary solution to help unemployed workers pay bills and care for dependents. But you must meet eligibility requirements to receive unemployment compensation (and keep receiving it). You can take the first step by submitting an application with the Ohio Department of Job and Family Services.

How has COVID-19 affected Ohio unemployment benefits?

• The federal Coronavirus Aid, Relief and Economic Security Act, or CARES Act, extends benefits up to 39 weeks rather than capping them at 26 weeks per year.
• The CARES Act also provides an additional $600 per week in addition to your regular unemployment benefit beginning on March 27, 2020, and ending on or before July 31, 2020.
• In addition, self-employed workers, independent contractors, gig economy workers, and others who otherwise wouldn’t qualify may now be eligible for unemployment benefits.
• If you’re out of work because of COVID‐19, you should use mass‐layoff number #2000180 when you file your application.
• In response to the COVID-19 crisis, the Office of Unemployment Insurance Operations has extended its hours when agents can take initial applications: Monday through Friday from 7 a.m. to 7 p.m., Saturday from 9 a.m. to 5 p.m., and Sunday from 9 a.m. to 1 p.m. Eastern time.

This article was fact-checked by our editors and a member of the Credit Karma product specialist team, led by Senior Manager of Operations Christina Taylor. It has been updated for the 2020 tax year.

Keeping track of how much tax you might owe when Tax Day comes around — or how much refund you might be due — is always a good idea.

To estimate your federal tax obligation, the starting point is your adjusted gross income, or AGI — your income after making adjustments but before taking any tax deductions. But to determine your starting point, you’ll need an important piece of information: your gross income.

Let’s look at how the IRS defines gross income and what role this number plays in calculating your total tax obligation each year.

Knowing what the IRS says you should include in gross income and what you might be able to exclude from tax calculations can help you file an accurate return and pay the correct amount of federal income tax.

• What does “gross income” mean?
• What is excluded from gross income for tax purposes?
• Why is gross income important for taxes?
• Gross income: taxes and beyond

What does “gross income” mean?

Does the concept of “gross income” seem obvious? When it comes to taxes, identifying your gross income isn’t quite as simple as just looking at your annual salary.

The IRS considers all of the income you received — including money, goods, property or services — to be part of your gross income, unless it’s specifically exempt from taxation. This includes income from sources outside of the U.S. and earnings from the sale of your main home, even if you can exclude part or all of it. It may even include part of your Social Security benefits, if you can receive them.

Keep in mind: Gross income includes both earned and unearned income.

For example, if you receive a paycheck from an employer, you can typically look on the pay stub for a line item that says something like “total gross pay.” This number is calculated before taxes and other withholdings are taken out. If you have multiple employers and receive multiple paychecks, you’ll need to add the income from all of your W-2s to get the total for your tax return. If you receive tips for your job, don’t forget to include these as well. Then you’ll need to add in unearned income — for example, the interest you receive from a savings account during the year.

What’s the difference between earned and unearned income?

Generally, earned income includes money you make — either as an employee or through working for yourself. In other words, it includes all types of income that you actively earned.

Unearned income means income that you didn’t work for, like interest from savings, dividends on investments, lottery winnings, life insurance proceeds and more.

What is excluded from gross income for tax purposes?

There’s an important distinction between gross income for tax purposes and gross income as it applies to other financial matters.

For example, a mortgage lender who wants to know your gross income when considering whether to give you a mortgage likely means all of your income before taxes. Comparing that number to your net income (your take-home pay after payroll taxes and other deductions) can help the lender understand your financial picture. But for tax purposes, you’re allowed to exclude certain types of income from your gross income because those types aren’t considered taxable.

The list of income items excluded from gross income is lengthy. Here are some examples.

• Alimony you receive (if you divorced or separated after Dec. 31, 2018)
• Life insurance death benefits
• Inheritances, bequests and gifts
• Interest from state or municipal bonds
• Workers’ compensation
• Amounts your employer contributes to a qualified pension plan on your behalf
• Military pay for serving in a combat zone
• The amount your employer pays for your accident or health insurance
• Payments foster parents receive from a government entity to provide foster care

So if you’re injured at work and are approved for three months of workers’ compensation pay, you likely won’t have to include that money in your gross income. The same is true if you inherit money or real estate from a relative who has died. If you receive life insurance payouts in addition to your inheritance, you likely won’t have to consider this money as part of your gross income either.

Why is gross income important for taxes?

First of all, your gross income is important because it helps determine whether you must file or not.

For tax year 2020, you must file a federal tax return if your gross income is at or above the minimum listed below for your filing status and age. (Note that while this is draft info from the IRS, the numbers aren’t likely to change.)

Gross income is also the starting point for figuring out adjusted gross income. AGI is defined as gross income minus adjustments to income as allowed by the IRS. Once you know your AGI, you can figure out your taxable income, which is essentially your AGI minus deductions.

On IRS Form 1040 you’ll list your gross income and work through adjustments and deductions before determining your taxable income. Finally, you’ll use this taxable income number to see which income tax table applies to you.

Gross income: taxes and beyond

Gross income is necessary for filing taxes. But it’s also an important number that you’ll use when you apply for a loan like a mortgage. Your credit reports, credit scores and debt-to-income ratio are key factors that lenders consider in evaluating credit applications. You’ll need to know your gross income to figure out your debt-to-income ratio, which is calculated by dividing your total monthly debt by your gross income. The resulting number gives lenders an idea of whether you’ll be able to pay back the loan.

Bottom line

Gross income may seem like a pretty straightforward concept — it’s all the income you earn. But when it comes to taxes, not all types of income are treated the same.

Gross income can get you a step closer to calculating your federal tax obligation. But you may have some types of income that aren’t taxable and don’t need to be included in your gross income.

To learn more about the types of income that are and aren’t taxed, you can check out IRS Publication 525.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is an Enrolled Agent and the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

You hear your local bank is offering free checking and you’re interested in opening an account. According to the Consumer Financial Protection Bureau, that means it can’t charge any monthly service fees; fees for exceeding a certain number of transactions; fees for not meeting a minimum monthly balance; or fees to deposit, withdraw or transfer money.

But you may be surprised to learn that a free checking account may still charge you for using a debit card at an ATM or for overdrafting your account. Accounts advertised as free and no-fee banking are not always what they seem, so it’s good to read the fine print and do some research beforehand.

• Bank fee basics
• What are some qualifications for no-fee banking?
• Where might I find no-fee banking?

Bank fee basics

Some financial institutions advertise free and no-fee accounts. But you may be more likely to find a bank or credit union that will waive certain fees for some types of accounts than you are to find a bank account that is truly fee-free.

Keep in mind that banks and credit unions can charge customers fees to use certain savings and checking account services. While offers vary among financial institutions, common checking account fees you may encounter include …

• Monthly service fees. This may be waived if you make direct deposits.
• Overdraft fees if you bounce a check.
• ATM-use fee each time you use an ATM other than your own.
• Transaction fees for check use.
• Fees for access to online or mobile banking or bill pay.
• Fees for failing to maintain a minimum balance.

When fees add up, banking can get expensive. No-fee or free banking —  which doesn’t charge fees for various aspects of your accounts — may sound like a simple solution. But there’s often a catch for any type of “no-fee” banking account. When exploring your options, be sure to learn which fees are eliminated completely and which may apply under certain circumstances. Ask for a fee schedule for easy reference.

What are some qualifications for no-fee banking?

You may have to meet a number of qualifications to avoid certain bank account fees.

• Minimum opening deposit
• Minimum account balance
• Required monthly direct deposit

Here’s a sample scenario: You open a fee-free savings account at a credit union. But in order to avoid monthly maintenance charges, the financial institution requires you to maintain a $500 minimum balance. When you read the account agreement details, you learn that once your balance goes below that required minimum amount, you’re charged a monthly maintenance fee of $20.

This is why it’s always a good idea to read the fine print with any type of financial account. Financial institutions can have varying rules for different accounts. If you don’t meet qualifications to avoid certain fees, you may be facing monthly fees. On the flip side, if you understand the requirements and follow them, you may be rewarded with no-fee banking that has the potential to save you plenty of money.

Where might I find no-fee banking?

There are many places to find free and no-fee banking options. A good first step is to ask your current bank or credit union, which may offer accounts that waive certain fees.

An internet search can yield a variety of no-fee banking options as well. Some of these options are from online banks, which means there are likely no physical branches and that you can manage your online banking account digitally — often on a mobile device.

Of course, you can always ask friends and relatives for banking services recommendations. A recommendation from someone you trust about no-fee banking can help narrow your search for your next savings or checking account.

Bottom line

Having an account with the opportunity to avoid fees is a good thing, but it’s important to be cautious. Always read the fine print of the account details so you understand which fees can be waived and under which circumstances. And be sure to follow the rules so you can continue to enjoy free or no-fee banking. After some thorough research, you should be on your way to choosing a bank.

This article was fact-checked by our editors and a member of the Credit Karma product specialist team, led by Senior Manager of Operations Christina Taylor. It has been updated for the 2020 tax year.

Fortunately, the adoption tax credit can help offset certain adoption-related costs for parents who qualify to take the credit.

Let’s look at the credit, who can claim it, how much it can be worth and other important things to know about the adoption tax credit.

• How much does adoption cost?
• What is the adoption tax credit?
• What expenses qualify for the adoption tax credit?
• How much is the adoption tax credit worth?
• How do I qualify for the adoption tax credit?
• How do I claim the adoption tax credit?
• When can I claim the adoption tax credit?
• What is the income exclusion for employer-provided adoption assistance?

How much does adoption cost?

It’s difficult to find statistics on just how many kids are adopted in the U.S. each year. While state and federal governments keep track of the number of children adopted from foster care and foreign countries, there’s no good source of data on adoptions through private agencies. But multiple sources estimate the number of children adopted each year exceeds 100,000.

Adoption outside the public child welfare system involving an attorney can cost around $15,000 to $40,000, according to the Child Welfare Information Gateway of the U.S. Department of Health and Human Services. Private agency adoptions conducted outside the public child welfare system often run around $20,000 to $45,000. A home study (review of the adopting parents’ home sometimes required before an adoption is approved) alone can cost between $1,500 and $4,000.

Adopting a child from foster care costs much less. Federal and state programs can help adoptive parents cope with costs associated with adopting children from foster care. And children adopted from foster care may also qualify parents to receive a one-time reimbursement for certain adoption costs and monthly maintenance payments to help care for the child.

What is the adoption tax credit?

Bottom line: Adoption can be costly. The good news: The adoption tax credit can help with your federal taxes at tax time.

The adoption tax credit is available for adoptions of an eligible child. This includes children younger than 18 and anyone older than 18 who’s physically or mentally incapable of taking care of themselves. Keep in mind that if you’re a stepparent adopting your spouse’s child, you are not eligible for this credit.

What is a tax credit?

A tax credit is a dollar-for-dollar reduction in the amount of federal income tax you must pay.

What expenses qualify for the adoption tax credit?

Not all adoption-related expenses will necessarily be eligible for the credit. The IRS specifies these costs as qualified adoption-related expenses for purposes of claiming the adoption tax credit.

• Reasonable and necessary adoption fees
• Court costs and attorney fees
• Traveling expenses (including money spent on meals and lodging while away)
• Other expenses that are directly related to the legal adoption of an eligible child (such as a home study)

How much is the adoption tax credit worth?

The adoption tax credit is worth up to $14,300 per child for the 2020 tax year, helping to cover qualifying expenses associated with adopting an eligible child. This is a nonrefundable tax credit. That means it’s limited to your tax liability for the year, reducing it dollar-per-dollar up to the full amount of the credit. If a nonrefundable credit reduces your tax liability to zero, you can’t get any excess credit back as a refund.

But if you have any leftover credit in excess of your liability, you can claim the remaining credit on future tax returns for up to the next five years.

Here’s an example of how that could work.

• You adopt a child in the current tax year and have qualified adoption-related expenses of $10,000.
• Because your qualified expenses are below the $14,300 expense limit, your total adoption tax credit will be for the full amount of your qualified expenses — $10,000.
• Your federal income tax obligation for the year is just $2,000, leaving you with $8,000 in excess credit.
• You can apply that credit toward your federal income tax obligation for the next five years or until you use up all the credit, whichever comes first.

Exceptions for special needs children

If you adopt a special needs child, you could qualify for the maximum credit amount even if that amount exceeds your actual qualified adoption expenses. For the purposes of the credit, a child who is a U.S. citizen or legal resident of the United States is considered to be special needs if they can’t or shouldn’t be reunited with their birth parents and they have a condition or circumstances (for example a disability) that could make them unadoptable unless their adoptive families get some assistance.

How do I qualify for the adoption tax credit?

If you are adopting an eligible child and have qualifying adoption-related expenses, it’s worthwhile to investigate whether you can take the adoption tax credit on your federal taxes. But even if you adopt an eligible child and have qualifying expenses, there are limits on who can get the credit.

Income limitations

There are income limits for claiming the adoption tax credit. Here they are for the 2020 tax year.

• $214,520 or less: If your modified adjusted gross income, or MAGI, is $214,520 or less, you may be eligible for the entire credit.
• $214,521– $254,519: The credit is reduced for taxpayers with MAGI between $214,521 and $254,519.
• $254,520 or more: If your MAGI is $254,520 or more, you’re no longer eligible for the credit.

The credit phases out proportionally. For example, if a taxpayer’s income is $231,160 — roughly the midpoint of the phaseout range — the tax credit is reduced 50%, meaning it becomes $7,040 per child.

Filing status considerations

You can claim the credit if you adopt alone or split it with the co-parent. Married couples generally must file a joint tax return to claim the adoption tax credit together. For registered domestic partners adopting a child together, you both may mutually agree to split the qualified expense and the resulting credit at tax time.

Most people who use a status of married filing separately can’t get the credit in the first year the qualified adoption expenses are allowable, but there are exceptions. If you’re married filing separately, check out the instructions for IRS Form 8839 to learn about any exceptions.

What is modified adjusted gross income?

Adjusted gross income, or AGI, is all the income you receive in a year minus certain tax adjustments. Modified adjusted gross income, or MAGI, is your AGI plus some deductions you add back in. MAGI helps determine whether you qualify for certain tax breaks.

How do I claim the adoption tax credit?

If you qualify to claim the adoption tax credit, you’ll use IRS tax Form 8839 to do so. Include the name and age of the adopted child, along with the child’s taxpayer identification number on the form. The child’s TIN is typically their Social Security number. If you don’t have the child’s Social Security number, you may be able to use an adoption taxpayer identification number for the child instead. To get an ATIN, you’ll need to fill out IRS tax Form W-7A.

When can I claim the adoption tax credit?

Generally, when you can take the credit will depend on when you paid the qualifying adoption expenses, whether the adoption is within the U.S. or from a foreign country, and whether the adoption was ever finalized.

When you adopt an eligible child who’s a U.S. citizen or resident of the U.S. (or a U.S. possession), if you pay for qualified adoption expenses before the year in which the adoption is finalized, you can claim the credit for those expenses for the next tax year. This is true even if you never finalize the domestic adoption.

For foreign adoptions (of a child who’s not yet a U.S. citizen or resident), you can’t take a credit for any qualified adoption expenses (paid before and during the year of the adoption) until the year the international adoption is final.

If you have qualified expenses after the adoption becomes final, you may be able to claim a credit for the year in which you paid the expenses, regardless of whether the adoption was foreign or domestic.

What is the income exclusion for employer-provided adoption assistance?

Some employers offer benefits that help subsidize adoption costs. These benefits may be excluded from your income, or your salary might be reduced by the benefit amount, meaning you won’t pay taxes on this amount. This is different than the adoption tax credit. For the 2020 tax year, the maximum amount that can be excluded from an employee’s gross income for the amounts paid by an employer for qualified adoption expenses is $14,300.

You can’t take the adoption credit for any expenses your employer has reimbursed. You’ll have to reduce your credit amount by the reimbursement amount.

Bottom line

The adoption tax credit can help offset the overall costs of an adoption. Once the adoption is finalized, remember to explore other tax benefits associated with being the legal guardian of another person — you may be able to take advantage of several tax breaks for parents. First, learn if your adoptive child meets qualifications to be claimed as a dependent. You may also want to explore the child tax credit. And if you plan to use child care services so you can work, check out the dependent care tax credit.

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is an Enrolled Agent and the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

This article was fact-checked by our editors and CPA Janet Murphy, senior product specialist with Credit Karma.

Living in the Golden State probably feels a bit more golden when you get a state tax refund. Fortunately, it’s easy to track your California tax refund.

With some basic information, you can track your refund through the California Franchise Tax Board’s online portal. Let’s look at how to track your California state tax refund for the most recent tax year.

• How can I track a California tax refund?
• How long might it take to get my California tax refund?
• How can I get help?
• What if my refund is different than what I expected?

How can I track a California tax refund?

Paying taxes is a fact of life for many who live or work in the most-populous U.S. state. The amount of state income tax you owe will depend on a number of factors, including your filing status, how much money you earn in a year, and what credits or deductions you’re eligible to take.

If you overpay your state taxes during the tax year, you may be owed a refund when Tax Day comes around. If you’ve filed your state tax return and are expecting a California state refund, you can probably track its status through the State of California Franchise Tax Board. It offers a “Where’s my refund” tool that’s similar to the IRS tool for tracking your federal income tax return. The tool will allow you to track the status of your most recent (or current-year) refund. If you want to check on refunds from prior tax years, you’ll have to contact the FTB.

To track your current tax refund, you’ll need several important pieces of information.

• Social Security number
• Numbers in your mailing address
• ZIP code
• Refund amount

When you click the “Check Your Refund” button on the website, you’ll first enter your Social Security number. Then you’ll enter the numbers in your mailing address. This refers to the digits before the street name — so if you live at 104 Main Street, the numbers would be 104. Next, you’ll enter your ZIP code. Finally, you’ll enter the anticipated refund amount in whole dollars, which can be found on your most recent California tax return.

How long might it take to get my California tax refund?

Processing times vary depending on multiple factors. Here are a few.

• How you file your California tax return — If you choose to e-file, normal processing times can take up to two weeks. If you decide to paper file, processing can take up to four weeks.
• Potential delays — Your return could be delayed if the FTB decides it needs extra review for accuracy, is incomplete, or shows signs of fraud or identity theft. In those situations, it could take a month for you to receive your refund or a notice from the FTB requesting more information if you e-filed your return and two months if you filed a paper return.
• Amendments to your return — If you amend your California state tax return, that could delay your refund up to three months.

Generally, choosing to e-file your return and have your refund deposited directly into your bank account will help you get your refund faster.

How can I get help?

While the State of California Franchise Tax Board’s online refund tracking tool may help you stay on top of your refund’s status, it does have limitations. If you want to check the refund status of a past year’s return, you can’t use the online tracking tool. And if you run into an issue with the online tracking tool — say you don’t see a refund status or it says you should’ve received a refund by now but you haven’t — you can contact the FTB about your refund in three ways.

1. Phone — Call 1-800-852-5711 on weekdays from 7 a.m. to 5 p.m. PST.
2. Chat — Sign into MyFTB to chat on weekdays from 7 a.m. to 5 p.m. PST.
3. Mail — Mail your query to the following address:
   Franchise Tax Board
   PO Box 942840
   Sacramento, CA 942840-0040

What if my refund is different than what I expected?

Even if you do your best to submit an accurate return, it’s still possible for the refund amount you actually receive to be different from what you were expecting. For example, the amount may change if you don’t qualify for a tax credit you attempted to claim or the refund is put toward a past-due tax debt or other government agency debt, like child support.

If the California Franchise Tax Board makes changes to your return, you should receive a letter in the mail called a Notice of Tax Return Change that explains the change and updated refund amount.

Bottom line

Learning you’re receiving a tax refund can be good news. It’s even better when you file your state tax return for free, because you’ll be saving more of your hard-earned money. For next year, consider e-file options that can take just a few weeks to process. And if you’re waiting for your refund now, check out the FTB website to track the status of your California state refund.

Relevant sources: State of California Franchise Tax Board: Where’s my refund? | U.S. Census Bureau | State of California Franchise Tax Board: Check your Refund Status | State of California Franchise Tax Board: Returns and Refunds | State of California Franchise Tax Board Personal Income Tax Booklet (2018) | State of California Franchise Tax Board: Help with refunds

A senior product specialist with Credit Karma, Janet Murphy is a CPA with more than a decade in the tax industry. She’s worked as a tax analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. You can find her on LinkedIn.

This article was fact-checked by our editors and a member of the Credit Karma product specialist team, led by Senior Manager of Operations Christina Taylor.

When you file your federal income tax return, you could be eligible for the child tax credit for each qualifying child you have. The child tax credit is worth a maximum of $2,000 per qualifying child. And if the credit reduces your tax obligation to zero, you may also be able to get up to $1,400 of the credit refunded to you as the additional child tax credit.

• What is the additional child tax credit?
• How do I qualify for the additional child tax credit?
• How much is the additional child tax credit worth?
• How do I claim the additional child tax credit?

What is the additional child tax credit?

Like all tax credits, the additional child tax credit works by reducing the amount of tax you owe. The additional child credit is actually part of the child tax credit, which was temporarily increased under the Tax Cuts and Jobs Act of 2017.

If you qualify for the child tax credit and the credit lowers the amount of federal income tax you owe to zero, you could qualify for the additional child tax credit, which allows you to get any excess credit — up to $1,400 per qualifying child — as a tax refund.

Of course, you must have qualifying kids to be eligible for a child tax credit. But not everyone who has kids will qualify for the child tax credit and additional child tax credit.

How do I qualify for the additional child tax credit?

To receive the additional child tax credit, you first need to be eligible for the child tax credit by having (and claiming) at least one qualifying child. A qualifying child must be …

1. Related to you. A qualifying relative can be a son, daughter, stepchild, brother, sister, stepbrother, stepsister, half brother, half sister or a descendant of any of them. Eligible foster children may also be qualifying children.
2. Younger than 17 at the end of the tax year.
3. One who has not provided more than half their own support for the tax year.
4. Living with you for more than half the tax year (with some exceptions).
5. Claimed as a dependent on your federal income tax return.
6. Not filing a joint return for the year. A child may still be a qualifying child if the only reason they file a joint return is to claim a refund of withheld income tax or estimated tax paid.
7. A U.S. citizen, U.S. national or U.S. resident alien.

Additionally, tax reform added an important requirement for claiming the child tax credit or additional child tax credit: The child you’re claiming the credit for must have a Social Security number.

How much is the additional child tax credit worth?

For tax years between Jan. 1, 2018, and Dec. 31, 2025, filers can claim the child tax credit for all qualifying children. The maximum amount per qualifying child is $2,000. This credit starts to phase out at $200,000 modified adjusted gross income or $400,000 for married couples filing jointly.

If your child tax credit is more than the amount of federal income tax you owe, you may be eligible for the additional child tax credit. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. Even if you don’t owe any tax, you may receive this refund. Translation: The IRS may be cutting you a refund check.

An example of how the child tax credit works

Let’s say you and your partner owe $3,000 in federal income tax. You have three children and qualify for the full child tax credit for each, which means you get a $6,000 credit (3 x $2,000 = $6,000). You now have zero federal tax liability and $3,000 in unused credit ($3,000 total tax bill – $6,000 tax credit = $3,000 unused credit). This unused credit can be claimed as the additional child tax credit, which allows you a refund of up to $1,400 per qualifying child.

Now let’s change the scenario. You and your partner still have three qualifying children, so your credit amount is still $6,000. But now your federal income tax bill is just $1,000, leaving you with $5,000 in unused credit ($1,000 total tax bill – $6,000 total tax credit = $5,000 unused credit). But the refundable portion of the credit is just $1,400 per qualifying child. So the maximum amount you can get refunded would be $4,200 (3 x $1,400).

How do I claim the additional child tax credit?

To determine if you’re eligible for the additional child tax credit, you can fill out the Child Tax Credit Worksheet, which is typically included in the instructions for the Form 1040. If you qualify for the credit, the worksheet may also direct you to use Schedule 8812 to determine if you’re eligible for the additional child tax credit.

Divorced or separated: Which parent can claim the credit?

While the rules are different for divorced or separated parents, the parent who claims the qualifying child as a dependent on their tax return is usually the parent who can also claim the child tax credit and additional child tax credit (if they meet all other qualifications for claiming the credit).

Bottom line

The additional child tax credit could affect your refund by up to $1,400 per qualifying child.

Being a parent may be the best “job” you’ve ever had — but it’s also one that comes with high overhead. The federal government offers parent- and family-oriented tax breaks like the child tax credit and additional child tax credit to help defray the costs of parenthood. These credits can help reduce your federal income tax obligation and potentially increase any refund you’re owed.

And that’s something that any parent can smile about.

Relevant sources: IRS: Child Tax Credit and Credit for Other Dependents at a Glance | IRS: Instructions for Schedule 8812, Additional Child Tax Credit | IRS Publication 972: Child Tax Credit | The Tax Cuts and Jobs Act of 2017 | IRS: Credits and Deductions for Individuals

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is an Enrolled Agent and the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

It’s important to build a financial strategy that incorporates savings goals. And while traditional savings accounts are an option, they aren’t the only way to build up your funds. Money market accounts and certificates of deposit, or CDs, are other options that may help you earn more money through higher interest rates.

When you compare money markets and CDs, one option may stand out as a better fit for you. Your choice will likely depend on your specific needs, like access to your money or check-writing capabilities. And like any financial decision you make, it’s important to understand the positives and negatives of each type of deposit account.

Let’s look at some of the pros and cons of money market accounts vs. CDs.

• What are money market accounts and how do they work?
• What are CDs and how do they work?
• Money markets vs. CDs

What are money market accounts and how do they work?

Many banks and credit unions offer money market accounts, which are similar to both savings and checking accounts. These accounts earn interest, like savings accounts, while also providing some of the access you get with a checking account, though with some limitations. For example, withdrawals and payments via check, debit card, draft or electronic transfer are limited to six per month total for money market accounts. But withdrawals or payments done via ATM or in person, by mail, by messenger or via telephone check don’t count against that limit.

Pros of money market accounts

The deposits you put in a money market account earn interest. But rates can vary, so it’s wise to do some research to see which financial institutions offer the highest money market rates. At the end of July 2019, the national average interest rate for money market accounts was 0.18% for deposits less than $100,000 and 0.29% for deposits of $100,000 or more, according to the Federal Deposit Insurance Corporation.

A money market account is generally considered a low-risk savings option and can be insured by the FDIC if it’s at a bank. The National Credit Union Administration insures money market accounts at credit unions. When insured, the FDIC and NCUA cover money market accounts up to $250,000.

Let’s recap the pros of money market accounts.

• Higher earning: Interest rates typically higher than a traditional savings account
• Low risk: Insured by FDIC or NCUA
• Flexibility: Some features of a checking account

Cons of money market accounts

While money market accounts offer similar features to a checking account, those features are limited. For example, you can only withdraw money or make payments up to six times a month via check, debit card, draft or electronic transfer. But if you have more than six monthly transactions to make, know that making withdrawals at an ATM or payments on the phone doesn’t count against that limit.

Unpredictability can be another drawback. The interest rate on a money market account can fluctuate, while a regular savings account typically has a fixed rate you can depend on. Though with money market accounts that are tiered, you could earn more interest as your balance gets higher.

Money market accounts may also require you to maintain a minimum balance that may seem high. If your balance falls below the minimum, you could face account fees or other consequences on top of potentially earning less due to a lower balance if the account is tiered.

Let’s recap the cons of money market accounts.

• Minimums: Potential minimum deposit requirements
• Unpredictability: Typically have variable interest rate
• Limitations: Six total transactions allowed using a check, debit card, draft or electronic transfer

Common question: Are money market accounts related to money market mutual funds?

While the name is similar, money market accounts are different from money market mutual funds, which are investment options offered by investment companies. Because money market mutual funds are not insured by the FDIC or NCUA, there’s a greater risk you could lose money.

What are CDs and how do they work?

Offered by many banks and credit unions, a certificate of deposit is a unique type of savings account that requires you to keep the funds in the account for a set period of time.

CD terms are often anywhere from six months (short-term CDs) to five years or more (long-term CDs). At the end of the term, the CD “matures,” and you’ll receive the initial amount you put into the CD, plus the interest that accrued on that amount over the CD term. The rate of return you receive on a CD (and other types of deposit accounts) is the annual percentage yield, or APY.

Pros of CDs

Because the financial institution holds your money for a specific length of time, CDs typically offer higher interest rates compared to traditional savings accounts and some may offer higher interest than money market accounts. And the longer your CD term, the higher your interest rate is likely to be. For example, CDs for less than $100,000 earn on average 0.39% for a six-month term, 0.56% for a 12-month term, 0.86% for a 36-month term and 1.10% for a 60-month term, according to the most recent national data available from the FDIC.

Certificates of deposit also typically have fixed interest rates, so you know at the outset how much interest your investment will earn by the maturity date. There are exceptions, though. If you get a variable-rate CD, the interest rate can change according to rules the issuing bank or credit union will set and explain.

And like both a money market account and a savings account, a CD is generally considered a low-risk savings option because it’s insured by the FDIC or the NCUA for up to $250,000.

Let’s recap the pros of CDs.

• Predictability: Fixed interest rates (with exceptions)
• High earning: Higher rates than traditional savings accounts
• Low risk: FDIC or NCUA insured
• Flexibility: Different term lengths
• Less temptation: Funds locked for a set period of time, unavailable to spend

Cons of CDs

CDs typically have a minimum amount that you’re required to deposit. The amount can vary widely, but it’s common to see minimums in the thousands, and they can venture into tens of thousands. And the higher-interest-rate CDs may require a higher minimum deposit amount.

Once you put your money into a CD, you probably won’t be able to withdraw it without penalty before the maturity date. That penalty may vary depending on the financial organization’s rules, including how long the money was held in the account. Make sure to learn the details of the early-withdrawal penalty in the terms and account agreement, keeping future needs in mind.

And take note: Some institutions offering high-yield CDs may not be completely honest. FINRA — the Financial Industry Regulatory Authority — has warned investors to be wary due to reports of organizations advertising high-yield CDs as bait to get people in the door.

These promos might get you to show up in person and then a representative might try to get you to invest a sizable amount of money ($25,000 or more) into an annuity that’s not insured and which is much riskier, according to a FINRA alert.

If you’re unsure about any financial opportunity, you can use BrokerCheck to help verify if the person and firm are registered with FINRA.

Let’s recap the cons of CDs.

• Minimums: Minimum deposit requirements
• Limitations: No access to your money while it’s in the CD
• Penalties: Costs for early withdrawals

Money markets vs. CDs

Money market accounts and CDs are both savings vehicles that can put your money to work for you, earning more interest than a traditional savings or checking account. Though a CD will likely have a higher interest rate than a money market account. To check and compare the most-recent interest rate data published by the FDIC for savings accounts, money market accounts, CDs and more, visit the FDIC online.

When looking at data, keep in mind that while CDs may earn more, you’ll be sacrificing flexibility, because the money will be required to stay in the account for a specific term or else you can face penalties for early withdrawal. With money market accounts, you can expect a lower interest rate, but you’ll gain regular access to your money and the ability to do things like write a few checks each month.

Bottom line

So when it comes to money market accounts vs. CDs, which is better? That’s all up to how you want your money to work for you.

It’s important to understand the pros and cons of money market accounts and CDs so that you can choose the savings vehicle that best meets your savings goals. For some people, the flexibility of a money market account wins hands-down. For others, the higher interest rates of CDs are a top priority.

There’s no one right or wrong answer for which type of savings vehicle is better. And your overall savings plan can include both a money market account and CDs. The important thing is to take as much advantage of savings opportunities as you can so that your money can grow and work harder for you.

This article was fact-checked by our editors and a member of the Credit Karma product specialist team, led by Senior Manager of Operations Christina Taylor. It has been updated for the 2020 tax year.

Paying taxes is a part of life for most Americans. And while everyone is subject to the same IRS tax laws when they file their federal tax return annually, they don’t necessarily pay the same state income taxes.

Why? Where you live and work affects the state tax laws that apply to you. Some states don’t have any income tax at all — and you may be tempted to relocate to one thinking the move will reduce your overall tax obligation.

While the thought of living in a state where income taxes aren’t taken from your paycheck may be appealing to those who live in states where their income is taxed, there’s usually a give and take. States may need to make up for a lack of income tax revenue in other ways. For example, some states have higher sales tax rates or rely on money from tourism to help fund budgets. Others have local taxes levied by municipalities or counties.

Before you consider a move to a state with no personal income tax, it’s important to know all the details and how they could impact you.

• Which states don’t have income tax?
• Why do state income taxes matter?
• State tax rates vary widely
• How do states with no income tax make money?

Which states don’t have income tax?

When you file your Form 1040, you’re reporting and paying your federal income taxes. Depending on where you live and/or work, you may also have to report and pay state income taxes by filling out and filing a state-level tax return.

Most states tax individual income: 41 states and the District of Columbia tax income, including salary and wages. New Hampshire and Tennessee only tax interest and dividend income. Here are the seven states with no income tax at all.

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

Keep in mind, just because you live in a state that doesn’t have an income tax doesn’t necessarily mean you won’t file a state income tax return. If you live in one state and work in another, you may have to file an income tax return in the state where you earn your paycheck. Likewise, if you moved during the tax year and previously worked in a different state, you’ll likely need to file with that state. It’s important to check each state’s tax laws to find out the details.

Why do state income taxes matter?

State income taxes are an important part of a state’s overall budget that helps provide you and other residents — as well as visitors — with essential components of living. This could include things like road repair, infrastructure maintenance, educational systems, government services and more. In fact, individual income taxes are a major source of state government revenue, accounting for 37% of state tax collections, according to the Tax Foundation.

You can choose to live and work in a state with lower or no income taxes in order to reduce your tax obligation — but remember there may be trade-offs. Before you decide to relocate for a job or to avoid state-level income taxes, research other cost-of-living factors in the state. This includes things like sales tax (the extra money you pay when buying certain consumer goods) and property taxes (the money you pay when you own real estate).

It’s also a good idea to crunch these numbers along with other cost-of-living considerations (i.e., housing, transportation and groceries) to learn how much buying power your income has in that state.

State tax rates vary widely

States that levy income taxes typically use one of two methods: the graduated income tax or the flat rate income tax. For both methods you first need to figure out your taxable income in order to calculate your state-level income tax obligation.

Of the states with an income tax, 11 use the flat-rate tax method, meaning one rate applies to all levels of taxable income. Those states are Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, New Hampshire, North Carolina, Pennsylvania, Tennessee and Utah. Thirty-one states and the District of Columbia have graduated rate income taxes, meaning your tax rate differs depending on your taxable income level.

What’s more, the number of brackets for those graduated levels varies by state. For example, Hawaii has 12 tax rates and brackets, while the District of Columbia has just six.

These graduated state tax rates can vary greatly. For example, in 2019 California had an income tax rate of 13.3% for couples married filing jointly with income of more than $1,181,484. And New York has a top personal income tax rate of 8.82%. In comparison, North Dakota’s income tax maxes at 2.9%. When you file your taxes, you can learn your tax rate based on your state’s guidelines.

Can state income tax rates change?

Yes, state legislatures can vote on income tax laws and they can be altered from tax year to tax year. For example, North Carolina’s flat income tax was reduced from 5.49% in 2018 to 5.25% for 2019. Here’s another example: Tennessee is phasing out its Hall Tax (the tax on dividends and interest income) and will repeal its income tax completely beginning in 2022. It’s important to keep up to date on state tax laws where you work and live so you know how they affect you.

How do states with no income tax make money?

Your total state tax liability goes beyond simply understanding income taxes. States that don’t levy income taxes may need to get revenue from other sources. Sales tax and property taxes are two key ways that states can earn money in lieu of income tax.

For example, Texas does not impose an individual income tax or state-level property tax, but allows local governments to collect property taxes. In 2017 (the most recent year with available data), county and municipal property tax levies throughout Texas ranged up to 2%. And even though Tennessee currently taxes only dividends and interest earned rather than income, the state also has a 4% sales tax on food, a 7% sales tax rate on most tangible personal property and taxable services, and local sales taxes that can range as high as 2.75% in some localities.

Bottom line

While seven states have no individual income tax, that doesn’t mean living there means living tax free, or that you’ll have a low total tax obligation. States all have ways to fund their budgets appropriately, and that could mean paying higher sales tax, increased property tax and more. All those taxes contribute to your total tax burden each year. By understanding the big picture, you’ll better assess the true cost of living in any state without an income tax.

Relevant sources: Tax Foundation: State Individual Income Tax Rates and Brackets for 2019 | National Conference of State Legislatures: Which States Rely on Which Tax | Tax Policy Center, Urban Institute & Brookings Institution: Brief Book | U.S. Department of the Treasury: Resource Center, State and Local Taxes | Center on Budget and Policy Priorities: Policy Basics: Where Do Our State Tax Dollars Go? | USA.gov: State and Local Taxes |New York State Department of Taxation: Withholding Tax Tables and Methods | North Dakota Income Tax Withholding Rates & Instructions | North Carolina Department of Revenue: Tax Rate for Tax Years 2017 and 2018 | Tennessee Department of Revenue: Due Date and Tax Rates | Tennessee Sales and Use Tax County and City Local Tax Rates | Texas Office of the Comptroller: Property Tax System Basics

Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She codeveloped an online DIY tax-preparation product, serving as chief operating officer for seven years. She is an Enrolled Agent and the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s degree in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.

Updated September 12, 2022

This date may not reflect recent changes in individual terms.

Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

Written by: Laura Malm

Pros

• Multiple loan options
• Specialty-vehicle financing on some loans
• Online and mobile account management

Cons

• Can’t get financing directly — must apply through a participating dealership
• No funding for vehicles older than 10 model years
• No principal-only payments

What you need to know about Ally Bank auto loans

If you’re thinking of getting a car loan at Ally Bank, here are some features that stand out.

Flexible loan options

Ally Bank, a subsidiary of Ally Financial, offers loans with multiple terms for a wide range of budgets. So whether you plan to buy a vehicle or lease one, there are different options. 

Specialty-vehicle financing

Loan options may include financing your vehicle’s design for accessibility needs, like wheelchair lifts and right-hand drive capabilities. 

Must finance through dealership

You’re not able to apply directly for an auto loan through Ally Bank. Instead, to learn about interest rates, loan terms and qualification, you must do so through a partnering dealership.

A closer look at Ally Bank auto loans

It’s important to consider the details of a car loan, and shop around, before making a decision. Here are some key things to know about Ally Bank.

• You can select monthly or one-time payment options from a checking or savings account.
• You can check your payment status, balance and statements anytime by going online or using your mobile device.
• There’s a free Ally Auto Mobile Pay app, available on both iOS and Android devices.
• There’s no principal-only payment. That means extra payments go toward any outstanding fees or finance charges first and then are applied to future payments.
• Financing options are available for new vehicles, and for used cars or certified pre-owned vehicles up to 10 model years old and that have no more than 120,000 miles at the start of the loan.

Is an Ally Bank auto loan right for you?

An Ally Bank auto loan may be a good option for people who prefer to finance directly at the dealership while getting access to a variety of loan types. Choices include lease loan and buy loan options.

If you have the time and ability to shop around, it’s best to compare interest rates at a variety of financial institutions. Depending on your credit history and the terms you qualify for, you may be able to get a better loan elsewhere. Keep in mind that if you’re interested in buying a vehicle that’s older than 10 years, or has more than 120,000 miles, you won’t be able to finance through Ally.

And if you’d like the option to pay down your auto purchase faster by making additional payments toward your loan principal, Ally isn’t a good option, because it doesn’t allow principal-only payments.

How to apply for an auto loan from Ally

Information about how to apply for a car loan from Ally Bank is limited because you have to go to a partnering dealership to apply directly — and requirements may vary from dealership to dealership.

But you can start the process by going to Ally’s website to identify its partnering dealerships. Then you can go to one of them to look for a car you might want to buy or lease.

After that, the next step at the dealership will likely be a review of your credit, which typically will trigger a hard credit inquiry.  This can negatively affect your credit, so you’ll want to keep this in mind — especially if you’re comparing offers from other lenders. Rate-shopping under certain circumstances may have a minimal impact, but multiple credit inquiries in a short period of time have potential to harm your credit.

If you’re approved, carefully review Ally’s offer — and any other offers you’re comparing — before deciding about signing on the dotted line.

Not sure if Ally is right for you? Consider this alternative.

If you’re looking for a prequalification experience — which could give an estimate of what your rates and terms might be without a hard credit inquiry — an Ally Bank auto loan may not be for you. That’s because Ally Bank won’t give you an idea of what your interest rates or loan terms might be until you’ve actually applied at a partnering dealership.

If you’re unsure whether an Ally Bank auto loan is right for you, consider this alternative.

• Capital One auto loan: If you’d like to check your estimated interest rate and potential loan options ahead of time, Capital One may be a good choice, since it offers a simple prequalification process that doesn’t involve a hard credit inquiry.

This article was fact-checked by our editors and Jennifer Samuel, senior product specialist for Credit Karma.

The Internal Revenue Service recognizes that taxpayers can use some help when navigating their annual federal income taxes. So the agency has a network of locations you can visit to do just that. Visit the Taxpayer Assistance Center Office locator and search by ZIP code to find an office near you.

Keep reading to learn more about what a Taxpayer Assistance Center can do for you and how to find one.

• What is a Taxpayer Assistance Center?
• How do I find an IRS office near me?
• How do I make an appointment at a local IRS office?
• What services do Taxpayer Assistance Centers provide?
• What should I take to my appointment?

What is a Taxpayer Assistance Center?

The IRS says that nearly every tax issue can be resolved online or by phone. But if you do need to talk to an IRS representative in person, you can visit a local Taxpayer Assistance Center.

All 50 states, the District of Columbia and Puerto Rico have TACs, though the number in each region varies. Larger, more-populated states may have more locations (for example, California has 28) while smaller states may have fewer (just two in Iowa).

Heads-up though: Taxpayer Assistance Centers are appointment only and are closed on federal holidays.

How do I find an IRS office near me?

Locate your nearest IRS office by using the Taxpayer Assistance Center Office locator at irs.gov. The tool allows you to search by ZIP code and radius.

The IRS also provides a state-by-state list of centers, some of which review identification documents for people applying for an individual taxpayer identification number (or TIN) in person.

How do I make an appointment at a local IRS office?

To visit a Taxpayer Assistance Center, make an appointment by calling 1-844-545-5640.

Before making an appointment though, try resolving your tax issues online or by phone. Either method could help you get the answers you need quickly, rather than having to wait for your appointment.

For a list of online tools and resources to help answer your questions, visit irs.gov/help. You can also type your question into the IRS Interactive Tax Assistant. And if you want to speak to someone on the phone for tax help, you can call 1-800-829-1040 from 7 a.m. to 7 p.m. local time.

What services do Taxpayer Assistance Centers provide?

You can get in-person help with a variety of federal tax issues and more when you visit your local Taxpayer Assistance Center. Keep in mind though, services can vary from center to center. Ask ahead of time or check online for the list of services provided at your local center to ensure you’ll get the help you need.

Here are some examples of TAC services.

• Help with letters, notices of garnished wages or levies on a bank account
• Changes to tax account information
• Payments by cash, money order or check
• Help with questions about tax provisions of the Affordable Care Act
• Help with questions about the Tax Cuts and Jobs Act
• Answers related to your individual federal tax return
• Applications for individual taxpayer identification numbers and Form W-7
• Payment arrangements
• Solutions to a variety of other tax issues

Some offices offer Facilitated Self Assistance (or FSA) systems, a self-assistance computer kiosk, with an IRS employee available to help. This provides a hybrid of in-person assistance and computer self-navigation where you can access irs.gov to complete a number of tasks or get more information on subjects like …

• The Free File program
• Forms and publications
• “Where’s My Refund?” inquiries
• Earned income tax credit (or EITC)
• Tax law questions
• Transcripts
• Online applications for an employer identification number (or EIN)
• Application for an online payment agreement
• Electronic payments (Direct Pay and the Electronic Federal Tax Payment System)

What if the experts at the Taxpayer Assistance Center can’t answer my questions?

If you don’t get the help you need at your local Taxpayer Assistance Center, try contacting the Taxpayer Advocate Service. This independent organization within the IRS works to protect taxpayer rights and help individuals understand tax-related issues they haven’t been able to resolve through normal IRS channels.

What should I take to my appointment?

Once you’ve booked your appointment at a Taxpayer Assistance Center, it’s important to prepare the documents you’ll need to bring with you. You’ll be asked to provide valid photo identification and a taxpayer identification number, such as a Social Security number.

It’s also wise to bring any paperwork related to your tax issues so that IRS reps can better assist you and answer your questions as quickly and accurately as possible. Examples of paperwork that might be useful, depending on your issue, include W-2s, 1099 forms, bank statements, relevant receipts and tax returns from previous years.

And it’s important to note that the IRS representatives at Taxpayer Assistance Centers can help you with many of your tax-related questions and provide necessary guidance, but it’s not the same as hiring a tax professional to prepare your taxes or help you with a tax issue. And even though you may qualify for free services to help you file your taxes with one-on-one assistance, tax preparation services are not available at Taxpayer Assistance Center locations.

For more information about free tax services, including locations in your community, look into the Volunteer Income Tax Assistance (or VITA) program or the Tax Counseling for the Elderly (or TCE) program.

Bottom line

From federal income taxes and beyond, if you have questions about your taxes, the IRS may be able to help, either online or over the phone.

But if you can’t find the answers and guidance you need, another option is to search the Taxpayer Assistance Center Office locator online to find a nearby location you can visit in person. You can make an appointment at your local TAC to discuss a variety of important tax-related topics and get help solving any tax issues you’re dealing with.

Jennifer Samuel, senior tax product specialist for Credit Karma, has more than a decade of experience in the tax preparation industry, including work as a tax analyst and tax preparation professional. She holds a bachelor’s degree in accounting from Saint Leo University. You can find her on LinkedIn.

This article was fact-checked by our editors and CPA Janet Murphy, senior product specialist with Credit Karma.

If you employ someone to regularly care for your children in your home you should familiarize yourself with the household employer’s tax. It’s a federal tax that’s often referred to as the “nanny tax” since nannies are among the types of workers the IRS considers household workers.

If you work as a nanny, managing the nanny tax is your employer’s responsibility — not yours. But you’re still responsible for paying any tax that may be due on income you earn, whether you’re considered an employee or not.

Let’s look at the household employer’s tax, whom it applies to, when it comes into play and who’s responsible for paying it.

• What is the nanny tax?
• Do I have to pay the nanny tax?
• When does the nanny tax kick in?
• How do I pay the nanny tax?

What is the nanny tax?

To understand what the nanny tax is, let’s start with this: Employers are typically required by law to pay federal employment taxes (and possibly certain state, municipal and/or county taxes) for every employee who works for them. Federal employment taxes include Social Security tax, Medicare tax, federal unemployment tax and federal income.

If you employ someone to work in your home — for example, a nanny, babysitter or housekeeper — the IRS may consider you an employer and require you to pay certain employment taxes for that employee.

Do I have to pay the nanny tax?

So who’s your household employee? The teenager who babysits for you on the weekends? A nanny who worked for you only a few weeks of the year?

Am I a household employer?

You’re a household employer if you have a household employee, the IRS says. If you hire someone to do household work around your private home, and you control the work they do and how they do it, they’re your household employee. It doesn’t matter whether the work is full time or part time, how you pay the worker (hourly, weekly or by the job) or if you hired them yourself or through an agency or association.

The household employee designation is for more than just nannies and babysitters. The IRS says examples of workers who do household work include …

• Butlers
• Caretakers
• Cooks
• Domestic workers
• Drivers
• Health aides
• House cleaning workers
• Housekeepers
• Maids
• Private nurses
• Babysitters
• Yard workers
• Nannies

Who’s not a household employee?

Not everyone you hire to do work for you in your home will be considered a household employee. The two key components are the control they have over the work being done and if that work is done in your private home.

For example, if you hire someone to care for your children but it’s at the caretaker’s home or a day care center, that person would not be a household employee. Likewise, if you hire a lawn care crew to tend to your yard and they bring their own tools and also service your neighbors’ yards, they likely would not be household employees.

Do I have to pay the nanny tax if a relative watches my child?

If your child is younger than 21 years old and you pay that child to watch his younger siblings, you don’t have to pay employment taxes. Likewise, if you pay your spouse or your child’s grandparent to watch your child, you don’t have to pay the nanny tax.

When does the nanny tax kick in?

You may have to pay nanny taxes if …

• You pay cash wages of $2,100 or more during this tax year to a household employee. In that case, you’ll need to withhold and pay Social Security and Medicare taxes, which are 15.3% of the employee’s wages. Additional requirements may apply for individual employees whom you pay more than $200,000 in wages. You’ll split the amount evenly, each paying 7.65%. However, you’re off the hook when it comes to money you pay your spouse, your child younger than 21, your parent, or anyone younger than 18 at any time in the year. In those situations, you don’t have to pay Social Security and Medicare taxes
• You pay cash wages of $1,000 or more in any calendar quarter of the current or prior tax year to all household employees (again, your spouse, parent or child younger than 21 don’t count). In that case, you’ll need to pay a 6% federal unemployment tax on a portion of the employee’s wages. To find out if you need to pay state unemployment tax, contact your state’s unemployment tax agency.

It’s important to note that nanny taxes work differently from federal income taxes. As a household employer, you’re not required to withhold federal income tax from wages you pay your household employee. You can do so if both you and your employee agree to tax withholding, in which case they’ll need to give you a completed Form W-4. If you do withhold federal income tax from the employee’s wages, then you’re responsible for paying it to the IRS.

How do I pay the nanny tax? 

As a household employer, it’s your responsibility to pay the nanny tax if you owe it.

Step 1: Get an EIN

If the IRS considers you an employer, you’ll need to have an Employer Identification Number, or EIN, from the IRS before you file any forms related to your nanny or other household employee. Instead of your Social Security number, you’ll use your nine-digit EIN when reporting your nanny tax obligation. You can apply for an EIN at IRS.gov/EIN by faxing or mailing Form SS-4 to the IRS.

Step 2: Verify eligibility to work in the U.S.

Once you have an EIN, you and your nanny should fill out Form I-9 to verify that they’re eligible to work in the U.S. Part of this form includes a list of documents that are acceptable as proof of employment eligibility in the U.S.

Step 3: Issue a Form W-2

If you paid your household employee Social Security and Medicare wages of $2,100 or more, or withheld federal income tax from your employee’s wages, you’ll have to file a W-2 and give it to your employee by Jan. 31 of the calendar year following the tax year. You’ll also need to send a copy of the form to the Social Security Administration by the same date.

Step 4: Pay your nanny tax

To pay your nanny tax, you’ll attach Schedule H to your Form 1040 when you file your own federal income tax return. The form can help you calculate your total household employment taxes. Pay the amount you owe  — and any other tax you may owe — by the tax filing deadline (usually April 15).

If you don’t want to pay your entire nanny tax in one shot when you file your tax return, you may have other options, like making estimated tax payments to the IRS throughout the year.

Keep in mind different states have different state tax laws, so you’ll need to find out how your state requires you to handle employer taxes and state income taxes for your household employee.

Bottom line

You can learn more about federal household employer’s taxes in IRS Publication 926.

When you pay your nanny tax obligations, you might benefit both you and your nanny. You can avoid getting into trouble for not doing what the federal government requires you to do regarding employer taxes. And you’re helping your nanny contribute to Social Security, which may benefit your nanny in the future if they’re eligible to receive Social Security benefits when they retire.

A senior product specialist with Credit Karma, Janet Murphy is a CPA with more than a decade in the tax industry. She’s worked as a tax analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. You can find her on LinkedIn.