Tag Archives: IRS

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We Passed Our American Express Financial Review: Part 2

Last week Friday we got a  call and an email from American Express telling us that account is under financial review. As we explained in the previous post financial review is a nightmare. We started sharing the details of the F/R over here. The reason why we got the F/R is because we were spending to much money on our cards. We did a 12 card App-O-Rama and needed to spend $95,000 total.

They sent us the 4506t form to fill out, I immediately downloaded onto my BlackBerry Classic (which I love). ‎Using the PDF editor on my phone I filled out the form in entirely. Once it was done I emailed the forms that for myself and had a hard copy on my computer. The next step is you need to fax this form over to American Express. The financial review department fax number is 1800 219 8549.. If you don’t have a fax machine you can use a free online fax service for example fax zero.

4506-T Form, The form you need to fill out by a Financial Review

Once I had the paperwork sent back to them I called him to follow up to make sure it was properly faxed, received, and sent over to the IRS . My agent is not available when I called so I left him a voice message stating my name, credit card number, phone number and a short message. In the message I  stating that I sent in the form and it would like him to review them to let me know if they’re satisfactory. ‎He did not return my call.

American Express Building, Brighton UK

The following day was Saturday which I was unable to call him, Sunday he was out. Monday he was out and was first back in the office on Tuesday. ‎I did try to get ahold of him on Tuesday, but he did not answer my call. I must’ve tried in five times on Tuesday, but he never did return my call. I left him another message again with my name, credit card number, phone number and I told him I’m waiting to hear back.

Finally, on Wednesday he called me back. He told me that you got my voicemail has been very busy. He told me that he got my forms he sent them over to the IRS to receive the transcripts, and American Express already received the transcripts back. ‎I was advised that they’ll have an answer by the end of the day (Wednesday). I told him that I need my credit cards for my business and I would appreciate to get this done ASAP. He didn’t call me back on Wednesday.

I need this done ASAP!

On Thursday I got emails from American Express stating this card ending in 1004 the limits have changed. The new credit limit is $13,500. ‎I got this email for every card. When I logged into American Express I still saw the banner proclamation that my accounts are still suspended. However, I knew the review was basically complete.

Over the weekend there was a voicemail on my cell phone that the review was complete. I should have received an email with this information (which we had on Wednesday)‎. I logged into my account and confirmed this. The review was over. I was actually surprised that I pulled it off in a week, they usually take much longer and are much more dragged out.

After getting my accounts locked for a week, American Express reinstated them. They slashed some of the limits, but more then that they didn’t do.

Some after thoughts:

  • It can be that I asked him to expedite it that it helped.
  • It seems like the rep doesn’t make the decision, they just do the dirty work, of calling you, being in contact with you ect. The decision making‎ is done by a back office.
  • ‎I was extremely nice and respectful to the agent, in return he was helpful and quick.
  • Having a real income can definitely pull you through, many people don’t have sufficient income.
  • Fill out the 4506T form correctly. Missing information can delay your F/R.
  • Use an online editor, this will ensure no mistakes.
  • Don’t be upset at the agent, your problem isn’t with them. They are just your contact with Amex.

And some tips to stay under the radar:

  • Avoid spending a lot of money on a new account in a short amount of time. It takes months to build up your reputation with American Express.
  • Don’t spend more than 50% of your credit limit over the month on a credit card. For a charge card it is much harder to draw the line, as most standard charge cards do not have a limit. The idea is to take it slowly, and build up your relationship. In a short amount of time you will be able to spend  $100k monthly.
  • Sudden large changes in spending pattern.
  • Funding pre-paid cards
  • Over utilization of “spending ability” button on website.

Everything you wanted to know about American Express cards

Public Offer: 50,000 Premier Rewards Gold Card from American Express!

American Express Once In A Lifetime Bonus: Some Good News

Application Status: How to Check If You Got Approved

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

We passed our American Express Financial Review.

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True-or-False-300x300

Credit Cards Can Be Used to Pay Taxes?

TRUE! The IRS allows you to pay taxes with a credit card but you must use a 3rd party payment processor.  The government does NOT accept credit card payments directly.

These payment processors charge a percent of your total tax bill.


The least expensive is Pay 1040, which charges 1.87% for credit card payments, (and a flat fee of $2.59 for debit card payments).

A $5,000 tax bill would total:

  • $5,093.50 with a credit card ($5,000 x 1.87% = $93.50)
  • $5,002.59 with a debit card ($5,000 + $2.59 flat fee)

Note:  You will NOT be charged cash advance fees when you pay with a credit card.  The FAQ’s for all payment processors say:

Your tax payment will be treated like a retail purchase and not a cash advance. 

Some other companies:

 

Credit Card Joint thinks this is a great idea if 2 things are kept in mind.

1) You have a credit card that gets you more then 1.87%. Namely a Citi Double Cash, Fidelity 2% credit card among others.

2) You have no other way of Meeting the Spending Threshold.

Meeting Minimum Spending Requirements

We spoke about that in a Three part series HERE, HERE, and HERE. Paying taxes with a credit card can make sense if you have a minimum spending requirement to meet on a card within a certain time period. Although you may be losing out some money on the 1.87% charge, in the long term you will gain the 50k or 35k in bonus points worth more then the charge.

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

Paying Taxes with a credit card can be a great option for some.

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Santander

Santander Extra20: Get $20 Bonus Every Month (And What They Didn’t Tell You)

Santander Bank has a program called “Extra $20“. This program gives you an extra $20 every month that you complete 2 requirements. It is simple to complete the 2 things and by doing these two things they will deposit $20 in your “savings” account. Watch the money grow at the end of the year you will have amassed $240 (plus interest).

$20 Free For Having A Santander Bank Account

What Are The 2 Things You Need To Do?

  1. Have a Direct Deposit of $1,500 or more
  2. Make 2 bill payments from your checking account

That’s it!

Signup Here

Are you ready to signup?

Here is a little more information. Before you can start you need a to:

  • Open an extra20® Checking and extra20SM Savings account. You can open one up easily online here.
  • You will need $35, $25 for the checking account and $10 for the savings account
  • Then you will need to Have a Direct Deposit of $1500 or more (within service fee period)
  • Pay 2 bills with BillPay through the Online Banking (within service fee period)
  • Then you will e rewarded with the $20 bonus into your extra20SM Savings account.

No catch

Get $10 when you have $1,500 or more direct deposited into your extra20® checking account each monthly service fee period.1

No kidding

Get another $10 when you schedule two or more bills to be paid during the same monthly service fee period through the Online Banking BillPay tab.

Yes $20

There’s no cap on how long you can collect your $20 as long as the product is offered. The money goes directly into your extra20SMsavings account.1

 

So what is the scary part?

Actually there is a few things that people may overlook.

  • There is a service fee if you do not have the Direct Deposit.

Only open this account if you can have a Direct Deposit. It is not worth the fees if you do not have a way of receiving a Direct Deposit. (An ACH would work).

There is a tiny fine print way down on the bottom that you can’t even read with reading glasses. I blew up the letters for all the old folks to read.

  • Your bonuses will be reported as interest on Form 1099-INT in the year received.

In short, you will be taxed on this as earnings, there goes 15% of your earnings. Maybe it isn’t as worthwhile as you thought. Credit card signup bonuses are not considered earnings or income, so they (currently) are ot taxable. As my accountant explained it to me it is a rebate. Here is a cut out from an IRS letter.

The IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel.

The next paragraph can be a concern:

This relief does not apply to travel or other promotional benefits that are converted to cash, to compensation that is paid in the form of travel or other promotional benefits, or in other circumstances where these benefits are used for tax avoidance purposes.

1099 INT Form

It also pays to keep in mind that Citi does consider the Citi Checking account with the AA bonus taxable. Other banks have added a clause in their Terms and conditions indicating that they may tax you for your miles like this Bank of America one.

The value of this reward may constitute taxable income to you. You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as neither Bank of America, its affiliates, nor their employees provide tax advice.

Wow, I got off on a tangent over here. Enough said.

Do I have an Extra20 account?

Yes.

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary:

Signup for the Santander Extra20 to Get $20 Bonus Every Month that you make two Bill payments and have a Direct Deposit.

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