The wait for your tax refund to get into your bank account can be long and stressful t. However, there are faster ways to make it happen and speed up the process. First, you need to know the processes involved in a tax refund case. You need to know the things that you are doing wrong and learn the steps to correct them.
The time involved in getting your tax refund varies and depends on several factors. If you electronically filled for your tax refund, it usually speeds up your refund process through direct deposit. The internal revenue service says it can pay out tax refunds within 21 calendar days after you file for a refund.
According to statistics, nine out of ten e-filers receive their tax refunds in three weeks or less. For people who file through paperwork, they can expect to wait for a more extended period to get their refund. The IRS says it takes up to six to eight weeks to process tax refund filled through the paperwork.
Taking all these factors into consideration, if you want to get the process for your tax refund faster, you need to e-file with direct deposit. There are several online websites you can fill through for your tax refund.
After filing for your tax refund online, the next thing to do is to set up how you will receive payment. If you want to get your refund faster, you need to set up a direct deposit as eight out of ten tax refunds are received through direct deposit. Several sites serve as a 3rd party to speed up the process, once you register on one of them, all you have to do is wait for your refund to hit your account and get alerted.
Several options are available to explore if you want to get your money from the internal revenue service quickly. Once you file for your tax refund electronically, you can back it up with the following;
- Make sure you set up direct deposit
As mentioned earlier, eight out of ten taxpayers opt for e-file and set up direct deposit to quicken their refund process. If you use a direct deposit, you will get your refund between 10 to 21 days from when you file. The internal revenue service deposits into savings, checking, or retirement account. They also leave a space on the tax return form for you to fill in a request for direct deposit.
There are websites you can log on to track your direct deposit refund process.
- Set up direct depositing into multiple accounts
Another way to set up your tax refund is by having your deposits split into different accounts. It allows you to split into up to three accounts. It also doesn’t limit you to a savings or checking account as you can direct all your refund into your IRA.
Modern tax preparation software takes you through how to request for this form of payment in most tax-based websites. Alternatively, you can opt to submit the IRS Form 8888 with your tax return form; it tells the IRS that you want to split your tax refund into different accounts.
However, the accounts have to be opened in your name, your spouse name, or a joint account with both of your names. They don’t necessarily have to be opened at the same bank or financial establishment. Before you fill in these accounts, you have to be sure your bank accepts direct deposits in your type of account.
- Get a tax refund anticipation loan
Some businesses offer tax refund anticipation loans, and they are tagged as “instant refund” or “rapid refund.”They give you your money in one or two days, and they get the refund when it arrives from the IRS.
However, some fees will be charged for this speed that you are getting. The business providers charge you the fees, and they are exorbitant in some cases.
The companies have their criteria, once you tick all the boxes; you get your money before the refund arrives. While some require you use their companies to do your taxes, some others require you open your direct deposit with them.
- Invest in savings bonds
The internal revenue service introduced the savings bond purchase option in 2010. You can opt to use a portion of your refund to purchase the Series I savings bond when you file Form 8888 with your tax return. Make sure you complete part II of the form.
The limit to the number of total bonds you can purchase is $5000, with a stipulation to purchase one or more $50 bonds, as no other face values are available through the program. The great thing about I bonds is that they earn two types of interest.
They get a fixed rate, a standard rate, and a rate that’s adjusted for inflation every six months.
- Refunds by Paper check
Typically, the IRS mails you a refund check within six weeks of receiving your tax return. If you e-file, the mail takes about three weeks to arrive. To track the status of your refund check, you can visit the IRS website.
As stated earlier, a paper check is the slowest way to get your tax refund. Also, apart from the speed, there’s a chance that your check could get mixed up in the mail.
- Prepare for mistakes that might arise
When it comes to taxes, it is easy to make mistakes. It involves a lot of numbers, and it takes little to mix up the address or your bank account number.
The IRS website allows you to correct your address if you don’t receive your refund after the predicted period. They also have a number you can call, and you can also complete Form 8822 and send it via mail to the address on the form.
For Form 8888, the IRS will send you a paper check if you make a mistake. If it involves a wrong account number and the account belongs to another person, you will have to work it out with the bank as the money would have been paid in there. The IRS wouldn’t get involved as they have already paid the refund in their books.
- Refundable Tax Credits
If you earn a low or moderate income, you might qualify for the earned income tax credit (EITC). If you qualify for this refundable tax credit, you will get a refund check from the IRS even if you haven’t over paid your tax installments for the year.
Your income level and the number of children you have to affect the amount of credit you get. If you claim this tax credit or the child tax credit, it will result in your tax refund being slightly delayed. However, it’s usually worth the wait.
The PATH act requires that the IRS withhold tax refunds for this kind of claims until mid-February. The reason for this is to verify that everyone that claims these credits is indeed eligible to the claims.
- Avoid a Tax refund
When you receive the tax refunds, it seems nice and cool. However, receiving a tax refund isn’t the best. A lot of tax refunds are as a result of overpaid taxes through the year. What you do in the real sense is that you are providing the government with an interest-free loan.
You can adjust the withholdings from your paycheck by submitting a new W-4 form to your employer. It reduces the money taken from your account and will help you have more money in your bank account on paydays.
However, you have to be careful not to adjust your withholdings too much, because if too little is withheld from your paychecks; you might end up owing the IRS.
Track the progress of your refund
The IRS has helped the tracking of tax refund payments and has eradicated the element of having to guess when it will arrive. All you have to do to check the status of your refund is to visit the online portal made available by the IRS.
The tools provided help you to get updates for 24 hours regarding your e-filed tax refund complaints. You can track your money from the moment the IRS receives your complaint to when the refund is sent.
However, the best thing to do before your tax refund money arrives is to have a solid plan on how to spend the money. You can use it to sort your day to day expenses or invest the money for long term returns.
Most people incur debts before they receive the refund arrives. While it might be tempting to spend in anticipation of your refund, you have to avoid as much as you can. It is money you worked for and not free money from the government.
We know vacations, and new wear sounds appealing, but investing in self-growth is even better for you. Make sure you spend wisely!
Data Unions, fisherfolk and DeFi
By Ruby Short, Streamr
In the fintech world it seems every month there’s a new trend or terminology to get acquainted with. From just learning about cryptocurrency a few years ago, to the crazy boom markets of 2017-18, the market has now moved on to DeFi, or Decentralised Finance to those less in the know.
It’s a trend which is gathering momentum, too – $275m of crypto collateral was invested in the DeFi economy in early 2019, but by February of this year it hit $1 billion, and by the end of July this number had risen to $4 billion.
According to crypto exchange Binance, DeFi refers to “a movement that aims to create an open-source, permissionless and transparent financial service ecosystem that is available to everyone and operates without any central authority.” Essentially it gives full asset control to those who use it, whether this is through peer-to-peer models or DeFi applications.
These apps, known as DApps, run on a blockchain network meaning they’re not controlled by a single authority. And as they are also Open Source, they are publicly available – characteristics that make transactions quicker, more affordable and more efficient than their centralised counterparts, where data is stored on servers managed by one authority (think traditional banks).
So why is DeFi getting so much attention?
DeFi is exciting for many because it gives more people more control over their money. Where much of the financial sector is traditionally centralised it inherits bias, thus restricting many people from their funds and what they can do with it.
With this approach, anyone can make investments or get into trading much more easily, and, most importantly, keep control in the hands of the user and not large corporations.
One of the preliminary benefits of this control is the improved visibility we gain over our financial data. In fact, any data we produce in general, whether online or through smart devices is predominantly controlled by giant centralised platforms such as Google and Facebook. In many cases users are unaware of where this is being sold on, or at least have been up until now.
As with DeFi and DApps, a way to decentralise this control has been introduced – in the form of Data Unions. A relatively new concept, this is a framework that enables individuals to bundle together their real-time data with others to create valuable insights which can be sold on, offering each the chance to earn revenue. It is helping businesses and individuals realise the value of the information they produce.
How does it work?
Our data on its own holds little value, but once bundled with multiple data sets from other people and sources and combined in a Data Union, it becomes an attractive set of insights to buyers who can use it to improve their market knowledge, product or service.
Data is shared through an app on the device or object via Streamr’s Data Union framework, a toolbox, which any developer or company can integrate into their existing products. It also allows individuals to choose which particular data types they share and monetise, and which they keep private.
This information then passes, encrypted, through the Streamr Network, to the Data Union where it’s bundled with others’ data for sale on the Marketplace – a process called crowdselling, which has the potential to generate unique data sets by incentivising trade directly from data producers.
What’s more, Data Unions can be set up to capture any form of data. For instance, a music streaming company could commission their own app where users could sell their listening and genre habits paired with their demographic info.
What has this got to do with DeFi?
Data Unions can help provide a means of DeFi direct to the people that need it most.
To break this down, a Data Union is beneficial because it enables any internet user to be paid for their data, which is unlike any data tax that has been proposed by many politicians. And, the advantage of a DeFi solution is that anyone can get paid from it because the finances are no longer dependent on their jurisdiction, but on which products they are using. Putting these together can have endless benefits.
We’re already seeing this happen, with a framework being used to improve the lives of financially marginalised groups. Tracey is a blockchain enabled Data Union working in partnership with WWF.
The application incentivises Filipino fisherfolk to record their catch and trade data digitally through direct data monetisation via the Streamr Marketplace. This data makes the first mile of their seafood products through the supply chain, traceable. With regional fish stocks declining, accurate catch yield data is a desirable insight for third party members such as retailers and final buyers.
The benefits of this model are twofold. Many fisherfolk in the Philippines are unbanked, meaning they don’t have a bank account. Trading this data gives them access to finance and loans previously out of reach, changing them and their family’s livelihoods. It also enables a self-sustaining ecosystem that captures accurate traceability data and helps these areas monitor their overfishing levels for more sustainable fishing.
What does this mean for us for the future?
We’re seeing a lot of momentum building around all forms of online decentralization,and the potential is huge. Over the coming years we will see these systems become ever more integrated into the existing internet stack, which will profoundly impact our possibilities online. Soon, it will become normal to take part in the internet’s data economy.
We see internet users becoming members of several Data Unions and have a range of different options to choose from that best suits them and their data sets. Personal data monetisation will no longer be a privacy issue we’re all suffering under, but rather a question of whether we want to sell our data or not. Users will have the freedom to choose for themselves if they want to sell their data or not and ethical data sharing will become the norm.
ECOMMPAY expands Open Banking payments solution to Europe
Open Banking by ECOMMPAY facilitates fast, secure and simple payments
International payment service provider and direct bank card acquirer, ECOMMPAY, has today announced the expansion of its payment system Open Banking by ECOMMPAY to Europe. The solution allows consumers to initiate online payments to merchants.
Open Banking by ECOMMPAY leverages Open Banking technology, which enables third-party providers to access banks’ data to provide payment initiation through API connections. The news comes as research by the Open Banking Implementation Entity recently showed that uptake of Open Banking has doubled over the past six months, with more than two million consumers making use of the data-sharing service.
ECOMMPAY’s solution will allow consumers to connect to over 4000 banks in more than 28 European countries, while merchants can accept payments from customers in real-time, directly to their bank account. The solution is available in the UK, Latvia, Estonia and the Netherlands, and will be rolled out to further countries soon.
Benefits for consumers as well as merchants
For shoppers, Open Banking by ECOMMPAY means confidential information is accessed in a secure manner, compliant with GDPR requirements. Financial data is stored in one place so that credit decisions on loans or other transactions can be made promptly. Purchases can be made easily via smart devices, and consumers simply log in to their online banking via their mobile app to approve payments.
Merchants benefit from access to new infrastructure for payments. Without the need for credit or debit cards, chargeback risks due to fraud or an inability to capture funds are eliminated, while card fees are cut too. As the process does not require intermediaries, the payment process is efficient, and can also be customised by region, currency and other localised requirements. While banks usually have full control over the services customers need such as loans or transfers, Open Banking brings these decisions under a single administration.
Simplified European expansion
Historically, businesses growing into new markets would require a local banking relationship to facilitate the collection of direct debit payments, and face multiple complications around legal requirements, licenses and compliance. However, Open Banking by ECOMMPAY allows companies to use one efficient, cost-effective and simple payment solution to expand within Europe.
Paul Marcantonio, Executive Director of ECOMMPAY, commented: “Open Banking is revolutionising the way we pay, and the recent growth in its use indicates people are looking for more payments choice. Open Banking for Europe by ECOMMPAY will allow us to cater to the increasing number of people taking advantage of this secure, real-time and simple payment technology. Our solution will let merchants quickly expand into new markets and accept payments directly from customers’ bank accounts.
“With the pandemic shifting businesses online faster than ever before, the need for fast, safe and secure payment methods is growing. There is an urgent need to cater to a variety of payment methods, and at the same time to counter fraud and cyber-crime.”
ECOMMPAY has enjoyed steady growth since its launch in 2012, and has built a global presence with six international offices and operations in key markets including Asia, Europe, Africa, Russia and the UK. The company is a principal member of Visa and Mastercard, and a member of Visa Direct and MoneySend, as well as being the first payment provider on the PayPal Commerce Platform and the first acquirer to implement a Mastercard Dashboard.
The company will be hosting a webinar on Open Banking on 10th December. ECOMMPAY and its host speakers will look at the different opportunities that open banking brings for businesses, the challenges faced implementing it, and how to make it work from every business angle. Key topics will include how Open Banking will impact online business in the future, the effect of Brexit and Covid-19, and how to become an early adopter.
The Hidden Costs of International E-commerce
By Gavan Smythe, Managing Director, iCompareFX
Taking a business globally can be an attractive prospect, potentially targeting markets with fewer competitors, taking advantage of a larger consumer base and even gaining access to cost-effective manufacturing resources.
However, it’s not as simple as just shipping product overseas. Successful international traders conduct extensive market research, understanding each region’s barriers to entry – whether it’s regulations around communication and marketing, finding key contacts in supply chain management or navigating legal and cultural restrictions.
This also means identifying the hidden costs of international trading, which threaten the bottom line of businesses.
The price of peace of mind
Online trading isn’t without its complications. Buying online means handing over confidential bank or card details and, without the right protection in place, it can leave consumers open to theft and fraud.
That’s why e-commerce payment services include a gateway model, which secures transactions by encrypting the cardholder’s details and managing the payment process for the merchant.
However, like any specialist service, merchants pay to keep this sensitive data safe. Gateway fees are typically calculated as a percentage of the transaction amount. And while this payment model is useful for SMEs – helping them efficiently scale – it represents an additional cost that many business owners don’t account for.
Those tempted to simply roll out the cheapest service risk damaging their reputation by potentially being an unsafe seller and one which undervalues its customers. This will eventually impact revenue, as customers look elsewhere, and merchants navigate the costly time spent ironing out problems with insecure payments.
When it comes to choosing a payment gateway service, key considerations should include working with a provider which operates across the same regions and checking contract terms. Some providers may charge set-up fees, monthly subscription fees or implement a blanket charge if a minimum volume of transactions isn’t met.
Merchants should also consider whether to use a direct or indirect payment gateway. While direct payment gateways allow consistent branding with customised design and copy, it may cost extra to integrate the service with an existing website.
Indirect gateways take users away to a separate payment portal on a different page. This is cost-effective to install and can appear more secure to users as they may be using a familiar and trusted payment gateway brand
Calculating conversion fees
As a business owner, payment gateway solution providers charge a number of percentage fees. While for sellers in domestic markets the fee structure can be quite simple, for online sellers in overseas markets, the fee structure becomes complex.
For example, as an international online seller, you can be subject to additional costs for processing international cards, plus additional currency conversion costs back to your business’ home currency.
In some circumstances, this can cost up to 9 percent of your sale revenue. A business has the choice of passing these costs on to the customer or to reduce its profit margin in international markets.
Businesses shouldn’t rush when it comes to choosing a provider. Taking the time to review and compare what’s out there puts them in a stronger position to choose the perfect match.
Providers vary in their offerings, from the regions they operate in, to their fees and exchange rates and even transfer speeds. Those who value trust and transparency may be willing to pay slightly higher to work with a provider which offers exceptional customer service standards, helping them navigate the currency exchange process.
For those moving into multiple markets, it’s worth using a comparison service or tool to make sure they’re partnering with the right provider for each currency pair and region, as it’s unlikely a single provider will offer a blanket ‘best solution’ across the global market.
The role of multi-currency accounts
Having looked at the impact of currency conversion fees, what can businesses do to mitigate these costly charges when it comes to trading in an increasing number of currencies?
Opening a multi-currency account allows businesses to access the speed and affordable conversion costs needed to make the most of international trading. They allow businesses to access unique local banking details in foreign countries and all balances and transfer controls are accessible within a single dashboard.
Not only are the conversion fees associated with these accounts much lower compared with transferring currencies between bank accounts but it’s also quick and efficient – allowing businesses to access funds almost instantly and pass this convenience on to customers.
Specialist money transfer companies that offer multi-currency account solutions offer these services at no monthly cost. Simple and low-cost fee structures are applied on currency conversion and outgoing funds. And incoming receipts of money transfers don’t cost a penny.
Not all multi-currency account solution providers offer access to the same currencies. Furthermore, not all payment gateways offer support for payouts in multiple currencies. Businesses should conduct an assessment of current and future customer and supplier locations to choose the most appropriate solution provider.
Conducting an internal risk assessment helps businesses decide which multi-currency account makes sense for them, based on key requirements, like the number of supported currencies, target regions, potential overdraft facilities and ease of transfers.
Managing international suppliers
In many industries, international e-commerce is not as simple as just sending products to different regions. Logistics and legal regulations across the world mean businesses are often required to work with local specialists to deliver their service or offering.
This may mean working with local manufacturers to produce products in each region or simply partnering with local marketing, PR or advertising professionals to create culturally sensitive brand awareness in the native language.
In these cases, the business becomes the customer. They are required to make payments in multiple currencies as they manage their global operations.
For example, UK bank accounts charge relatively large fees to make payments in foreign currencies and these soon add up when running operations around the world.
This is where multi-currency accounts again prove fruitful. Not only do they allow businesses to hold multiple currencies – which is ideal for sellers – but they can also send money to other accounts with minimal fees if they’re in the same currency.
Paying suppliers in the same region as their customer base can remove the double currency conversion by receiving payment gateway payouts in the foreign currency and paying out of the multi-currency account in the same currency. No currency conversion is necessary in this scenario.
Businesses able to identify all these costs and admin fees up-front will be best placed to get the most value from the research and comparison stage when comparing providers.
Ultimately, they’ll achieve the lowest possible fees for each market, currency and transaction.
Data Unions, fisherfolk and DeFi
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