Laura Kennedy, Associate Editor of The Kiplinger Letter
discusses programs by manufacturers and retailers that encourage environmentally responsible buying.

Consumers get some welcome greenbacks for making environmentally friendly choices. Meanwhile, companies get to burnish their environmental reputations, attracting more consumers who already make a point of buying green products from good environmental stewards. At the same time, the distribution of associated coupons and rewards raises foot traffic and brand awareness.
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Advocates of eco-conscious living hope the programs will spread environmental awareness to more-mainstream consumers, who may be deterred by higher prices for organic food or the extra time it might take to separate out their recyclables. The economic downturn is "a great time to introduce an incentive" for sustainable living, says Tiger Beaudoin, the founder and vice president of marketing for EcoBonus, a green rewards program that launched on Earth Day 2011. "People have good intentions, but price is an important purchase driver."

Take a look at some of the programs catching on:

RecycleBank. Consumers earn points, redeemable toward purchases at national and local retailers, for curbside recycling -- including e-waste such as old cell phones or mp3 players. The recyclers can redeem the points at national stores like Dick's Sporting Goods or McDonald's as well as at local businesses. More than 300 communities work with RecycleBank because they gain too, reaping savings by diverting trash to recycling facilities instead of landfills. The towns keep some of the budget savings and share the rest with RecycleBank, which uses the money to fund its projects. RecycleBank recently started an energy savings program with the Citizens Utility Board of Illinois that rewards residents for energy reduction, based on individualized energy-saving recommendations.

Waste Management's Greenopolis kiosks. The trash removal giant gives rewards points to consumers who recycle bottles and cans at kiosks stationed outside retailers and other businesses. Points can be turned in for coupons or gift certificates usable at local businesses or with national sponsors such as Sherwin Williams, Embassy Suites and Hertz.

EcoBonus. The program from global incentives company BI Worldwide grants points to consumers who make environmentally sustainable purchases. Eligible products are marked with a special EcoBonus symbol. Shoppers can put the rewards toward additional environmentally friendly buying -- stainless steel water bottles, for example -- plus groups and organizations can collect points toward major purchases such as rooftop solar panels.

TerraCycle's program benefiting nonprofits and schools. The company collects what is typically nonrecyclable waste, such as candy and snack wrappers, pens, coffee bags and toothpaste tubes, from consumers, as well as recyclable items such as cell phones, plastic containers and more. It uses the trash to make new products sold at major retailers including Target, Wal-Mart and Home Depot. Consumers who make the effort to get their trash to TerraCycle earn monetary rewards that go to nonprofits of their choice. Some manufacturers, such as skincare products maker Aveeno, even encourage consumers to send their brands' empty product containers to TerraCycle for repurposing.

The green rewards programs are just part of a wave of new initiatives aimed at shaping consumer behavior beyond returning to specific brands or retailers.

Health-care related retailers aim to encourage healthful living: In April, Rite Aid started its "wellness +" program, which gives members benefits such as 24/7 access to a pharmacist and the chance to accrue points redeemable for product discounts or to use for health screenings. CVS recently completed a pilot program that rewarded consumers who remembered to take their blood pressure medication regularly. And Kroger and drugstore Duane Reade are partnering to test a national program called WellQ, intended to coax consumers into setting and achieving wellness goals, including timely refills of drug prescriptions.

The fact is, Americans seem to love loyalty and reward programs and are more than happy to add another membership card to their key rings. The average U.S. consumer belongs to 12-14 loyalty programs. The trick for consumer organizations and brands is to use the programs not only to influence shoppers' buying habits, but to encourage other behavior, says Kelly Hlavinka, managing partner with Colloquy, part of the global marketing company LoyaltyOne.
     

Are you aware of the significant changes in the way the IRS targets taxpayers for audits and how it conducts the exams?  

 

Whether you have read statistics about the percentage of returns that are audited or heard about the recent cuts to the IRS's budget, you might feel justified in playing the odds that you or your business won't be among those selected by the IRS for examination. But the numbers are very misleading, because the IRS is getting a lot smarter about how it chooses returns for audit and how its examiners conduct their audits.

 

Heightened Focus

 

Over the past few years, the IRS has dramatically stepped up its efforts to study specific industries, and to educate its examiners about business practices, terminology, accounting methods, and common industry practices. It has also identified areas of inquiry that produce audit results. Examiners are told specifically to look out for certain red flags to get at what is really going on in a business or transaction. The IRS has also updated its tax gap figures (the estimated $450 billion difference between what taxpayers owe and what they pay). Several research studies are underway into various segments of the taxpayer population. That, in conjunction with Treasury reports on IRS audit performance means that examinations are increasingly focused on business areas and issues that are likeliest to generate increased taxes, penalties, and interest.

 

Individuals

 

In March 2012, the IRS released audit rates for fiscal year (FY) 2011, which show a general show an uptick in audits, especially of higher income taxpayers.  Individual taxpayers were collectively audited as a 1.1 percent rate over the FY 2011 period.  The audit rate for individuals with adjusted gross incomes (AGI) between $200,000 and $500,000 was 2.66 percent in FY 2011 compared to 1.92 percent in FY 2010.  The audit rate for individuals with AGI between $500,000 and $1 million was 5.38 percent in FY 2011 compared to 3.37 percent in FY 2010.  For individuals with AGI between $1 million and $5 million, the audit rate increased from 6.67 percent in FY 2010 to 11.80 percent in FY 2011.

 

Industry Compliance

 

Another IRS initiative is to improve compliance by fostering greater communication between the IRS and representatives of various industries. This interplay is intended to clarify treatment of specific tax problems far in advance of an audit. For example, the IRS and the food service industry have come to an understanding about properly determining and reporting employee tips. Employers that comply will face reduced IRS scrutiny on this issue. Additionally, the IRS has established the Voluntary Classification Settlement Program (VCSP) where employers who have misclassified their employees as independent contractors may come forward before the IRS initiates an audit and voluntarily reclassify the workers in exchange for reduced penalties.

 

For more information, please feel free to contact Chornyak and Associates at 614-888-2121, toll free at 877-389-2121, or by e-mail at chornyak@chornyak.com.

 

Janna Herron of Bankrate.com points out 10 important considerstions for getting the right credit card. Finding a good card -- and managing it well -- can boost your buying power and credit score.

Tip 1: Know your credit
The state of your credit will determine what card you can get. If you have good to great credit (FICO score of 720 and above), you'll likely qualify for numerous rewards cards that cater to your personal tastes. There are rewards cards for hotels, airlines and gas stations. Others will give you cash back. Those with decent credit (620 to 720 FICO credit score) may need to stick with a plain-vanilla credit card with no annual fee. For those with no credit or blemished credit (FICO credit score below 620), a secured credit card may be your only option. Secured cards require an upfront deposit to serve as collateral against the credit limit.

Tip 2: Read the fine print
It may not be the most thrilling read, but the details of a credit card's agreement will help you differentiate it from others. The terms and conditions are usually posted on an issuer's website, so you can read them before you apply. The agreement gives the annual percentage rate, or APR, for purchases, balance transfers and cash advances. It also will tell you about late fees, annual fees and the higher interest rate -- the penalty APR -- following missed payments. And it will discuss fees for other services such as transferring balances, getting cash advances or shopping in foreign countries.

Tip 3: Ignore flattering marketing
Many issuers will send out "special invitations" to apply for a credit card, or they'll tell you that you're "preselected" for a credit card. Don't believe it. The issuer is just stroking your ego. Most likely, the issuer has prescreened you for the credit card. That doesn't guarantee you will qualify for the card. You also may find a better deal if you comparison shop instead of filling out whatever application shows up in the mail.

Tip 4: Don't overspend for sign-up bonuses
Those sign-up bonuses are hardly free. Most come with spending requirements that encourage some consumers to buy more than they should. If you don't pay off the entire balance every month, you will be charged interest that would cancel out any benefit from the rewards program.

Tip 5: Watch out for small-business credit cards
If you sign up for a small-business credit card as a sole proprietorship using your Social Security number, that account is on your personal credit report. If you miss a payment on the business card, it will ding your credit score. Another downside is that the consumer protections under the Credit Card Accountability, Responsibility and Disclosure Act don't apply to small-business credit cards. Because of these disadvantages, you may want to consider getting a personal credit card instead and reserve it for business expenses only.

Tip 6: Store credit cards aren't always a deal
Every time you open a new department store or retail credit card, your credit score takes a hit. The new account lowers the average age of your credit history, a key component of a credit score. A lender will also pull your credit report during the application process, known as a "hard" credit inquiry, which is also harmful to your score. If you don't pay off the entire balance, the upfront 10 percent to 20 percent discount you received likely will be erased by the card's annual percentage rate, which typically rises above 20 percent.

Tip 7: Follow best credit card practices
To get the most from your credit card and avoid trouble, make sure to pay off your balance on time every month. That way, you won't pay unnecessary interest charges, and the timely payments will help boost your credit score. If you can't pay off the entire balance, stop using the card until you can.

Tip 8: Maximize your rewards
Make sure your rewards credit card is working for you. Look for quarterly changes in rewards points and special rewards-earning promotions that offer more points for every dollar spent. You can get more rewards through your credit card's online shopping portals, too. These portals, which connect you to major retailers, will give you bonus points for every dollar you spend. Similarly, register your credit card with dining programs that will increase the number of points you get by dining at certain restaurants.

Tip 9: Learn how to dig out of credit card debt
Develop a strategy for dealing with credit card debt, and be ready to follow it. Here are some of the basics: If your balances rise too high, leave those credit cards at home. Pay the minimum balances on all of your cards. If there's money left over, pay down the card with the highest interest rate before dealing with the others. Work your way from the highest interest rate card to the lowest to save the most on interest.

Tip 10: Know how to handle card fraud
Make a habit of checking your credit card activity at least once a month, if not more, for odd charges. If you find an unauthorized transaction, or if you lose your card, immediately notify your issuer. The issuer will send you a new card and/or a new account number. Call the three major credit reporting agencies to put a fraud alert on your credit reports. Pull your reports to check for any fraudulent accounts. Check again six months later.

As our population ages, more and more members of the Baby Boom generation are considering downsizing their living quarters and/or relocating to another area of the country.  This month's helpful article from Commonwealth Financial Network discusses options, financial concerns, and recommendations before you make a decision.