Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. What Are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks View fees and expenses related to investment choices Invest funds on-the-go, and even automate regular contributions Automatically reinvest earnings on current investments Adjust portfolio for personal risk tolerance View performance projections Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions The best part? Investing through trusted apps is usually cheaper, faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who Are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you up front how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and Expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning Investment Requirement: At least $5 to start Types of Investments Available: ETFs (exchange-traded funds) Portfolio Options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners, but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. [youmaylike] Great for Truly Free Investing: Robinhood Fees and Expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning Investment Requirement: You’ll need $2,000 to get started Types of Investments Available: ETFs, stocks, cryptocurrency and options Portfolio Options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic Investing?: No Automatic Reinvesting?: No Automatic Rebalancing?: Yes A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and Expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning Investment Requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of Investments Available: ETFs (exchange-traded funds) and fractional stock shares Portfolio Options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic Investing?: Yes Automatic Reinvesting?: No Automatic Rebalancing?: No The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and Expenses: 0.25% annually Beginning Investment Requirement: $500 minimum initial investment Types of Investments Available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans, trusts Portfolio Options: 11 asset classes to choose from, including natural resources and real estate Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings, and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and Expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee Beginning Investment Requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading) Types of Investments Available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex, cryptocurrency Portfolio Options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your individual passions, preferences and tolerances Automatic Investing?: Yes, with EP Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!
How To Do Your Own Taxes
If you work for an employer, are self-employed, or receive taxable money from any source, you may be legally required to file your taxes with the IRS each year. More than 152 million Americans filed taxes in 2020. 102 million of those filers received a tax refund because they overpaid their federal taxes. The average refund was $2,741.
If you don't file your taxes, you may be in violation of federal laws. You also won't get a refund unless you file, even if you overpaid. Do you want to know how to do your own taxes? Then keep reading.
How to Start Filing Your Own Taxes
No matter which method you choose to file your own taxes, you'll need to gather some paperwork. Make sure you have copies of the following:
- Last years tax returns
- Income documents that may arrive in the mail or electronically, including: W-2 forms from employers, form 1099-NEC from freelance or contract clients, forms 1099-DIV or 1099-INT from banks or institutions that paid you interest or dividends, and/or form 1098-T from education-related entities.
- Receipts for charitable donations
- Receipts for non-reimbursable work-related expenses
- Medical bills
- Social Security numbers and birth dates for joint-filers and anyone you'll claim as a dependent
It's smart to keep all of your tax-related documents in one place. You'll receive income-related documentation in January and February each year.
You have several options when it comes to filing your taxes.
IRS Free File
If you want to file your taxes using IRS Free File, you'll need last year's adjusted gross income (AGI) from your previous tax return to verify your identity. Many tax preparation software companies offer IRS Free File.
The IRS's Free File tool is open to taxpayers with a 2020 adjusted gross income of $72,000 or less. You can find out if you are eligible to use the IRS Free File service with their offer lookup tool.
Tax Preparation Software
Tax software allows you to do your own taxes by simply answering a series of questions. The tax interview feature included with many tax preparation software packages makes getting your maximum refund a sure thing.
A good tax software program starts at $20 but could cost much more depending on your circumstances.
If you had a major life event, own a business, want to itemize your deductions, or need to report securities transactions, you may want to invest in professional tax preparation. In 2019, the average cost of professional tax preparation was $203. If you have complicated taxes or are intimidated by the idea of doing your own taxes, you may be better off seeking help from a professional.
How to Get Extra Time to File Your Taxes
If you can't meet the IRS deadline for filing your taxes, you can ask for a tax deadline extension. It takes about five minutes to fill out the simple request form. Even if your income exceeds the maximum allowed for the Free File system, you can electronically request an extension.
The IRS automatically extends the tax deadline to October 31 each year for taxpayers that request extra time to do their taxes. You'll have to estimate how much you'll owe the IRS and pay that amount, but you'll have extra time to properly prepare your tax filing paperwork.
How to File Past-due Tax Returns
If you were required to file taxes with the IRS in the past but didn't meet the deadline, go ahead and complete past-due tax returns, now. Filing past-due tax returns mean you'll avoid further interest and penalties if you owe taxes.
Your refund may be lost if you don't file tax returns in a timely manner. You can still get money owed to you by the IRS if you file a late return within three years of the original deadline. This includes tax credits like the Earned Income Credit.
If you need help filing your past-due tax return, call 1-(800)-829-1040. You can get wage and income information to help you file your past-due returns by filling out Form 4506-T, Request for Transcript of Tax Return.
Do It Yourself, or Hire a Tax Preparer?
Of the 152 million taxpayers that filed a tax return with the IRS in 2020, more than 69 million decided to do their own taxes. Whether you choose to do your own taxes or hire a professional to help you with the paperwork is up to you. Taxpayers aren't legally required to hire (and pay) someone to do their taxes.
Qualifying taxpayers can get free help with tax filing. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free services for basic tax returns. To qualify, you must make less than $57,000 per year, have a disability, or have a limited ability to speak English. People over the age of 60 can get help with questions about retirement or pension-related tax issues.
If you prefer to do your own taxes, it's wise to invest in tax software. Tax codes are updated every year, so you'll need the most recent version of the software you choose to help you file correctly.
Compare costs when deciding whether to do your own taxes. For some people, the process is intimidating, so they prefer to hand over their records to a professional. Other people don't mind going through the steps with help from tax software. In years past, doing your own taxes meant piles of paperwork and time-consuming calculations. Now, it's easy to get tax software to do the heavy lifting. You just have to plug in the numbers.