Money & Life Archives | Page 27 of 29

Apr

2023

Car Rental Rates: How They Work

By Emily Greenhill Pierce | credit card, Money & Life | Comments Off

If you need wheels for an upcoming vacay, chances are you’re searching for rental options and trying to understand why prices can fluctuate so much. Typically, car rental rates vary based on supply and demand, just like airline tickets and hotel rooms. Lower availability generally means higher rental car rates.

There are some obvious times when demand will be high, such as spring break in Florida. Much of the time, though, there’s no way to know when a car rental company has a surplus or not, so car rental rates can seem to vary with no rhyme or reason.

But there is a method to the madness. With a little shopper savvy, you can snag the cheapest rental car rates for your next getaway. Learn more here, including:

• What factors impact car rental rates?

• How can you get the best car rental rates?

• What are some alternatives to renting a car?

Why Are Car Rental Rates So High?

During the COVID-19 pandemic, people scrambled for car rentals to escape the doldrums of lockdown. As a result of demand, car rental rates shot up, reaching record highs in July 2021. While weekly rental car rates have dipped since the summer of 2021, they’ve remained consistently higher than before the pandemic.

With more Americans traveling lately, the demand for rental cars has remained high. Plenty of people who fly to LAX, Orlando, or elsewhere are in search of wheels to get around.

Combine those forces with the effect of inflation, and your weekly car rental can cost more than a plane ticket.

Factors That Influence Rental Car Rates

Beyond supply and demand there are other factors that play into the prices of weekly or monthly car rental rates. It’s important to be aware of them when budgeting for your next family vacation.

Factors that can affect car rental rates include:

• Age of the driver. Car companies may have a surcharge for renters under 25.

• Type of car. Luxury brands and larger cars can push prices higher.

• Pickup location. Prices can vary between airport vs. in-town branches.

• Day of the week. Your pickup and drop-off days can influence cost.

• Length of the rental. Deals can be found for short- and long-term rentals if you know the rules of the (rental) road.

• Extra fees and add-ons, including insurance, additional drivers, and perks like satellite radio.

11 Ways to Get the Best Car Rental Rates

Wondering how to get the best car rental rates? Whether you’re planning a quick weekend getaway or an epic cross-country road trip, here are some tips for scoring the lowest price.

1. Book Early

Booking in advance can help you snag a low price, which can be an incentive for planning ahead. Reserving your rental car three to six months in advance can be the ideal time frame for finding the lowest prices. So if you know, say, you are going to be doing some summer travel and are making hotel reservations, don’t forget to book your car too. Bonus: You’ll likely have your pick of vehicles, with compact sedans, minivans, and SUVs available.

Waiting till the last minute can definitely be risky: What if every car is already booked? But if you do have late-breaking travel plans (maybe you want to visit your college roomie who just had a baby), you might luck out. One recent report revealed you can save around 15% when you book the same rental only a week in advance, provided a vehicle is available.

2. Shop Around Online

Online searching can help unlock travel deals. The same holds true for car rentals. There are a lot of online travel agencies (OTAs), such as Kayak and Expedia, that can do the comparison shopping for you. They review all kinds of sites to find you the lowest car rental rates, so you don’t have to click through to each individual company.

But remember, these are third-party vendors. If you need to change or cancel your reservation, it can be easier to do so directly through a car rental agency.

3. Check for Membership Discounts

Most rental car companies offer loyalty programs that are typically free to join. In the same way you earn credit card points for swiping your plastic, you can earn points for each booking that can be applied toward a free rental or vehicle upgrade in the future.

There are also warehouse club memberships, such as Costco, that provide discounts at major car rental companies, such as Avis, Alamo, Budget, and Enterprise. AAA works with Hertz, Dollar Car Rental, and Thrifty to bring down costs for members.

Many travel credit cards can help you earn points to spend on whatever you’d like — including car rentals.

4. Use Your Own Insurance

Your personal car insurance typically covers a rental car with the same limits and deductibles — as long as your trip is for personal travel. If you’re on a business trip, you might need commercial coverage or your company might have a commercial auto policy that can cover the rental.

Most rental companies prefer for you to pay with a credit card for your car rental reservation. But what most people don’t know is that many travel credit cards will cover basic collision insurance on rentals, saving you up to $30 a day. Check with your credit card provider to fully understand the terms and conditions.

5. Rent for the Weekend

If your schedule and plans allow, time your trip for the weekend, when you can nab the lowest rental car rates for a getaway. Rental car companies cater to business travelers who tend to need cars Monday through Friday, making rates per day higher during the week.

6. Rent by the Week

What if you have a longer adventure in mind? Rental companies can offer deals if you rent a car for the whole week versus just a few days. (And if you are planning a major road trip or renting a car all summer for beach getaways, check with rental companies and see if monthly car rental rates are available at a discount.)

If you are planning on covering considerable ground, be sure and ask about weekly car rental rates with unlimited mileage. That way, you can take to the open road without worrying about the odometer.

7. Avoid Airport Pickup

Picking up your rental car at the airport is convenient when a flight is part of your travel plan, but doing so can come with a higher price tag. Airport rental locations may charge a “Customer Facility Charge,” which can add up to several dollars a day.

Plus, demand can be high at the airport, leading to higher prices or lack of available cars. Renting from a local branch in town can save you money. Just be sure to factor in the cost of the transportation from the airport.

8. Don’t Add Additional Drivers

Most rental car agreements charge extra to add an additional driver — between $12 to $15 a day, depending on the location. Some companies will waive the additional driver fee for a spouse, as long as you have the same address on your driver’s licenses.

9. Refuel Yourself

Rental car companies typically require you to return your vehicle with the same fuel level you left with. If you leave with a full tank and come back half full, they’ll charge you a fueling fee. This can trigger an additional “ka-ching” to your bill.

You can opt for a prepay fuel option, but rental car companies tend to charge a lot more for their gas than the going rate. So if you’re not rushing to an early-morning flight, it’s worth making a pit stop at a gas station. (Hint: If you have a gas credit card, use it to help boost your rewards and savings.)

10. Skip the Extras

Opting out of the extras offered by car rental agencies can save you some cash. Make a playlist instead of paying for satellite radio, bring your kid’s car seat if possible, or utilize your phone’s map apps vs. renting a GPS with the car to help navigate.

11. Opt for a Modest Car

This may sound obvious, but the larger and fancier the vehicle, the bigger the price. Selecting an economy vehicle can save you hundreds on a weekly rental, and you’ll spend less on gas.

How to Get the Most Out of Your Car Rental Rewards Program

A car rental rewards program can help you earn points toward free rentals, allow you expedited check-ins, free car upgrades, and more. Familiarize yourself with the benefits of your tier status, so you can take full advantage of the perks. Also be sure to stay on top of any reward point expiration dates.

Recommended: Guide to Choosing a Rewards Credit Card

Alternatives to Car Rentals

Another way to save money on car rentals is to not rent a car! Hey, when money is tight, it’s worth exploring all your options.

• If you’re visiting a city, explore local mass transit and taxi/rideshares. Book a conveniently located hotel where you can walk or bike to everything.

• Investigate the cost of rideshare services. Could you take an Uber to the resort you’re staying at and then use shuttles to get around?

• Consider car-sharing services like Getaround and Turo that can allow you to use a car just when you need it. If you have a vacation planned and need wheels for only one or two excursions, that might save you money and keep you from blowing your entire travel fund.

The Takeaway

If you need a car when traveling, you can find good deals on car rentals by doing some comparison shopping, being flexible with your travel schedule, and maximizing any rewards programs. Doing so can help you put your money toward what makes a vacation the most fun and memorable vs. watching it fly out the window.

SoFi Travel is a new service offered exclusively to SoFi members. Earn 2x rewards when booking with your SoFi Mastercard or debit card. Then apply those rewards to your next trip when you book through our travel portal. SoFi makes planning a getaway fast, easy, and convenient — perfect for people on the move.

Photo credit: iStock/GoodLifeStudio

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Eligibility: You must be a SoFi registered user.
You must agree to SoFi’s privacy consent agreement.
You must book the travel on SoFi’s Travel Portal reached directly through a link on the SoFi website or mobile application. Travel booked directly on Expedia's website or app, or any other site operated or powered by Expedia is not eligible.
You must pay using your SoFi Credit Card.

SoFi Member Rewards: All terms applicable to the use of SoFi Member Rewards apply. To learn more please see: https://www.sofi.com/rewards/ and Terms applicable to Member Rewards.

Additional Terms: Changes to your bookings will affect the Rewards balance for the purchase. Any canceled bookings or fraud will cause Rewards to be rescinded. Rewards can be delayed by up to 7 business days after a transaction posts on Members’ SoFi Credit Card ledger. SoFi reserves the right to withhold Rewards points for suspected fraud, misuse, or suspicious activities.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Apr

2023

Responsible Tourism: 8 Ways Travelers Can Support the Local Community

By Beth Greenfield | credit card, Money & Life | Comments Off

Travel, as you may have heard, is big business. The tourism sector accounted for 10.4% of the world’s GDP before the pandemic, and it’s on the rise again. But who really benefits from our vacation mindsets and liberal spending? Thinking about that, and making decisions based on the answers, is the first step toward becoming a responsible tourist.

The way you travel the world — from where you stay to where you shop — matters. Below we introduce the tenets of “responsible tourism.”

What Is Responsible Tourism?

The responsible tourism movement aims to minimize and even reverse the negative effects of travel, from overcrowding and pollution to the erosion of cultural identity. A responsible tourist will make choices based on what’s best for the long-term success of the community they’re visiting.

Conscientious travelers will want to keep the following goals in mind:

• Minimize negative economic, social, and environmental impacts

• Generate economic benefit for local people while supporting improved working conditions

• Honor natural and local heritage

• Make connections with local people that foster a deeper understanding of the culture

• Take into account people with disabilities

• Be culturally sensitive overall

Responsible tourism was first defined by U.K. professor Harold Goodwin as part of the 2002 World Summit on Sustainable Development. It differs from sustainable tourism, which focuses more on conserving natural heritage and biodiversity. Both movements offer blueprints not only for tourists, but for business operators, governments, and local residents.

And remember: The negative effects of tourism, while more pronounced in poor countries, are also felt in many American communities.

Benefits of Supporting Local Economies

What travelers spend in local communities ideally benefits both locals and travelers. Most travelers are eager to help out the places they visit. And if tourists play their cards right, they’ll experience fewer crowds and a more authentic experience.

Before the pandemic, the travel sector employed 1 in 10 people around the globe. As the World Travel & Tourism Council reminds us, “[B]ehind every job in travel and tourism, there is a face, a story, a family and sometimes a whole community’s livelihood.”

Jobs in tourism offer chances at economic success to all sorts of people, including women and young people. In fact, women are employed in tourism at almost twice the rate of other sectors. And in some areas, wildlife tourism can help protect that wildlife through preservation programs and the creation of conservation jobs.

8 Ways to Support Local Economies

So how can you know if the money you spend is benefiting locals? You can start by avoiding chains of all sorts. Read on for more ideas.

1. Book Locally Owned Accommodations

Chain hotels and Airbnbs run by property managers mainly benefit their global headquarters. Plus they can damage the local culture by driving gentrification.

Instead, opt for a locally run or family-owned inn, B&B, or small hotel. You’ll be contributing directly to the local economy, as you learn more about the place and its idiosyncrasies.

2. Eat in Local Restaurants

After enduring a long flight and arriving in an unfamiliar place grumpy and hungry, you may be tempted to pop into a familiar coffee or food establishment that you know from home. But buying food from global chain restaurants doesn’t support the local economy — nor does it expand your palate, which is one of the great benefits of travel.

Recommended: Apply for a Rewards Credit Card

3. Consider an Off-Season Visit

Travelers tend to overrun popular destinations during peak season. And in a tourism-dependent economy, their absence during low season can cause places to all but shut down. Instead of contributing to the tourist crush, try booking for a less coveted time.

Instead of summer travel to a northeastern U.S. beach town, try holding off till the fall, when it’s still balmy but emptying out.

4. Hire Local Cars and Drivers

Who knows the place you’re visiting better than a born-and-bred local? Rather than renting a car (likely from a global chain), hire a knowledgeable local driver to help you get around. You’ll learn the lay of the land and enjoy lots of insider tips and anecdotes for good measure. And you’ll put money directly into a local family’s pocket.

5. Take Trains Over Planes

Flying is one of the least sustainable parts of travel. In fact, it’s one of the least sustainable human activities, period, contributing to 2.5% of the world’s carbon emissions. Sure, when you globetrot, you need to fly to get somewhere. But why make it worse by then taking a bunch of small, enticingly cheap flights within your host country? Instead, set your sights on trains and buses, which have a much lower impact than even the shortest flights.

6. Buy Local Souvenirs

You want to go shopping, and locals have stuff to sell. What could be easier? The challenge comes in avoiding massive commercial shops and purchasing items from local artisans in craft markets and tiny, proprietor-run boutiques.

It’s also important to be aware of illegal souvenirs and avoid them at all costs. These include anything made of protected animals or trees, such as souvenirs made from poached ivory, animal skins and furs, rosewood, seashells, and hummingbirds, for just a few examples.

7. Volunteer With or Donate to Local Causes

Before heading to your destination, do a search for what donated materials might be needed by local charities. Then reserve some space in your luggage (which you can then refill with your locally purchased handicrafts). For some guidance on what to bring where, check out the destinations guide from the nonprofit Pack for a Purpose .

8. Share Your Experiences on Social Media

Once you’ve experienced responsible travel for yourself, spread the word! Using the popular #responsibletravel hashtag, share pics and details of the local establishments where you stay, eat, and shop — you may inspire others to do the same. This way, you can go on changing the world through others.

Tips for Being a Responsible Tourist

Read up on responsible tourism ahead of your trip. The fresh mindset you’ll be left with can help you get more out of your travels. Then make a few reservations in advance at local haunts.

Once you arrive, every time you open your wallet, think: Am I benefiting the local economy? Am I contributing in a positive or negative way? Keep it positive, and your destination will thank you.

The Takeaway

Enjoy your time away from home by keeping in mind the basic tenets of responsible travel: Respect local culture, minimize your waste, shop locally, and try to keep your footprint small. The whole world will benefit in the end.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

Wherever you’re going, get there with SoFi Travel.

Photo credit: iStock/FilippoBacci

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

SoFi Member Rewards: All terms applicable to the use of SoFi Member Rewards apply. To learn more please see: https://www.sofi.com/rewards/ and Terms applicable to Member Rewards.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Apr

2023

Hotel Rates: How They Work

By Walecia Konrad | credit card, Money & Life | Comments Off

Booking a hotel can feel like spinning the roulette wheel — you’re never quite sure where you’ll land pricewise. You can find different hotel rates listed from one travel site to another, as well as on individual hotel websites. The result: Confused and frustrated travelers.

Understanding how hotel pricing works and why rates range so widely is a good first step in demystifying the hotel booking process. Here we’ll explain why hotels do what they do, then offer advice on how you can use that knowledge to find the best rate for your next out-of-town stay.

What Factors Influence Hotel Rates?

Many factors determine the price you pay for your hotel stay, from the destination you’re seeking to the time of year you’re traveling. Other influences are less predictable. Let’s take a closer look.

Location

It’s no secret that sought-after hotels in large cities or popular resorts will cost quite a bit more than a modest motel on a country road. But did you know pricing also varies widely within a location? Hotels near city attractions such as sports arenas, convention centers, downtown, or revitalized neighborhoods will likely charge significantly more than the same type of property located on the outskirts of town or in the suburbs.

Star Ratings

A variety of different groups — such as guidebook publishers, consumer associations and travel websites — award hotels between one and five stars. The more stars awarded, the more the hotel will charge.

But star ratings are not standardized. The same hotel may have three different ratings, depending on where you’re looking. And each star-giving organization has its own methodology (although you can usually find an explanation on the website). The bottom line: Rates among hotels in the same location with the same star rating can still vary significantly.

In general terms, here’s what star ratings usually mean:

• 1 star. Often independently owned, these hotels/motels provide the bare minimum.

• 2 stars. Economy chains, such as Econo Lodge or Days Inn, offer the basics plus a few “extras” — like a television.

• 3 stars. Usually big chains, such as Marriott and DoubleTree, have stylish, comfortable rooms with true extras, such as a fitness room and restaurant.

• 4 stars. These are large, fully staffed, upscale hotels with lots of extras.

• 5 stars. Luxury hotels indulge customers with all imaginable amenities.

Keep in mind that one or two stars does not necessarily signify a lack of cleanliness or safety. They may be perfectly fine, just no frills. Best to check online reviews to make sure.

Recommended: How Families Can Afford to Travel

Room Type

Whether you’ve chosen a no-frills two-star motel or a glamorous five-star resort, you’ll pay more for certain rooms within the same building. The view, proximity to a noisy elevator, square footage, and the number and size of beds are taken into account when pricing a specific room. Sometimes room upgrades are available using your credit card rewards.

Amenities and Additional Services

Special touches, like turn-down service and super fluffy towels, can add to your enjoyment during, but they’ll also add to the price. Hotels factor high-end bedding, luxurious towels, upscale bath products, complimentary dry cleaning and 24-hour room service into the price of each room.

Recommended: Traveling with Pets

Peak Season and Holidays

Hotels in prime destinations book up fast during busy travel seasons such as holidays, spring break, and summer vacation. Sometimes peak season really does follow the seasons, such as winter months in Florida and summer months in New England. Because the volume of travelers increases during peak season, hotels know they can charge higher prices and still book all or almost all of their rooms.

Peak times can even be determined by the day of the week. In most locations that cater to non-business travelers, you’ll likely pay more to stay on a weekend night than a weekday, no matter what time of the year you are traveling.

Supply and Demand

This may be the most significant factor in determining hotel rates. Hotels profit when they achieve maximum occupancy for as many nights as possible. As long as demand for rooms is strong, hotels know they can price rooms at higher rates and still get customers. Holidays, major events, and school breaks are all times when hotels can potentially achieve full or near full occupancy.

That said, hotels can’t afford to let rooms go empty, so when demand is slow, operators will drop rates, sometimes even at the last minute, hoping to lure available customers from the competition.

Tips to Getting the Best Rate on Your Hotel

Now that you’ve got the inside story on hotel pricing and availability, let’s see how you can use that information to get the best rates and stay within your travel budget.

1. Be Flexible

Off peak doesn’t have to mean the dead of winter or the middle of hurricane season. If you have the flexibility to move your vacation dates just a week or two, you can often save a bundle on hotel rates. Traveling the week after Easter, for instance, or just after Labor Day can make a world of difference.

2. Book in Advance for Peak Season Travel

Sometimes peak season travel can’t be avoided. If you must travel for a holiday, big event, or during a popular vacation time, book as far ahead as possible so you’ll be first in line. As rooms book up, pricing for remaining rooms can increase even more — a situation you want to avoid.

3. Off Peak, Consider Waiting Until the Last Minute

During less busy travel times, hotels have been known to drop rates at the last minute in an effort to fill rooms. Or they may offload empty rooms to an online travel agent. (More on these sites below.) If you use the wait-and-see approach, you may need to search among several locations, so flexibility is key.

4. Off the Beaten Path

As mentioned above, hotels in the most central, desirable locations charge the most. Consider a property that may be just as nice but a little bit out of the way — say a bus ride to downtown or a relaxing walk to the beach. If you’re willing to be a bit of an explorer, you can save on hotel rates and perhaps discover a charming area you wouldn’t have otherwise.

5. Compare Travel Websites

Online travel agents and travel websites like Priceline, Expedia, Kayak, and Orbitz offer hotel bookings at major chains and independent inns and resorts. Some of these sites specialize in last-minute bookings.

Often these sites will feature rates below those offered on the hotel website. But rates vary among the different sites, so you’ll want to do a thorough search to find the best deal.

And always check back with the hotel, calling the location you are interested in to see if you can negotiate a lower price for the same room than what you’re finding online. In some cases, hotels may offer you the same rate, but will upgrade your room or throw in other extras.

Last-minute bookings at some online travel agents such as Hotel Tonight and Hotwire are opaque — a travel industry term that means you agree to book without knowing the name of the hotel until you pay for it. Instead, you’ll see the location, star rating, and price to help you make a decision.

6. Consider Nonrefundable Reservations

Many hotels and travel websites offer cheaper rates for nonrefundable bookings. The savings can be significant, but the risk of losing your money is substantial too.

There are ways around this. If you have a cancel-for-any-reason travel insurance policy for your trip, your hotel costs will be partially refunded.

In addition, check if your credit card offers travel insurance that will cover cancellations for any reason.

7. Track Your Refundable Hotel Reservations

There is also a way to save money on refundable hotel rates that allow you to cancel at any time. Go ahead and book the best deal you can find, then periodically check back to see if the rate has fallen. If it has, rebook at the new lower rate, then cancel your original reservation.

If you don’t have time to track the prices yourself, use a website or app like Rebookey that will monitor your reservation for you and notify you if the rate drops.

8. Use Your Rewards

If you belong to any hotel chain loyalty programs, always check for member discounts at properties in or near the destination you are headed. You may find a comparable or better deal than you can find elsewhere. And you’ll rack up more points.

Most airline credit cards and travel credit cards have affiliations with major hotel chains. You may be able to use your reward points to pay for your hotel room. Or if you have a cash-back credit card, you may have enough in the “bank” to cover your hotel costs.

9. Always Ask for Specific Discounts

Many hotel chains offer discounts for members of AARP, AAA, and other organizations. Be sure to ask when you make your reservation. If you book with an online service that doesn’t ask for this information, check with the hotel receptionist when you register.

The Takeaway

Making sense of the puzzling way hotels set prices can help travelers become better shoppers. When you know how rates work, you can use several tools — last-minute bookings, price-tracking sites, discount memberships, and more — to save on your hotel bill. In addition, the more flexible you can be about when you travel and what hotel you stay at, the easier it will be to find the best deals.

Whether you want to travel more or get a better ROI for your travel dollar, SoFi can help. SoFi Travel is a new service exclusively for SoFi members that lets you budget, plan, and book your next trip in a convenient one-stop shop. SoFi takes the guessing game out of how much you can afford for that honeymoon, family vacation, or quick getaway — and we help you save too.

SoFi Travel can take you farther.

FAQ

Why does the price of hotels vary so much?

Many factors go into hotel pricing, including location, star ratings, type of room, amenities, peak or off-season, and supply and demand. Hotel rooms may be priced differently if they are sold through online travel agents and other travel websites versus purchasing from the hotel directly.

What is considered off season?

Traditionally, off-season travel has been defined by the seasons. For example, peak season in warmer climates like Florida, Arizona, or island resorts hits in the cold winter months — and hotel prices surge. But off-season can also mean big savings just a few days or weeks away from peak travel times.

What’s the best way to get a last-minute hotel discount?

Several travel websites specialize in last-minute bookings. In an effort to avoid rooms going empty, hotels will sell through these sites. You can get a good deal this way, but in most cases, you’ll pay for the room without knowing the name of the hotel — only the price, location, and star rating.

Can I negotiate hotel rates?

Sometimes. If you find a better rate on a travel website than the hotel is advertising on its own site, it can make sense to call the hotel directly and ask if they will beat the travel site price. The hotel may agree. Or it may match the discounted price but offer extras such as meal vouchers or a room upgrade.

Photo credit: iStock/structuresxx

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

SoFi Member Rewards: All terms applicable to the use of SoFi Member Rewards apply. To learn more please see: https://www.sofi.com/rewards/ and Terms applicable to Member Rewards.

Apr

2023

My Tax Preparer Made a Mistake — What Can I Do?

By Jacqueline DeMarco | Money & Life, relay | Comments Off

Hiring a tax preparer can give you some peace of mind that your taxes are being filed correctly. But even a pro can sometimes make a mistake. Depending on the error, you could end up getting a refund you’re not entitled to or paying more in taxes than you actually owe.

The good news is, there are ways to get your tax return back on track if an error was made. Keep reading to learn what steps you can take when you realize your tax preparer made a mistake.

Table of Contents

Who Are Tax Preparers
Pros and Cons of Working With a Tax Preparer
Are Tax Preparers Worth It
Fixing Errors on Filed Returns
Am I Responsible if My Tax Preparer Makes a Mistake
What Happens if a Tax Preparer Messed Up Your Return
What to Do if a Tax Preparer Messed Up
The Takeaway
FAQ

Key Points

• Hiring a tax preparer offers peace of mind, though errors can still occur, affecting refunds or tax liabilities.

• Errors on filed tax returns can be corrected using Form 1040-X.

• Taxpayers are ultimately responsible for any mistakes, not the preparer.

• If a tax preparer errs, contacting them and possibly the IRS is advisable.

• In severe cases, legal action against the preparer for negligence is an option.

Who Are Tax Preparers?

There are different types of tax return preparers, but typically, they’re enrolled agents, attorneys, or certified public accountants (CPAs). There is no professional credential that qualifies someone to be a tax preparer. However, they do need to have an IRS Preparer Tax Identification Number (PTIN) in order to help clients file their tax returns.

Because a tax preparer is dealing with your sensitive financial information, it’s important to do your due diligence before hiring one. Research potential tax preparers’ backgrounds and references, and if possible, ask for referrals from trusted friends and family members.

It’s also a good idea to look for a tax preparer who specializes in the types of taxes you need help with, such as self-employed taxes.

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Pros and Cons of Working With a Tax Preparer

Thinking about enlisting the help of a professional as you prepare for tax season? You may want to consider the advantages and disadvantages of working with a tax preparer.

Pros

• Ample experience (if you hire the right professional)

• Expert insight into potential tax credits and deductions

• Peace of mind that your taxes are filed properly

Cons

• May be more expensive than doing your own taxes

• Mistakes can still happen

• Less privacy

Are Tax Preparers Worth It?

Whether or not a tax preparer is worth the money depends on a few different factors. These may include:

• How much time it saves you. If you have complicated taxes or are concerned you might miss the tax filing deadline, you may find that an hour or so with a professional tax preparer is more efficient and therefore worth the cost.

• The complexity of your taxes. People who only have one source of W-2 income, take the standard deduction, and have no investments may be able to easily file their taxes without the help of a tax preparer. However, a small business owner dealing with payroll or a freelancer with dozens of sources of income may find that hiring a tax preparer could save them a lot of headaches.

• The tax preparer’s experience. An experienced, qualified tax preparer can ensure your returns are prepared correctly and perhaps even help you identify tax credits or deductions.

• Cost. Some tax preparers charge the same or slightly more than the cost of purchasing tax preparation software, while others are on the more expensive side. Depending on your needs, hiring one may or may not be worth budgeting for.

Fixing Errors on Filed Returns

If you realize your tax preparer made an error on your filed tax return, all is not lost. You can amend it using Form 1040-X, Amended U.S. Individual Income Tax Return. Common errors include having the wrong information regarding income, credit, tax liability, filing status, or deductions.

It’s also possible to amend a return in order to claim an unused tax credit. Generally, mistakes on income tax return need to be amended within three years (this includes extensions).

Am I Responsible if My Tax Preparer Makes a Mistake?

While it may seem like the professional tax preparer would be on the hook for any mistakes made on income taxes they help file, it’s the taxpayer who’s held responsible. However, the tax preparer can help make any necessary corrections.

What Happens if a Tax Preparer Messed Up Your Return

If you realize your tax preparer made a mistake (or multiple) on your income tax return, you need to file an amended return with the IRS. Ideally, the tax preparer would help with this process, but they aren’t required to do so.

What to Do if a Tax Preparer Messed Up

Mistakes happen. Here are the steps you can take to get things back in order in the event your tax preparer makes an error on your income tax return.

Make Sure It’s the Preparer’s Fault

Before you start pointing fingers at the tax preparer, make sure they’re the one who made the mistake. Tax preparers require a lot of detailed information so they can file an income tax return on your behalf, and it’s easy to give them the wrong information by mistake. Do some digging to see who’s really at fault.

Check Your Contract

Once you’re certain the tax preparer made a mistake, take a look at the contract you signed with them. It should outline whether the preparer will file an amendment for you at no extra charge and what their liabilities are.

Contact the Preparer

The next step would be to contact the tax preparer to alert them of the mistake and to provide them with any related correspondence from the IRS.

Notify the IRS and Professional Organizations

If the mistake is substantial — and not your fault — you’ll need to convince the IRS of the tax preparer’s negligence. You may also want to outline any damages you’ve suffered as a result of the error. The IRS is then responsible for investigating who is responsible and if the tax preparer is at fault, this can result in their tax identification number being rescinded.

It’s also possible to report the tax preparer to a professional organization they belong to, like the American Bar Association or the American Institute of Certified Public Accountants.

Tell It to the Judge

Ideally, the tax preparer will help you remedy the mistake, and everyone can go on their merry way. However, if the error caused a lot of issues for you, you may choose to sue for negligence. Taking the issue to a judge is a last resort, but it’s an option if you want to file a standard professional malpractice complaint with your state court.

Recommended: Free Credit Score Monitoring

The Takeaway

Even the most qualified tax preparers can sometimes make a mistake. If a tax pro made an error on your tax return, all is not lost. The IRS allows you to fix errors on an income tax return, and in most cases, your tax preparer should be willing to help out. If you suspect the preparer was negligent when filing your return, you can report them to the IRS. As a last resort, you can even sue them (though hopefully it would never come to that).

One way to make getting ready for tax season easier is to gain a holistic picture of your financial life. A money tracker app like SoFi’s can allow you to track spending, set financial goals, and view all bank account balances in one place. You can also monitor credit scores.

Get the information and tools you need to make the most of your money.

FAQ

Is a tax preparer liable for mistakes?

At the end of the day, even if the tax preparer is the one to make the mistake, the taxpayer is the one held liable by the IRS. That said, some contracts with tax payers do include taking responsibility for errors.

How much money will the IRS fine a tax preparer who has made a mistake filing a client’s taxes caused by lack of due diligence?

Simple mistakes are one thing, but if a professional tax preparer doesn’t follow tax rules, regulations, or laws, they can be penalized financially by the IRS. How much that fine is depends on different factors like how many violations occurred.

Can you report a tax preparer to the IRS?

Yes, it is possible to report a tax preparer to the IRS. It’s important to submit a detailed report to the IRS and to outline any damages suffered.

Photo credit: iStock/Rockaa

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Apr

2023

40+ Creative Ideas to Make Extra Money at Home

By Rebecca Lake | Life & Career, Money & Life, relay | Comments Off

Ideas for making money at home are everywhere. And some of the best ones revolve around things you can do online or off, using skills and experience you already have.

Figuring out which money-making idea works for you often depends on how much time you have and how much extra income you’re interested in generating. You might start a side hustle, explore small business ideas, look for passive income options, or get a full-time remote job.

Need some inspiration? Here are more than 40 options to consider.

40+ Creative Ways to Make Money

Creative thinking is key to finding different ways to earn an income, especially if your goal is to learn how to make money with no job. Some of the easiest ways to earn extra cash from home are selling a service (i.e., your time and skills) or selling a product.

Can you earn money online without selling anything? Absolutely, and there are plenty of ways to do it. We’ve broken down some different ideas by category to help you find your perfect money-making idea.

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Money-Making Craft Ideas

Selling handmade crafts can be an excellent way to turn a hobby into a side hustle or full-fledged business. You don’t necessarily need to be an expert artisan to get started.

Craft trends come and go, but here are some classic products to consider trying:

• Crocheted items, such as scarves or baby clothes

• Handmade soap

• Handmade candles

• Bath bombs and bath scrubs

• Paper goods

• Jewelry

• Lip balms

• Home decor items

• Lamps and lighting

• Pillows

• Vinyl stickers or decals

• Handpainted signs

• Hair accessories

• String art

• Art prints

• Tote bags

• Wreaths

• Holiday decorations

• Bookmarks

• Keychains

• Dog bowls and other pet accessories

Once you zero in on your craft idea, think about how much time you’ll need to make each item and how much money you’ll need to spend on supplies. This can help you figure out how to price each item and how much profit you stand to make. Tip: Do some online research and see how other sellers are pricing and marketing their items.

Another important consideration is where you sell your goods. Luckily, there’s no shortage of options — here are some to consider:

• Facebook Marketplace

• Local Facebook bargain or community groups

• Etsy

• Amazon Handmade

• aftcra.com

• Craigslist

• eBay

• Your own website

• Craft fairs

• Local boutiques

If you’re selling your crafts online, remember to factor in shipping costs, taxes, and any fees the platform charges when setting your prices. Otherwise, you could end up shrinking your total profit.

Money-Making Website Ideas

You don’t need a website to earn extra cash from home, but having one could open up new money-making opportunities. To set up a website, you’ll need to find a hosting company and choose a domain. Your domain is your site name.

Once your site is set up, there are several ways you could use it to make money:

Selling products

A website is a great way to sell products you create, such as an e-book, digital printables, or an online course. If you’re selling handmade items, like crafts or clothing, you could set up a shop page on your site instead of using a third-party selling platform.

Selling services

If you don’t want to make a product, you could try selling a service instead. For example, you might use a website to offer services such as writing, photography, graphic design, tutoring, or online coaching.

Affiliate marketing

Affiliate marketing means recommending products and services sold by other people, then collecting a commission when the person you referred makes a purchase. For instance, if you have a pet blog, you could include an affiliate link to your favorite dog food brand. When someone clicks the link and buys the dog food, you make money.

Hosting ads on your website is another way to potentially earn extra cash from home. Every time someone visits your site and views an ad, you make money. The more traffic — or views — your website gets, the more you could earn.

Money-Making Business Ideas

Thinking about becoming your own boss? If you prefer online business ideas, there are plenty of opportunities to consider, including:

• Coaching or consulting

• Interior design

• Freelance writing or editing

• Starting an e-commerce store

• Virtual accounting

• Transcription services

• Teaching online through a platform like Outschool

Now, what could you do offline to make money from home? Some small business ideas you may pursue include starting a home baking business, offering childcare services in your home, or tutoring.

If you’re interested in starting a home business, it’s important to check into any legal requirements in your state first. For example, if you want to launch a baking business from home, you might be subject to local or state restrictions on home kitchens. The same applies if you want to care for children in your home. Once you reach a certain number of children, you may need to register with the state as a daycare center.

Side Hustle Money-Making Ideas

There are lots of low-stress ways to earn money. Will these opportunities make you rich? Not necessarily. But they could be a good way to earn some extra cash in your spare time without a lot of effort.

Here are some ideas to explore:

• Taking online surveys

• Joining an online focus group

• Selling things you no longer need

• Getting paid to watch videos, play games, or read emails

• Customer service representative

• Earning free gift cards or money with cashback apps

• Becoming a mock juror online

• Getting paid to test websites or apps

Home Jobs to Avoid

While there are lots of ideas for making extra money, some are better than others. Here are ones to avoid:

• Illegal side hustles or jobs

• Work-from-home job scams

• At-home jobs that require a lot of work for little pay

• Pyramid schemes or multi-level marketing (MLM) programs

There’s a simple rule of thumb to keep in mind when researching ways to earn extra cash: If something seems too good to be true, it probably is. Words and phrases like “guaranteed,” “make money while you sleep,” or “easy money” are often telltale indicators that an at-home job opportunity isn’t everything it seems. It’s also a good idea to be wary of any work-from-home job that requires you to pay fees or a deposit up front before getting started.

Tips for Making Money From Home

If you’re pursuing money-making ideas from home, it helps to know some of the do’s and don’ts so you can avoid job scams while maximizing your earning potential.

When exploring ways to make money from home, do:

• Look for opportunities that fit your skill set or interests

• Consider how much time you can put in to making money

• Weigh any up front investment of time or money that might be required

• Remember to keep track of work-related expenses using a spending app

• Report the income you earn on your taxes if you’re required to do so

When looking at ways to make money from home, don’t:

• Assume it’s easy to make money online

• Give out personal or sensitive information to people you don’t know

• Fall for work-from-home job scams

• “Forget” to report the money you make on your taxes

• Get frustrated and give up if you’re not making money right away

Also, don’t be afraid to try and try again if something isn’t working out. After all, there’s no single option for how to make extra income from home. You may start off doing one thing and find that another side hustle or job idea is a better fit. And you don’t have to limit yourself to just one thing either — having multiple side hustles can mean multiple streams of income.

The Takeaway

Whether you’re selling goods online, starting a business, or using your website to turn a profit, there’s no shortage of ways to make money from the comfort of home. In fact, you may discover there are multiple opportunities that fit your schedule and interests. As you’re researching your options, factor in how much time and money is required. It’s also a good idea to be wary of opportunities that sound too good to be true (they probably are). Once you start drawing an income, don’t forget to report it on your taxes, if you’re required to do so.

Need a simple way to get a handle on your income and work-related expenses? Using a money tracker app like SoFi makes it easy to see where you are financially at any given time. You can monitor your credit score, see what you’re spending, and view the progress you’re making toward your goals at no cost just for being a SoFi member.

Stay on top of your finances by seeing exactly how your money comes and goes.

FAQ

How can I make $100 a day from home?

Some of the best ways to make $100 a day from home include taking surveys for money, using cashback apps to shop, offering freelance services, and selling printables or handcrafted items online. You can also make $100 a day from home by flipping items you no longer need on sites like eBay, Facebook Marketplace, or Craigslist.

How can I make fun money?

If you just want to make some extra money to spend on “fun,” some of the easiest ways to do it include selling things you no longer need, doing odd jobs in your spare time, or getting paid to take surveys and play games through various mobile apps. You can also research weird ways to make money, like donating plasma or selling your hair.

How can I make money just sitting at home?

Some of the best ways to make money sitting at home are passive income ideas that require little to no work. For example, you may be able to make passive income by investing in stocks that pay dividends, setting up an affiliate marketing website to earn commissions when people shop at your affiliate partners, or opening a digital printable shop on sites like Etsy.

Photo credit: iStock/Amarr_RT

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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