Finding Your Way: Finances
For more information about financial questions, see the
Personal Finance Information Guide. For information about cash benefits for low-income individuals or families, see
Many states have a sales tax, which is a percentage paid on every dollar spent to buy goods. In Massachusetts the sales tax rate is 5%. This tax is paid on everything but food and clothing. Food bought in a restaurant or fast-food facility is subject to the 5% tax.
State Department of Revenue: www.mass.dor
Federal Internal Revenue Service: www.irs.ustreas.gov
People who work in the United States pay income tax to the state and federal governments. These taxes must be paid each year by April 15 for the previous year. Most employers deduct a percentage of your paycheck and send it to the state and federal governments to pay your estimated taxes. Your employer will send you a statement of your total earnings and deductions for the previous year by January 30 of the new year. You need to complete an income tax form even if you do not owe any additional money. Income Tax forms and instructions can be found in libraries and post offices.
Each individual is responsible for sending in his or her own taxes. Many individuals and agencies will assist people with their income tax preparation for a fee. These fees differ greatly. Check with your public library to find out if there are any free tax preparation services in your community.
Social Security and Medicare Benefits
Social Security Administration
100 Concord Street, Framingham, MA 01702
Telephone: 508-875-5047 / 1-800-772-1213
In order to work legally in the United States, a person must have a Social Security number. This number can also be used for bank account identification purposes and for filing income tax returns. You must go to the Social Security Office to obtain an application for a Social Security card. Proof of date of birth and visa status are required. You will need to show your passport. Social Security numbers are only issued for employment purposes; therefore, you must have a permanent resident visa or documentation from the Immigration and Naturalization Service (INS) showing that you have a work visa.
Social Security is the federal government system for providing a continuing income when a family’s earnings are reduced or stopped because of retirement, disability, or death. Ninety percent of all workers in the United States earn protection under the Social Security Act.
Everyone 65 or older who is entitled to monthly Social Security benefits automatically gets hospital insurance under Medicare without paying a monthly premium. Others who do not qualify for Social Security (for example elderly immigrants) may be able to join a Medicare Insurance Plan by paying a regular premium.
Another federal program is Supplemental Security Income (SSI). This program assures a minimum monthly stipend to needy people with limited income and resources who are 65 and older, blind, or disabled. Eligibility depends on individual circumstances. Factors considered include number of family members, income, and assets. For more information about whether you qualify, visit your local Social Security office or check the
Social Security Website
Banking Your Money
Money should be kept in a bank for safety and to permit your savings to earn interest. All banking institutions are insured by the federal government so that you will not lose your deposits if the bank is robbed or goes out of business. All records in the bank are (under normal circumstances) confidential.
In Massachusetts, there are two kinds of institutions in which you may deposit your money: banks and credit unions. They provide a variety of services. You may open a savings account at a bank and receive interest on the money you have deposited. You may withdraw the money at any time, but people normally keep a certain amount in their accounts for emergencies or to build up savings for the future.
Banks and credit unions also offer checking accounts. You deposit an amount in your checking account in the bank or credit union and write checks for up to the total amount of money in your account. You should keep your own records of all checks; the bank will send you a monthly statement of all transactions. Many kinds of checking accounts are available. Some pay interest; others do not. Some have monthly charges; others do not if a certain minimum balance is maintained in the account. Discount or free checking accounts are available for seniors over 65 years. Not all stores accept checks. Those that do accept checks normally require identification, such as a driver’s license or a credit card. However, checks are a very convenient way to pay bills and mail money. Checks can be mailed safely; currency cannot. Most employers pay their employees in the form of a check, which then can be deposited into your account or cashed at a bank. Banks and credit unions offer the cheapest way to borrow money, but the rates are still high and the monthly repayments may be too difficult unless you have planned your budget carefully.
If you do not have a checking account, both banks and credit unions will issue a bank check (also called a treasurer’s check or a cashier’s check) for the amount that you need. You may have to pay a small service charge in addition to the amount of the check. Another common form of payment is a money order. This can be purchased in various amounts in most banks, credit unions, post offices, supermarkets, and other locations. Some banks and credit unions have safe deposit boxes in which you may keep your valuables (documents, jewelry, but no cash).
Credit cards, usually issued by banks and credit unions, are very popular for store purchases and other expenses. Before choosing a credit card, opening a bank account, or selecting a telephone service, etc., ask friends for advice, and compare costs and service. These are highly competitive services with differences that can be important to you.
If you have a consumer problem, you can contact the Attorney General Consumer Complaint Hotline at 617-727-8400 or the Consumer Assistance Office - MetroWest, Inc. located at 209 West Central Street, Natick, MA 01760, 508-651-8812. They can give you information and send you brochures and materials on a wide variety of topics ranging from warranties, repairs, returns, landlord/tenant issues, used car purchases, store policies, etc. They can also get involved in phone mediations when there are disputes. You can also find information on the state
For Used Car Lemon
Law, see the Automobile Page.
A store may have any return policy it wishes, but that policy must be posted where it can be seen by the buyer before the sales transaction is completed. It is your obligation to read and understand that policy. Most stores require the original sales receipt when making a return. It is a good idea to always check receipts at time of purchase and keep them in a safe place. It is illegal for a seller to misrepresent its refund, return or cancellation policy, or to fail to honor any promises about it. Sellers are required to have a large enough supply of advertised items available to meet reasonably anticipated demands. If a store runs out of an advertised item, ask for a “rain check” so you can buy the item at the advertised price. The store must notify you when the item is back in stock. The rain check must be honored within 60 days.
Coupons and Store Cards
There are two kinds of coupons - store coupons and manufacturers’ coupons. Store coupons are issued by stores. You can use these in the store that issues them. They are usually found in store circulars, printed advertisement in newspapers or at the stores. Bring them to the check-out counter and the cashier will deduct the amount of the coupon from the cost of the item. Manufacturers’ coupons are issued by the manufacturer, not individual stores. They are usually found in the Sunday newspaper, in stores, or in the mail. You can use these anywhere. Store cards are issued by individual stores and offer you discounted or sale prices with or without coupons. You have to fill out an application for a store card.
There are two kinds of rebates- instant rebates and mail-in rebates. Instant rebates are issued by the manufacturer. When you use an instant rebate, the cashier will deduct the amount of the rebate off the cost of the item at the check-out. Mail-in rebates are also issued by the manufacturer. When you buy an item that has a mail-in rebate, you pay full price at the check-out counter. Then you fill out a rebate form (ask the cashier where these can be found), send proof of purchase (the receipt and/or the bar code from the package) and you will receive a rebate check in the mail in about eight to ten weeks.