Crash Test Results Revealed!

by Gerri Willis

Is that latest SUV safe to drive? The Insurance Institute for Highway Safety is out with its latest crash test results for middize SUVs. Here's the full report!

Midsize SUVs have mixed results in latest round of small overlap tests

ARLINGTON, Va. — Three more midsize SUVs achieved good or acceptable ratings from the Insurance Institute for Highway Safety in the latest round of small overlap front crash testing, but many models, including three newly rated SUVs from Fiat Chrysler Automobiles and one from Hyundai, continue to struggle with the test.

The Nissan Murano earns a good rating and, with a superior-rated optional front crash prevention system, qualifies for the Institute's highest award, TOP SAFETY PICK+. The Ford Flex earns an acceptable rating and qualifies for TOP SAFETY PICK.’

 

Consumers looking for a midsize SUV now have seven choices that qualify for awards from IIHS. The earlier winners are the Toyota Highlander with TOP SAFETY PICK+ and the Chevrolet Equinox, GMC Terrain, Kia Sorento and Nissan Pathfinder, which all earn TOP SAFETY PICK.

Among the seven 2015 models in this round of testing, the Jeep Wrangler 4-door model also picked up a good small overlap rating. However, the Wrangler offers only marginal protection in side and rear crashes, so it's not a recommended choice. It also lacks a fixed roof, so it can't provide good protection in rollover crashes.

Aside from the Wrangler, three other Fiat Chrysler SUVs were tested for small overlap protection and didn't fare well. The Dodge Journey earns a poor rating, and the Dodge Durango and Jeep Cherokee earn marginal ratings. The Hyundai Santa Fe also earns a marginal rating.

The small overlap test replicates what happens when the front corner of a vehicle collides with another vehicle or an object such as a tree or utility pole. In the test, 25 percent of a vehicle's front end on the driver's side strikes a rigid barrier at 40 mph.

The test is more difficult than either the head-on crashes conducted by the government or the longstanding IIHS moderate overlap test. That's because, in a small overlap test, the main structures of the vehicle's front-end crush zone are bypassed, making it hard for the vehicle to manage crash energy. The occupant compartment can collapse as a result.

Since IIHS began small overlap testing in 2012, manufacturers have responded to the challenge in two ways. One is by taking the test into account when models are redesigned. The other is by making smaller modifications to beef up the front structure and improve airbags even before a model gets a full overhaul.

"This test presented a major challenge for manufacturers when it was introduced three years ago, and many have adapted quickly," says IIHS Chief Research Officer David Zuby. "Chrysler, Dodge and Jeep have had some successes with redesigned models, but they haven't done much in the way of interim improvements. As a result, they still have many models that rate poor or marginal."

BEST AND WORST: The Nissan Murano's structure (left) held up well. In contrast, the occupant compartment of the Dodge Journey (right) collapsed.

The best performer in the current group of seven is the redesigned 2015 Murano. It hit all the marks for ideal small overlap protection. The driver space held up well, with maximum intrusion of 5 inches at the lower door hinge pillar. The dummy's movement was well-controlled, and its head hit the front airbag and stayed there until rebound. The side curtain airbag deployed with sufficient forward coverage to protect the head from contact with side structure and outside objects. Measures taken from the dummy indicate a low risk of any significant injuries in a crash of this severity.

In addition to earning a good small overlap rating, the Murano improved its roof strength rating to good from the previous generation's marginal rating.

The optional front crash prevention also is new for 2015. The Murano's autobrake nearly avoided a collision in the 12 mph IIHS track test and reduced the vehicle's speed by 11 mph in the 25 mph test. The Murano also earns a point for meeting federal criteria for forward collision warning systems.

The Journey is the worst performer in the group and a classic example of poor small overlap protection. The occupant compartment failed to hold up, with intrusion measuring as much as 9 inches at the instrument panel and the parking brake pedal, which tore through the dummy's left lower leg. Injuries to the left hip, left knee and right lower leg also would be possible.

The dummy's head barely contacted the front airbag before sliding off the left side, as the steering column moved to the right. The side curtain airbag failed to deploy, leaving the dummy's head vulnerable to contact with side structure and outside objects.

The Journey was introduced in 2009, and its poor rating applies to the previous models.

http://www.iihs.org/iihs/news/desktopnews/midsize-suvs-have-mixed-results-in-latest-round-of-small-overlap-tests

 

 

 

User’s Guide to Spring Real Estate

by Gerri Willis

Remember when getting a mortgage was easy as fogging a mirror? Buyers this spring buying season will find that getting the perfect loan is harder, and the range of options slimmer.

The biggest surprise for repeat buyers is that the lender you may have wanted to work with may not even be originating loans anymore. Many of the big banks have consolidated their mortgage underwriting efforts, reducing the big banks’ share of the business to 33 percent today from 61 percent in 2012, according to the American Enterprise Institute. Wells Fargo remains the nation’s largest underwriter and JPMorgan Chase No. 2, but the nation’s third largest lender is Quicken, the makers if TurboTax and QuickBooks. Other nonbank lenders with large shares of the business include PHH, Freedom Mortgage and Pennymac.

All of this makes it critical that you shop around when getting a mortgage. A website like www.bankrate.com can help you find the players in your area offering the best terms. In fact, the best deals may well not be from the big banks but rather the younger upstarts.

Prepare yourself as well for the large amount of paperwork you’ll have to pull together. Mortgage reform means the burden for proving your income is high. Bankrate’s Greg McBride says that banks even try to make sure that the down payment isn’t being given as a gift by parents or grandparents and, in fact, has been saved by the mortgage applicant.

As different as the market is today, you’ll also find that the government is still trying to attract low income applicants into the process. The FHA mortgage requirements allow credit scores as low as 580 and a down payment of 3.5 percent. Credit scores of 620 and a down payment of 3 percent qualify applicants for Fannie Mae and Freddie Mac programs.  

The good news in the market is that rates remain low. The average rate for 30-year-fixed rate loans is 3.84 percent. To find out how to take advantage of the opportunities in the real estate market this spring, join The Willis Report at 5pm EST tonight.

Beware of the IRS Audit

by Gerri Willis

The IRS has scaled back. It’s not answering most taxpayer’s questions. It’s even printing fewer of its instructional booklets and it’s operating with a smaller budget. Does that mean this is the year to cheat on your taxes? The simple answer is no. The IRS may decide to look back at returns filed in the last three years when it audits a taxpayer and for what it deems a substantial error, the IRS may go back six years. So, even if you shade the truth or outright lie on this year’s return and you get away with it, the IRS can still come back years later and penalize you.

Let’s be clear. Most of us aren’t plotting how to get one over on the IRS. Instead, we’re trying to make sure we don’t get audited. The good news is you can control most of the things that will get your return a second look but not all of them. High income earners, for example, are more likely to get a second look because the IRS focuses on where the money is. Audit rates for $1 million plus earners is 10.7 percent, while the audit rate for those earning $200,000 or less is 0.78 percent. Likewise if your deductions are higher than the average taken by people in your tax bracket or if you are self-employed or own your own business, chances are your return will fall into the pile for further scrutiny. Things you can control that can result in an audit include: failing to report all your income, writing off losses for a hobby or business expenses.

Even the most careful filer can find themselves on the other side of an audit. If you do get a letter from the IRS, you should have a professional handle the inquiry. Don’t be surprised that you’ll have to back up your claims. It’s really all about the documentation. If you claim unreimbursed business expenses, for example, you have to prove each and every restaurant tab and plane ticket expense was paid for by you. That means you will need to have receipts in hand. Dominick Tavella, Diversified Private Wealth Advisors president advises taxpayers to answer only the questions that are asked and no more. Don’t get emotionally involved, says Tavella, the agent is only doing his or her job. Bottom line, if you’re audited, don’t panic.

To hear more from Tavella about what you need to know about the audit, join The Willis Report on the Fox Business Network tonight at 5p.m. ET.

User's Guide to Tax Deductions

by Gerri Willis

Still haven’t filed your taxes? You’re part of the 28 million Americans still scrambling to do so. The good news is that there are still ways to save money. Deductions reduce your taxable income and allow you to pay less. And, while you may be familiar with commonly used deductions, like the home mortgage and charitable giving tax breaks, there are literally hundreds more breaks you may not be familiar with. In 2012, the most recent year for which information is available, the 45 million filers of the long form reduced their gross income by $129 billion. Now do I have your attention?

While a deduction doesn’t pack the wallop of a tax credit, which reduces your taxes dollar for dollar, deductions can still bring your tax bill down. Here are a few you might think about using this year:

  • Deduct student loan interest up to $2,500. It’s good news for newly minted grads facing a mountain of college debt. They can deduct the interest thy paid unless their parents are still claiming them as dependents. The devil is in the details here. Be sure to check income limitations for using the deduction.
  • Help for the sandwich generation. Truth be told, this isn’t a deduction, but I get so many questions about breaks for boomers, I decided to include it. If you are supporting a parent and pay half of their support, you may claim your mom or dad or both as dependents and take the exemption amount on your taxes. Mom and Dad can’t be earning more than $3,950.
  • Teacher bonus. Classroom expenses of up to $250 can be deducted by teachers. Additional classroom expenses must be filed as miscellaneous itemized deductions.
  • Bad investments. You can do more than just prank call your financial advisor if you own worthless securities. You can actually write off stocks, bonds and other investments that have lost all their value. The law allows you to go back as far as seven years to find these beauties.

Finally, don’t be afraid to take the deductions you are due. The IRS expects you to utilize every tool at your disposal to reduce your taxes. And, good luck making the deadline!

Join us at 5 p.m. Eastern time on The Willis Report as Barbara Weltman, a contributing editor at J.K. Lasser’s Tax Guides, joins us to reveal even more little-known deductions.

Tax Season Solutions

by Gerri Willis

What if the worst happens this tax season? Like you miss the April 15 deadline for filing, or you can’t afford the taxes you owe to the Federal Government? The good news, is that there are solutions to even the thorniest tax problems.

Even the most organized among us sometimes find it difficult to meet the April 15 federal tax deadline. And, while it’s true you can file an extension that will allow you to put off the inevitable until Oct. 15, you’ll still have to estimate what you owe and stroke a check. Form 4868 is the form to use if you are applying for an extension. Estimate what you owe and pay the balance on time by tax day.

If your problem is that you simply owe more than you can afford, there’s a solution for that too. The IRS allows you to create your own installment plan at a cost of $52 for set-up. Plus, you’ll pay  interest and a monthly 0.25 percent late fee. File the request by April 15 and ask for an extension at the same time. Not filing at all is not an option. Fines and penalties escalate when you file nothing at all by the deadline.

Late filers can get help last minute by using tax software and filing online. The IRS allows you to use their free file option if your annual income is under $60,000. Go to www.irs.gov for details.

One word of warning: If you’ve filed and have been waiting for a refund with no luck, contact the IRS right away. One of the popular new scams is refund filching. Crooks file tax returns in advance of the actual person whose social security number they are using. They score a tax refund and you get nothing. Getting that money back is possible, but will take weeks, if not months.

Watch The Willis Report all this week at 5pm ET on the Fox Business Network for the latest on this year's tax filing season as we interview experts and answer your questions. 

User's Guide to Filing Your Taxes

by Gerri Willis

When Nina Olson, the nation's taxpayer advocate, predicted earlier this year that this tax season could be the worst for taxpayers and the IRS in 30 years, accounting pros were skeptical. But she's certainly looking prescient now. New estimates of the proportion of taxpayer phone calls to IRS help lines that are ignored have soared to 60 percent from 40 percent just weeks ago. What's more, the IRS itself is warning that refunds may be delayed for weeks. So much for the tax agency's mandate to assist taxpayers.

These days, the IRS is preoccupied with other problems. The stain of scandal from its campaign of harassment of politically conservative groups applying for non-profit status remains. And, Congress still hasn't forgotten the agency's lavish spending on conferences from a few years ago or its awarding of bonuses to IRS employees who failed to pay their taxes. IRS Commissioner John Koskinen complains that the tax agency's budget has been set back to 2012 levels by Congress, constraining its abilities to find tax cheats. But Olson says a better strategy is to focus on is the 98 percent of taxpayers who intend to comply with tax law. Answering their questions, she says, is a more efficient way to raise federal revenue. 

Despite these problems, there is no federal agency that strikes more fear into the hearts of Americans than the Internal Revenue Service, and for good reason. The IRS has the power to garnish your wages or seize your property for nonpayment and, unlike other creditors, they don't have to go to court to obtain a judgement against you to do so. Understanding tax law is virtually impossible unless you are a highly trained professional. There are four million words in the tax code, about five times longer than the Bible or 4.5 times longer than the complete works of Shakespeare. The language is arcane and obtuse. And for that reason, we spend more time and money every year complying with these complicated rules. Americans will spend an average of 16 hours completing their tax filings this year, of which eight hours will be record keeping, two is tax planning and five is form completion and submission (another hour is miscellaneous). The average cost is $260. 

A simpler tax code could go a long way toward helping Americans file taxes. In fact, the code has gotten more complicated rather than less with the White House's decision to give the IRS the job of enforcing Obamacare rules. The law generated 47 major changes to the tax code, the most sweeping changes to tax law in 20 years. The agency decides who gets insurance subsidies and who does not. It's their call whether the coverage offered by private companies meets the rigorous standards of the healthcare law. In short, the tax agency's mandate has expanded beyond tax collection into social policy implementation. Much of that is happening this year for the first time. New tax forms for Obamacare recipients are confusing. What's more, about 800,000 of the recipients received the wrong tax information from the federal government. One H&R Block study showed that 52 percent of Obamacare enrollees received too much in tax subsidies and now owe the federal government an average of $530 per filer. 

Bottom line, this year it is on you because the IRS is offering less and less help even as the laws are growing ever more complex.

Watch The Willis Report all this week at 5pm ET on the Fox Business Network for the latest on this year's tax filing season as we interview experts and answer your questions. 

 

Colleges & Universities Under Financial Scrutiny

by Gerri Willis

Attention college students (...and their moms and dads)!

The Department of Education has made public for the first time a list of about 500 colleges and universities the agency is concerned about and has placed under increased financial scrutiny.

Click the link:

https://www.documentcloud.org/documents/1698355-redacted-schools-on-hcm1-or-hcm2-as-of-3-1-2015.html

Don't miss The Willis Report tonight 5pm ET on the Fox Business Network. Find Fox Business in YOUR area http://www.foxbusiness.com/about/channel-finder/index.html

Colleges Going Broke?

by Gerri Willis

Parents and students have become obsessed by the rapid-fire growth in tuition demanded by the nation’s colleges and universities. And, it’s easy to see why. Over the last 30 years, tuitions and fees have risen twelve-fold. But the steady march of higher college costs has obscured a fact that students and their parents should be focused on: A not insignificant proportion of the nation’s 4,500 degree granting institutions are financially stressed. Though they charge higher and higher fees, student bodies are thinning and a large proportion, particularly private schools, are being forced to slash prices.

The problem began to get national attention when Sweet Briar College, an all-women institution located near Lynchburg, Va., announced it would close its doors. The 114-year old liberal arts college for women that started as a finishing school cited “insurmountable financial challenges” as the reason for its abrupt announcement earlier this year that it would close at the end of the academic year.

Financial woes aren’t limited to all-women colleges. Smaller schools have been merging with larger rivals for some time. And, according to Moody’s, a bond rating agency, operating revenue for four-year schools is on the decline. “We maintain a negative outlook for the U.S. higher education sectordue to lingering stagnation of operating revenue, coupled with mounting expense pressures and anticipated weakening of overall operating performance,” Moody analysts wrote in a recent report.

The agency reports 18 institutions that are “financially stressed,” listed below:

  • Alabama State University, AL
  • Ashland University, OH
  • Bard College, NY
  • Birmingham-Southern College, AL
  • Clark Atlanta University, GA
  • Dowling College, NY
  • Franklin Pierce University, NH
  • Glenville State College, WV
  • Life University, GA
  • Marymount University, VA
  • Mount Saint Mary’s University, MD
  • Regent University, VA
  • Sage Colleges, NY
  • St. Joseph’s College, NY
  • University of Puerto Rico, PR
  • Vermont Law School, VT
  • Wittenberg University, OH
  • Yeshiva University, NY

To be sure, the Moody’s designation does not mean these schools will shutter tomorrow. It simply means that at this time they are financially troubled. Unfortunately, even this list doesn’t tell the whole story. Bond rating agencies only cover the largest and best known universities in the country. Moody’s tracks just 560 schools, a fraction of the total. Much more trouble lurks at the thousands of smaller institutions that have a much lower profile. Private schools that rely on tuition for 80 percent or more of their funding are most prone to financial problems.

Parents, though, will want to identify problem schools this spring as they prepare to choose a school with their child by National Decision Day May 1. Moody’s rates just 30 schools Triple AAA, their highest rating. Those schools tend to be market-leading research universities, sometimes with highly profitable hospitals affiliated with the campus. Harvard University, the University of Virginia and Pennsylvania State University are the sorts of schools that are part of this elite club. Most troubled are smaller, regional schools some of which specialize in narrow fields of study. They rely on tuition for a large proportion of income.

Getting your hands on bond rating agency reports can be difficult. For that reason, check out the Department of Education annual watch list here: https://studentaid.ed.gov/about/data-center/school/composite-scores which contains the names of schools that have failed the department’s financial responsibility test. Even this list, though, is not perfect. Sweet Briar rated high on these tests in recent years. Another way to spot trouble: If a private school’s average discount on tuition is higher than 46 percent, trouble could be ahead. Slashing prices demonstrates financial stress. Also, ask whether the college is making its enrollment goals. Declining student body size is a sign of trouble.

Ultimately, the responsibility will fall to parents to make sure they are sending their dollars to a school that has the financial heft to hold up over time. Choosing a college or university is a decision that will impact your child for the rest of their life, responsible not just for the quality of their education, but what kind of jobs they land and the professional relationships they make.

Watch The Willis Report weeknights at 5pm ET on the Fox Business Network

 

How to Negotiate Financial Aid Offers

by Gerri Willis

One of the dirty little secrets of paying for college is that the price tag is negotiable. Although financial aid officers don’t like to admit it, negotiating prices has become commonplace. And, that’s good news because today’s price tags at $18,943 for in-state public schools, $32,762 out-of-state schools and $42,419 for private schools are simply unaffordable.

College tuition isn’t a tab most of us think can be haggled like a used car price, but declining enrollments mean that the nation’s 4,500 degree-granting institutions are fighting each other for the privilege of educating the nation’s brightest students. Truth is, universities have spent the past couple of decades beefing up their offerings, building elaborate gyms, dorms and student centers just as tuition-paying enrollees have dropped by 930,000 students in four years. In short, they’ve spent a lot to attract a declining clientele.

For that reason, Mom and Dad are finally getting a little leverage. To best take advantage of your better negotiating position, you’ll want to plan ahead, says Kal Chany, author of “Paying for College Without Going Broke,” and founder and president of Campus Consultants. First off, before you do anything else, get all your offers in hand. The standard procedure is that admission offices send out admission letters followed by financial aid offers (by letter or online) over the next six weeks. Chances are good that you will be mystified by the aid offer. That’s okay. The letters are typically loaded with jargon and even misleading information. Contact the aid office to make sure you understand every sentence. Then, compare your offers from different schools on an apples to apples basis to determine which school is giving you the most free money vis a vis the all-in price. It’s possible you can put one school against another to get more aid out of your top choice.

Next, Chany says ask the aid office for the procedure you should use to “appeal” your aid offer. Don’t use the word “negotiate,” or even “bargain.” Financial aid officers consider that presumptuous. Your best bet for success is if you’ve had a major change to your families’ finances. If one parent lost a job or has an expensive health problem, schools are likely to take that into consideration. You’ll need to send them detailed information to document your case, such as letters of dismissal or even medical bills.

Likewise if your household has grown or if your parents are responsible for another college student, a re-look is warranted. However, many schools are now also willing to match or beat offers from other schools. The flexibility of the student aid officer varies from school to school. But some private schools admit to granting appeals to as much as a third of their entering class.

One thing to keep in mind as you work to reduce your college bill: The student aid officer isn’t your friend. In fact, their job is to get your son or daughter to enroll with the smallest financial aid package possible. So, get ready to haggle. And, don’t miss that May 1 deadline for making the big decision where your child will attend college.

Join us tonight 5pm ET on The Willis Report as we help you and your family get the aid you deserve

A Guide to Federal Loans

by Gerri Willis

A free ride to college is a rare thing these days. If you are awaiting financial aid offers, you’re hoping for a grant windfall, but the reality is you will have to beef up your package with loans. Here’s a list of the federal loans, their details and annual award limits.

Federal Perkins loans: These loans are available for undergraduate and graduate students. Eligibility depends on financial need and the availability of funds at the college. The college is the lender and payment is owed to the college that makes the loan. Undergraduates can get up to $5,500, while graduate students can get up to $8,000. Total amounts cannot exceed $27,500 for undergrads and $60,000 for graduate students.

Direct subsidized loans: These loans are for undergraduate students who are enrolled at least halftime and have demonstrated financial need. Interest isn’t charged while the student is in school. The U.S. Department of Education is the lender and payment is owed to DOE. Annual awards are $3,500 to $5,500.

Direct unsubsidized loans: These loans are for undergraduate and graduate students who are enrolled at least halftime. Financial need is not required. The student is responsible for paying interest throughout the life of the loan. Payment is owed to the Department of Education.

Direct PLUS loans: These loans are for parents of dependent undergraduate students and for graduate or professional students. Financial need is not required. Students must be enrolled at least half-time and must be either a dependent undergrad for whom a parent is taking out a Direct PLUS loan or a graduate or professional student who is receiving Direct Plus loans. The borrower cannot have a negative credit history and is responsible for paying interest in all periods. Again, the Department of Education is the lender. The maximum award is the cost of attendance minus any other financial aid the student receives.

Join us tonight 5pm ET on The Willis Report as we help you and your family get the aid you deserve. 

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