Protect Against Collisions and More If you drive a car in the United States, liability insurance must cover it. This type of policy pays for medical and property damage resulting from a vehicular accident. You can also purchase comprehensive and collision insurance to cover other costs. These additional coverages help protect the value of your car should it be damaged. If you are calculating how much it will cost to buy a car, you need to take into consideration the cost of insurance as well. In this article, we’ll review the basics of car insurance and the best auto insurance companies in America, including costs, pros and cons. This is a brief introduction to automobile coverage. Liability Coverage When an accident occurs, liability insurance covers you, household members and authorized drivers for the costs associated with property damage and bodily injury. It covers the cost to repair or replace property damage that you caused. [youmaylike] You are also covered if you cause the bodily harm or death to someone else while you are driving the car. This includes medical expenses, loss of income and specified legal defense costs. Collision Insurance If you are involved in a collision, this type of insurance will help pay for repairing or replacing your vehicle. If the collision is your fault, the coverage may extend to other damaged vehicles involved in the accident. States do not mandate that you buy collision insurance, but your lender or car dealer will if you finance or lease the car. Policies offer a range of deductibles, which is how much you’ll have to pay for repairs before the insurance kicks in. Larger deductibles lower the policy premiums but expose you to more out-of-pocket expenses if a collision occurs. Comprehensive Insurance Comprehensive insurance covers damage to your car that occurs for reasons other than a collision, including theft, fire, vandalism, weather and natural disasters. This coverage is often required if you finance your automobile. You can add riders to this insurance to provide coverage of additional costs, including auto towing, glass repair, daily rental while your car is in the shop and emergency roadside service. As with collision insurance, you can set the deductible on your comprehensive insurance policy to cut your premium costs. Gap Insurance If your car is severely damaged in an accident or other incident, you might find that your comprehensive and collision damage won’t provide enough coverage to pay off the amount you owe on the vehicle. Many policies pay only the fair market value of a totaled car, which might be only 80% of the amount you owe. You can buy additional insurance to plug this gap and ensure you can pay off the car loan in full if the vehicle is destroyed or stolen. Normally, car leases require you to buy gap insurance. If you pay cash or pay off your loan, you can save money by avoiding or dropping gap insurance when no longer needed. Top Five Auto Insurers These five insurers all offer full coverage policies and many additional services. Amica Amica is a superstar among car insurers, winning accolades from Consumer Reports and J.D. Powers. It’s known for handling the claims process smoothly. The average annual cost for full coverage: is $1,360. Pros You can have your car repaired at any body shop, without restrictions. Offers a premium package which, for an additional cost, provides full glass coverage, rental coverage, good driving rewards and identity fraud monitoring. Superior financial stability rating from A.M. Best. Cons Missing some discounts, such as military, low-mileage and prepay discounts. Must speak on the phone to get a quote. Sparse website when it comes to customer education. State Farm State Farm is the country’s largest multi-line insurance company. It excels in customer service and regularly garners high marks from customers. The average annual cost for full coverage: is $1,337. Pros Superior financial stability rating from A.M. Best. Excellent online quote tool, getting customers a quote in as little as five minutes. Easy claim handling and top service from its more than 18,000 agents and its easy-to-use mobile app. Cons Doesn’t offer coverage for new car replacements or uninsured motorists. Missing prepayment and automatic payment discounts. The Hartford While only 11th in size, The Hartford is big when it comes to policy options. It offers rates based on your actual driving as well as full replacement of new cars when destroyed shortly after purchase. Average annual cost for full coverage: N/A. Pros Solid benefits, including superior roadside assistance and towing programs. High marks from customers for their purchase experiences. One of the few insurers with mechanical breakdown coverage for out-of-warranty repairs. Cons Mediocre service interaction according to J.D. Power surveys. Sparse online learning materials. Geico Geico is the second-largest U.S. car insurer. It is a favorite among tech-savvy geeks who appreciate the insurer’s mobile app and excellent online service. The average annual cost for full coverage: is $1,627. Pros Geico offers plenty of ways to save, such as multi-vehicle, driving history and vehicle safety equipment discounts. Special savings for active and retired military members and federal employees. Full-featured mobile app for getting quotes, buying insurance, managing your policy, submitting claims, summoning roadside assistance and making payments. Cons Human help may be in short supply, as just about everything is handled online. No gap insurance is offered. USAA No insurer matches USAA for service to military members. Unfortunately, it's only available to active service members, their families and retired veterans. Average annual cost for full coverage: $896. Pros Superior financial stability rating from A.M. Best. Top-ranked purchase experience score from J.D. Power. Cons Missing gap coverage. Doesn’t offer interior vehicle coverage or new car replacement coverage. Limited availability. The Right One for You Competition in the insurance industry helps drive down prices and prompts insurers to offer money-saving features. For example, your carrier might reward you for a safe driving record and for having a long-term relationship with the insurer. The right insurer for you is highly rated for service, offers the exact coverage you want and does so at an unbeatable price. You should always gather multiple quotes before selecting an insurer, and make sure you get credit for all applicable discounts.
How to Pay Federal Taxes Online
The U.S. government taxes its citizens’ and permanent residents’ income. That means that every dollar you earn is essentially reduced by a certain percentage because the federal government takes a portion of it. The percentage rate they take depends on how much money you make. Generally, as your income increases, the percentage of tax that you must pay also increases.
Federal taxes are used to fund various national programs. Income taxes are the federal government’s primary source of revenue. It pays for things like Social Security, Medicare and Medicaid. Other social welfare programs like housing assistance and temporary assistance for families in need are also funded through tax revenues. Taxes also cover things like military costs for defense and education.
Now, you might be asking, “How do I pay federal taxes online?” Keep reading to learn more.
Do I Need to Pay Federal Taxes?
While not everyone is required to file a tax return, most do because they can get tax money returned to them that has been withheld from their paychecks throughout the year, even if they do not owe any additional tax. If you are employed in a traditional W2 job, like most salary and hourly wage positions, your income taxes are generally paid for you by your employer.
By preparing and filing your tax return, you are often asking for your money back because your employer withheld too much; that’s why it’s called a “tax refund.” In fact, nearly 112 million people received tax refunds in 2018. This statistic indicates that most people have already paid all their taxes (and then some) by the end of 2018.
You will only have to pay federal taxes if your employer did not withhold enough funds to cover the taxes you owe. That means you only have to worry about paying your federal taxes online if you owe money to the Internal Revenue Service (IRS) after you prepare your taxes.
How to Pay Federal Taxes Online
Because the IRS is very interested in you paying any taxes that you owe based on your income, they try to make the payment process easy. You can always send in a check to the IRS for the amount you owe, but paying online is often faster and easier. Online payment options are based on how you pay.
Use the IRS’s Direct Pay
Direct Pay allows you to make income tax payments after your taxes have been prepared by using a checking or savings account. You can go to the Direct Pay website and simply click “Make a Payment.” From there, you input information about the payment, such as why you are making it, how you want it applied, and which tax period you are paying. It will also ask for various pieces of identifying information to ensure your payment is credited to your account correctly.
Use a Credit or Debit Card
The IRS also accepts credit or debit card payments online. However, you must use a specific e-filing service to take advantage of this payment option, such as through TurboTax or FileYourTaxes.com. You will also be charged a convenience fee to make a payment using this method.
Create an Installment Agreement
You can also work with the IRS to create an installment payment plan that can be paid online through Direct Pay. The IRS has an Online Payment Agreement tool you can use to see if you qualify to make payments on your tax obligations. It will also walk you through how to make these payments once your payment plan is approved and processed.
How Do I Know How Much to Pay?
Unfortunately, you cannot simply pay the IRS whatever you want, and they generally will not send you a bill (unless you are behind on filing your taxes and they have estimated your tax obligations, along with penalties and interest). Instead, you need to go through the work of preparing your tax return yourself or having a professional complete your return. Only then will you know how much tax you owe.
You can sometimes estimate your tax obligations if you know basic information, such as:
- Your income
- Whether you will take the standard deduction or use an itemized deduction
- Any other deductions you would qualify to receive
- Any credits you are entitled to get
- Any adjustments to your income that should be considered
For example, if you know you have a salary of $50,000, you are a single person, you will take the standard deduction, and that you are not entitled to any deductions or credits, estimating your tax obligations is fairly straightforward. However, if your tax situation is more complicated, you likely will not know how much you owe until you explore all of your deductions and credits and take every adjustment you can.
Income taxes use the following tax brackets and rates for 2019. These rates are periodically adjusted, so they may vary from year to year.
The example above included a single person earning $50,000 who uses the standard deduction. If they have no credits, additional deductions or adjustments, then their taxable income is $38,000. That puts them in the 12% tax bracket rather than the 22% tax bracket.
Those deductions are important because they can lower your tax obligations, so use them to your full advantage. Without the standard deduction in our example, the taxpayer would have had to pay $11,000 in taxes, but the standard deduction means they only have to pay $4,560.
The amount you pay at the end of the tax year is also offset by the payments you have made throughout the year, usually through your employer. You need to check your W2 to see how much those payments have been under most circumstances.
Keeping Good Records of Tax Payments
When you make any kind of tax payment, you should keep a record of it (receipt or otherwise). If you write a check, keep the carbon copy. If you make an online payment using Direct Pay or by credit card, keep the receipt that the IRS provides to you. The IRS recommends that you keep some records forever, but you should retain most records for at least three years.
However, the IRS has six years to dispute the amount you have paid or to make a claim that you have not paid. As a result, it is a good idea to keep all your tax payment records for seven years. That way, you can prove to the IRS that you made the payment even if they applied the payment incorrectly, or a different error occurred.
Many people have already paid their taxes throughout the year and only file their tax return to get their refund. However, when you owe taxes, paying online may be a good idea. Be sure to go through the process of preparing your tax return first so you know how much you should pay. Once you have made a payment, keep a record of the payment so you can prove that you made the payment later if necessary.