Real estate professionals get paid to help buyers and sellers complete the sale of a property.

Usually, the seller pays these fees. The total is typically a percentage of the sale, a flat-fee or another negotiated sum that gets split evenly between the buyer’s and seller’s agents.

Let’s take closer look how Realtors get paid, how much they get from a sale, and the services they provide.

• What are Realtors?
• How much are Realtors’ fees and how do they work?
• Do real estate agents get paid if there’s no sale?

What are Realtors?

Realtors are simply real estate professionals — agents or brokers — who have registered with the National Association of Realtors. NAR is a professional organization that imposes educational requirements and a code of ethics on its members.

Buyers and sellers can work with Realtors or non-Realtor agents and brokers, and should receive similar services from them, since they all must comply with minimum service provisions set by state laws.

All can help sellers with marketing properties, finding potential buyers and arranging showings — and can help buyers find and learn about properties to potentially purchase. They also may review contracts, negotiate offers and assist with closing transactions.

How much are Realtors’ fees and how do they work?

In traditional real estate transactions, the seller will typically pay a commission equaling 5% to 6% of the purchase price of the home — with the total usually split evenly between the buyer’s agents and the seller’s agents.

Brokers and agents on both sides typically have customary fees, though sellers are free to negotiate.

When a seller enters into a listing agreement with an agent, the agreement may state a specific period of time the agreement will be in effect. If a seller backs out of the agreement before the end of that time period without approval, the seller may still have to pay the agent’s commission.

Buyers’ and sellers’ agents may be allowed to offer a rebate equaling part of their commission. But state laws may impose restrictions on when and how the rebate is advertised and paid.

How else can real estate agents be paid?

Fee-for-service arrangements are an alternative to full-service brokerage firms. Instead of paying a set commission for a bundle of services, real estate professionals working under a fee-for-service arrangement can charge for specific things.

In a fee-for-service arrangement, brokers or agents could charge separately for services like listing the home on the Multiple Listing Service (or MLS), negotiating the purchase agreement or advising on pricing.

This could save sellers money since they can choose only to pay for services they need, paying an hourly or a flat fee for each service.

What services do real estate agents provide?

Traditionally, full-service real estate brokers or agents have provided a variety of services in exchange for a commission.

Here are some of the services generally included in this fee.

• Marketing a property, including listing it on the local MLS
• Reviewing purchase and sales agreements
• Negotiating the terms of the sale on behalf of their clients
• Arranging for potential buyers to visit properties
• Providing potential buyers with property information
• Helping buyers to understand financing options
• Assisting with handling paperwork required to close the transaction

Do real estate agents get paid if there’s no sale?

Sellers are typically not required to pay a commission if the property doesn’t sell. But, again, if they back out of a listing agreement early without the agent releasing them, they may be obligated to pay the original seller’s agent commission — assuming the sale happens during the time agreement should have been in effect.

Buyers who do not enter a contract to buy a home generally don’t have to pay anything to their agent, unless they signed an agreement specifying otherwise.

Next steps

Finding the right real estate professional can make buying or selling a home easier. And you may find the commission fees to be well worth it for the assistance you get.

Learn how to find a good real estate agent so that you can work with a professional that will offer the support you need, whether you’re buying or selling your home.

10 Cheapest and Most Expensive Cities to Travel to in the U.S.

A Credit Karma Study

Updated June 21, 2024

Written by:Christy Rakoczy Bieber and Andrew Depietro

Travel costs can vary dramatically from one location to the next. Identifying bargain destinations in the U.S. involves considering many factors, including airfare, hotel and transportation expenses.

Credit Karma identified some of the best bargains for travelers as well as the places to avoid if you want to stick to a smaller budget.

Credit Karma analyzed data from Expedia, the Bureau of Transportation Statistics, the Bureau of Economic Analysis and Lyft to estimate the price of flights, hotels, transportation and local cost of living in the cities that are home to the 52 busiest U.S. airports. Using this information, we identified the most and least expensive U.S. cities to visit. (You can check out our full methodology here.)

Based on our analysis, here are the five cheapest U.S. cities to travel to.

1. Cleveland
2. Omaha, Nebraska
3. Las Vegas
4. Memphis, Tennessee
5. Orlando, Florida

And these are five most expensive cities to travel to in the U.S.

1. New York
2. San Diego
3. Seattle
4. San Francisco
5. West Palm Beach, Florida

Keep reading to learn more about the costs of traveling to different urban metro areas in 2023.

Credit Karma Stat Snapshot

Most expensive city to travel to:

New York

Cheapest city to travel to:

Cleveland

City with the most expensive average airfare:

San Francisco

City with the cheapest average airfare:

Fort Lauderdale, Florida

City with the highest cost of living:

San Francisco

City with the lowest cost of living:

Cleveland

Least and most expensive U.S. cities to travel to in 2023

The table lists 52 U.S. cities in order of the cost of traveling to each city based on airfare, hotels, transportation costs and local cost of living — ranked from least expensive to most. It includes U.S. cities near the top 52 busiest U.S. airports, and it excludes secondary airports within those same cities. For example, the data for Chicago includes Chicago O’Hare and omits Midway Airport.

The least expensive city in the U.S. to travel to was Cleveland, while the costliest urban area to visit was New York City. The cost of living was more than 30% higher in New York versus in Cleveland, and the average price of a flight to Cleveland was $362 compared with $436 to New York. Considering these factors, it makes sense that Cleveland is the most budget-friendly destination while New York carries a far higher price tag.

Cleveland didn’t have the cheapest hotels in the U.S., though. Atlanta takes that title, with the average cost of the cheapest four- and five-star rated rooms coming in at $104 per night. By contrast, the city with the highest prices for lower-budget accommodations was West Palm Beach, Florida, where the average nightly cost of the cheapest hotel rooms was a whopping $290 per night.

When it comes to airfare, San Francisco travelers paid by far the highest price with an average fare of $498.55. That’s $218.92 more than the average fare paid by travelers to Fort Lauderdale, Florida, the city with the cheapest average ticket cost.

Top 10 cheapest cities to travel to in the U.S.

The table ranks the top 10 most affordable urban destinations, with the cheapest at the top of the list.

Key findings on the cheapest U.S. cities to travel to

Among the 10 cheapest cities to travel to, three are in the Midwest with another three in the South — four if you count Orlando, Florida.

The cheapest city in the U.S. to visit was Cleveland. Another Midwestern city, Omaha, Nebraska, came in at number two. Traveling to cities in the Midwest may be less expensive than visiting other parts of the country because of the overall lower cost of living in these areas. Consumer price index data show the price of goods and services for urban consumers in the Midwest and the South is below the national average.

Both Las Vegas and Orlando, Florida, also made the list of the top five cheapest cities to travel to. Because these are prime tourist destinations, costs are lower due to many airlines servicing both cities — and there are a lot of hotels for travelers to choose from. Orlando, Florida, alone has more than 130,000 hotel rooms compared with just 30,000 in San Francisco.

Top 10 most expensive cities to travel to in the U.S.

The table ranks the 10 most expensive U.S. cities to travel to, listed from the most expensive to the cheapest.

Key findings on the most expensive cities to travel to in the U.S.

Most of these high-priced destinations are in areas of the country with a high cost of living, as well as with airfares above the national average. For example, while the national average fare was $395.01, the average in New York was $435.70 and the average in San Francisco, the country’s most expensive airport, was $498.55.

Average Lyft fares were also very expensive in many of the destinations on this list. In New York, the average fare was $89 — $80 more than the $9 average fare in Honolulu, where Lyft prices are the lowest in the United States. Seattle had the second highest average Lyft fare in the country at $52.50.

Expensive lodging is also a trend in these high-cost urban areas. The average cost of a hotel in June 2023 near downtown Fort Lauderdale is $779. That’s the highest in the country, and it’s $652 more than the average of $127 in Ontario, California, where downtown-adjacent lodging is the cheapest in the U.S.

Note that the average cost of a cheap hotel in Fort Lauderdale, regardless of distance to downtown, is a much more affordable $189.

Tips for getting a good travel deal

No matter your destination, it’s likely possible to reduce the price of your next trip by making smart decisions during the planning process. Here are some of the best ways to save on travel.

• Be flexible about travel dates. Early-morning and late-night flights can cost less, as can midweek flights.
• Choose a budget airline. While seat sizes may be smaller and you’ll generally have to pay extra to bring bags aboard, budget airlines can come with far lower fares than larger competitors.
• Pay with points. Travel credit cards can help you to earn miles or points that you can cash in for free trips. This is especially helpful when traveling to destinations like San Francisco, where airfare comes at a premium.
• Opt for a hotel away from the urban center. In the Virginia Beach/Norfolk area, for example, the average nightly cost of cheap hotel rooms with four- or five star-ratings totals $133, while the average cost of a hotel room in the same area but close to the downtown center totals $612 per night.

Methodology

In order to identify the most-expensive places and least-expensive places to travel to in the U.S., 52 popular U.S. travel destinations, chosen by busiest airports, were analyzed against the following criteria:

1. Average domestic airline itinerary fares by airport, Q2 2022 (latest data available), sourced from the Bureau of Transportation Statistics 2)
2. Average cost per night at the three cheapest hotels with four- or five-star ratings, for a hypothetical travel period of June 3, 2023, to June 10, 2023, sourced from Expedia
3. Average cost per night at the three hotels closest to downtown with four- or five-star ratings, for a hypothetical travel period of June 3, 2023, to June 10, 2023, sourced from Expedia
4. Regional price parities, a measure of the cost of goods and services versus the U.S. cost index equal to 100, for each city’s metropolitan area, sourced from the Bureau of Economic Analysis
5. Average cost of a Lyft ride in each city, sourced from Lyft on Dec. 15, 2022

Sources

• Expedia
• Bureau of Transportation Statistics
• Bureau of Economic Analysis
• Lyft

Direct deposit is an easy and fast way to get access to your money.

Direct deposits — also known as electronic funds transfers, or EFTs — allow businesses and organizations to send secure payments that are usually available to you quickly. On average, it can take up to three business days for a direct deposit to clear, but the timing can depend on the type of payroll software your employer/the sender uses. Some employers can process your money faster and make it available immediately on your scheduled payday.

We’ll review what you should know about when your direct deposit will be available.

• What is direct deposit and how does it work?
• How long does direct deposit take?
• How do I check the status of my direct deposit?

What is direct deposit and how does it work?

Direct deposits are money transfers made electronically. They can be made by businesses, government agencies or the general public. Because the transfers are electronic, the U.S. Department of the Treasury considers direct deposits to be a safe and efficient way to send money.

Direct deposits may also allow you to avoid monthly maintenance fees at some banks.

To receive a direct deposit, you’ll probably need to sign up with your employer, or with whatever organization is paying the funds (the IRS, for example, if you’re receiving a tax refund). Keep in mind that if you plan to receive benefits like Social Security, veterans benefits, or pay for civil service or military retirement, the federal government requires that you receive payments by direct deposit.

To set up direct deposit, you’ll need to provide your bank information, including your checking account or savings account number and bank routing number. This tells the sender where to send your money.

Can companies require that employees receive wages via direct deposit? The answer depends on the scenario. According to federal regulations, if a company allows its employees to choose which institutions receive their direct deposits, the company can require participation in direct deposit. But if the company designates a specific institution to receive all of its employees direct deposits, employees can opt out and get a paper check instead.

How long does direct deposit take?

On average, it’ll take one to three business days for a direct deposit to clear, but the timing can depend on the type of payroll software your employer or sender uses. With some employers and payroll processing services, your direct deposits can be available on your scheduled payday.

To be sure of when your money will arrive, it’s best to talk with your employer for the details.

Does direct deposit happen immediately?

Banks must make direct deposits available at least by the following business day ifthe deposit is received on a normal banking day. But many banks may even make the money available immediately as a general practice.

Just be aware that if you’re signing up for your first direct deposit with an employer, government agency or other organization, it may take several payroll cycles before you stop getting paper checks and start receiving direct deposits in your account.

Is direct deposit automatic?

Once your direct deposit setup is processed, payments will go to your bank account automatically.

Employers are generally not allowed to charge a fee for direct deposit if they require you to accept pay this way, or if fees drop your pay below minimum wage. While banks may charge a variety of fees, there’s usually no cost to you for having direct deposits added to your account.

How do I check the status of my direct deposit?

You may want to check your account balance to see if your direct deposit payment has cleared. If a scheduled deposit hasn’t posted to your account, you can:

• Ask a bank representative if the problem is with the financial institution.
• Check with your employer or the organization that issued the direct deposit.
• Make sure you provided the right account information and routing number.

What’s next?

While direct deposit is a convenient and safe way to get paid — especially if you’re receiving a paycheck from an employer — it’s not the only way to get money.

Paper checks, cash and digital payment apps such as Zelle and Venmo also offer ways to deposit money into your checking or savings account. The right option for you can depend on things like …

• Whether you currently have a bank account
• The amount of money you expect to receive
• Whether the money is coming from abroad
• Whether it’s a peer-to-peer transfer or money from an employer

People want things they can’t pay for all at once and credit makes it possible to obtain them.

Why is credit important and how can you get access to it when you need it? Let’s find out.

Why is credit important?

When consumers and businesses can borrow money, economic transactions can take place efficiently and the economy can grow. Credit allows companies access to tools they need to produce the items we buy.

Credit also makes it possible for consumers to purchase things they need. Many items, from cars to houses, are too expensive for most people to pay for all at once. With credit, it’s possible to pay over time while accessing essential products and services when you need them.

Loans can enable wealth-building by allowing people to do things like pay for college, increase earning power, buy a home and benefit from rising property values, or start a business, Ross says.

If unforeseen expenses arise or you need something you can’t afford, being able to borrow could be a lifesaver.

Accessing credit is important for another reason in today’s society: consumer credit reporting. When you borrow money, creditors often report your behavior to credit-reporting agencies. Data on your financial behavior is aggregated to create credit reports and evaluated to generate credit scores. Those reports and scores are used by lenders when they assess how risky it may be to lend to you.

Why is good credit important?

So why do your credit reports and credit scores actually matter?

Your credit scores affect your ability to get credit in the future.

If you mismanage your credit and earn a poor credit score, you’ll be less likely to qualify for loans or credit. Or you’ll end up with a loan with a high interest rate and poor terms and conditions.

But what if you don’t want to ever borrow and you’re committed to paying cash for your house, car and other big purchases? Even in these cases, having good credit matters, because credit scores are used for lots of things in the U.S.

Landlords may check your credit when deciding whether to rent to you. When you try to get a cellphone contract, your credit scores and reports are usually checked.

Your auto insurer also may take a look at your credit scores when deciding what rates you’ll pay. And your credit can even affect your job prospects.

What are the risks of credit?

Credit is a tool, and like most tools, it can be misused.

Since your credit scores are used to measure your reliability, inconsistent borrowing behavior and low credit scores will likely make people and companies reluctant to do business with you. You may not be able to get a cellphone contract without a large deposit, or a landlord may not rent to you.

Another big risk: borrowing costs money — in fees and interest — and it’s possible to borrow more than you can repay.

To avoid problems you should limit borrowing and take out loans only if you can easily repay them. It’s also important to distinguish between so-called “bad” debt — debt used to buy things just because you want them — and “good” debt, such as a mortgage or student loans that can help build wealth in the long term.

Bottom line

Getting by without credit can be difficult because the U.S. is a credit-based economy. Without the ability to borrow — and without a positive credit history — you may not be able to make big purchases like a home or a college education and benefit from the wealth-building that may result. But credit’s not the answer to all your financial problems; you need to borrow responsibly and use credit wisely to help, not hurt, your financial future.

If paying off debt is your goal, debt consolidation with a personal loan can sometimes make debt repayment easier and cheaper.

You can consolidate all different kinds of debt using a personal loan. But first, you’ll want to figure out if it’s your best option.

Pros of debt consolidation loans

You could reduce your interest rate

Personal loans can have lower rates than other kinds of debt. If you can qualify for a low-interest personal loan and reduce your rate, you’ll save yourself money on loan repayment.

You could lock in a low rate

If you’re tired of owing money at variable rates, you could get a fixed-rate consolidation loan so you’ll know exactly what your monthly payment will be each month.

However, although many personal loans have low teaser rates, those rates can go up. Make sure you find out the maximum rate you could be charged for your consolidation loan.

You will have a repayment timeline

When you take out a personal loan, you agree to repay that loan on a set schedule. Since you’ll have your loan term going in, you’ll know exactly when you’ll become debt-free if you pay on time.

Be aware that if you want to pay off your loan early, your lender may charge a prepayment penalty.

You could boost your credit

Your credit scores are based on a number of different factors. Consolidating your debt with a personal loan could help your credit if it leads to a lower credit utilization rate and more on-time payments.

Cons of debt consolidation loans

You may pay a higher rate

There’s no guarantee a personal loan will have a lower interest rate than all the debt you pay off. If you consolidate any debt with a lower interest rate, you’ll raise the costs of repaying it.

You could end up paying more interest

Even if you lower your interest rate, there’s a chance your personal loan could cost you more if you stretch out your repayment period for too long.

This could mean you’ll pay more interest over time, depending on your loan’s interest rate.

You could get hit with fees

Depending upon your lender, you could end up owing application fees, origination fees or prepayment penalties if you pay off your loan early.

These fees sometimes make consolidating debt more costly than just continuing to pay back your current lenders.

You might put assets at risk

Some personal loans are secured personal loans. With a secured loan, certain assets will act as collateral to guarantee the loan.

Lenders could take the assets if you don’t repay as promised. If you take out a secured personal loan to consolidate debt and you don’t pay back your loan, you could lose the property you put on the line.

You could end up deeper in debt

When you pay off credit cards using the proceeds of a personal loan, you free up your line of credit. If you use these cards again and can’t pay off the balance, you could end up owing your original creditors again.

But now you’d have to pay off your consolidation loan and a bunch of new debt.

Bottom line

Consolidating debt with a personal loan can be a good idea if you can get a new loan with favorable terms and a lower interest rate than current debt.

If you qualify, make sure you understand the loan terms, have a plan to pay it back and get your spending under control so you don’t end up deeper in debt. If the conditions are right, a debt consolidation loan can be a good tool to help you become debt free faster.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

From mortgages to car payments to cellphone bills, most of us probably have more monthly bills than we’d prefer.

Because many creditors share your payment information with the three major consumer credit bureaus — Equifax, Experian and TransUnion — falling behind on your bills could negatively affect your credit scores.

Making late payments could also lead to late fees and penalty (higher) APRs on credit cards. Read on for some tips that can help you make your payments on time.

1. Make a list of every bill

Identifying all your creditors, vendors and service providers can be a good place to start.

Check your credit reports and list every lender (leave out accounts that are paid off). Next, review recent bank and credit card statements to add any recurring obligations, such as gym memberships or cellphone bills, to your list.

Your list should include the lender or service provider, the minimum monthly payment and total balance due.

2. Find out when your payments are due

Once you’ve got a list of bills to pay, find out when each bill is due and add that to your list. If your due dates are all over the place, you may want to tweak them to make tracking payments easier.

Many creditors allow you to pick or change the date you pay, so go online or call to find out.

3. Add your payments to a calendar

Tracking your bills’ due dates through a calendar or other system can come in handy. For example, if you use an online calendar, you can add payments there.

4. Decide how much you want to pay

For some of your bills, you may have to pay a set amount. Others — including credit cards — may allow you to pay as much or as little as you want after making the minimum monthly payment.

Ideally, you’d pay the full balance due on all your bills every billing cycle. This may not always be possible. But for accounts that allow you to carry a balance, you may decide to pay more than the minimum to help you save on interest, avoid building up unnecessary debt or potentially become debt-free faster.

5. Set up automated payments whenever possible

Armed with your list and your calendar, it’s time to set up your payment system. One approach is to pay as many bills as possible automatically. When you set up automated payments through creditors, you can specify whether you want them to debit the minimum due, the full balance due or another amount (if the accounts allow it).

6. Devise a system for manual payments

For those bills you pay manually, you can set up a separate system.

• Pay your bills immediately. If you take this approach, the goal is to pay the bill right away.
• Pay your bills on a certain day each month. Set aside a regular, recurring time to pay your bills.

7. Sign up for reminders

Whether you autopay or handle bills manually, it’s helpful to be reminded when bills come due. You can remind yourself to make a payment or to check if an automatic payment cleared.

Your own calendar reminders may be enough. Another approach is to use a specialized app for organizing your money and reminding you about bills.

What’s next?

By developing a system and sticking to it, you can make paying your bills on time easier. It may seem like a lot of effort, but it’s worth it to help maintain good credit scores, which can help you qualify for favorable rates if you borrow in the future.

This article was fact-checked by our editors and Rachel Weatherly, tax product specialist with Credit Karma.

The IRS wants to know about all your income, and it doesn’t just take your word for it when you report your total income on your federal income tax return.

Generally, the organizations that provide your income — such as an employer, a company that contracts freelance work from you, or an IRA administrator — have to share that information with the IRS too. In order to do that, these organizations need some basic tax information from you, including your taxpayer identification number, name or business name, and address.

To obtain that information, a company may ask you to complete a W-9 tax form. The form also helps the company understand whether or not it should withhold tax from amounts it pays you.

Let’s look at the information on a Form W-9, when you might receive a request to complete one and what you should do if that happens.

• What is a W-9 tax form?
• What information is on a W-9?
• Who might ask me for a W-9?
• Will I have to fill out more than one W-9?
• What should I do with a completed Form W-9?

What is a W-9 tax form?

A W-9, Request for Taxpayer Identification Number and Certification, is a tax form that companies use to request a tax identification number, or TIN, from a taxpayer with whom they’re doing business.

Every person or company has a unique TIN that the IRS uses to identify that taxpayer. For individuals, that’s usually a Social Security number, which is issued by the Social Security Administration. People who must pay federal income tax, but aren’t eligible to get a Social Security number, can apply for an individual taxpayer identification number, or ITIN, from the IRS. For companies, the TIN is an employer identification number, which the IRS issues.

Your unique TIN must be submitted with all of your tax forms so that the IRS can easily identify your tax information.

When you’re a salaried employee, your employer can get your Social Security number from your W-4 — a tax form that tells it how much tax to withhold from your paycheck. But if you’re self-employed or earned income other than employee wages, the company or person who paid you may ask you to complete a W-9. Information on the form can help ensure the company uses your correct TIN when reporting any amounts it paid you during the tax year to the IRS.

The company will likely report those amounts to the IRS on some type of 1099 form. For example, a company might complete and file a Form 1099-MISC for a freelancer whom it paid $600 or more for services during the tax year.

What information is on a W-9?

A W-9 tax form contains some basic tax information, including …

• Your name as you write it on your income tax return
• Your business name, if it’s different from your name
• How you or your business are classified for federal tax purposes (sole proprietorship/individual or single-member LLC, limited liability company, corporation, partnership, or trust or estate)
• Your full address
• Your taxpayer identification number, with separate fields for a Social Security number (for individuals) or an employer identification number, or EIN, for businesses.

You’ll need to sign your W-9 form. By doing so, you certify that you’ve provided your correct taxpayer ID, that you’re a U.S. citizen or U.S resident alien, and that you aren’t subject to backup withholding tax or reporting requirements under the Foreign Account Tax Compliance Act, or FATCA.

Optional information can also be included on the form, including the name of the person or company requesting its completion. 

What is backup withholding?

In some situations, companies making certain types of payments may be required to withhold 24% of the payment amounts and pay it to the IRS. This is known as “backup withholding,” and it can kick in when a taxpayer …

• Fails to provide the company making a payment with their TIN.
• Provides the paying company with an incorrect TIN that doesn’t match the number the IRS has on file for that taxpayer.
• Doesn’t report on their tax return all the interest and dividends they were required to report.
• Doesn’t certify to the paying company that they’re not subject to backup withholding.

But if you do everything you’re supposed to do — give the company your correct TIN, include all your taxable interest and dividends on your tax return, and certify your exemption from backup withholding — you won’t be subject to backup withholding.

Who might ask me for a W-9?

Generally, if a company is required to file an information return with the IRS to report amounts of $600 or more paid to you during a tax year, it may ask you to complete a W-9 tax form. That means freelancers and independent contractors may receive a request for a W-9 from companies they do work for, but they’re not the only taxpayers who might receive a request to complete the form.

The IRS also requires companies to submit information returns for real estate transactions, mortgage interest a taxpayer pays to a mortgage company, canceled debts, IRA contributions and other situations. In those situations, companies may also ask a taxpayer for a W-9.

Will I have to fill out more than one W-9?

You might receive a request for more than one W-9.

For example, if you work with more than one company that pays you $600 or more, each one could ask you to complete a W-9 because they’ll all need your TIN to complete and file a 1099 for you. Companies may also complete 1099 forms even if you haven’t met the $600 threshold, just to make sure they’re properly reporting money they paid out when doing business.

You have to complete W-9 tax forms for every company that has a legitimate reason to request one, and you must complete the form accurately or face a penalty and possibly backup withholding in the future.

After you’ve filled out a W-9 once, you shouldn’t need to complete it again for the same requester. But if your information changes, you’re required to alert the company that asked for the W-9 that you need to modify your personal information. This is important so the requester has the right address and TIN to include on your 1099.

Be aware of identity theft

When you receive a request for a W-9, it’s probably a good idea to vet the requester to ensure they really do need the information they’re asking for. A W-9 contains sensitive information that could be valuable to identity thieves.

What should I do with a completed Form W-9?

When you complete a W-9, you’ll need to return it to the company, organization or individual who requested it from you. The IRS permits requesters to use an electronic system for receiving W-9s, but be sure you understand how the company requesting the form wants you to send it back.

It’s also a good idea to retain a copy of any tax form you complete throughout the year. There’s probably no one right answer for how long you should keep a copy of a W-9. But the IRS generally advises taxpayers to hold onto records for as long as they might need them to help document income or deductions on a tax return.

Bottom line

You should expect to receive a W-9 tax form from any company or individual, other than an employer, who paid you more than $600 per year. It’s a simple form, but make sure you fill it out accurately and provide your correct taxpayer identification number and address. The requesting company may need the information to prepare and file a 1099 that will let the IRS know how much it paid you during the tax year. And failing to properly complete a W-9 could mean your payments become subject to backup withholding.

Rachel Weatherly is a tax product specialist with Credit Karma. She studied accounting and finance at Western Carolina University and has also worked as a tax analyst. You can find her on LinkedIn.

This article was fact-checked by our editors and Rachel Weatherly, tax product specialist with Credit Karma.

The 1095 tax form appeared on the scene after the Affordable Care Act passed. It helps ensure taxpayers, employers and insurers comply with certain provisions of the act.

The form includes important information about a taxpayer’s health insurance coverage — most people will get at least one of three versions of Form 1095. Some people may get more than one.

Read on to find out how these forms could be used to help you complete your tax returns.

• What is a 1095 tax form?
• Why is the 1095 tax form important?
• How could this form affect my taxes?

What is a 1095 tax form?

Initially, when the forms were first put into use following the passage of the ACA, 1095s helped the IRS determine the following:

• Whether a taxpayer had health insurance as mandated by the ACA
• If an uninsured taxpayer should be subject to a shared responsibility payment for not having insurance
• If someone was eligible to receive tax credits, paid in advance, to help cover the cost of buying coverage from a marketplace insurer

Because the Tax Cuts and Jobs Act of 2017 set the penalty amount for not having insurance at zero, 1095 forms are now largely for information purposes — though two types of the form still play a role in determining advance premium tax credits.

Usually, you don’t need to do anything to get these forms delivered to you. They may arrive in the mail, or you may consent to receive them electronically. And for one of the forms (1095-A), you may need to log into your marketplace account at HealthCare.gov or your state marketplace website to get a copy.

When you receive the forms, you really only need to worry about them if you claimed advanced premium tax credits to help you afford insurance or if you could be eligible for these credits.

Three different types of 1095s

There are three different 1095 forms, all of which provide details on your qualifying health insurance coverage.

• 1095-A, Health Insurance Marketplace Statement — Health insurance marketplaces send this form to people who have purchased marketplace coverage. It states who is covered, what the monthly policy premiums are and what tax credits were provided to assist with paying for coverage.
• 1095-B, Health Coverage — This form is sent by employers and others who provide minimum essential coverage. Small employers who offer coverage but who aren’t required to will use this form.
• 1095-C, Employer-Provided Health Insurance Offer and Coverage — Employers who have at least 50 full-time employees must send out this form to each worker and to the IRS. It provides details on who has been offered employer-sponsored healthcare coverage, whether workers have chosen to take advantage of that coverage, and if so, what months you were or weren’t covered by the employer plan.

Why is the 1095 tax form important?

Form 1095-B and Form 1095-C help the IRS know who’s entitled to tax credits to help pay health insurance premiums. If you have coverage through an employer, you typically won’t qualify for the advanced premium tax credits that would help you buy a policy on Obamacare exchanges. The IRS also uses Form 1095-C to determine if a large employer (one with 50 or more full-time or full-time equivalent employees) is meeting the Obamacare requirement to offer employer-provided health insurance.

Since you’re no longer penalized if you don’t have a qualifying health plan, you don’t really need Form 1095-B to complete your federal income tax return. But if you receive a 1095-A, you need it to do your taxes.

You’ll use the information on those forms to complete Form 8962, which you use to calculate how much, if any, premium tax credit you’re entitled to. It can also verify you received the right amount of credit. You’ll file Form 8962 with your tax return. If you didn’t receive the correct amount, you may have to pay back some of the credits you received, or you may be entitled to additional funds.

How could this form affect my taxes?

When you apply for insurance on a healthcare exchange, you estimate your family’s income for the tax year. Your estimates are used to determine if you’re entitled to tax credits —  called advanced premium credits — to help you buy insurance. But unlike typical tax credits, you usually don’t receive them when you submit your return. Instead, you can choose to have the money paid to your insurer during the year so that you pay lower premiums.

The IRS wants to make sure you got the correct amount of credits, so you need to include Form 8962 with your taxes. Form 8962 asks about your family size, income, how much your premiums were each month and what credits you received each month. Chances are good you won’t know this information offhand, but Form 1095-A (and for some people, 1095-C) has the details you need to complete Form 8962, which you must attach to your 1040 Form.

If the credit amount that you get is more than you’re allowed based on your income and family size, Form 8962 lets the IRS know this — and lets you and the IRS know the amount of excess credits you have to repay. Owing money for excess credits you received would increase your tax bill. On the other hand, if you were owed more credits than you got, your tax bill would be reduced and you could potentially get money back.

Bottom line

If you had qualifying health insurance coverage in 2019, you’ll likely receive at least one 1095 tax form. If you need to complete Form 8962, you’ll use your 1095-A or 1095-C (whichever applies to your situation) to do it. Keep your 1095 tax form with your other tax forms and submit Form 8962 to the IRS along with your 1040 tax return.

Rachel Weatherly is a tax product specialist with Credit Karma. She studied accounting and finance at Western Carolina University and has also worked as a tax analyst. You can find her on LinkedIn.

Pros

• Considers people with bad credit or a bankruptcy
• Offers the ability to apply for preapproval
• May reduce your interest rate through its Rate Reduction Rewards program

Cons

• Loans available for new or near-new cars only
• Not all potential applicants will be eligible for preapproval
• You must buy your vehicle from a preferred dealer

What you need to know about Prestige Financial auto loans

Headquartered in Draper, Utah, Prestige Financial Services, Inc. partners with certain franchise car dealerships across the country to offer auto financing.

Limited loan options

Prestige Financial only offers loans for new and near-new cars. So if you’re interested in refinancing your car loan, buying out your lease or buying a car from a private seller, this finance company won’t be a fit.

Considers people with less-than-perfect credit

Getting an auto loan with bad credit can be tough. But Prestige Financial considers people with low FICO® scores or a recent bankruptcy. So those who are going through a Chapter 7 bankruptcy or who have finalized a repayment plan under a Chapter 13 bankruptcy can potentially qualify for a loan.

While you don’t necessarily need good credit, Prestige lists several requirements if you want to apply for preapproval. You must have a minimum income of $2,250 if you’re applying as an individual or $2,750 if you’re applying with a joint applicant. And if you’re self-employed, you’re out of luck — Prestige won’t consider income from self-employment. Also, keep in mind that you can’t add a co-signer to your preapproval application — you can apply only with a spouse or someone else you have joint credit with. 

Interest rates may be high, even with rate discounts

People who get a loan through Prestige may qualify for an interest rate reduction of 0.5% every three months, up to a maximum reduction of 2% annually. But to get these interest rate discounts, you must register for the Rate Reduction Rewards program, choose to receive electronic communications, enroll in automatic payments, make on-time payments each month and maintain qualifying vehicle insurance.

But if your loan annual percentage rate, or APR, drops to 14%, you’ll no longer qualify for future rate reductions. 

You won’t find out much about Prestige Financial loans until you apply

Prestige doesn’t offer much information about its auto loans on its website, including minimum or maximum loan amounts, loan rates or loan terms. You won’t get a sense of estimated loan terms, rates or monthly payment until you’re preapproved. And while you’re required to buy your vehicle from a partner dealer, Prestige doesn’t list its partners, and you won’t know where you can shop until after preapproval.

And remember that preapproval isn’t a guarantee of loan approval, and your estimated loan rate and term may change once you finalize your loan application.

The good news is that Prestige Financial makes it easy to apply online or via phone. Within one business day of applying, you’ll find out the status of your application. You’ll also receive a certificate of preapproval via email that you can take to a partner automobile dealership so you can begin shopping right away.

A closer look at Prestige Financial auto loans

If you’re considering an auto loan from Prestige, here are a few other details to know.

• You may not need to put money down. While some auto loan lenders require you to make a down payment, Prestige Financial isn’t one of them. But the partner dealership may require a down payment — and you won’t find out until you visit the dealer.
• A lot of documentation is required if you’re preapproved. You’ll need to submit a lot of paperwork in the preapproval application process, including a recent pay stub, utility bill and six personal references who don’t live with you.

Is a Prestige Financial auto loan the right fit for you?

Prestige may be a good option if you’re having trouble qualifying for an auto loan because of bad credit or financial difficulties, such as a bankruptcy. If you’re only able to get approved for a high loan rate, Prestige’s rate reduction program could help you reduce the amount of interest you pay over the life your loan.

But if you can qualify for better rates elsewhere or want more flexibility in where you can shop for a car, Prestige may not be right for you. And if you want a less-expensive, older used car, you’ll need to consider a different lender.

How to apply for a loan from Prestige auto loans

You can apply for preapproval from Prestige online or over the phone. You’ll need to provide a valid driver’s license, proof of income and active vehicle insurance, and a recent utility bill. And if you’ve recently filed for bankruptcy, you’ll need to provide your attorney’s name as well as proof of an approved Chapter 13 payment plan or your Chapter 7 case information so that Prestige can view court filing documents online.

Before you apply for an auto loan with Prestige, it’s a good idea to check your credit and compare other loan offers. Understanding your credit can help set expectations. In general, lower credit scores will result in higher interest rates. And shopping around can help you find the best loan rate and terms for your needs. Read our article on how to get a car loan to learn more about the process.

Not sure if Prestige Financial is right for you? Consider these alternatives.

If you aren’t sure whether an auto loan from Prestige Financial Services is right for you, here are a couple of other options to consider.

• Auto Credit Express auto loan: Auto Credit Express may be ideal if you want the ability to apply with a co-signer.
• Tresl auto loan: This lender could be good for someone who wants to refinance their car or buy out a lease.

But what exactly does it mean to be prequalified versus preapproved for credit cards? Does it mean you’ll definitely get approved if you apply for the card? In both cases, prequalification and preapproval represent steps toward getting actual approval, but neither guarantees it.

According to the Consumer Financial Protection Bureau, there’s not much difference between the two terms, other than some legal distinctions. Prequalified can mean a company has decided that you look like someone who might be a good fit for their credit card, so they’re inviting you to apply. Preapproval could mean a company has done a bit more research on you — or not.

You might also see the term “prescreened.” Some credit card issuers use that in place of prequalified or preapproved.

Whichever term you see, the bottom line is that the way companies, card issuers and lenders use prequalified and preapproval can vary, so it pays to look closely at the fine print of specific offers before you apply.

• Prequalified vs. preapproved: The basics
• What do preapproved and prequalified mean on Credit Karma?
• How to opt out of receiving preapproved or prequalified offers

Prequalified vs. preapproved: The basics

Here are some basic things to know about credit card prequalification and preapproval.

• Unsolicited prequalified credit card offers (like the ones that arrive in your mail or email) generally do not represent a hard inquiry credit check. A hard inquiry, which can affect your credit scores, typically happens once you respond to the offer and formally apply.
• Neither prequalified nor preapproved credit card offers actually come with a credit card (again, you have to apply and be approved first).
• Neither is a guarantee you’ll be approved for the credit card with the terms advertised — or at all.

In some cases, you can ask to be prequalified or preapproved for a credit card — often through a credit card company’s website.

Some credit card issuers may distinguish between prequalified and preapproval, giving one status stricter requirements than the other — so your odds of approval can be hard to figure out. Again, this can vary from company to company.

What do preapproved and prequalified mean on Credit Karma?

On Credit Karma, you won’t see the terms “preapproved” or “prequalified” used for specific credit card offers. Instead, you’ll see your Credit Karma Approval Odds, which serve as guidelines for the likelihood you’ll be approved for the card. If you see “Outstanding” or “Excellent,” there’s a strong chance you’ll be approved.

Even though the odds may be in your favor, you’re still not guaranteed the card. If you apply, you could get declined for a variety of reasons, like already having too many accounts with the issuer or not having enough income.

How to opt out of receiving preapproved or prequalified offers

If you don’t want to receive prescreened credit card offers, it’s easy to opt out for five years. Just visit optoutprescreen.com or call 1-888-567-8688. Just keep in mind that by opting out in the ways described in this section, you’re just reducing the amount you get. These opt-out options don’t apply to all prescreened offers.

If you want to opt out permanently, you’ll have to submit a written request after you start the opt-out request on the website.

One thing to note: This only removes you from certain lists associated with the major consumer credit-reporting agencies. You may still receive some offers in the mail or electronically.

The Federal Trade Commission has more information on opting out on its website.

Bottom line

Neither prequalification nor preapproval guarantees actual approval, but it’s a sign the odds might be in your favor. Be sure to read the fine print to understand what the card issuer means by prequalified or preapproved, and be aware that applying typically results in a hard inquiry, which could negatively impact your credit.

You might be able to proactively request prequalification or preapproval before you apply for a credit card. And if you get rejected at this stage, you’ll have saved yourself a hard inquiry and the resulting ding on your credit scores.

Unfortunately, there’s no such thing as an IRA loan, whether you have a traditional or a Roth account. While 401(k) accounts and other employer-sponsored retirement plans can allow participants to borrow and repay a loan over time, individual retirement arrangements, or IRAs, aren’t set up this way.

In fact, you can face IRS penalties if you withdraw funds from your IRA before age 59½. Under certain exceptions though, you may be able to withdraw money without paying a penalty.

But just because you can take money out of your IRA doesn’t necessarily mean you should. In addition to the potential costs, there are risks and some significant disadvantages.

Let’s look at the options, pros, cons and risks, so that you can make an informed choice about whether to borrow from your IRA.

Options for accessing IRA funds

Short-term rollovers

If you need a very short-term loan from your IRA and can pay back the money quickly — within 60 days or less — you may be able to access the funds with an IRA rollover.

Rollovers are often used to move money from a 401(k) or IRA to a new retirement account, like when you want to move to a different broker or consolidate multiple IRAs into one. With a rollover, you take the money out of your IRA and have 60 days to put it into another qualifying retirement account.

The IRS recognizes that people can change their minds about moving money between retirement accounts after they’ve taken a withdrawal from an existing IRA. So you’re also allowed to return withdrawn money right back into the same IRA instead of into a new one. If you do an indirect rollover — meaning the distributed money comes to you first instead of going directly from one IRA to another — you could potentially use the money for 60 days without penalty.

This approach has some significant risks and drawbacks, though. Here are a few.

• 20% “interest” — Technically, you won’t pay interest on rollover funds. But tax law requires IRA plan administrators to withhold 20% of indirect rollovers (when you cash out yourself) for taxes just in case you don’t complete the rollover. When you redeposit the money into an IRA, you’ll have to repay the full amount you withdrew, including the 20% you didn’t actually get. For example, if you indirectly roll over $5,000, you’ll actually receive $4,000 and be required to redeposit $5,000 within 60 days. That amounts to repaying your own funds at 20% “interest.”
• One-a-year limit — You’re only allowed to do one rollover within a 12-month period, so your ability to use this strategy is limited.
• Fees — Plan administrators may charge administrative fees for rollovers.
• Taxes and penalties — If you fail to redeposit the money within 60 days, the IRS will treat the transaction as an IRA distribution. The withdrawal will be taxed as income, and if you’re younger than 59½ you could also face a 10% penalty for making an early withdrawal.

Withdrawals for specific needs

While you’re generally subject to a 10% penalty for early withdrawals from an IRA if you take money out before age 59½, there are some exceptions to this rule.

You’ll have to pay ordinary income tax on your distribution but can avoid the 10% penalty. Here are some of these exceptions.

• Total and permanent disability of the IRA owner
• Qualified higher-education expenses
• Up to $10,000 for qualified first-time homebuyers
• Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income
• Health insurance premiums while you’re out of work

Roth IRA withdrawals

Roth accounts work differently than traditional IRAs. When you deposit money into a Roth account, you make contributions with after-tax dollars. If you wait until retirement age and meet certain requirements, like having the account open no less than five years before withdrawals, you can take out money tax-free.

If you need to access funds from a Roth IRA prior to age 59½, you can withdraw the amount you put into the IRA without paying taxes or incurring penalties. This makes it possible to access money you put into your Roth IRA account anytime you need it. And if you withdraw funds from a Roth IRA before the tax-filing deadline of the same year you made the contributions, then they won’t count toward your contribution cap for the year.

But you have to be careful not to withdraw any earnings. If you withdraw money your investments earned, you’ll be subject to the 10% penalty unless you fall into one of the following exemptions:

• Permanent disability
• Buying or building a first home
• Paying for significant medical expenses (more than 7.5% of your AGI)
• Paying health insurance premiums while unemployed
• Paying for higher-education expenses

Drawbacks of IRA withdrawals

Although you can access the money in a traditional or Roth IRA, doing so often isn’t a good idea. There are two primary reasons why you don’t want to raid your IRA.

• You could face steep penalties. If you attempt to borrow from your IRA using the 60-day indirect-rollover method and don’t put the money back on time, you could get stuck paying the 10% penalty applied to early withdrawals. You could also face this penalty if it turns out you don’t fit into a hardship exemption or if you accidentally withdraw earnings and not just contributions from your Roth IRA.
• You lose out on potential growth. While the money is withdrawn, it won’t be earning returns and growing to help fund your retirement. And if you withdraw contributions from a Roth IRA that count toward your annual cap or take a hardship distribution from your traditional IRA, you can’t put the money back, so you lose out on all the gains it could’ve provided leading up to retirement.

Bottom line

Taking money out of your IRA, whether as a withdrawal or an indirect rollover that you plan to repay in 60 days, is a risky endeavor because of the potential taxes and penalties. Plus the loss of growth opportunity from the withdrawn funds could mean you face financial shortfalls as a senior.

Perhaps there’s a reason why there’s no such thing as an IRA loan — taking money out of a retirement account is borrowing against your own future financial security. Given the risks and disadvantages, raiding your IRA should be a last resort only after you’ve exhausted all other options.

Updated January 29, 2024

This date may not reflect recent changes in individual terms.

Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

Written by: Christy Rakoczy Bieber

Pros

• Range of auto loan options
• Wide loan amount range from $2,500 to $100,000
• Low starting interest rate

Cons

• Loan eligibility varies by lender

What you need to know about Autopay auto loans

Autopay isn’t a direct lender — it partners with a network of credit unions and financing institutions across the U.S. to offer auto loans online. Working with a variety of lenders helps Autopay find loans for people with a range of credit scores.

Specializes in auto refinance loans

Autopay offers both traditional and cash back refinancing, along with lease-buyout refinancing and loans for new and used cars.

Wide range of loan amounts

Autopay offers loans in amounts from $2,500 to $100,000. This is a wide range — some lenders have higher loan minimums.

A closer look at Autopay auto loans

If you’re thinking of applying for an auto loan through Autopay, here are some more details to know.

• Loan terms range from 24 months to 96 months.
• Autopay allows you to have a co-applicant on the loan.
• You can apply for prequalification with just a soft credit inquiry. If you’re prequalified and choose an offer, your selected lender will complete a hard credit inquiry as part of the loan application process, which may affect your credit scores.
• For an additional cost, Autopay offers extended warranty options and guaranteed asset protection insurance. Gap insurance can cover the difference between the current value of a vehicle that’s stolen or declared a total loss and the amount you still owe on your auto loan.

Is an Autopay auto refinance loan right for you?

A loan through Autopay could be a good option if you’re in the process of rebuilding your credit. Through its network of lenders, Autopay can help you shop around for loans you might qualify for.

Autopay can also help you shop around for rates. If you want to refinance at a lower interest rate, Autopay might be ideal — especially if you have excellent credit and can qualify for the starting interest rate.

Lastly, Autopay may be a good choice if you need to finance only a small amount or want options when it comes to your loan term. But keep in mind that the longer the loan term, the more interest you’ll pay — and the greater your risk of becoming upside down on your car loan.

How to apply for a loan from Autopay

Autopay offers the ability to apply for prequalification online or over the phone.

If you prequalify, you’ll be able to see potential loan offers. If you choose one, you’ll then submit an application to the selected lender to see if you’re approved for a loan and at what terms.

Before you apply for an auto loan through Autopay, it’s a good idea to check your credit and compare other loan offers. Understanding your credit can help set expectations – in general, lower credit scores will result in higher interest rates. And shopping around can help you find the best loan rate and terms for your needs. Read our articles on how to get a car loan and how to refinance a car loan to learn more about the process.

Not sure an Autopay auto loan is right for you? Consider these alternatives.

If you aren’t sure whether Autopay is a good fit for you, here are two other options to consider.

• Tresl auto refinance loan: Tresl could be good for people who want someone to walk them through the loan application process.
• First Investors Financial Services auto refinance loan: First Investors could be a good option to consider if you have lower credit scores or a previous bankruptcy.