Back to top


More News


Click here to go back

What to consider before lending money to family and friends


When your best friend views your nest egg as a source of start-up funds for his latest business venture, or your nephew hits you up for a car loan, your first impulse may be to reach into your bank account to help. But it's a fact that loans to family and friends often end up straining both finances and relationships. As Shakespeare said, "Loan oft loses both itself and friend." In other words, if you lend money to friends, you often don't get paid back, and the friendship itself may disintegrate.


It's best to consider a loan to someone you love as an "arm's length" transaction. If you're pondering such a loan, keep the following in mind:


* You can just say "no." It's your money, after all. Do you really want to raid an emergency fund or dip into your child's college account to finance a friend's business idea? Think like a bank. It's reasonable to ask tough questions about the person's bank accounts, potential sources of income, planned use of loan proceeds, and spending habits before extending credit.


* Consider a gift. If you're comfortable sharing your resources, you may want to provide a monetary gift with no strings attached. In many cases, this is the best solution because neither you nor your friend expect the money to be paid back. Unlike a loan, this type of arrangement can forestall misunderstandings and hurt feelings later on. Of course, you should not give money if doing so would unduly strain your own finances.


* Formalize loans. If you decide to lend more than a small amount to a friend or family member, it's generally best to draft a written agreement. This can be as simple as filling out a promissory note (available online or at office supply stores). Such forms spell out the basic terms of the loan -- amount, interest rate, payback period -- and provide some limited protection should you and the borrower end up in small claims court. Another recent innovation is the use of direct lending (also called social lending or peer-to-peer lending) websites to facilitate loans between family and friends. For a fee, such sites can prepare loan documentation, send payment reminders, issue regular reports, even facilitate electronic fund transfers. If the loan involves a significant amount of money, check with your attorney.


Remember: Many personal relationships have been damaged when loans go awry. So proceed with caution.


31 July 2018
Three Summer Tax Tips for Newlyweds

Posted in general

Are you planning to tie the knot this summer? If you already did, then my warmest congratulations to both of you! To make sure that there are no surprises come tax time, I will share with you three summer tax tips that you can do right now.

Hello, this is Noel Dalmacio, your ultimate CPA at LowerMyTaxNow.

So here are the three summer tax tips:

  1. Report any name change to the Social Security Administration before filing your next year’s tax return. It would cause delayed refund if you changed your name without informing the Social Security office.
  2. Report any address change to the United States Postal Service, your employers and the IRS to ensure your receive tax-related items.
  3. Finally, use the withholding calculator by going to to make sure you adjust your withholding appropriately. This is important for families with more than one wage earner, for taxpayers who have more than one job at a time, or for those with children.

So those are the three summer tax tips that you can do right now if you just got married to avoid any tax issues during tax time. Congratulations!

Until then, this is Noel Dalmacio, your ultimate CPA at

Last Updated by Tax on 2018-07-31 06:48:58 PM