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The Sharing Economy and Taxes

If you rent out a room to others using airbnb or drive your car for Uber to take part in the sharing economy, the money you earn may be taxable.

April 1 is the deadline for first RMD

If you’ve reached age 70½ in 2016, you must take a required distribution from your IRA by April 1, 2017.

College Costs Increase for 2014/2015

Background Every year, the College Board releases  its Trends in College Pricing and Trends in Student Aid reports that highlight current college costs and trends in financial aid. While costs can vary significantly depending on the region and college, the College Board publishes average cost figures, which are based on its survey of nearly 4,000 colleges across the country. Following are cost highlights. Total cost figures include tuition and fees, room and board, and a sum for books, transportation, and personal expenses. Together, these expenditures are officially referred to as the “total cost of attendance.”

It’s Never Too Early to Teach Your Kids About Money

I have two daughters and it has given me the pleasure of seeing them grow up and get excited about even the little things like chasing butterflies or finding a lucky penny. My kids find lucky pennies all the time. In fact, they find lucky coins all over the place. Some are by chance as we’re walking down the sidewalk and other times it’s a lucky coin that I may place in an inconspicuous place so they stumble upon it and find it (sometimes it’s fun creating luck for my kids). Whether they find the coin by luck or otherwise, it gives me a great opportunity to teach them. After the excitement of the find goes away, they get even more excited when I ask, “Where should we put that lucky coin?” With glee they almost always reply, “In the piggy bank!” I feel parents can teach their kids about […]

16 Ways to Withdraw Money From Your 401k Without Penalty

When hard times befall you, you may wonder if there is a way withdraw money from your 401k plan. In some cases you can get to the funds for a hardship withdrawal, but if you’re under age 59½ you will likely owe the 10% early withdrawal penalty. The term 401k is used throughout this article, but these options apply to all qualified plans, including 403b, 457, etc.. These rules are not for IRA withdrawals (although some are similar) – see the article at this link for 19 Ways to Withdraw IRA Funds Without Penalty. Generally it’s difficult to withdraw money from your 401k, that’s part of the value of a 401k plan – a sort of forced discipline that requires you to leave your savings alone until retirement or face some significant penalties. Many 401k plans have options available to get your hands on the money, but most have substantial […]

How to Save More

This may seem like common sense but we are common sense people. If your’e looking for ways to save a bit more money in 2014 – here are some steps that you can take to put some extra green back in your pockets. 1. Brew your own coffee. I’m m a coffee fanatic and rarely go a few hours without replenishing my mug of joe. I can’t imagine what my coffee bill would be per month if I went to the fast food place or coffee shop – likely $5-$10 per day. At $150-$300 per month, brewing my own makes more sense. 2. Cut your TV costs. Don’t watch a lot of TV or want to make more time for other things? Simply reduce the channels you watch or scrap it altogether. This can put an extra $150 in your pocket per month. 3. Turn the lights off. This one is near and […]

See How 1% More Can Benefit You

We have a project going to encourage people to increase personal savings by at least 1% more this month.  This means that you would add 1% more of your income to your savings rate – so if you earn $75,000 per year in your household and you currently save around $2,250 per year, that’s 3%.  Adding 1% more would bring that total to $3,000 for the year, which works out to an increase of only $62.50 per month.  Give it a shot! Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be.  Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! The 1% Mindset – Transformation Beyond Money by Neal Frankle, @NealFrankle Are You Part of The 1%? by […]

November is “Add 1% More to Your Savings” Month

That’s right, we unofficially declared November to be “Add 1% More to Your Savings” month.  So you can add that to the month-long observances like: No-shave November International Drum Month Sweet Potato Awareness Month and many more (see the list at Wikipedia) In November we encourage folks to increase their retirement savings rate by at least 1% more than the current rate.  It’s a small step, but it will pay off for you in the long run. Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be.  Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! The 1 Percent Solution by John Davis, @MentorCapitalMg Friday Financial Tidbit-What increasing your retirement contributions 1% can do for your retirement account by Jonathan White, […]

Life Insurance is Not an Investment

Last week I seemed to cause a bit of a kerfuffle when I wrote about which life insurance may or may not be appropriate for the general consumer. For the readers that sent in emails and comments – thank you! It’s much appreciated and we enjoy the feedback. Twitter was also flitting and chirping with the commotion. In particular, the discussion really narrowed down to, and most of the comments we received were regarding the comment I made on life insurance not being an investment. And that’s still true. It’s not. Now there are plenty of people that will argue with me that it is an investment for this reason or that. For this writing I am hoping to explain and to clarify what I meant as an investment. From a pure investment standpoint – meaning saving and investing one’s money for retirement and or college or just saving and […]

The Crystal Ball

Every so often we get asked by our clients or prospective clients which direction the market is going to go. This is always and entertaining question to get – and some of our “regulars” already know the answer. Having a bit of a sense of humor (albeit dry sometimes) I’ll joke with clients and tell them that the day they handed out crystal balls in my investment class, it was the one time I called in sick – and you only get one chance at the coveted crystal ball. Thus, I forever lost the opportunity to predict the future of the markets. Darn. Inevitably, clients laugh and understand the joke – and take away the underlying theme of the jocularity – that we can’t predict the future, especially in securities markets. But this doesn’t mean we can’t plan ahead. So why do we invest? Why do we save for retirement? […]

Your State Income Tax Refund Card?

  As of this writing there are about 7 states that have left issuing paper income tax refund checks in favor of plastic debit card. Those states include Georgia, South Carolina, Oklahoma, Virginia, Connecticut, Louisiana, and New York (New York still offers the choice of paper or plastic). The main reasoning behind this new refund system has been to eliminate the costs associated with issuing paper checks, with the cost of printing and issuing cards now passed to the credit and debit card companies. But the costs saved by the state may end up costing those issued the debit cards. Here’s how: Most cards will allow a one-time withdrawal of cash free of charge. Those that want their entire refund in cash simply need to go to a participating bank (one that works with one of the major card companies) and request the withdrawal. After the one-time freebie, then fees […]

Why Hire a Professional?

Throughout our lives as different life events happen and the need for help arises we have the opportunity to rely on ourselves to get the tasks done, or entrust in the skill and expertise of a professional. Very often there’s a fine line as to what we’ll bother doing ourselves or to whom we’ll hire and delegate the job. For mundane tasks, the tasks that we know we can do ourselves with little to no effort, it’s second nature for us to roll up our sleeves and get the job done. Examples of this include washing the car, cleaning the house, balancing the checkbook, bandaging a small cut, and doing the dishes. It’s rare that we’ll “contract out” these tasks as they are very limited in the expertise needed to get them done, and from a frugality standpoint, most of us are willing to accept the trade-off of doing the […]

2013 IRA MAGI Limits – Married Filing Separately

Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately, who did not live with his or her spouse during the tax year, is considered Single and will use the information on that page to determine eligibility. For a Traditional IRA (Filing Status Married Filing Separately): If you are not covered by a retirement plan at your job and your spouse is not covered by a retirement plan, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at your job and your MAGI is less than $10,000, you are entitled to a partial deduction, reduced by 50% for every dollar (or 60% if over age 50), and rounded up to the nearest $10.  If the amount works out to less than $200, you are allowed to contribute at least $200. If you are covered by a retirement […]

A Dozen Ways to Increase Your Savings Rate

United States (Photo credit: Wikipedia) A baker’s dozen bloggers have now published articles encouraging all Americans to commit at least 1% more to retirement savings this year. We have several more bloggers who are going to put their posts up soon. See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far (newest are at the top): From Emily Guy Birken: Increase your savings rate by 1% From Jonathan White: Ways to increase your retirement contributions 1% in 2013 From Alan Moore: Financial Challenge – Should You Choose To Accept It From Ann Minnium: Gifts That Matter From Laura Scharr: In Crisis: Personal Savings- Here Are Six Steps to Improve Your Retirement Security From yours truly: Add Your First 1% to Your 401(k) From Steve Stewart: Seriously. What’s 1 percent gonna do? From Theresa Chen Wan: […]

Wealth Defense: When Should You Start Social Security Benefits?

The foregoing is a re-post of an article that I wrote which was included in The Motley Fool’s Rule Your Retirement newsletter.  Enjoy! Want to double a chunk of your retirement income? It’s easy — just delay taking Social Security by about six years! OK, so it’s not really that simple. The time to apply for Social Security benefits is different for each individual; there is no magical “best age” for everyone. Thus, to maximize your benefit, it’s important to understand the consequences of choosing to apply at different ages. It all starts with the most important age: your full retirement age, or FRA (see table below). If you receive your Social Security retirement benefit before your FRA, the benefit will be reduced. The biggest reduction is at age 62, the earliest you can begin receiving benefits (except for widows and widowers, who can begin survivors’ benefits at 60). Year […]

Smoke, Mirrors, and Alphabet Soup

In an environment of Ponzi schemes and financial scandals many Americans have lost trust and confidence in the financial profession; seems like there are some financial advisers that have been helping themselves, more than their clients. To fight back against this trend of lost trust and skepticism, advisors are being more creative with credentials, some of which can be earned with minimal or no study and can be bought with a couple hundred dollars. A quick look at the Financial Industry Regulatory Authority’s web site (FINRA) ( shows over one hundred and twenty different credentials being used by advisors to build creditability and trust.  I’m sure there are many more not tracked by FINRA. Professional certifications arose decades ago as a way for people in various industries to identify qualified practitioners. It’s always good to know that our doctor has an MD or our account is a CPA. In the […]

Flash again! Homebuyer’s Credit Expanded to Non-first timers…

In an update to the update, I wanted to pass this along:  part of the bill passed last week which extended the first-time homebuyer’s credit through June of 2010, ALSO expanded the types of homebuyers to include “long-term residents of the same principal residence”. This “long-term resident” is defined as a homeowner who has owned and lived in the same principal residence for five consecutive years within the eight year period ending with the purchase of the new home. New limits are in effect, as well – originally this credit (maximum $8,000 for first-timers, $6,500 for long-timer homeowners) phased out between $75,000 and $95,000 MAGI for a single individual or between $150,00 and $170,000 for married filing jointly (MFJ).  The new phaseouts begin at $125,000 for singles and $225,000 for MFJ.  There is a further limitation in that the home must cost no more than $800,000 (although this is solely […]

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