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Gadgets, gadgets, gadgets!

Mar 3

Posted by Hannah in CREDIT, SAVING MONEY!

When it comes to keeping more money in your pocket, I see it two ways. Find a better way to get items at a discount or with coupons, or a better way to sell the gadgets you already have and no longer use. Previously, we have written a blog about saving money by using sites like retailmenot.com or couponcabin.com. Now we would like to introduce sites like Gazelle.com, where you can sell those old computers and phones you don’t use!

This site is designed for you to search for that old phone that you used, or laptop that has been stored in the basement for the last 6 months; now instead of just letting them clutter your home you can sell them! The products that are still in useable condition will be recycled to a new owner, and those that have lived a full life will be recycled properly and they don’t have to be stuffed in your house, or in a landfill! It is a win-win!

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Last day to Donate to Haitian Relief Effort for 2009 Tax Deduction – 02.28.10

Feb 28

Posted by Teri in CONTRIBUTIONS, TAXES

Today is the last day to donate to the Haitian Relief effort and provide for a deduction for 2009. Donations after today can be applied to your 2010 return.

On Fri, January 22, 2010, President Obama signed into law a measure allowing contributions made for the victims of the Haiti Earthquake to be tax deductible on their 2009 tax returns.

Under current law, donors would have to wait until they file their 2010 returns next year to take the deductions. The bill would allow donations made by the end of February to be deducted from 2009 returns.

For the nuts and bolts of this legislation you can visit the IRS website.

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The “ Credit CARD Act” of 2009 – IN EFFECT TODAY!

Feb 22

Posted by Adam in CREDIT, RECESSION, SAVING MONEY!

This is an UPDATE to a previous blog entitled “The Bill of Rights for Credit Card Holders” .

Greetings! This article serves as both a reminder of and an announcement for the Credit Card Accountability Responsibility and Disclosure Act of 2009, AKA the Credit CARD Act of 2009. We have other blog entries on this topic, and are reminding all that the CARD Act goes into effect TODAY, February 22, 2010.

Now, while this act has been enacted  on February 22, some other important changes went into effect during August, and others will not take effect until August 22, 2010. What this means is to keep an eye open about changes in your credit cards! And watch our BLOG for updates!

Briefly, the CARD act  requires that credit card companies provide disclosure about the majority of their fee generating activities, including: Account Activity, Payment Due Dates, and Transaction details. Some examples of the changes in the new rules are below:

  • Except in certain circumstances, the card issuers cannot increase the Annual Percentage Rate (APR) on existing balances for one year after the account is opened.
  • Monthly statements are now required to be mailed/delivered at least 21 days before the payment due date. This is an increase of 14 days! Further, statements must show how much interest and fees have been paid during the year.
  • Due Dates now must be on the same day each month! This is intended to prevent customers from late fees caused by accidentally missing a due date, because it changes from month to month. But don’t worry, if the due date falls on a holiday or weekend, the deadline is the next business day.
  • Now, in certain circumstances, no fees will be imposed for going over the credit limit!
  • Also, companies will now be prohibited from issuing a credit card to anyone under 21, unless he or she submits a written application with the appropriate signatures. This is intended to protect college students and other young people from accruing significant credit card debt without the being able to pay them.

Some of the new rule changes for the CARD act can be useful, particularly at protecting those who cannot protect themselves. I am a fan of the change to not issue credit cards to those under 21 and of the changes to the bank statements. However, I am wary of what these changes may affect, particularly the APR, and the possibility of it increasing along with annual fees and lost rewards.

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Homebuyer Tax Credit- Time is running out!

Feb 17

Posted by Teri in HOUSING ASSISTANCE, TAX CREDITS

Highlights

  • To collect either tax credit, homes must be under contract by April 30.
  • “The first thing they need to do is make sure they can get a mortgage.”
  • Insurance premiums on FHA loans increase after April 2.

There are two homebuyer federal income tax credits: the first-time homebuyer tax credit of up to $8,000, and the move-up homebuyer tax credit of up to $6,500. Both come with deadlines.

To collect either tax credit, buyers have to have homes under contract by April 30. That means that both buyer and seller must have signed the purchase contract by that date. After that, there’s another deadline: The transaction has to close by June 30.

Below is a timeline for homebuyers who want to complete the transaction on time to collect the federal income tax credit. The following dates aren’t ironclad; the real estate agent, lender and title company will know if you need to deviate from this timeline because of your situation or location. Use this timeline as a general guide and as motivation to take action quickly.

Above all, let everyone — from the lender to the seller to the inspector — know about your deadlines


Compliments:

Chad E. Bahnsen

Mortgage Network

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Tax Credit for Hiring New Employees!

Feb 6

Posted by Christopher in ECONOMY, SMALL BUSINESS, TAX CREDITS, TAXES

President Obama has proposed a temporary tax credit to Congress that will encourage businesses to hire new employees.  The newly proposed Small Business Jobs and Wages Tax Credit would provide businesses with:

  1. A $5,000 tax credit for each new employee hired in 2010!  For example, if a business hires four new employees during 2010 the business would receive $20,000 in tax credits at the end of the year.  However, this credit will be capped at $500,000 per business to ensure that most of the benefit from this credit goes to small businesses!
  2. A reimbursement will be given to businesses for the Social Security payroll taxes that would be paid on real increases in a business’s payroll.  Increases on a business’s payroll would include: raising employee’s wages, expanding employee hours, or hiring of new employees.  The reimbursement would only apply to Social Security payrolls, therefore the reimbursement would not apply to wage increases over the current taxable maximum of $106,800.  Here is an example of how the reimbursement would work:  A business increases all 50 of its employee’s wages by $1,000 in 2010, costing the business $50,000.  Of the $50,000, $3,100 (or 6.2% of $50,000) will be reimbursed to the business to cover the Social Security payroll taxes on those increases that the business would normally have to pay.
  3. Lastly, firms will be able to claim the credit on a quarterly basis!  This will help businesses receive the money faster, plus it will give businesses an early incentive to hire and increase payrolls.

Businesses will not be allowed to cheat the credit either! Businesses will not be allowed to fire current employees and replace them with new ones just to receive the credits benefits.  For example: a company cannot fire 10 employees and hire 10 new employees.  Another example: a business that fires 10 employees making $50,000 each and hires 20 employees making $25,000 each will not receive benefits from this credit either.  There is no way to cheat the system!  The whole objective is for businesses to increase the number of employees, not fire old ones and replace them! Quarterly payroll tax returns serve as an audit point.

This straightforward tax credit, if approved by Congress, will mostly benefit small businesses and hopefully provide a spark for businesses to get the incentive to hire new employees again!

Maco & Associates will update you as soon as word comes out about the approval or rejection of this tax credit by Congress. STAY TUNED!

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Spot and Fluffy: the Next Deduction for Your Family

Feb 4

Posted by Hannah in CREDIT, TAX CREDITS, TAXES

Instead of my dog ate my homework, perhaps your dog can help eat your tax return? and some of the dues associated with it? A new proposal called the H.A.P.P.Y Act, (the Humanity and Pets Partnered Through the Years Act) might just give pet owners one more helpful deduction on their taxes.  The idea is to give pet owners a tax deduction of $3,5oo a year on “qualified pet care expenses”, this would include food and vet bills.  The deductions would be based on a percent of costs and vary for tax brackets.

Benefits could possibly mean more families will adopt animals from shelters or that families who already have pets can continue to provide them with the best care.

The H.A.P.P.Y act has just been presented to the U.S House of Representatives, we will just have to wait and see what the verdict is!

In the meantime, might want to save any vet bills!

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HAITI CONTRIBUTIONS IN 2010 ARE DEDUCTIBLE FOR 2009 TAX RETURNS!

Jan 24

Posted by Teri in CONTRIBUTIONS, TAXES

Your generosity knows no bounds, and your heart breaks for the victims of the Haiti Earthquakes. You are not alone, and the government is allowing you immediate relief for your generosity!  On Fri, January 22, 2010, President Obama signed into law a measure allowing contributions made for the victims of the Haiti Earthquake to be tax deductible on their 2009 tax returns.

The measure sped through Congress, receiving final approval Thursday.

Under current law, donors would have to wait until they file their 2010 returns next year to take the deductions. The bill would allow donations made by the end of February to be deducted from 2009 returns.

For the nuts and bolts of this legislation you can visit the IRS website.

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Uncle Sam’s Deal of the Decade!Roth IRA Conversions!

Jan 8

Posted by Christopher in RETIREMENT PLANNING, ROTH IRA, SAVING MONEY!

It is 2010, and for people who have a traditional IRA (Individual Retirement Account) this is your lucky year; Uncle Sam is offering the deal of the decade!  Starting January 1, 2010 traditional IRA holders will have the opportunity to move money, without restriction, to a Roth IRA where money can grow TAX FREE (until you withdraw it!)

Essentially a Roth and traditional IRA are meant to do the same thing; provide people with a place to save money for retirement.  However that is about the only thing they have in common.  There are many differences between the two, but income restrictions are the most important to consider during 2010 because the changes the restrictions will undergo.  Investing in a traditional IRA’s has no income restriction; a person can make as much money as he or she wants and can open up a traditional IRA.  For Roth IRA’s there are restrictions: individuals who have an AGI (Adjusted Gross Income) that exceeds $120,000 and couples that have an AGI exceeding $176,000 are restricted from opening a Roth IRA.  Also, individuals with an AGI of more than $100,000 and married couples filing separate returns cannot move assets from their traditional IRA to a Roth IRA.

In 2010 the income restrictions for individuals and couples will remain the same, but Uncle Sam is permanently (well, as permanent as any tax code item is!) eliminating the income and filing status restrictions on transferring money from a traditional IRA to a Roth IRA.  Basically, starting January 1, 2010, individuals with an AGI of more than $100,000 and married couples filing separate returns WILL NOW be allowed to move their money from a traditional IRA to a Roth IRA. What a deal!  Here’s why:

  1. Withdrawals from a Roth IRA are tax free for 5 years after the transfer, or after the individual turns 59 ½ years of age, (whatever comes first) is thed time frame when withdrawing money without a penalty can occur.  Traditional IRA withdrawals are not tax free; every withdrawal made is taxed.
  2. A Roth IRA has NO required withdrawals, which allows a persons’ money to grow tax free without being touched.  With a traditional IRA withdrawals are mandatory after the age of 70 ½ years old, and people have to pay taxes on those withdrawals.
  3. Another advantage a Roth has over a traditional IRA occurs when leaving accounts to a heir.  Whether it is a traditional or Roth IRA the heir must make annual withdrawals from the account that is given to them.  The advantage that Roth has over the traditional IRA is that although money has to be withdrawn annually, no income tax has to be paid on the withdrawals.

Unfortunately, this is not as simple as moving money from one account to another and that’s it; there is a cost to converting the money: an “income-tax bill.”  Every time money is withdrawn from a traditional IRA, income-tax must be paid on the withdrawal.  Essentially, when moving money from a traditional IRA to a Roth IRA a person has to pay income tax on the conversion.  To help determine the amount of tax that will be on the money conversion, use the Roth conversion calculator provided here: Roth IRA conversion calculator!

Although there is a cost to converting, Uncle Sam has a special offer for people who do choose to convert their money in 2010!  Those who choose to convert their money in 2010 will have the option to put the amount converted on their 2010 tax return, OR have it spread out equally among their 2011 and 2012 returns.  So, instead of paying income tax on the whole conversion amount in one year, a person has the option of spreading the payment out to two years.   Due to the risk of Congress increasing tax rates, it may be beneficial to put the conversion amount on the 2010 tax return to avoid possibly paying higher taxes on the amount in 2011 or 2012.

There are a myriad of other reasons one may wish to convert than those listed above. If the value of a traditional IRA has fallen, the tax on the conversion of a lower asset base may make this attractive if an investor wishes to reinvest in the same securities. Discuss the particulars with your Financial Advisor before making any transfer of assets to a Roth, but 2010 is the year to do it if you choose to take advantage of this new opportunity to shelter money!

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Expiring Tax Credits..Don’t miss these!

Dec 15

Posted by Teri in ENERGY CREDIT, HOUSING ASSISTANCE, INVESTMENTS, TAX CREDITS, TAXES

Deferring Taxes

Deferring Taxes

You’ve heard a lot about Stimulus bills throughout the year. Many of the tax breaks of the recent stimulus bills will expire at the  end of 2009, and there are no guarantees they will still be available in 2010. So, consider some of the following:

  • Income Shifting: Currently the top two tax rates are 33% and 35%, but they expire after December 31, 2010. Current proposals reinstate the 36 % and 39.6% rates in 2010. The potential exists that Congress can make these moves retroactive to January 1, 2010. So, if you are higher income individual, you need to look at ways to accelerate income into the current year to protect your risk.
  • Gains and Losses: Look at year end trades (tax harvesting) as a method to manage your liability from any gain.
  • First Time Homebuyer Credit: The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.
    But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
    For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.
    A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.
  • Green Incentives: We have talked about these throughout the year. Make your improvements up to 30% of the sum of the improvements, limited to $1500 for 2009 and 2010. Make sure the improvement is qualified and has the appropriate documentation. Look also at the New Residential Energy Property Credit.
  • Contributions: Tighter rules- now a bank

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Pennsylvania Appliance Rebate..the specifics!

Nov 25

Posted by Hannah in CREDIT, ENERGY CREDIT, TAX CREDITS

Family of feet warming at a fireplaceEarlier this year we discussed news regarding an appliance rebate, similar to the cash for clunkers rebate.  Well, now some more of the specifics for each state are available!   So time to start planning for any appliances you might be in the market for!

Pennsylvania will be receiving $10.9 million for this credit and has decided to focus the credit for non-electrical heating, air conditioning and water heating appliances.  The funds still need approval, but hopes are that it will be completed by the end of this year and ready for consumers by March 2010.

So far we know that the appliances must be fueled by propane, gas, or oil and must meet energy star standards.  More specifics, such as the amount for each appliance, will be available once the funds are approved for Pennsylvania.  Other states will have their own set of standards of using the credit funds.

This is something to help you plan if you are looking to purchase a more efficient heater, air conditioning or water heater.  For those who cannot wait through the cold winter to replace their heater, there are other credits available for energy star appliances!

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