Beware of Scammers Targeting Your Tax Info, Warns IRS
Tax scammers continue to become more sophisticated, which means it’s more important than ever to pay attention to any person or message asking you to provide confidential information. Here are several of the more prevalent scams to be on the lookout for, according to the IRS...
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Ideas to Lower Back-to-School Shopping Costs
With inflation hiking the prices of everything over the past 4 years, and schools asking families to fork over larger and larger sums of money every year to help with shared supplies, the cost of your back-to-school shopping trip can quickly spiral out of control...
Tracking Relative Return
A 3% return could be good enough in a bear market, and a 10% return might be mediocre in a bull market. How can you readily know how your investments are performing?
Some Things Get Better with Time
Fine wine, balsamic vinegar, cheese, and certain tax breaks have something in common. They can get better with age. Case in point: consider this sample list...
Expand Your Professional Vocabulary
In our fast-moving world, using concise yet descriptive words and phrases can be very powerful when communicating important thoughts and ideas...
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AUGUST 2024 Q & A
Q: I have a hobby that I’m considering turning into a side business in hopes of making it full-time. What legal aspects do I need to consider?
A: Regulations vary from state to state and business to business. Be aware of the requirements of the Americans with Disabilities Act to accommodate customers and employees. Information resources to contact include your state and local government(s), the chamber of commerce, and your local Small Business Administration (SBA) office.
Consult your legal and tax professionals for advice specific to your enterprise and area. You also must decide what business form you want to use. Most new small businesses choose a sole proprietorship, partnership, or a limited liability corporation structure.
How Lenders See You
Lenders often determine an individual’s creditworthiness by looking at that person’s debt-to-income ratio. If the ratio is considered acceptable, it’s more likely that lenders will make the loan. Calculating the ratio can provide insight into the state of your financial health. Here’s how to calculate your ratio.
Start by adding up all of your monthly debt obligations — mortgage, auto, and other loan payments, as well as minimum credit card payments. Next, divide that amount by your gross monthly income. That’s the amount of money you earn before taxes and other deductions are taken. Income generally includes your pay, investment income, and self-employment income.
If you multiply the ratio by 100, you’ll get the ratio as a percentage. If your ratio seems high, it may be time for you to take some action to lower it. Paying down credit cards or other debt is a good starting point.
Retirement Savings Versus College Savings
For Millennials with young families, this can be a quandary. Try to save for both, but prioritize retirement savings. There are loans for college but not retirement.
SET PRIORITIES
While you value providing higher education for your children, step back and think hard before choosing to fund education over saving for retirement. Alternatively, start your children working toward winning scholarships in their freshman year of high school. Academics and sports are one way, but leadership in clubs and community service are also important.
MAXIMIZE EMPLOYER 401(K) MATCHES
A 401(k) plan matching contribution may be the best return you will ever get on an investment. In addition to the match, you also get a tax break on your contributions and the earnings on those contributions. If your employer also offers a Roth 401(k) option, all contributions, including the match, will be made with after-tax money.
CONSIDER A COLLEGE SAVINGS PLAN
Ask your professional advisor about a college savings plan only after you’ve maximized your retirement plan matching contributions. They can help you compare the benefits of saving more in your company plan, contributing to an individual retirement account or Roth IRA, or funding a separate college savings plan.
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