March 20th, 2010
In 2006 Presiident Bush signed into law a major change to the tax laws when it comes to converting a traditional IRA to a Roth IRA. This year (2010) everyone can convert their traditional IRAs to a Roth IRA which is something that was not always true in previous years.
This year (2010) taxpayers with a modified adjusted gross income of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA. This change applies to all years beyond 2010 however a SPECIAL BONUS for 2010 allows the income taxes due on the 2010 conversion can now be spread over two years (2010 Taxes and 2011 Taxes). Conversions in subsequent years are included in income during the tax year in which the conversion is completed.
So in summary, if you can afford the extra tax cost of paying for the taxes now on the conversion from IRA to Roth IRA then you can withdrawl from the Roth IRA tax free when you are eligible to start withdrawing from it. This means all future earnings/income on your Roth IRA will grow tax-free unlike if they were in a traditional IRA where you would pay taxes when you withdrew from the traditional IRA account. As stated above, if you do the conversion in 2010 you can spread the tax burden for this over two years which is a one time special offering that if you can take advantage of then you should!
In case you do not have any IRA’s or Roth IRA’s then I suggest placing some money away for your retirement years in a low cost / low fee company. As always some of my favorite low-cost / low-fee companies to choose from are Vanguard, T Rowe Price, Charles Schwabb and Fidelity.
Posted in Financial, News, Work | No Comments »
November 11th, 2009
Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes can receive a tax credit for 30% of the cost, up to $1,500, for improvements “placed in service” starting January 1, 2009, through December 31, 2010. See EnergyStar.gov’s Federal Tax Credits for Energy Efficiency for a complete summary of energy efficiency tax credits available to consumers.
For more information please visit this site: http://www.energy.gov/taxbreaks.htm
Posted in Alternative Energy, Financial, News | No Comments »
November 11th, 2009
Tax Credits Provide Outstanding Opportunities for Home Buyers
The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers.
For more information please visit http://www.federalhousingtaxcredit.com/
Tags: American Dream, Federal Tax Credit, Home Ownership, IRS, Tax Credit
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November 22nd, 2008
Did you know that if you own normal stock or mutual funds (retirement related funds don’t count) that you can sell some of the true losers and take a deduction from your taxes? By selling those funds that are way down and dogs anyway you can utilize the loss to help lower your overall Long Term Gains, Short Term Gains and then finally up to $3,000 of your ordinary income tax?
I will give you an example. Back in 2000 I bought some stock from Consumers Energy since that is where I was getting my electricity from at the time and I thought it would be a good idea to be a part owner of a company I actually buy things from (in this case it was energy). Well, overtime my $500 investment lost money and eventually was down to less than 1/2 of what I originally put in it. I thought for sure the run up in prices of gas and oil would help the stock out in the past year but to my dismay, with the financial meltdown we just experienced in September 2008, it went down further and I said that now it was high time to cut my losses.
I decided to sell the stock, now worth just a paltry $200 and take the loss against any Long term & Short term capital gains that I have had this year. However since most stocks are down 20-30-40% this year, it is very doubtful I will have very many gains at all, so it will most likely be going against my ordinary income that I am earning. This is a good thing especially with all the doom and gloom going around right now! Plus I will have $200 to reinvest in a down market, and best of all, into a whole new sector that is down 20-30-40% and has some hope of rising in the near future. Who knows, maybe my $200 will grow to $500, and then I will not only have gained my money back, but had a tax savings for tax year 2008!
The only major catch to this is that you can’t reinvest the money back into the same stock within 31 days or else the IRS wouldn’t give you a deduction because it would be considered a wash. However, you could put it in a different mutual fund or stock which is in the same sector the same day that you sold your interest in the original stock, in this case into the sector energy. If I really wanted, I could put the $200 into another electricity company such as Duke Energy (just as an example) however in all reality, I will probably put it into some sort of index to the S&P 500 as I believe consumer staples will probably be one of the first sectors to start rebounding.
Tags: finance, financials, money, mutual funds, stocks
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May 11th, 2008
I was disgusted to find out the other day that the 80,000 plus points I had accumulated to my Hilton Honors account had been deactivated because I had not stayed at a Hilton Family hotel ( Hilton, Conrad Hotels & Resorts, Doubletree , Embassy Suites Hotels, Hampton Inn , Hampton Inn & Suites , Hilton Garden Inn , Hilton Grand Vacations, Homewood Suites by Hilton and The Waldorf=Astoria Collection) in over a year.
I talked to a lady on the Hilton Honors phone line who seemed as if it was no big deal that I suddenly lost all my points. I had made it to Hilton Honors Gold status a few years ago and slowly as my travel for work declined so did my status. I then went to Silver and finally blue. After I explained to her how hard I had worked for both my previous job and my business to be successful and spent many a nights at Hilton Family hotels she offered me a bonus for the next year where every night I stay I would get 8,000 points. Well thats all fine and dandy except for the fact that I have to stay there to earn back my points I should have never lost in the first place. The weird thing is that they didn’t even attempt to contact me to let me know I should stay there to keep my points or use them up before they expired. All around it is a bad business choice for them.
Anyway I accepted the offer to reinstate my account but honestly it left a very bad taste in my mouth. I then proceeded to call Marriot Rewards to find out what their policy was because I have over 50,000 points accumulated with their program. The lady at Marriot Rewards was very friendly to me and told me not to worry because the points I have do not have an expiration date. She even went on to tell me a story about how she had a caller who had not stayed at Marriott for 12 years and wanted to find out what her balance was. The caller was pleasantly surprised to find out that they still had points!
In conclusion I have decided that all my personal as well as business travel from here on out will be at a Marriott family hotel. It doesn’t make sense for me to go back to Hilton to earn my points all over again when I still have all my original points from Marriott.
Posted in Financial, Rewards, Work | No Comments »
May 11th, 2008
Need a new improved and much more efficient water heater soon? Well there is no better time than now (or before Jan 1, 2008) to get one! That is how long you have left to obtain this credit for your federal taxes.
Actually there is more than just new water heaters that are eligible. You can update your homes insulation, start a solar hobby (I will come back to this topic at a later date) or get a new furnace. For a complete list of eligible items check out this site at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
which is the energy star information provided by the government.
Posted in Alternative Energy, Financial | No Comments »
May 11th, 2008
Dear Tadek:
I have $500 to invest in the stock market. What stock(s) should I buy? Please post and provide your opinion.
Susie (not Suzi Orman, obviously)
Well Susie that is a great question however you neglected to give me some important information to go by (years til retirement is a biggy) but in general I myself invest in mutual funds that mirros one of the big indexes (S&P 500, Nasdaq etc). It really depends on your age as to what type of index you should invest in. If you are young and have many years until retirement the best thing would be to put your money in investments that have a higher risk yet offer a higher return as you will have many years to flow with the market fluctuations. If you are soon to retire then you are best to place your money in a mix of low risk bonds and mutual funds so that you won’t lose your retirement income in the case of a down market.
As always it never hurts to follow your heart (or more importantly your wallet) and find mutual funds or stocks that invest in companies that you yourself take advantage of in your daily life. I also advise to find some no-load fund companies to place your money so that more of your money is put to work investing. Some (not all) examples of companies that provide such funds are Vanguard, T Rowe Price, Oakmark and Fidelity.
I hope this helps you out to plan accordingly for retirement.
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May 11th, 2008
In Response to a comment on my first post,
Tadek has its origin in Poland where it is short for Tadeusz. I have polish origin in my blood and I liked the name so stuck with it!
I’m in a credit card dilemma…I have a credit card with 8.9% fixed with a balance of 760 on it. And I also have a credit card fixed at 1.9% which changes to 11.99% in September with a balance of 597 on it. What’s the best way to pay both of these cards off with the least amount of finance charges??? I need all the money I can get to pay the rest of my bills and would like some advice. Thanks!!!
Well I would advise paying the minimum payments on all outstanding credit card balances and trying to pay off the card with the highest interest rate. In your case this might be a little tricky since your current highest interest rate is 8.9%fixed but in September you have a card that changes from a low interest rate to a higher interest rate. Your best bet is always to pay off the highest interest rate cards first and then once they are out of the way to pay the next highest and so on and so on. Just make sure you always pay at least the minimum every month otherwise you will get some nasty late fee’s which can add up very quickly. I hope that helps and best of luck to your future finance independence!
Now if anyone else out there has some kind of dillema please feel free to write about it here or send an email to tadek @ tadek.biz
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May 11th, 2008
This is the first post for this weblog. Basically Tadek is my nickname and I was originally going to use this site as a base for my web design and hosting company. However I have since decided that since a Doctor in New Jersey has the rights to www. tadek . com that I would turn this blog into a place I write down information about financial things I have found out over the course of my life which may or may not be helpful to you. Today I am just getting this site set up and will not really be writing anything useful related to financial items but I have big plans for this site once I get used to the feel for it. Hope you have a good day.
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May 11th, 2008
This is the third, and hopefully final, blog software I will be using. I have heard so many good things about wordpress and after being both saddened by the official demise of BBlog as well spammed to death I decided to finally ditch it and go for the gold in open source blogging software. I really hope that in a few years wordpress will still be powering my various thoughts.
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Technically this isn’t the first post. However we upgraded from perlblog to BBlog this morning. I did move all of my previous postings over so never fear… they are still here!
Things haven’t been fully migrated yet so please in the meantime excuse the “dust”. Thanks!
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