Friday, May 21, 2021

Can we pay fewer taxes like the rich?

 

Student loan rates going up

Interest rates on federal student loans are set to rise nearly a full percentage point later this year, increasing the price of borrowing to pay for college for current and incoming students. The new rates, which are based on the results of a Treasury auction Wednesday, apply only to loans issued for the upcoming 2021-2022 academic year. Old loan rates stay the same but is it time to take some gains and pay old loans down or off? Unless you have need of the tax deduction in retirement, getting rid of debt now may be a smart move. On the other hand, the interest on this debt reduces income and taxes even if you don’t itemize. If you are concerned about your grandchild paying for higher education, you might use some of your gains to reduce the amount of loans taken out. Some of us have experienced better earnings (56%) than expected and a college education is a great use of our money. Saving for college can be less expensive using a 529 plan. You may also consider having your student do the first two years at a community college.

Consider your options: https://www.amazon.com/Education-Funding-Save-right-plan/dp/1482549956

 

Advisors having a hard time beating low-cost index funds.

If you did not notice or your advisor does not use a benchmark, your low-cost index fund beat almost all the traders this past year. Vanguard’s 500 Index is up 56% for one year. Yes the stock market goes down but you get a long-term average of about 11% in a low-cost fund. Since 2010, advisors have been hard pressed to earn their fees. Vanguard charges 0.04% a year because we investors own it—no middle people—so we keep almost all of our gains. Many of my readers hit or passed their goals for the year already. Just consider how right your advisor must be buying and selling to beat the market. Even the smartest gurus have trouble beating the markets. Yale’s legendary manager David Swensen with his 12.4% record failed to beat the market rate of 13.02% during his 1985-2020 tenure. Most advisors earn you only 3.79% over time. You can do better.

Earn 11%:  https://www.amazon.com/You-Beat-Wall-Street-professionals/dp/1986031373

 

Does “bundling” insurance save you money?

Several carriers claim “bundling” or “customizing” saves you money. Certainly, it saves the insurer money. But buying two or more policies from the same company may actually cost you more. We need to shop for the best deal for each—auto, home and umbrella—since each contract has good and bad elements. For instance, my homeowner’s has been in place for 40 years and no other provider can match the price. On the other hand, my car company keeps raising the price despite me driving less, taking the safe driving course, and keeping my cars longer. And only my vehicle insurer will write my lawsuit coverage since it depends on a certain amount of vehicle liability coverage. Giving all your insurance business to one agent makes sense for their convenience but often costs you more, not less. Worse: some folks buy their retirement income and investments from their insurance agent. “Bundling” is a sales gimmick not an insurance discount.

Shop and save: https://www.amazon.com/Save-000-every-year-Only/dp/1500681571

 

Can we pay fewer taxes like the rich?

Inequality has grown dramatically over the last four decades: The top 1% have enjoyed extraordinary income growth, while growth for the vast majority has been anemic. Yet high-income households have not been asked to pay higher tax rates and corporations’ contributions to federal taxes have fallen to historic lows. Wages have fallen over time—they have become detached from productivity gains. Tax assessments come from wages and the rich don’t live on wages. And Social Security stops taking taxes on incomes over $142,800. Most of their income is tax-deferred or tax-advantaged. For instance, Warren Buffett with over $108.2 Billions pays only 17.7% while his office workers pay over 32.9%. The wealthy use complicated legal entities to hide their incomes. Take the former president’s claim that you are smart when you can pay professionals to manipulate your income. They found him a way to subtract his failed businesses on his personal income taxes so he can avoid taxes for years. Stop paying taxes like the rich; but do it legally.

Tax-FREE IRS account: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

 

How to keep your retirement full of income

First, you gotta beat inflation—25+ years may be the length of your income needs—but the VALUE of your fixed income is cut in half in 25 years. In the past, when people died right after retiring, they never had this problem. Today your $800 a month will be able to buy only $400 worth of goods in 25 years. You can’t beat inflation by holding your nest egg in 1% CDs and bonds. Stocks will protect you from inflation since the average return of 11% is greater than the 3% inflation rate. Prepare for a down market by using two buckets—one with a year of living expenses and the rest in a stock mutual fund like Warren Buffett’s heirs. Second, you can’t be assured of cash later if you spend it unwisely now unless you continue to grow your portfolio. Third, you can’t buy your kids happiness at the expense of your future. Most grandparents want to give financial support but they also don’t want to become a financial burden. Relax; your offspring will make it on their own by learning how to save. Fourth, get out of debt as soon as you can so you can have enough for later. Fifth, use tax-advantaged accumulation accounts. You have a great legal tax shelter available so use it for a tax-FREE retirement.

Go tax-FREE: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072

 

Maximize SS benefits with your spouse

Taking Social Security benefits is not so simple. You and your loved one need to look closely at the options together BEFORE making a decision since some decisions cannot be reversed. Because the SS offices are closed now, you need to use the website and get help from a knowledgeable source. If you can make an appointment, even virtually, your best source may not be the SS office personnel. However, they helped us learn of collecting higher benefits than we thought we received when we first applied. There are claiming strategies that are better long-term than taking benefits as soon as you can.

How to maximize income: https://www.amazon.com/Maximize-Social-Security-Benefits-Retirement/dp/1495439224/

 

 

Where is that refund?

The Internal Revenue Service reminds taxpayers that the most convenient way to check on a tax refund is by using the “Where’s My Refund?” tool at IRS.gov or through the IRS2Go Mobile App.

Where is the stimulus 1 or 2? If you did not receive stimulus 1 or 2, start filing here: https://www.irs.gov/newsroom/recovery-rebate-credit.

Stimulus 3? https://www.irs.gov/coronavirus/third-economic-impact-payment

 

What to do if you can’t pay by May 17?

Avoid the penalty for not paying estimated tax. Ask for an automatic extension to file till October. If that does not work for you, you can apply for a payment plan. An individual can setup an IRS installment plan if you owe $50,000 or less and can pay back the amount owed in 3 years. If you are a business owner, you can setup an installment plan if you owe $25,000 or less. The IRS will charge a one-time fee of $105.

If you own less than $25,000 and can pay the amount owed within six years, ask the IRS for a streamlined payment agreement. The IRS will charge a one-time fee of $102.

Request an Offer in Compromise if you cannot pay the total amount owed. This allows you to settle your tax debt for less than the total amount owed if you will be unable to pay back the total amount owed within 10 years. The IRS will charge a one-time fee of $150. Given the pandemic economic hardship, apply for the extension to file now: https://www.irs.gov/pub/irs-pdf/f4868.pdf

Special circumstances help: call the IRS Taxpayer Advocate Service 1-877-777-4778 for free assistance.

More ways: https://www.irs.gov/newsroom/heres-how-people-can-pay-their-federal-taxes

 

 

**********ACCOUNTABILITY**************

 

 

Like 1776, this period is a test of democracyWe rejected an "American fascist"

 

Dictator steals reporter’s correspondence

 

When ‘Truth and Reconciliation Commission’? 

 

 

How Govt wastes our money:

Lack of health insurance delays treatments: more critical care and expensive solutions

GOP wavers on rounding up tax cheats: political donations matter: workers pay more tax

We paid $7 million in fake farm owners: no D&B, property or employee checks

 

Trump continues to take our money to push his propaganda: Steve Miller on our salary

 

SCAMS/SPINS:

GOP: No Jan 6 insurrection; no Dem president; no taxes for repairs; no discrimination.

Death threats used as a tool of control of GOP: GOP policy now: It’s the big lie or death

Trumpist illegal voting: prosecuting the wrong group

Trumpist news: Census did NOT count voters: Fake pics mislead

 

GOP millionaires say extra $300 unemployment is too much: min wage “$290 is better”

Congress protects scammers once they have our money: FTC can’t return our stolen $.

GOP takes control of PA gov decisions on emergencies, schools, etc

 

Auto pilot kills another non-driver: Tesla didn’t ‘see’ truck or side of road at night

 

BEWARE: cheap hearing aides may not work well: return policy?

Masks still needed 7 places: keep one in pocket

Many conservative men fear vax needle keeping the pandemic death rate high.

Vacation in safe spot: US has pandemic hot and cold spots: Few get shots here

 

Broker violation check useless: 90% of FINRA complaints/violations removed

Knight Nguyen caught selling high-risk fraudulent securities promising low-risk alts

Richard E Jackson TX caught framing the wrong men: how many more? No jail

UBS, UniC, Nomura caught in EU bond price-fixing cartel : fine; no jail

 

CNA Financial IL raising rates to cover $40 mil to hackers: cheaper to hire the hackers

 

DMB Financial MA debt consultant caught charging unlawful fees: refunds but no jail

Frederick M. Stow TN caught stealing $930,000; forging transfer forms: 5 year jail

Fidelity allows teens to gamble: no experience/oversight required, another suicide?

 

Paying ransom or neutralize hackers: $5 million or Seal Team 6 next time.

 

IRS: Easy Steps to Protect Your Computer and Phone and Avoid Phishing Emails.

IRS: Free special ID protection PIN goes on your return so scammers can’t take refund

IRS: Previous tax returns available online: https://www.irs.gov/individuals/get-transcript

IRS tips to avoid scams: https://www.irs.gov/newsroom/tax-scams-consumer-alerts

 

Is it a scam?  Check AARP scamline 877.908.3360. BBB Scam tracker

 

Check IRS: https://www.irs.gov/newsroom/dirty-dozen-part-1-taxpayers-should-be-on-the-lookout-for-these-scams

https://www.irs.gov/newsroom/dirty-dozen-part-2-thieves-work-all-year-to-scam-taxpayers

Find tax preparer: https://www.irs.gov/tax-professionals/choosing-a-tax-professional

 

Check Social Security: https://blog.ssa.gov/

Safeguard data: ConsumerReports help: https://securityplanner.consumerreports.org/

 

 

Jobs

Gov hiring: good pay, benefits, pension, no layoffs,

Be creative: Neanderthals died out because they were less creative than humans

Joe Biden is selling new eF150: starting at $39,000: it is “quick” he says.

 

Coping with new work environment: yes, you must wear clothes again

 

Who owns your account now?

Homeowners insurance ratings: your best deal for coverage

Vehicle insurance ratings: you best deal for coverage

Refinance before rates go up: 3% rates won’t last forever

 

Used car prices up 12%: average $23,000: more than new

State Farm to provide electric-fire detection monitor: plug in sends message to phone

HealthCare available for pandemic victims: get subsidies just like your Congressperson

 

Best household paint: 5,804 opinions help you pick—good paint saves money/time

 

Miracles:

Texting by thoughts: computer translates thoughts into text

No mask; no 6 feet; not HALF vaccinated: 590,000 and counting

Iceberg 80 times the size of Manhattan on its way to find Titanic: friends reunited

 

We can apply for Medicare online: https://blog.ssa.gov/apply-for-medicare-online

We can apply for Social Security online: https://www.ssa.gov/benefits/retirement/

We can apply for health care online: https://www.healthcare.gov/

 

 

IAN

41 Watchung Plaza, B242

MontclairNJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts available at http://dankeppel.blogspot.com/

 

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