Positive vs. Negative Debt; what it really means

The distinction between what constitutes “positive” and “negative” debt is a topic of significant importance in personal finance discussions. Understanding this difference is crucial for making informed borrowing decisions that can either pave the way to financial prosperity or lead to economic hardship.

Positive debt, or what is often termed “good” debt, is characterized by borrowing […]

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Lending to Friends and Family

The first thing which may come to mind when lending money to friends or family may be thoughts around impact on your relationship, because this is just a personal matter, right? Well, the Internal Revenue Service may feel differently.

There are some things which you should keep in mind, and some things you […]

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FAFSA Changes Benefit Grandparent 529s

FAFSA stands for the Free Application for Federal Student Aid. It is the main form used by universities and colleges that determines a student’s eligibility to receive financial aid. To simplify, there is a formula that assesses the income and assets of both parents and students. This formula is used to calculate […]

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Costly States

Which state has the highest (lowest) taxes? The answer turns out to be surprisingly complicated.

If you look at state income taxes, and assuming a decent to high level of income, California immediately jumps to the bottom of the list. It’s highest state income tax bracket is 13.3% — higher than second-place Hawaii […]

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Capital Gains: How to Determine Your Tax Rate

A simple-sounding question that, in the world of tax planning, is harder to answer. The simplest calculation is that, in 2021, single taxpayers will pay 0% capital gains taxes if their adjusted gross income is below $40,400, while joint taxpayers will pay 0% capital gain taxes below $80,800 of adjusted gross income. After […]

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Is It Time to Review Your IRA Estate Planning Strategies?

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was passed in December 2019 as part of a larger federal spending package, included a provision that warrants special attention from those who own high-value IRAs. Specifically, the “stretch” IRA provision — which permitted nonspouse beneficiaries who inherited IRAs to spread distributions over their […]

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Taxation of Social Security Benefits

How do you determine how much of your Social Security benefits are subject to taxes? Like most things’ taxation-related, it becomes difficult to follow.

Start by adding half of your Social Security benefits in any given year and add that amount to all your other income — including tax-exempt interest, which is otherwise […]

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Changes to Tax Withholding

The Tax Cut and Jobs Act (TCJA) made it difficult for taxpayers to estimate how much tax should be withheld from their paychecks.  Unfortunately, many under withheld and, as a result, either had to pay more or did not get as large of refund.

A new updated Form W-4 now reflects the changes of the TCJA.  […]

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For College Savings, 529’s Are Hard to Beat

Raising kids is hard enough, so why not make things easier for yourself when it comes to saving for college? Ideally, you want a savings vehicle that doesn’t impose arbitrary income limits on eligibility; lets you contribute a little or a lot, depending on what else happens to be going on financially in your life […]

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Estate Planning Consider the Tax Basis of Gifted or Inherited Property

Tax basis can be important when deciding whether to make gifts now or transfer property at your death. This is because the tax basis of the person receiving the property depends on whether the transfer is by gift or at death. This, in turn, affects the amount of taxable gain subject to income tax when […]

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