Money Roundup: Taxes Done Edition

by Michael on Mar 31, 2014 · 0 comments

Late last week, I gathered up all of our tax documents and took them to our tax guy. And yesterday afternoon, I got an e-mail saying that our returns are done. I’ll delve into this in more detail in the future, but here’s a quick summary…

It looks like we’re on the hook for about $5,600 in additional federal taxes and another $3,200 to the state. Yes, this resulted in a small underpayment penalty on both our federal and state returns.

On the state side, the underpayment was intentional. We’re bunching our deductions into alternate years, so I wanted to hold off on making those state payment until 2014. But on the federal side? I was just lazy.

I should also note that, while I’ve previously created an artificial overage such that we could buy an extra $5k in I-bonds with our tax refund, I’m not sure it’s worth the headache. I probably won’t bother this time around.

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IRS to Modify IRA Rollover Rules

by Michael on Mar 27, 2014 · 0 comments

IRS Logo

In the past, the IRS limited you to one IRA rollover per year per account. But, thanks to the Tax Court’s recent ruling in Bobrow vs. Commissioner, that will be changing.

Indeed, as of next year, you will be allowed just one IRA rollover per year. Period. This change was made made public in Announcement 2014-15, though it won’t actually go into effect until next year.

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Defining Financial Independence

by Michael on Mar 20, 2014 · 0 comments

Photo of Hikers on Mountain

If you prowl around the internet a bit, it won’t take you long to find someone chronicling their journey toward “early retirement.”

Of course, what these individuals are seeking isn’t really early retirement, but rather financial independence.

In other words, they’re trying to reach the point at which they no longer have to work to support themselves. Whether they choose to continue working once they get there is another issue entirely.

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The big news in e-commerce this past week was that the cost of Amazon Prime in increasing from $79/year to $99/year. While some customers are up in arms, I view this as much ado about nothing.

Consider that this is the first price increase since the service was introduced in 2005, and the inflation-adjusted value of that original $79/year is now ca. $95/year.

So we’re mostly talking about an inflation adjustment here. And don’t forget about the addition of a free video streaming service similar to Netflix (which charges $8/month) as well as free books via the Kindle Lending Library.

But don’t worry, there’s still time to get in at the old price… You can get a year of Amazon Prime for $79 through April 17th.

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Discover it Card

Looking ahead, it’s time for Discover cardholders to enroll in the new bonus reward categories for Winter 2013. Full details can be found below.

As a reminder, Discover (and others) adopted rotating reward categories a few years ago. This means that you can get 5% cash back on select purchases, but only if you manually enroll for the latest offer each quarter.

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Chase Logo

For those of you with a Chase Freedom card, it’s time to look ahead to their 5% reward categories for 2014.

As a reminder, Chase (and others) adopted rotating reward categories a few years ago, offering 5% cash back on select purchases, but you have to re-enroll quarterly.

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Photo of Car in Agent's Hands

When we stopped by our insurance agent’s office to add our oldest son to our car insurance policy last month, we got a pleasant surprise.

We were aware that he’d qualify for discounts for his good grades, for having taken a defensive driving course, and for having completed State Farm’s “Steer Clear” safe driver program.

What we didn’t expect was to be presented with an extra discount if we added a life insurance policy on our son’s behalf. Interestingly, this discount actually outweighed the cost of the life insurance policy, so it was a classic win-win.

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Wise Words From Warren Buffett

by Michael on Mar 6, 2014 · 0 comments

Warren Buffett’s annual letter to shareholders has always been a treasure trove of investing insight. This year’s letter, which was recently released, is no different.

Among other things, Buffett urges individuals to stay within their “circle of competence,” saying that:

“Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power.”

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