Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
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What to do when you are told "no" because of credit challenges, or loan program guidelines. How do you know as a potential consumer of a mortgage loan that you are getting the information you need to make an informed decision moving forward? Online searches and blogs that may or may not be providing you with accurate or complete information and .com mortgage companies that fill their call center with newly licensed call center "headset jockeys" can often lead to inaccurate information when...
Extensions Whether you file a tax return by the April due date, May due date for 2020, or obtain an extension to file, filing an annual tax return is mandatory if your income is above a certain level, which will vary depending upon your filing status. Filing an extension will grant you another six months for individuals and corporations (five month extension for partnerships, LLCs, estates and trusts) to file the tax return. Filing an extension, however, will not allow you to delay payment on...
When it's time to prepare the next generation for a financial legacy, you might want to bring your family members together to talk about money. But sitting down together isn't easy, because money is a complicated and emotionally charged topic. Rather than risk conflict, your family may prefer to avoid talking about it altogether. If your family isn't quite ready to have a formal conversation, you can still lay the groundwork for the future by identifying and sharing your money values - the...
If you earn a lot of money, you may also pay a lot in taxes – a fact that's particularly relevant now, as we are well into tax-filing season. At this point, there's not a lot you can do to affect the outcome for the 2020 tax year, but if you want to change your tax outlook for the years ahead, you can make several moves. Here are a few "tax-smart" investment strategies to consider: • Put as much as you can into your 401(k). By contributing pretax dollars to a traditional 401(k), you'll red...
Blast from the past. There was a game show on television (originally hosted by Johnny Carson and Ed McMahon). There were three couples on the show as contestants, Johnny Carson would ask a question of each couple, and the man would then decide whether to answer the question himself or ”trust” the woman to do so. Each couple was awarded money for a correct answer, and the couple with the most money at the end of the show won. If the couples were tied in winnings, they were then asked a que...
As people move through different stages of life, there are new financial opportunities and potential pitfalls around every corner. Here are common money mistakes to watch out for at every age. Your 20s & 30s Being financially illiterate. By learning as much as you can about saving, budgeting, and investing now, you could benefit from it for the rest of your life. Not saving regularly. Save a portion of every paycheck and then spend what's left over - not the other way around. You can earmark...
It is a common mistake that many who want to be home buyers think they cannot purchase a home unless they have a 20 percent down payment. This is not the case, but what happens when someone does not have 20 percent down? That is where mortgage insurance comes in. Mortgage insurance is not protection for the homeowner and is not to be confused with a homeowners insurance policy. It is a policy that protects the mortgage lender and is required if you do not have 20 percent down or utilize certain...
Tax-related identity theft occurs when someone uses a taxpayer's stolen Social Security number and name to file a tax return to claim a fraudulent refund. Often the taxpayer doesn't know this has occurred until they try to file a legitimate tax return and have their return rejected with an error code stating that a return has already been filed using that name and Social Security number. This article discusses the steps to take when a taxpayer's identity has been stolen, along with helpful...
April 15 is not that far off, but you still have time to make some moves that could favorably affect your tax returns. Specifically, you may want to consider some tax-smart contributions. You have until the April 15 filing deadline to contribute to an IRA, or to open one for the 2020 tax year. When you invest in a traditional IRA, your earnings can grow on a tax-deferred basis and your contributions may be tax deductible, depending on your income level. And starting with 2020, you can fund a...
Do I need to file a tax return? The answer depends on your filing status, your age and the type of income you earn. Each person is allowed to earn a certain amount of income before they are required to file a tax return. For 2020 tax returns, individuals are not allowed a personal exemption deduction, but are still entitled to a standard deduction of $12,400 for a single filer. Hence, an individual can have $12,400 of taxable income before being taxed if under age 65. If age 65 or over, an...
On March 8, we observe International Women's Day, a celebration of the social, economic, cultural and political achievements of women. Of course, women still tend to encounter more obstacles than men in the pursuit of financial security. Let's consider a few of them. To begin with, women are still more likely to leave the workforce, at least temporarily, to raise children, resulting in lower contributions to employer-sponsored retirement plans such as 401(k)s. And women are often the ones who...
If you happened to dive into my previous article, we were discussing new housing construction. With the current lack of inventory in the housing market, which the National Association of Realtors (NAR) projects will continue well into 2021, we will see an approximate three percent appreciation in housing values in 2021. Active listings are down nationwide over 38 percent adding to a continued shortage of homes to meet demand. Anyone who has been though Economics 101 would understand the supply...
Foreign Bank Account Traps – If you have any bank account, retirement account, investment account and/or business ownership interest with a value of $10,000 or more in a foreign country, you must advise us since special reporting rules now apply. Failure to disclose this on your tax return could result in severe penalties, as well as additional fees in representing you in any dispute with the Internal Revenue Service. The United States has negotiated agreements with foreign countries to r...
If you've been investing for many years and you've owned bonds, you've seen some pretty big changes on your financial statements. In 2000, the average yield on a 10-year U.S. Treasury security was about six percent; in 2010, it had dropped to slightly over three percent, and for most of 2020, it was less than one percent. That's an enormous difference, and it may lead you to this question: With yields so low on bonds, why should you even consider them? Of course, while the 10-year Treasury note...
Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption and threshold amounts. Here are a few of the key adjustments for 2021. Estate, Gift and Generation-Skipping Transfer Tax • The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2021 is $15,000, the same as in 2020. • The gift and estate tax basic exclusion amount (and gen...
What a year we had! The surging pandemic, confusion over who gets a stimulus payment and an overwhelmed IRS workforce still trying to catch up on last year's delayed tax season. The tax season can be frustrating under normal circumstances especially if you're trying to reach the IRS spokesman. This year may prove to be an extreme exercise in patience. We are going into an unprecedented tax season with a bevy of changes as a result of the novel Coronavirus. This is not the year to procrastinate....
If you're in a blended family, you're already aware of the emotional and financial issues involved in your daily life. But what about the future? When it's time to do your estate planning – and it's never too soon for that – you'll need to be aware of the entanglements and complexities that can get in the way of your vision for leaving the legacy you desire. You can take comfort in knowing that you're far from alone. More than half of married or cohabiting couples with at least one living par...
Just hearing this phrase makes me want to curl up on the couch with a blanket and enjoy some cornfield baseball, but that is not what we are going to talk about here. It seems everywhere I turn in our wonderful town there are new houses breaking ground or beautiful land just waiting for someone to build their dream home on it. In fact, according to the National Association of Home Builders (NAHB), new home construction is in its third month of record highs, yet new housing starts are still...
"You can't time the market" is an old maxim, but you also might say, "You can't always time retirement." Market losses on the front end of retirement could have an outsized effect on the income you receive from your portfolio by reducing the assets available to pursue growth when the market recovers. The risk of experiencing poor investment performance at the wrong time is called sequence risk or sequence-of-returns risk. Dividing your portfolio One strategy that may help address sequence risk...
When you begin investing, you'll generally assess your comfort with risk, as your investment choices will be guided at least partially by your risk tolerance. But once you actually experience the ups and downs of the market, this tolerance could be tested. Risk tolerance may appear less bothersome in the abstract but seem quite different in reality. For example, you might initially think you wouldn't be fazed by short-term market downturns, no matter how severe. However, when the financial...
If you've been contributing for many years to your 401(k) or similar retirement plan, it may be your largest pool of money. So, if you are facing a financial need, you may think about tapping into your account. After all, it's your money – why not use it? But touching your 401(k) before you retire may not be a good idea, as it can lead to some unwanted consequences. First, taking funds out of your 401(k) now could increase the risk of running out of money during retirement, which could last f...
In early 2020, 61 percent of U.S. workers surveyed said that retirement planning makes them feel stressed.1 Investor confidence was continually tested as the year wore on, and it’s likely that this percentage rose — perhaps even substantially. If you find yourself among those feeling stressed heading into the new year, these tips may help you focus and enhance your retirement savings strategy in 2021. 1. Consider increasing your savings by just 1 percent. If you participate in a retirement sav...
Have you heard the term median home price? When articles, media and websites state what the median home price is for a specific area, does that mean that most houses are that price? Does it mean that the entry level home price is that amount? If the median home price goes down, does that mean the housing market is crashing? Here in Tehachapi, the median home price has been trending upward consistently for the last several years. As of October, the median home price is $310,000 and is up 6...
Your employer-sponsored retirement plan is a valuable asset. But sometimes things happen that can affect the status of your plan. So, for example, if you work for a hospital that changes ownership, and you have been participating in a 403(b), 457(b) or 401(k) retirement plan, what should you do with it now? Basically, you have four options: • Cash out your plan. You can simply cash out your plan and take the money, but you'll have to pay taxes on it, and possibly penalties as well. So, unless y...
We're nearing the end of 2020 – and for many of us, it will be a relief to turn the calendar page on this challenging year. However, we've still got a few weeks left, which means you have time to make some year-end financial moves that may work in your favor. Here are a few suggestions: • Add to your IRA. For the 2020 tax year, you can put in up to $6,000 to your traditional or Roth IRA, or $7,000 if you're 50 or older. If you haven't reached this limit, consider adding some money. You act...
