Saving on Taxes and Give to Charity

Here is a tip from my favorite CPA, Brent, on a way to save taxes and still donate to your charity.

If you are 70 1/2 and have to take a Required Minimum Distribution, RMD, one way to give to your favorite church/charity is via this RMD.

Have the firm/trustee liquidate a specified dollar amount from your IRA and have them mail/wire the amount directly to the charity.

You will pay no taxes on those withdrawals and still benefit from your standard deduction.

Any amount processed as a QCD, Qualified Charitable Deduction, counts toward your RMD and reduces the amount of your IRA distribution.

You can only make the tax free transfer from an IRA, not a 401(k) or a 403 (b).

 

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No Fees for Freezing Credit Reports

Brian Krebs did a great article on the change in fees for freezing and unfreezing your credit reports.

Starting Sept. 21st. the three large credit reporting agencies cannot charge for freezing your credit accounts.

Here is the entire article. https://krebsonsecurity.com/2018/09/in-a-few-days-credit-freezes-will-be-fee-free/

Saving Money on Prescriptions

I just saw an interesting story on NBC which shows how to save money on prescriptions.

• Your insurance may not give you the cheapest price on the drugs you need.
• Question the pharmacist and find out if the same prescription without insurance is cheaper. Apparently, the drug store can’t/won’t tell you if the non-insurance prescription is cheaper.
• Check out the website – https://www.goodrx.com/ It will show you the price of the same drug at different stores. It may also show coupons which could same you even more money.
• 

Over 55 – Save $299+

T-Mobile has a great deal for couples over 55.
We just went over to the T-Mobile store and saved $299 over the next 12 months.

They are now charging $60 (includes charges and taxes) for two lines when you use AutoPay.
This plan includes unlimited talk, text, and 4G LTE smartphone data.
I don’t see any “gotchas” so this could save you a lot of money.

Watch the Youtube video – it’s pretty funny.

 

 

 

Free Credit Score from Discover

I just found a new service that my Discover Card is offering for free. On each new statement they are including my FICO score.

In the past, I have used the AnnualCreditReport.com which gives you a copy of your credit report once a year, but I’m pretty sure it doesn’t give you your number. 

Here’s some information from the FTC which tells you why it’s important to keep track of your credit report.

If you’re interested, you do need a Discover credit card.

Here’s some more information that Discover is putting on-line. (click here)

 

Credit-Debit Card Fraud – What To Do

Within the last year, there seems to be a jump in credit-debit card fraud and I thought I’d put together some tips to keep as protected as possible.

• Restaurants – don’t use a credit card – use cash. Any time someone takes your card and it’s out of sight, it’s just asking for trouble.
• Use a credit card – not a debit card. While both cards are protected, the potential for damage and aggravation is much higher with a debit card. A debit card can empty your bank account without you even knowing it. I don’t even have a debit card.
• Use different credit cards for different purposes. I have a card for Amazon purchases, a card for other online purchases, and a card for medical expenses. I like to segregate my expenses so that I can keep track of what I am spending and with whom. If you only use one card, when bad guys get hold of it, it’s harder to spot the bad purchases. If you have certain monthly charges to credit cards like Tivo or Netflix, consider having a card for just those expenses.
• Pay close attention to your monthly statements. If you don’t recognize a store or expense, question it. If it’s not you, you don’t have to pay for it.
• When you use a bank ATM, watch for skimmers and cameras. I like to use a piece of paper to cover my hand when I enter my pin.
• Watch out for phishing attacks in email. NEVER click on email links. Type in the website link and then go from there. Links in email are excellent ways to lose your identity.
• Shred all paper mail that may have credit card information.
• If you suspect a problem, immediately call your credit card company.

 

Thanks for the credit card image to By Lotus Head from Johannesburg, Gauteng, South Africa (sxc.hu)

Making Free Donations via Amazon

Amazon Smile is a new program whereby any purchase you make via their Smile.Amazon.com website will donate .5% of the purchase price to a charity of your choosing.

Right now, only physical products , not digital, are included.

The problem I have is in remembering to go to Smile.Amazon.com and not just the regular Amazon.com.

A solution to this is to download the “Smile Always” Extension for Chrome. It will automatically redirect you to the charitable site.

There is also a Firefox addon called Amazon Smile  Redirector – see the link below.
https://addons.mozilla.org/en-US/firefox/addon/amazonsmileredirector/

 

 

Kevin O’Leary Investment Advice

I was reading Kevin O’Leary’s book,  “Cold Hard Truth on Men, Women & Money, and I like it so much I thought I’d share a few of his thoughts. 

• Diversify – 5% in any one stock or bond and 20% in any one industry. 
• Dividends – only buy stock and bonds that either give a dividend or interest.
• Invest in industries you understand. 
• Buy and hold. 

Practical Tips

• Establish your own credit line.
• Make a budget and set aside savings every month.
• Pay off consumer debt first and then start investing.
• Invest your age in bonds. If you are 40 years old, have 40% of your investments in bonds.
• He also has good money advice for kids, marriage etc.

Missouri Matching $2500 for College Plans.

If your’e saving for a son/daughter in a Missouri 529 Plan,  you can get up to $25oo from the state of Missouri.

The MOST 529 Matching Grant Program is open to Missouri residents with an annual household income of $74,999 or less who own and contribute to a MOST 529 Plan account. If you qualify and are approved for the program, contributions to your MOST 529 Plan account will be matched dollar-for-dollar up to $500 per year with a lifetime maximum match of $2,500.

Applications for the program will be accepted between March 1 and June 30, 2012, and applicants will be notified by August 31, 2012, about the status of their application.

Here’s the link for more information.

http://www.treasurer.mo.gov/content/save-for-college/most-529-matching-grant

More Information about Missouri 529 Plans at:

http://www.treasurer.mo.gov/content/save-for-college/

College Classes – $15 for Seniors – TODAY

Today, Friday, August 17th, is the day Seniors (65+) can signup for classes for $15 dollars.

This is only for St. Louis Community College classes.

Hopefully you have gone over ahead of time and gotten a student number and a registration form where you put in what classes you want. You can check online what classes are available here:
http://classes.stlcc.edu/ClassSchedule/Term_Courses.asp

When you fill out the form, make sure you list a number of classes which you might be interested in. Put “Alternate” in front of classes in case your first class is full or is not going to be held.

I’ve been told by a teacher at the school that they need a minimum of 15 students per class and a maximum of 18.

I got over to the school at 8am and there were 43 people ahead of me. Luckily the computers were down, so they just took the application and said we could pay on Monday. That sure beats waiting in line for the 43 people ahead of me.

I’d suggest you take a picture of your registration form as they don’t give you any copy.

Note #1- I gave them my form on Friday morning and Saturday in the mail I got my registration form back with my class enrollment and invoice for $15. They also called my on Saturday morning. I’m very impressed.

Note #2 – after paying your fee, you need to go and get your student ID and parking pass. Before you go over there make sure you know your computer login information.
https://selfservice.stlcc.edu/pls/SLCC/twbkwbis.P_WWWLogin both your ID and password. I’d recommend making a password that is not too hard. You will have to use it during the year to login to the school computers.

Note #3 When you get your .edu email address, you can also then take advantage of the Amazon student free 6 month Prime account and then 50% off the regular membership.
http://www.amazon.com/gp/student/signup/info

Note #4 – bring a large thumb drive to class – this is where you will keep a backup of your work.

Budgeting 101

Here’a basic one-page budget which I’ve been using for many years. Hopefully you will find it useful.

Lets take a quick overview of the one page budget.

Up at the top left is the date – this is the month you’re working on.

Column A is the list of all your expenses.
Like Gas, Electric etc.

Column B your balance from the previous month or your Beginning of Month(BOM)Balance.

Column C is the amount of money you think you need to set aside each month for each expense.

Column D is your actual payment for that expense.

Column E are any adjustments you might have to make to your figures.

Column F is your balance at the End of the Month or EOM.

Column G is for any notes you might want to make.

Toward the bottom you’ll see the word Cash – that’s how much money you have in your checking account.

And Finally the word BALANCE – this is how much you have extra after you’ve paid all your bills. It should be a positive number, not a negative number.

MONTH/YEAR

A	B	C	D	E	F	G
	Balance – BOM	Budget	Expense	Adjust	Balance-EOM	Misc and Notes
Food	0.00	-400.00	400.00		0.00
Cable TV	0.00	-87.00	87.00		0.00
Car Insurance	-100.00	-50.00			-150.00
Car License
					0.00
Car Repair
Electric	0.00				0.00
Laclede Gas	0.00
	0.00				0.00
Medical	0.00				0.00
Food	0.00
Gas-car	0.00
Insurance
MISC.	0.00	0.00			0.00
Life Ins.
	0.00	0.00			0.00
	0.00	0.00			0.00
Per. Prop. Tax
Phone – cell	0.00
Real Estate Tax
Sewer
Trash..
Vacation	0.00
Water
Xmas
					0.00
				Adjustment	0.00
TOTAL	0.00	-2000.00	2000.00		-2000.00	TOTAL MISC…	0.00
	Balance	Budget	Expenses
				Cash	2000.00
				BALANCE	0.00

Now before we get into the detail of the budget, there’s one thing you need to do.
Get out your calendar and write the word budget on each an every month.
I usually put it on the last day of the month.
That way when you look at your weekly activities, you’ll remind yourself to do the budget that month.

Note that it only takes me less than 15 minutes to do each month’s budget.
So it’s not a big deal once you set it up.
Now let’s go through this in a bit more detail.
First the date.
I usually do my budget at the end of the month.
I want to see how I did for the previous month.

Now in Column A you need to list all your expenses. These are expenses which you have to pay. They can be either due on a weekly, monthly or possibly due every six months like car insurance.

Things like food and your monthly cable bill are two good examples of bills that you will have to pay on a regular basis. Ideally, if you budget $400 for food every month and you spend $400 for food every month then your balance at the end of the month is zero.  If you only spend $360 then you will have a positive surplus of $40. If you spend $500 for the month then you will have a negative balance of -$100.

Some bills don’t come on a monthly basis – things like life insurance and car insurance may come every 6 months or even once a year.
In my example above we are budgeting $50/month for car insurance. We start the beginning of the month with a balance of  -$100, we add -$50 for the month and end the month with a -$150.00 balance.

You may also notice that I don’t have a place on the budget for Savings.
What I want you to do is have at least 5 to10% of your salaries taken out of your paycheck each month and put into a savings account. That way when you get your check you
don’t even think about that money. It’s set aside for an emergency. Most experts tell you to keep at least eight months set aside in a savings account. When you get that done then you can start investing for retirement. But that’s not what this program is about. Today we’re talking about making a adhering to a monthly budget.

I also don’t show taxes on this budget. Make sure you have enough taxes taken out of each monthly paycheck so you won’t owe any taxes at the end of the year.

Now for some of you, you may have no real idea what your expenses are.
For those people I’d recommend that you go back through your check book and credit card statements and figure out first where you’re spending your money.

If you have to, keep a notebook with you and write down every time you spend money, what it’s for and how much. Then you can use that to help figure out what your expenses are.

If you don’t have budget billing ( I encourage this to even out your monthly bills)  you’ll have to find or estimate your gas and electric bills for a year and then divide by 12. Look for your old stubs, go through your checkbook, look at your old credit card statements however you pay for it.
If you don’t have some of the information, estimate it as best you can.

The same is true for every other expense category.
Find out or estimate how much you spend yearly in each category, divide by 12 and that’s your monthly budget amount.

Your non-monthly expenses like car and life insurance do the same.
Figure out how much you spend on a yearly basis and divide by 12.

It’s important to note that each entry in the Budget col. is a negative number.
If you plan on spending $300 per month on Groceries, then you need to enter
negative 300.00 in the Budget column.
Every item in the budget column is a negative number.

At the bottom of Col C -, you’ll notice an  amount.
That’s how much money you plan on spending or setting aside every month.
That amount should be equal to or greater than your take home pay.

If you take home pay – after taxes- is $2000 per month and you budget is $2300 a month your in trouble.
You’re probably in debt and paying off a lot of credit cards and finance charges.

+++++++++++++++++++++++++++++++++++++

Column D – are the payments you make every month.
When you pay with cash – that’s a payment
When you write a check – that’s a payment

If you use a debit card and the money comes directly out of your bank account – that’s a payment
If you pay bills online and the money comes out of your checking account – that’s a payment

Here’s where it gets a bit tricky.
If you buy something with a credit card, it’s not a payment until you actually pay for it.
If you buy a book in June with your MasterCard and pay for it in July, it’s a July expense.

So each month I have to go through my check book and credit card statements and see what bills I paid and they get listed in col C the Payment column.

+++++++++++++++++++++++++++++++++++++

Column B is the Balance at the Beginning of the month.
BOM stand for Beginning of Month.
This number is usually either zero or a negative number.
This is the money you’re setting aside for each expense.
Each month you copy over the figure from Col F Bal EOM over to column D

Let me give you an example .
If you’re budgeting for a vacation
How about going to the Florida Keys in December.
That would be nice wouldn’t it.Wwe’re setting aside $200 a month.
By the endo of June how much money should we have set aside?
$1200. Your balance at the beginning of the month would be a negative $1200

Your Balance at the BOM is brought forward Col F – the Balance at the EOM
of the previous month.

So, one of the first things you do each month when you start a new budget, is you copy the EOM balance from the previous month onto the BOM of this month.

If your EOM balance for June is -1200, then you write in that amount in the BOM balance for your July budget.

+++++++++++++++++++++++++++++++++++++

Column E  is an adjustment column and usually doesn’t have any figure in it. Usually at the end of the year I use it to bring my figures into balance and adjust some of my figures.

+++++++++++++++++++++++++++++++++++++

Col F is the Balance at the EOM or End of the Month.

COL F = COL B + C + D + E
Basically you just add up all of the figures to the left of Col F
and that’s the EOM balance

+++++++++++++++++++++++++++++++++++++

Now some of you may be thinking
Come on Tom – pen and paper – calculators
I’m not very good at math – I’ll never be able to make all those calculations.

Well this is where a computer definitely helps out.

I’ve put this budget into an Excel spreadsheet.
It does all the calculations for you.
I’ve posted  an excel budget you can start with below.

blank-budget

+++++++++++++++++++++++++++++++++++++

End of the Year

At the End of the Year – my final December budget
I’ll try to make adjustments if I was off in some of my calculations.

Now let me tell you quickly that initially it’s going to take some work on your part to set this budget up, but once you’ve made the initial entries it’s a breeze to go through.

It is a bit painful to start, but it’s worth it.
Let me close with this:

There’s a TV commercial a man in his mid-30s is counting his blessings: , a big house, a pool in the backyard, a new SUV. He even belongs to the local golf club.
“How do I do it?”, says the man rhetorically.
“I’m in debt up to my eyeballs.”, he responds.
Somebody please help me.

My friends a budget will help you to not only pull you out from financial ruin,
but it will keep you out of trouble in the first place.

Financial Advice – Two Recommendations

I’ve recently found two sources of good financial advice.

1. Dave Domian is part of LPL.com and puts out a weekly newsletter – it’s always very interesting and insightful.
You have to email Dave to subscribe.
david.domian@lpl.com

2. http://www.marketwatch.com/

Even with a degree in finance, I am not a financial expert.
The more advice you can get the better.

Saving Money on Priority Mail

If you look at the two Priority Mail boxes below. which would you choose to use and which is the cheapest?

If you answered #1, you might be right. If you answered #2, you might be right also. It all depends on the weight and where it’s being sent.

I sent a package to Texas today and wanted to use Priority Mail with the USPS. What I discovered is that there are a lot of choices. For a 2 pound package, I could pay anywhere from $7.26 to $15.45. It’s basically the same service so you might as well pay the cheapest rate.

If you look at the above rates for a 2# box, you will see that normal Priority Mail has a rate as low as $7.26 or as high as $15.45. It all depends on which box you put it in. Even though the boxes are virtually identical, when the box has the word “Flat Rate,” then you are charged a set fee for package regardless of the weight or zone.

So the general rule is this,
When it’s light – use regular Priority Mail.
When it’s heavy, use a Flat Rate Priority Mail.

The Post Office does have plain Priority Mail boxes, but they are hard to find at the local post office.  You can order them at USPS.com, but you’ll have to do a bit of searching. If you use your own plain box, make sure you cover it with Priority Mail stickers, so it’s plainly labeled and you’ll get the two day treatment. You can order the labels for free online at USPS.com

USPS.com also has other free boxes online, but they are the Flat Rate Boxes. These are charged a set rate and you could pay $15.45 instead of $7.26.

Three rules for Priorirty Mail.

1. Always have both type of Priority mail boxes at home – they’re free from USPS.com and will deliver them to your home.

2. Weigh you package.

3. Go to USPS.com and see which rate is cheaper. It just takes a couple of minutes, but will save you money every time you use Priority Mail.

Note – you can even schedule a pickup of your Priority Mail package online if you print your own postage.

One Key for All Your Homes Locks

I just installed a new door lock and this process works great. If you’ve like to get back to one key for all your doors give this a try. Once you get this type of lock in all your doors, you can change the lock for all locks in just a few minutes.

SMART KEY PROBLEMS AND A SOLUTION

I was so happy with the Smart Key on one door I decided to buy another door lock for a different door. Installation went fine, but when I did the Smart Key setup, I somehow messed it up. Now neither key would work. I called Kwikset and got a solution – here’s what I did.

1. Lock the lock. Put in the key that should be working. Hold the lock with one hand and with the other slowly turn it back and forth and slowly pull it out. When the lock turns, put in your Smart Key, then push the key in the entire way.
2. Now turn the key back to the starting position and pull it out.
3. It fixed!

Southwest Airline Prices

SEPT 18 – I thought I would track airline ticket prices for a while to see if there is any pattern. I’m using Southwest airlines as that’s the one I usually take. I just recently paid $160 (one-way) for a ticket, but now the price has jumped to $233. This is starting on Sunday – Sept. 18th – around five months before we need to travel. I also signed up for email alerts and alerts on my iTouch to see if that my help also.

According to the WSJ, the best times to look for sales are on Tuesday or Wednesdays. I’ve also read that the best prices come about eight weeks before you have to leave. This calendar starts Sept. 18

OCT 18 – Prices have finally gone down temporarily (72 hours) to $125 one way, but it’s only good through February 15th.

Oct. 25 – Prices went down to $125 for my date at certain times.

S	M	T	W	T	F	S
233		139-179	179	179	179	179
179	179	179	179	179	179	Oct 1-179
179	179	179	179	179	179	179
179	179	179	179	179	179	179
179	179	179	179	179	184	184
184	125

$400 Tax Credit per Person – Schedule M

I’ve got good news and I’ve got bad news.

The good news: many tax payers can claim a $400/person or $800/couple tax credit.

The bad news: you have to fill out another tax form – Schedule M.

TaxGirl.com has some good articles on the subject. It’s a bit confusing.

This is one good reason to have a career in tax accounting – you’ll always have a job.

Saving Money on Prescriptions

AARP recently had an interesting article on the disparity in drug prices from one store to the next. In one case a generic form of Zocor 80 mg costs $7.71 at Costco, $24.36 at Walmart and $89.99 at Walgreens. I’ve also found that with some generics you can get a 90 days supply at Walmart for $10. It’s probably worth you while to take five minutes and do a little shopping around to see where you can get the best deal.

744 FREE Magazines

Once a week I electronically pick and choose certain magazines from our local library. What I didn’t realize is that they have 744 magazines to choose from. After a bit of searching I found a listing which shows all the magazine available in the St. Louis County library system. All you have to do is reserve them online nd pick them up at your nearest library. This is the best deal in town. Here’s the list.

Save Money with CR Videos

Consumer Reports has some great videos on some of the products they’ve tested.

It will save you quite a bit of money and help you with your buying habits.

For instance – should you buy the $3.50 Sham Wow or the 25 cent sponge?

Here’s the link (click here)

HVAC – What I’ve Learned from 12 Appointments

Rule #1 – Never just get one opinion or bid. I dealt with twelve HVAC contractors.
Everyone has a different opinion about what you need and none of the twelve contractors agreed on exactly what I needed. What you’ll also discover is that you can learn something from each person.
Get 12 ideas from 12 people – put them all together and you’ll start to get a good overall idea of what you need. (You probably don’t need twelve like I did, but I had some problems I wanted to correct and not everyone agrees on the best solution.)

Some dealers don’t tell you about the company rebates. I have one Lennox company that was going to give me $1000 in rebates from Lennox and the union, another Lennox dealer doesn’t even mention the rebates.

My range of quotes have gone from $5400 for a basic SEER=14 system, to $10,000 for a SEER=16. (this is the guy who is keeping the rebates)

You need air movement not only coming into the room, but also leaving the room. Ideally if you have a 6″ supply coming in, you should have a 6″ supply going out. One dealer tried to get me to install one air return duct in the hall. When I asked him,What happens when I close the door?” he answered,” oh, there’s a small space under the door that the air can get through – WRONG!

If you have a 2nd floor room that gets hot, you can either add another register to the room or change the size from 6 inch to 8 inches. An 8″ duct is approximately equal to two 6″ ducts.

Trane.com website – has incorrect information about the $1500 tax credit, they don’t list a phone number and when you do finally find a phone number with Google, no one is there and the phone messaging system isn’t working. Also their contact web form doesn’t appear to be working.

Attic Tips – While you can put a 90+ AFUE furnace in the attic, it creates water condensation which has to go somewhere. My next door neighbor had water pouring out of her attic this winter and it turns out that her condensation pipe had frozen and the water had no where to go

SAFEPAN – Attic Installation
While all the dealers said they were going to install a safepan to catch water and condensation, the picture above shows a poor installation done on my neighbors home. Instead of putting the safepan on a piece of plywood, they just supported it in spots with 2x4s and it ended up in an “S” figure.  Then if the Float switch is located near the top of the “S” the water can overflow near the bottom and you’ll have water in your ceiling.

TAX CREDIT INFO (link to gov. site)
To get the $1500 Tax Credit, you’ll need to buy a variable speed furnace which costs $1000 more than the regular furnace. Then you’ll have to buy a more expensive air conditioner. The $1500 tax credit definitely will cost you $1500 extra in the cost of the unit.

Also many companies still don’t list which units qualify for the tax credit. Many times you have to buy specific combinations of units – condenser, coil and furnace.

While you don’t have to send in any paperwork to prove your tax deduction, you do need to have your receipts and documentation to prove your credit if you’re audited.

Conclusion – I finally bought the 14 Seer AC and 80% AFUE 2 stage furnace. I saved about $1100 over the more efficient 16 SEER units and even though I missed out on the tax credits this year, I plan on getting them next year when I redo the downstairs units.

I ended up using Total Comfort Heating Heating and Air Conditioning, not only for my attic installation, but also for my first floor installation in 2010.  They have a BBB rating of A+ and were great to work with. 314-99-2665. Ken Ross was great to work with.