The Best Way to Use a Donor Advised Fund
Speaking of donating appreciated shares to charities, I read a great article by Nickel at FiveCentNickel.com about using a donor advised fund as an alternative to donating shares directly to each individual charity.
Donor Advised Fund In a Nutshell
A donor advised fund lets you do time-shifting. You donate and take the tax deduction now. Then you take your sweet time to distribute the money to charities. It can be next year, or it can be years down the road. Before the money is distributed to charities, you invest the money among some mutual fund pools offered by the donor advised fund, similarly to how you invest in a 401k or 529 plan with a menu of options.
Blog Economics: A Look From Inside
Although I have been blogging for four years, I didn’t write much about the economics of blogging. As I prepare to close the books for this year, I thought some of you may be interested in a look from inside. If you read blogs, you should know what’s happening on the other side. Then you will understand why bloggers do what they do. If you never thought about it much, some of these may be a surprise.
I’m by no means a professional blogger. I have a very busy full time job. I blog as a hobby. Helping others blog is itself a cottage industry, complete with blogs (of course!), peer discussion forums, all kinds of tools and services, books, gurus, consultants, and even conferences. For the most part, I haven’t paid much attention to the trade although I’m fully aware of their existence. The real pros will probably tell me I’m doing it all wrong.
Like a small magazine
Free E-Book: Unveiling the Retirement Myth by Jim Otar
Jim Otar is a financial planner in Canada. He wrote a book Unveiling the Retirement Myth on retirement income planning: how to make your retirement portfolio last as long as you do when you are living off your savings and investments in retirement.
The book has received all five-star reviews on Amazon. People on the Bogleheads and Early Retirement forums also liked it.
How To Donate Or Gift Shares to Charity Or Family Member
You probably heard donating appreciated stocks or mutual fund shares to a charity is more cost effective than donating cash. The charity gets the shares. You get a tax deduction for the full value (if you itemize) and you avoid paying capital gains tax.
My previous article about 0% long term capital gains tax rate also mentioned gifting appreciated shares to a family member in a low tax bracket, who can then sell and pay no capital gains tax.
But how do you donate or gift shares, exactly?
Three Tax Cuts That Are Not Extended
Although the Bush tax cuts were extended for another two years, some tax incentives were not extended because they weren’t part of the Bush tax cuts. They fall into the one-time stimulus category.
Residential Energy Tax Credit
The Residential Energy Property Credit provides a 30% tax credit of up to $1,500 over a two-year period (2009 and 2010) if you make energy efficiency improvements to your home. These include insulation, exterior windows, heating, and air conditioning. The improvement must be placed into service by December 31, 2010.
Now I Know What Money Makeover Stories Are About
I got this spam several times from a PR guy for financial advisors. Now I know what the money makeover stories in newspapers, magazines and on TV are all about.
This Financial Advisor Marketing strategy is all about using makeovers to generate more new business for you.
I’m sure you have seen all of the different types of makeover shows on television. There are specific times of the year when you should pitch the makeover story to your local media: the month of January (just after New Year’s Eve), spring time, just before summer, at the beginning of fall, and of course, the holiday time. If you can do a financial makeover of some kind, you’re are guaranteed to have success!
Backdoor Roth: A Complete How-To
Although I believe a traditional deductible IRA is often better than a Roth IRA, a Roth IRA is still better than a taxable account if you aren’t eligible for a traditional deductible IRA. When you aren’t allowed to contribute to a Roth IRA because your income is too high, there’s still a backdoor.
It takes some effort but it’s worth it. I did the prep work last year and I was able to use the Backdoor Roth. Although I wrote about it in Rollover IRA to Solo 401k last year, I see many still don’t know how to work the backdoor.
So here it goes: a complete how-to for the Backdoor Roth. » Read more …
2010 and 2011 AMT Tax Brackets
AMT is Alternative Minimum Tax. The Bush tax cut extension law officially known as the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (H.R. 4853) includes an AMT patch for 2010 and 2011. Congress used to patch AMT one year at a time. This time they did two years in one shot. That’s a 100% improvement!
I’m updating my AMT tax brackets table with the new patches. These tax brackets apply when you pay AMT. The rates are marginal rates, i.e. the rate you pay on your last or next dollar of income. The numbers in the first two columns are Alternative Minimum Taxable Income. For most people, it’s AGI minus deductions allowed under AMT (mortgage interest and charity donations). It’s before the AMT exemption.
2010 » Read more …
0% Capital Gains Tax Rate for 2011 and 2012
Linda Stern of Reuters wrote about some of the less well known tax breaks in the proposed tax cut extension legislation before Congress.
She linked to an analysis of the Senate bill by the Joint Committee on Taxation.
Book Review: Can I Retire? by Mike Piper
I forget how I got to know Mike Piper. Maybe from his comments on or links to my blog? Maybe from his posts to the Bogleheads investment forum? Mike is the blogger at Oblivious Investor. He writes a "100 pages or less" series of books that aim to make things easy to understand. His latest book, Can I Retire?, is about retirement planning and investing during retirement.
[Links to Amazon.com are affiliate links. Amazon pays me 4% - 6.5% if you make a purchase within 24 hours.]
In the interest of full disclosure, I must say I consider Mike Piper a friend. Although we haven’t met or spoken in person, we’ve exchanged emails. When I wrote my book Explore TIPS, Mike helped review the draft. In Can I Retire?, Mike included my book in the list of suggestions for further reading among books by other well known authors. He also frequently links to and re-tweets my blog posts.
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