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Tax Cut Extension: What’s In It For You?

December 23, 2010 by Jon

Tax Cut ExtensionCongress finally put off the inevitable last week and passed the tax cut extension we’ve all been waiting for since the beginning of the year.  If you’re not sure how you benefit from the extension, we’ll break it down for you.

Tax Rates

With the signing of the tax cut extension, all income tax rates will remain the same for two more years.  So we won’t see the possibility of  rates going higher until after 2012.  It’s not really a benefit over this year but if the tax cut extension hadn’t passed we would all be paying more taxes next year and beyond.

The tax rate on long-term capital gains and qualified dividends will also remain the same for the next two years.  The tax rate for both will max out at 15% through 2012.  If you’re in one of  the two lowest tax brackets (10% or 15%) you will have a 0% capital gains rate.  You have until the end of the year to rebalance your portfolio to take advantage of these tax rates for the year. Continue Reading…

What Is This Santa Claus Rally?

December 16, 2010 by Jon

Santa Claus RallyThe holidays are upon us once again and Wall Street is waiting to see if Santa will spread a little holiday cheer on the stock market at the end this year.  Like the Christmas shopping season the term “Santa Claus Rally”, seems to be used earlier every year.  Any slight change in the stock market from November to December and a race ensues to see who can use the “Santa Claus Rally” term first.

The media, as usual, tends to jump the gun on the Santa Claus Rally.  The stock market has many seasonal market indicators.  They tend to be very specific time periods and most are backed by significant historical data. Continue Reading…

Should You Convert Your Traditional IRA to a Roth IRA Before Year End?

December 9, 2010 by Jon

IRA ConversionThe 2010 Roth IRA conversion deadline is approaching quickly.  If you haven’t heard, the previous income limit ($100,000) for converting a traditional IRA to a Roth IRA was lifted all the way back in January.  With 2011 approaching, it’s always a good idea to check your finances and make any beneficial changes before the new tax year begins.

2010 Roth IRA Conversion Overview

Back in January a new rule allowed for anyone, regardless of income, to convert an existing traditional IRA or old 401(k) to a Roth IRA.  Of course it’s not that simple.  If you do decide to make the Roth IRA conversion, you have to pay taxes on the converted amount at your current income tax rate.  For the 2010 year only, you can choose to make that full tax payment in 2010, or you can choose to split the income tax payment in 2011 and 2012.  If you choose to split the tax payment between 2011 and 2012, half will be taxed at your 2011 income tax rate, half at your 2012 income tax rate. Continue Reading…

FDIC, NCUA? What Is This Alphabet Soup?

December 2, 2010 by Jon

FDICIn a world of online banking, ATMs, direct deposit, debit cards, we don’t have to go the brick and mortar bank as often as we used to.  Before the internet age there used to be a time where people had to go to the bank rather often and in doing so would see the alphabet soup splashed on every door and drive through teller window.

A quick check of the top ten largest banks websites and only two had the “Member FDIC” icon on the home page and both of those were at the bottom.  Why the other eight banks fail to use it, who knows?  You would think after this economic downturn, with banks still closing, using a symbol of security would be given a higher priority.  Not to worry though, the other eight banks are also covered by the FDIC, you just have to go several pages in and find the small print.  It’s there, somewhere, trust me. Continue Reading…

2011 IRA Contribution And Income Limits

November 11, 2010 by Jon

If you’re looking to contribute to a new or existing Roth IRA or traditional IRA in 2011, we have the information to let you plan ahead.  There are some slight changes to the income limits from the 2010 limits, but not the contribution limits.

2011 Maximum Contribution Limits

The 2011 Roth IRA and traditional IRA contribution limits will be the same as in 2010.  What that allows is a maximum $5,000 contribution for both the Roth IRA and the traditional IRA.  If you are 50 years old or older you have the opportunity to make an additional “catch up” contribution of $1,000 (a total of $6,000 max. contribution).  The “catch up” contribution is available for both the Roth IRA and traditional IRA.

While the maximum contribution hasn’t changed, there are some slight changes to the income limits that phase out the allowable contributions or deductions.  All income limits will be based on your modified adjusted gross income or MAGI.

Continue Reading…

How Will The Elections Affect Your Money

November 3, 2010 by Jon

Elections“MidTerm Election Effect”

Personally I think the mute button was invented as a sole response to political commercials.  But all that is finally over with as of Tuesday’s elections.  Regardless of your political leanings midterm elections can have a major impact on your money.  As far as the stock market is concerned, elections provide an immediate clarity, good or bad, of what to expect from the government for the next two years. Continue Reading…

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