Friday Financial Five–August 23rd, 2013

Friday, August 23, 2013

Dan Forbes, GoLocalProv Financial Expert

 

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Tax credits and the RI health care exchange

The plans and rates are now available at HealthSource RI and it’s time to start investigating options. There are a host of different plans for individuals, families, and employers to choose from. Premiums, as always, are affected by deductibles and co-pays, but a primary concern for insureds might be qualifying for tax credits. For individuals, go to the calculator to obtain an estimate using 2014 information. For employers to qualify for tax credits, all employees must be covered, the company must pay at least half the cost, and the average annual full time employee wages for the company must be below $50,000. Does that put some high paying small business jobs on the line?

The limiting of Federal interference

Wednesday marked the official beginning of the end for massive Federal bond buying, as the sentiment that the economy needs to be taken of central bank training wheels is beginning to take hold. While there was no specificity in when the tapering will begin, the general sentiment from the meeting is that the economy is strengthening to the point where massive bond buying isn’t necessary. Upon determining a (hopefully) smooth exit strategy, the Federal Reserve can turn its attention to finding Ben Bernanke’s successor in January, largely believed to be either Janet Yellen or Larry Summers.

Rhode Island Schedule M deductions

On the back of last week’s 529 deduction on Schedule M of the RI state income tax form, there are others that are interesting while also subject to recapture. There’s the qualifying investment in a venture capital partnership. This is also the section where modifications for the Musical & Theatrical Tax Credit, the Motion Picture Production Tax Credit, and the Historic Tax Credit are taken. Finally, and most randomly, are Scituate residents, who can deduct contributions to a Scituate Medical Savings Account.

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Renters and buyers

A recent report by Realtor Magazine says ninety percent of renters surveyed would like to buy but almost half of them don’t think they would be financially able to for another five years. So, the market is at a strange place with rents going up in many places thanks to recent foreclosure displacements and tax increases, but also showing an accompanying appreciation in purchase prices. Rising interest rates have slowed refinancing activity, but buying activity remains on the uptick. Basically, the cost of housing is going up regardless of what you choose to do.

Advisors in the news for the wrong reasons

It’s disappointing whenever a story arises about members of the financial profession abusing client relationships, but some recent ones really take the cake. In New Jersey, a man was convicted of stealing over $1 million dollars from clients. These weren’t just any clients – they were his parents. In Arizona, a high profile advisor stole over $100,000 from a charity. These prominent cases highlight the need for government watchdogs and financial associations to finally come together. Set the highest bar for financial advisors as it pertains to ethics and fiduciary responsibility.

 

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].

 

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