JoeTaxpayer

We’ll start this week with Hank Coleman’s article at Money Q&A, Ten Ways To Break Your Texting While Driving Habit. Not strictly a finance discussion, Hank’s public service announce may save you from an untimely death. As much as I like to offer advice on will, trusts, and estate planning, I think avoiding death is probably a great start. Read Hank’s list, and let him know Joe sent you.

At Money Momba, JT McGee explained How David Einhorn’s Apple Preferred Stock Proposal Works. If you are an Apple stockholder, you may be aware of the news. David Einhorn is suing Apple as they were planning to eliminate the ability to issue preferred stock without a shareholder vote. Einhorn sees the potential for “unlocking value” in Apple via preferred shares. Apple had traded as high as $705 this past September, but recently dropped to $440. I’d suggest the current fair price is smewhere in between these two extremes.

At Bargaineering, Jim Wang asks for Your Take: The End of Saturday USPS Mail Delivery. This week the Post Office announced the end of an era. As of August 1st, no more Saturday mail. It would seem email, texting, IMing, etc, have caught us with the post office.

The Chicago Financial Planner offered 4 Signs of a Lousy 401(k) Plan.  If your plan is guilty of any of these symptoms, you may want to think about how much your depositing to your 401(k) and consider alternate investment accounts.

20 Something Finance wrote Your Guide to a Less Painful 2012 Tax Return. Tax time is right around the corner, and this year, it need not be painful.

And last, I’d like to share an article I wrote for H&R Block – 5 Things Parents Need to Know About Filing a Tax Return. If you are a parent or soon to be one, check it out and leave a comment there, if you’d like.

About Nemo – That was the name of the snowstorm that just hit the northeast. Records were broken in some cities, and the picture above is the impassable back door to my garage. This wasn’t the most snow I’ve seen, but the powder set us up for some amazing drifts, 7-8 feet in some spots.

U.S. Attorney General Eric Holder brought forward a lawsuit against S&P this week. The same S&P whose name is licensed for its stock index is also a rating agency. In theory, they are supposed to produce a rating that reflects the risk of a given bond defaulting. In reality, they were complicit in promoting a fraud by issuing ratings that were beyond reason, and they are now accused of issuing ratings they themselves, didn’t believe.

A few weeks ago, I talked about the end of estate planning. It might have been a bit of an over-reaction to the news that the estate exemption was made a permanent, inflation-adjusted figure of $5.25M for 2013. Perhaps I was jumping to conclusions as there are a number of reasons one may want a trust. More important, you may have done some advanced planning years ago when the $1M exemption wasn’t enough to keep your estate (death) tax free.

You may have discovered, however, that income retained within that trust is taxed at some pretty crazy rates;

This, as compared to a single filer that would not hit 28% until a taxable $85,650 or married couple filing jointly at $142,700. Fortunately, in 2013, there is still a long term capital gain rate, albeit a higher one,  20%, plus 3.8% if the trust is in the top bracket. Nearly 24% when the trust beneficiary may very well be in the 15% bracket.

How to navigate this? First, you need to consider whether the trust should retain all of its earnings or if the beneficiary is responsible enough to get this small distribution. In 2013, a child subject to the ‘kiddie tax’ can receive up to $1000 in unearned income and pay no tax. Additionally, the next $1000 is taxed at the child’s rate, likely 10%. If the trust assets are loaded with CDs earning interest, this may be tough, as interest is all taxed at the ordinary rate. Invested in the right mix of low dividend stocks would keep the need to distribute any income to a minimum.

Even with the generous estate tax rules currently in place, a trust can help your heirs avoid probate, and in case you have a child whom you fear would blow his inheritance on a weekend in Vegas, the trust can be used to provide an annual stream of income instead of a lump sum windfall.

First, it’s not the same when the home team, in my case, the Patriots, aren’t in the game. I don’t have any emotional interest in the outcome, but still, I watch. Not for the football, but for the commercials. 1984. It was the Washington Redskins and the LA Raiders. I’ll admit, I didn’t remember this, I Googled it. What I do remember is the Apple commercial. When you can remember a commercial nearly thirty years later, you know they did something right.

At The Finance Buff, my friend Harry Sit described Debit Card Discounts vs Credit Card Rewards. An interesting analysis for those who want to squeeze every last cent out their potential card rewards.

At Monevator, the Investor offers Congratulations if you stayed the course with shares. He’s warned not to get frightened out of the market and time has proven that to be sage advice.

At Money Infant, the question is Are You Frugal or Just Plain Cheap? Something to ponder if your goal is to be be frugal, but sometimes get to close to crossing that line.

Mike Piper at The Oblivious Investor answers the ago old question – What to Do with a Lump Sum? An insightful article with a link to a Vanguard study from last year.

And, in case you missed it, I recently authored my first guest post at Blocktalk, the H&R Block Blog. How to Change Your W-4 Withholdings to Maximize Your Tax Refund. Most people treat their W-4 as a “set it and forget it.” If your refund or your tax due in April is too high, check out the article and get to know your W-4 again.