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Mar 17, 2015

529 college savings plan basics

When considering a 529 plan, the first thing you need to know is that these plans come in two flavors: “prepaid college tuition plans” and “college savings plans.” But a perk of both plan types is that they are open to anyone, regardless of income — unlike, say, a Coverdell Education Savings Account (CESA), which excludes joint filers with adjusted gross incomes (AGIs) above $220,000 and single filers with AGIs above $110,000. You can also put much more money into a 529 plan. For example, Alabama’s Higher Education 529 Plan allows a maximum contribution of $300,000 that can then grow tax-free. In contrast, annual contributions to CESAs are limited to only $2,000.

529 account beneficiaries can usually be changed without any income-tax consequences as long as the new beneficiary is family (including a cousin) to the former beneficiary.

But before you plunk down your contribution, there are still tax issues to consider. For starters, while future withdrawals will be federally tax free, you might owe gift tax if you contribute more than $14,000 annually. That’s because anything you contribute over that amount reduces your $5.43 million (for 2015) federal gift exemption. Keep in mind, however, that both you and your spouse can each make $14,000 contributions in a given year. In fact, if you’ve got the cash on hand, you could even make five years’ worth of contributions upfront, provided that you don’t make any other cash gifts to that beneficiary over the next five years. That means you and your spouse could join forces to contribute up to $140,000 in one fell swoop without negative gift-tax consequences (5 x $14,000 x 2 = $140,000). Grandparents can get in on the act too, which can be especially strategic if they’re looking to reduce their estate-tax liability.

Finally, unlike UGMA and UTMA (custodial accounts set up for minors), 529 plan contributions are not irrevocable. If Junior decides to become a circus acrobat rather than go to college, with a 529 plan you can simply change the beneficiary of the account to someone else in your family who is actually going to go to college. With an UGMA or UTMA, on the other hand, once Junior is legally viewed as an adult by your state, he could take the money and start his own circus.

Finding the right plan

The first step in finding the right plan is to decide between a prepaid and college savings plan. We lean strongly toward college savings plans, which offer you much more flexibility — both in terms of investments and how you spend your money.

The next step is careful research, but fortunately, you have an excellent crib sheet: will give you the lowdown on each state’s plan, including maximum contributions, eligibility requirements, performance information and contact information. It’s an invaluable resource for finding what you need.

Here are some other things to consider:

Do you want a financial adviser?

Just like in the mutual-fund world, you have two routes to choose from when considering 529 plans. You can either go it alone or pay a commission to an adviser. With solid no-commission programs offered by fund families like T. Rowe Price (which works with Alaska) and Fidelity (which works with Delaware, New Hampshire and Massachusetts), selecting a plan on your own might not be too hard. Like a mutual fund, should you go the broker/financial adviser route, you’ll have a few ways to spread out the costs. For example, you may be able to pay, say, a 3.5% commission upfront or when you cash in your shares.

How good are the investments?

This is perhaps the most important decision since no matter what plan you pick, your choices are going to be very limited. Many plans gear investment choices based on the age of your child, but that doesn’t mean that they will match your tolerance for risk. Some plans may be too aggressive or too conservative for you. So be sure to look at the fund’s historical returns and volatility.

How flexible is the plan?

Before you sign up, make sure you understand all the ins and outs of the plan. Find out if there are time limits on when the account must be used. Also, know how much you can contribute to the plan and check to see what expenses the account can cover.

Review the fees

Be sure to check the enrollment fee as well as any annual fees. Obviously, the more you pay in fees, the less you’ll have in your college stash.

Jan 26, 2015

8 Common Misconceptions About 529 Plans

As far as financial investments go, a 529 college cost savings strategy is not especially complexed. It's just a car that permits households to conserve for college expenses with tax-deferred revenues development and tax-free circulations. In addition, lots of states provide a tax break for citizens adding to their strategies.

The policies about acquiring a strategy and making use of the cash can be challenging to comprehend, and there are various points of confusion about how 529 strategies work. Right here are a few of the most usual mistaken beliefs:

1. You are restricted to your house state's strategy. Since states administer the 529 strategies, numerous moms and dads and grandparents incorrectly think they are restricted to those provided by their state of home. A purchaser can pick any state's strategy, however it's finest to very first see whether your state provides any tax advantage or cost decrease for homeowners.

James Dowd, handling director at North Capital, a San Francisco-based advisory company, states confusion about a house state requirement prevails. "Most of our customers are in California, and California does not provide that reduction, yet the majority of people purchase the California state strategy," Dowd states. "Quite honestly, it's not one of the much better strategies that's out there, so we typically discover there's a chance to obtain a much better alternative for customers in getting them from the state strategy where they're invested.".

2. Your annual contribution limitations are the exact same as in your individual retirement account. Overall 529 strategy contribution limitations are set by the states and can be as high as $380,000. To stay clear of present tax effects, federal law permits single taxpayers to contribute up to $14,000 in one year or make a lump-sum contribution of $70,000 to cover 5 years. Couples could contribute as much as $28,000 annually or $140,000 as a swelling amount.

"It's not restricted to $5,500 if you're under 50 like it is with an IRA," states Lindsey James, handling partner at Houston's LJK Financial. "We discuss this a lot with our higher-net-worth customers. It can be something actually helpful for grandparents. The couple, together, can put in $28,000 for one grandchild, $28,000 for another, so it can be a method to obtain some cash from your estate.".

3. Your earnings is expensive to add to a 529 strategy. In this case, some investors puzzle a 529 strategy with a Coverdell Education Savings Account, which is readily available to individuals with earnings below $110,000 for songs or $220,000 for those wed filing collectively. "A great deal of times, we'll get customers who state they're not qualified since they make too much cash," Dowd states. Since 529 strategies have no earnings limitations for owners, even high earners can contribute and get offered tax breaks.

4. The account should be held in your kid's name. "Usually it's finest to have the account with the moms and dad shown as the owner or the trustee with the kid as recipient. Individuals get puzzled about that on a regular basis. They're uncertain about the distinction," states David McPherson, creator of Four Ponds Financial Planning LLC, based in Falmouth, Massachusetts.

With a 529 strategy, the contributor, not the recipient, is in charge. That suggests a kid who's a recipient does not call the shots when she or he ends up being of legal age (normally age 18) and want to invest the cash on something aside from college. When customers comprehend the benefactor is in control, that showcase "has the tendency to be something individuals like," James states. "That's special, instead of a custodial account.".

5. You'll lose the cash if your youngster does not go to college or gets a scholarship. If, for whatever factor, a recipient does not utilize the cash in the 529 strategy, the properties can be moved to another recipient. That typically suggests another kid in the very same household gets the funds, however the recipient can likewise be another relative, such as a niece or nephew. A contributor planning to return to school can even alter the recipient to himself or herself.

"A 529 strategy is really versatile, however individuals do not appear to recognize that," McPherson states. "I constantly highlight the capability to move it around in between various relative.".

6. The cash can just be utilized at a four-year college or university. Funds from a 529 strategy can be used towards lots of postsecondary education programs, not simply conventional colleges. "Even if the youngster does not wind up going to college, they might wind up going to trade school or some sort of expert program where the funds can be made use of," Dowd states.

7. A 529 strategy recipient have to be below a specific age. This is another circumstances where individuals could be puzzling a 529 strategy with a Coverdell, which needs the account to be developed prior to the recipient turns 18 and the balance to be invested by age 30. A 529 strategy, nevertheless, can be opened for a recipient of any age, and the funds can be dispersed despite how old the recipient is when she or he goes to college or graduate school.

Even if a youngster is approaching college age, it's typically worth opening a 529 account, Dowd states. "There's an advantage to nearly any person, as long as there are a couple of years left up until your youngster is in college or up until they finish college," he states.

8. It's unworthy purchasing a 529 strategy due to the fact that it will certainly harm your youngster's possibility of getting financial assistance. The policies about financial assistance can be complexed, and they vary by state and by college. While 529 strategies, in many cases, do element into the financial assistance computation, McPherson states the advantages typically surpass the disadvantages.

"I state put the cash in the 529, due to the fact that you're going to require it one method or the other. Even if you get financial assistance, it's very tight, so exactly what you might be granted is most likely still going to leave you far short of exactly what you require for college," he states.

Jul 17, 2014

Important Considerations and Features For Students Leasing a Business Car

BMW i3 Side On Closed Doors Car Leasing Made S...
 (Photo credit: Carleasingmadesimpletm)
Hiring a car for business purposes offers some notable benefits, though the overall competitiveness of the arrangement is dependent upon more than these benefits alone since there are a number of important features that business owners need to understand and look out for when leasing a car.

Why Lease Rather Than Buy?

For business owners, leasing has long been more advantageous than buying because most car leasing expenses are tax deductible, there’s minimal financial outlay involved, road taxes are usually included, and leasing rates are usually much lower than repayments.

There are, however, a few drawbacks to car leasing contracts including the capped mileage limit most car leasing agencies apply to their leasing contracts and the fact that the business won’t have accumulated an asset by the end of the leasing contract.

At the end of the day, leasing is a better option for business owners, though they’re advised to confer with their accountant to ensure leasing will prove more advantageous in the long run than buying a business car outright.

Which Car to Lease?

Business owners shouldn’t get carried away when leasing a car just because they’re presented with the opportunity to get about in a car they couldn’t ordinarily afford but rather select a vehicle that’s suited to their business needs, though having said that, in business circles it’s important to put one’s best foot forward and getting about in a nice car conveys the impression of professionalism and prosperity.

However, efficiency should be a high priority, and not only because of the savings afforded to businesses with regard to fuel consumption, but also because higher emission vehicles are hit with rising taxes as was announced in the last budget.

“By choosing more efficient vehicles, the tax savings and environmental benefits to the business will be considerable,” says Matt Dyer, LeasePlan’s commercial director.

Important Car Leasing Contract Features

Leasing a business car is actually very straightforward but it isn’t something to should rush into because there’s quite a lot to take into consideration.

Once you’ve decided upon a make and model that’s most suitable for your business needs you can start sourcing car leasing agencies to shortlist by comparing the deals they have to offer.

The length of time you wish to lease a car is an important consideration because you’ll be entering into a binding contract and you need to lease a car for the length of time you deem suitable for your business needs.

Most car leasing agencies offer contracts of 12, 24, 36, or 48 months, so make sure you can lease a car for the length of time that best fits in with your business plans.

Mileage caps are another important contractual feature that you’ll need to take into consideration when sourcing a suitable leasing contract.

Most agencies offer similar mileage caps, though if you feel as though you’ll exceed the mileage cap – when you exceed the mileage cap you’ll pay a fixed fee per mile – you need to source a leasing agency that provides higher mileage contracts; however, you also need to bear in mind that higher mileage contracts equate to higher monthly payments.

Additionally, discuss the possibility of extending the mileage cap if needed as some leasing agencies will allow you to increase the mileage if it appears as though you’ll need to exceed it, though be sure to discuss this prior, not after, entering into a business car leasing contract.

Vehicle options, for instance Satnav and digital air conditioning, are something else to look into further and you should also discuss your branding options if you plan on emblazoning your leased car with a car body wrap – car wraps are an excellent marketing method that garners plenty of exposure – to increase awareness of your business brand when you get about town.

Gap insurance is another important contractual consideration to check before signing on the dotted line, as are acquisition and disposition fees, and don’t forget to enquire about purchase options and the fees applied in case you decide to buy.

Car leasing is, generally speaking, a much better option than buying a car for business purposes but you need to know what to look for in a business car leasing contract.

About the Author:

Ruby Shultz is a writer for a company with a car search facility that is one of the most advanced in the market. Leasing Options is a specialist catering to those looking for a reliable personal car lease.

Jul 1, 2014

How Some Students are Paying Less for Car Insurance

Like it or not, young people usually end up paying more for coverage than more mature drivers. Even so, there are a few perfectly acceptable strategies that young adults can employ to bring down their premiumsespecially if they are students. But before we get into the discounts that are available to students, it’s worth taking a look at how insurers calculate risk. Generally, they take the following factors into account:

·         Type of car
·         Marital status
·         Occupation
·         Driving record
·         Place of residence
·         Credit rating
·         Gender
·         Age

The latter is the most obvious strike against students. Statistics show that young (i.e. inexperienced) drivers are much more likely to be involved in an accident than their more mature counterparts. However, many of the other variables on the list apply as well. For example, students haven’t spent as much time generating a paper trail in their adult lives, and that means that they aren’t going to have, for example, as clear or strong a credit rating or driving record. Likewise, students have yet to establish an occupation or—in most cases—tie the knot.

So why do factors like this matter? For starters, the variables listed above can tell us a lot about how (and how much) you’re going to drive your car. A person who owns a sports car probably bought that car—at least in part—because they intend to do some fast driving. Faster driving equals higher risk, plain and simple. In this case, it’s better to own up to the situation and purchase performance car insurance, which is tailor-made for vehicles like this.

Likewise, policyholders that are married and have children are statistically inclined to drive more carefully. Those that work far from home are going to spend more time on the road on their daily commute; and the more time you spend in traffic, the more likely you are to be involved in an accident—regardless of how careful you are. Got a good credit score? That probably means that you err on the side of responsibility. In such a way, insurers can paint a portrait of us in probabilities without ever having met us.

Of course, it would be wonderful if ever insurer were able to get to know their customers on a personal level. But as that’s not even a remote possibility, we’ll have to settle for the statistical equivalent. 

How Can Students Lower their Premiums?

Fortunately, it’s not all doom and gloom for university students. In fact, there are several ways that a young person who is focused on studying can bring down their premiums. Here are a few ideas to get you started:

ü Ask for a good student discount.

While students may not have much in the way of a history to demonstrate their responsibility, they do have a constantly updated academic record that hints at the kind of person they are. Insurers know that students who get good grades are less likely to take unnecessary risks. Again, we’re talking about statistical likelihoods here. It’s nothing personal, but better grades mean you’re probably a better driver.

ü Get added to your parent’s policy.

This is only an option if you are not the primary driver for the vehicle in question. Being added to your parent’s policy can result in a discount, because the assumption is that the primary driver will spend more time behind wheel. But be careful with this one. The act of fronting, or naming a lower-risk person as the primary driver when this is not the case, is illegal. If found out, it can void the existing policy, put the driver at risk for driving without coverage and lead to major points on the license.  It’s not worth the risk.

ü Look into telematics.

Some insurers will equip your car with a sort of ‘black box’ that measures the way you drive and reports back to headquarters. When there’s not much data about your personal habits for insurers to review, this is a practical way to prove what kind of driver you are. Over time, your premiums will adjust based on driving habits (propensity for speeding, etc.) as well as for how much time you spend driving in general.

Jun 20, 2014

Studying, Working and Short on Cash? Four Considerations before Borrowing

Budgeting (Photo credit: 401(K) 2013)

As a student you undoubtedly have a lot on your plate in addition to your studies and trying to make sense of your career choices and it’s probably safe to say that from time to time money is, like water in a drought, a scarce resource.

Going without cash and surviving off cup noodles is one way to weather a cash-strapped period, at least for a few days, but what about when you’re looking at a period of a week or more and there are no more noodles?

This is a situation many of us have been through in the past, with most surviving – albeit a few pounds lighter and looking considerably trimmer – to tell the tale.

Stressing about money?

Stressing about money and where it’s going to come from next isn’t something students want to deal with, plus it’s hard to focus on your studies when your stomach’s grumbling and rumbling like an antiquated tractor and you’re living in fear of that knock on your door from your landlord; however, there are options at your disposal.

Could a payday loan be the answer?

Applying for a payday loan is an option if you have an income from a part-time job – provided you can prove your income – but as with all loans and borrowing in general, it isn’t something you should rush into no matter how sure you are that you can comfortably make repayments.

Many students have found themselves in deep water because they’ve been too quick to apply for payday loans, not to mention those who’ve applied for loansto fund fun nights out, however there’s no need for you to find yourself in such a predicament provided you understand what you’re doing.

  1. Create a budget before borrowing
If you plan on applying for a payday loan to get you through a tight financial period it’s advisable to create a budget before applying; in fact, considering the trouble some students have found themselves in, it’s essential.
Creating a budget, as a savvy university student, should be a doddle and you’ll need to list:
-       Your income, i.e. wages and money received from elsewhere – your parents perhaps?
-       Your essential expenditure – bills, food, rent, transportation, etc. – and a little set aside for emergencies
-       Your repayment amounts and the dates on which they’re due
By creating a budget prior to applying for a payday loan you’ll understand how much you need to apply for and how much you can afford to borrow, though it’s often the case that they’re two very different figures.

  1. Ensure you’ll have enough work to repay your debt
Many students have found themselves in over their heads because they didn’t have enough work to cover their repayments.
This is the nature of part-time employment to a great extent, so give your employer a call to ensure you’ll have enough work coming in and if necessary, enquire about taking on a few extra shifts.

  1. Budget your loan, i.e. don’t spend it straight away
We’ve all experienced the joy of seeing a bank balance for the first time in days; however, resist the urge to spend it straight away.

A great wayto budget your loan is to withdraw the loan in its entirety, take a few envelopes, label each one with labels like ‘bills’, ‘food’, etc. and set aside an amount for each.
If you have more than one week’s rent to budget for it might pay to contact your landlord to enquire about paying two or more weeks rent upfront to ensure your rent is covered.

  1. Meet your repayment commitments on time
Along with choosing the right payday loan provider to apply to – some payday loan providers like CashSorted offer great rates and easy application processes – meeting your repayment commitments in a timely manner should be your top concern.

Failing to do so can harm your chances of borrowing on favourable terms in the future and the last thing you want to do is incur a poor credit score before you’ve finished school.

Applying for a payday loan can be an effective way to weather a tight financial period, though make sure you know exactly what you’re getting into before applying.

Apr 14, 2014

Arranging Cheap Transportation for College Students

If you will shortly be waving goodbye to a son or daughter who is leaving home to study at college, there are probably many things that are causing you sleepless nights right now. Whilst I cannot help with them all, I hope that the advice in this short article will help you to organise cheap transportation for your child so you do not have to worry about them getting to lectures in the mornings or coming back to visit at the weekends.

1. Trains and buses – this option is most useful in large cities and especially for students whose families live in London and who will be attending a college in the capital. You can purchase an oyster card that holds an annual season ticket, allowing your child unlimited travel on the underground, docklands light railway, overground trains in the city, and buses. This will enable them to visit you whenever they fancy, go shopping in town, attend lectures in various locations and basically go wherever they wish without having to worry about how much it will cost. An all-zones ticket will provide the most flexibility with regard to possible destinations.

2. A second hand car – if your son or daughter has already passed their driving test, buying them a small, economical car is well worth considering. It will give them a sense of independence that public transport cannot and mean that they can travel at any time of night or day rather than having to organise their trips around train and bus timetables. The only problem will be whether they can afford the petrol to go wherever they want but you can always give them a monthly allowance if this is likely to be an issue.

3. A cheap motorcycle – whilst some parents may not like the idea of their child riding a bike on busy roads, if your son or daughter is sensible and you buy them a well-maintained model, there is no reason why they cannot use it to travel safely and economically throughout their college years. A big advantage of this mode of transport is that motorcycle insurance is relatively inexpensive and a small bike will use far less petrol than a car. Your child will need to pass a test before they are allowed to ride on public roads, so you should include the cost of basic training in your budget when evaluating this option.

4. A bicycle – this is another option that is only really practical for students that live in a large city and are planning to attend a university that is not too far from home. If your son or daughter will be studying at a college that is many miles away, they are unlikely to want to ride home at the weekends. However, they could still use a cycle to get about the town or city in which their university is located and take it on a train or bus whenever they wish to come home for a couple of days.

Before you decide on the most suitable option for your child, it is a good idea to talk to them about their feelings on the matter. There is no point, for example, in buying a car for your son if he absolutely hates driving and has no intention of learning how to do so. Young ladies that are worried about safety issues on public transport may be equally unenthusiastic about the prospect of coming home on a night bus after spending the evening with friends in town. If you can afford to offer your child a choice, this will obviously be appreciated.

About the Author: Carole Nash is a motorcycle insurance provider in the UK that works with a panel of leading insurers to ensure that they offer not just appropriate and excellent cover but also great value for money.

Mar 14, 2014

Looking For Professional Language Translators

The language barrier between trading parties across the world can be eliminated with the services of language translations. However, it's equally imperative to choose a trustworthy and reliable translation company to proffer precise information to all your foreign customers. There are many companies out there proffering culturally inaccurate and irrelevant translations. Dealing with such inefficient companies can harm your business communication with your prospects speaking some other language. But fortunately, there is also no dearth in the number of translators and interpreters offering credible translation work. There are several reasons which make it indispensable to use professional services of language translations.

• Legal demands- It's extremely important to choose a language translator or interpreter who can understand and apply the necessary legal terms of court. Professional translators make sure that all your company's legal documents are accepted in the courts for their legitimacy.

• Financial demands- Financial translations are also highly sought after by people with diverse needs. The professional translators are equipped with all the needed skills to present accurate and precise language translations no matter how complicated the financial documents are.

• Technical demands- The professional translators also fulfill the technical demands of translations. A credible translation company employs qualified translators holding in-depth knowledge about the various technical fields.

• Website demands- Professional services of translations definitely play a significant role for businesses wishing to introduce a multilingual professional website for their company. With these services you can incorporate the option to translate your website content into different languages. This way you would be able to effectively communicate with your foreign customers and convey them your vision, mission, services and products.

There are numerous situations as such where you would need the assistance of a good translation agency. Especially, in order to successfully establish yourself in the foreign market, it's extremely critical to have accurate and culturally viable translations so that your core business message is conveyed to overseas customers precisely without creating misunderstanding.

Most of the reputed translation service providers also offer great consultation. While dealing with the foreign customers, you might need the guidance of a qualified language consultant. The translation agencies are well aware of this fact and thus provide you with the needed guidance through an adept consultant who can help you address all your queries as a great cultural ambassador. For instance, the way you use the dialects leaves a huge psychological effect on the customers. An expert consultant can thus advice you regarding the right approach to market your products or services to them. All these factors make it indispensable to use professional language translation services.