This weekend’s Your Money column includes a call for submissions from current high school seniors who have written their college application essays about money. We’ll read them all and publish the best here on Bucks. You can send us yours at moneyessays@nytimes.com.
Anything about affluence or lack thereof, social class, the economy, your family’s financial situation or paid work you’ve done is fair game here. If you’re in doubt, send it in anyway, as we intend to cast a wide net and define money pretty broadly.
This is open only to people who are applying to college this year. But if you took on similar issues in your application essay in the past, please post a comment about what you wrote (and whether you got in). And if you’re a high school guidance counselor or college admissions officer, please share memories of particularly good essays on money.
All the news from The Times that will hit you in the wallet.
A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.
In his Wealth Matters column this week, Paul Sullivan writes about the bill passed by Congress that permanently sets the estate and gift tax exemptions at $5 million. The action ends more than a decade of flux for the estate tax and, with it, more than a decade of uncertainty among the wealthy on how best to set up their finances to benefit heirs.
While most of us do not have to worry about either the estate or gift taxes, since our savings fall far short of the limits, the bill did resolve other tax issues, including setting new tax rates and permanently indexing the alternative minimum tax for inflation. While it is true that the changes mean we will probably be paying higher taxes this year, at least the worries about potentially larger increases are over.
Or do you disagree? Tell us your thoughts about the new tax legislation below.
The new fiscal bill, the American Taxpayer Relief Act of 2012, includes a provision that adds more flexibility to Roth retirement accounts.
Now, individuals can convert their existing 401(k) retirement plan to a Roth 401(k) — assuming their employer offers the Roth version, and allows conversions — regardless of whether they are eligible to take distributions out of the plan.
Previous rules allowed conversion from a 401(k) plan to a Roth version only if you were eligible to take funds out of the account. That meant, in general, that you had to be 59 and a half, dead, disabled or had left the employer (unless the plan allowed “in service” withdrawals), said Michael Kitces, a financial planner who summarized the change in his blog.
“It wasn’t very useful for most people,” he said. But now, he added, “Even if you still work there, and are younger than 59 and a half, you can do conversions.” Read more…
Mike Segar/Reuters Zipcar, which often rents to people who are under 21, includes Mini Coopers in its fleet.For those of us who like picking up a Zipcar for a few hours without having to talk to anyone and dislike waiting for the rental car bus or in line, Avis Budget Group’s acquisition of Zipcar is cause for a bit of fear. However the synergies end up benefiting both companies, you have to wonder whether some of them will degrade Zipcar’s service or policies.
Take the age-old rental-car age discrimination issue for instance, which I’ve been complaining about since 1995. Read more…
Those who commute to work using mass transit or van pools are eligible for the same amount in employer-provided pretax commuter benefits this year as their colleagues who drive and park, thanks to the fiscal package passed by Congress this week.
Workers whose employers offer such benefits can pay for their monthly transportation costs through pretax payroll deductions, saving them money.
In 2012, the amount that mass transit commuters were allowed to set aside monthly in their pretax commuter accounts fell to $125, from $230, while the limit for parking costs increased to $240, from $230, because of a cost of living adjustment.
The new fiscal measure increases the pretax transit benefit to $240 a month. (The actual cap is subject to confirmation by the Internal Revenue Service, which can adjust it in increments of $5, if necessary, to reflect inflation, said Jody Dietel, compliance officer with WageWorks, a benefit management firm.)
But because the fiscal package merely extended this “parity,” rather than making it permanent, its continuation after this year is still subject to future legislative action.
Why is it so difficult to make the equal benefit permanent? It does not seem to make sense to offer more of an incentive to drive than to take mass transit. Read more…
The fiscal legislation just passed by Congress, known as the American Taxpayer Relief Act of 2012, makes permanent a little-known tax break for people who send their children to private or religious schools for kindergarten through 12th grade.
The break comes via the Coverdell Education Savings Account, a vehicle my colleague Ron Lieber wrote about last summer.
The Coverdell lets you deposit up to $2,000 each year in an investment account. The contributions are not tax deductible, but you do not pay taxes on the earnings you take out, as long as you use them for tuition or other qualified expenses — including those for elementary or secondary education at independent and religious schools, as well as college tuition. Although the contribution limit is low, the tax savings can add up to thousands of dollars for diligent savers.
The tax break was scheduled to expire on Dec. 31. But it was retained, as part of the fiscal legislation’s permanent extension of the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16), according to the financial aid expert Mark Kantrowitz.
Would you make use of such an account for private school tuition?
All the news from The Times that will hit you in the wallet.
A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.
Ingo FastMy colleague Ron Lieber recently wrote about new ways to track your child’s allowance online. He did have some reservations: he prefers children’s early experiences with money to be more tangible so they can see the piggy bank or jar filling up with coins.
He’s got a good point. But after a couple of years of watching my children mishandle their cash in various odd ways, I’ve decided that actual bank accounts are in order. One child kept a roll of bills wadded up with an elastic in her sock drawer, and it eventually went through the washing machine. Her sister kept hers in a blue plastic bucket labeled “Money,” which she and her friends doled out to one another during play dates. We did try actual piggy banks, but the stoppers kept falling out.
So one of my New Year’s resolutions is to create online bank accounts for them. It was so simple that I’ve already done it — and wondered why I didn’t do it a lot sooner. Read more…
All the news from The Times that will hit you in the wallet.
A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.
Loading Twitter messages...
Paul Sullivan writes about the strategies that the wealthy use to manage their money and their overall well-being.
