| Last-minute tips that can save big bucks
The countdown is on. Just a few days left to file your 2006 tax return. Sure, I know, it's a task that's about as pleasant as cleaning out the refrigerator. When I was a bachelor, I'd put off cleaning the fridge until the science experiment at the back of the bottom shelf would develop legs and walk away. Preparing a tax return may not be quite as exciting — but it's equally important. And in fact, it can be profitable. To increase the likelihood that preparing your tax return is a profitable experience, let me share with you some last-minute tips that could save you some money. Families File a tax return for your kids. If a child earned any income at all in 2006, it makes sense to file a tax return, even if no taxes are owing. The reason? Earned income will create RRSP contribution room, which will save your child taxes when he or she contributes to a plan later in life.
Refund’s tax status clarified
Q. We moved from California to Missouri at the beginning of December 2004. For our 2005 taxes, we received refunds from both Missouri and California. For our 2006 taxes, do we need to claim the 2005 California refund? A. Generally state and local income tax refunds are taxable if the refunded tax was deducted in a prior year and the taxpayer received a tax benefit from the deduction. If you filed a 2005 California tax return, the return showed an overpayment, and you itemized deductions, then you will need to report the California refund on line 10 of your 2006 federal tax return. State and local income tax refunds are not taxable if the taxpayer did not itemize deductions in the prior year. In some cases state and local income tax refunds are only partly taxable.
It's Crunch Time for Advisors Helping Boomers Prepare for Retirement
With all the recent attention on baby boomers and their retirement readiness, it's no wonder that one of the biggest concerns for investment advisors and financial planners today is retirement planning. If the goal is to ensure a livable income for retirees, then a shrinking social security net, soaring healthcare costs and the virtual disappearance of fixed-rate pensions are not making any soon-to-be retirees breathe easier. In our most recent survey, AdvisorBenchmarking investigates this challenge and sheds more light on how advisors can turn this market challenge into real business opportunities. As wealthy clients transition into retirement and begin to transfer their wealth to heirs, retaining boomer assets has become a key objective for most advisors. Right now, nearly half of advisors (43%) say that 20% to 40% of their clients are retirees and that number will only multiply in the coming years.
WWII Merchant Mariner vets ask for benefits
Former seamen who served in the Merchant Marine during World War II shared some of their war experiences Wednesday before asking a House committee to approve a $1,000 monthly pension for every surviving World War II merchant mariner or for the spouses of mariners who have died. The aged seaman — the youngest whom his comrades called 'Kid' was 80 — spoke in impassioned but faltering voices about the need for Congress to right a historic wrong by paying the pensions, even as at least one congressman questioned whether that would be fair or affordable. One former merchant mariner, Stanley Wilner, told committee members that he did not brush his teeth or shave for three years after his cargo ship was sunk by a German raider off Singapore. He said German sailors turned him over to the Japanese, who forced him to work for three years on a railway bridge that was popularized in the film Bridge over the River Kwai.
Variable Annuities Survive and Thrive After Track Record of Struggles
Variable annuities are no strangers to controversy. VAs have been thrashed by many advisors as complex and expensive investment vehicles. Some analysts predicted withering sales ahead after peaking in 2000. But more than five years later VA products are proving they have the temerity to thrive under these unsympathetic conditions. In spite of state and federal investigations Market Audit found that VA product purchases made by seniors through brokers or other investment professionals climbed to 57% in 2004 from 52% in 2003. Paradoxically it is the financial advisor community that remains largely standoffish to VAs. According to Ann Hughes, ING U.S. Financial Services senior vice president, only about 20% of financial advisors believe in the investment value of VA products. The non-believers' sentiments for VAs range from "detestable," "absurd," and "nuts," to "foolish," "big mistake" and with "no earthly use." Ilene Davis, principal of Financial Independence Services, used to but stopped selling VA products.
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