Here Are 7 Ways You Can Start Saving On Next Year’s Taxes

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The holiday decorations aren’t up yet, and the Christmas carols haven’t hit the radio yet. That would really be rushing the season. But there’s one place where it pays to do your shopping early if you want to save money: Taxes! There are a few steps you can take now before the holiday rush to reduce your tax bill.

Increase Retirement Plan Contributions

Have the HR department take a little bit more out of your paycheck to increase your tax-deductible contribution to the 40l(k) or 403(b) plan. Unlike an IRA, you must make this year’s contributions before year-end. And the limits are generous: $17,500 if you’re under age 50, and $23,000 at age 50 or older. But even if you can’t contribute the max, every little bit will grow tax deferred.

If your company gives you a matching contribution, you get a double benefit — tax deduction and “free money.” You can’t afford to miss out on that deal. And though it sounds painful, you’ll get by without those extra few dollars in your paycheck.

Use Flex Spending — Save HSA Account

There are two different kinds of health care savings accounts. The Flex Spending account must be spent before year’s end. Don’t wait until the last minute to consider appropriate purchases. Schedule eye exams or dental procedures now, before the holiday crunch. This is use-it-or-lose-it money, so be sure to take advantage of any opportunities. For a list of approved spending items, go to IRS Publication 502 online.

But if you have a health savings account, it can roll over for future use. Although you do want to schedule regular preventive care, there’s no rush to use this money as it will grow tax-deferred to be used for some future medical expense.

Open Enrollment for Health Care Plans

Even if you already are enrolled in an individual health care plan for 2014, it may pay to check out the features of other plans, and their costs, for 2015. Yes, you’ll have to navigate again! But this year should be less confusing. Remember that open enrollment starts on Nov. 15, and ends on Dec. 31. Be sure to avoid this last-minute crunch.

Other Healthcare Deadlines

Seniors should check on new deals being offered on Medicare Part D. Even if you take the same drugs, or don’t take any drugs at all, you must have Part D coverage. Many plans have changed their pricing or their formularies. The best way to find out is to go to and click on the plan finder tool.

And you might also want to check on the best Medicare supplement plan — or enroll in Medicare Advantage. You’ll be surprised at how much money you might be able to save by considering other supplement plans. You can compare Medigap supplements at the website. Or if you’d like some handholding and advice, go to and they will help you find both a supplement and a Part D prescription drug program to fit your needs.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

How Confident Are You In The American Economy?

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Are you feeling better about the economy? The rest of America is more optimistic. The University of Michigan Consumer Sentiment reached a 14-month high in September. And on the same day, it was reported that retail sales in August grew broadly, as well. Barring unexpected events in the international arena, it appears that Americans are more willing to commit their emotions — and their dollars — to the economy.

The job news has improved each month, and that has helped add to confidence. Even the high level of the stock market has contributed to the optimism, though many participate in the stock market only indirectly, through retirement plans.

So what should you do with this news?

Does it make you confident enough to go out and buy a new house? The jury’s still out on that issue because, despite record-low interest rates, mortgage applications have stagnated. Maybe that’s too big a leap of confidence for those just starting out on the first step to home ownership.

Does the news make you confident enough to start searching for a new or better job? Or at least, does it make you feel bold enough to ask for a raise? According to the PayScale Index, U.S. wages are expected to grow at a rate of 1.9 percent, quarter over quarter, in the period that ends this month. It’s a nice increase — but far below the 3 percent-plus wage gains that were common before 2008 and the financial crisis.

Does it make you confident enough to go out and buy a new car — or at least a new “used” car? It already has. The surge in new car sales in August has raised the possibility that sales could top the 16.6 million sold in 2006, the last full year before the recession, according to That’s up from 10.4 million vehicles sold in 2009 during the depths of the economic collapse. Since then, sales have risen by at least 1 million units annually through last year, when 15.6 million were sold.

Or should you just go out and replace items in your wardrobe that have worn out in your years of stringency and economic fear? Retail sales, even excluding autos, rose more than expected in August after a flat figure in July. Consumers are expressing their optimism at the store.

Or are we just getting back into the same debt trouble that brought us into the financial crisis?

Yes, credit card debt is rising again. In fact, according to Sober Look, “Over the past three months, the year-over-year growth in credit card debt has exceeded wage growth in the United States. This is the first time we’ve seen this trend since the Great Recession.”

And that does not include student loan debt, which continues to rise beyond $1.1 trillion, exceeding total credit card debt outstanding.
Meanwhile, the personal savings rate, which had spiked to about 12 percent in the summer of 2012 amidst a continuing anemic recovery, has now dropped back to a rate of 5.7 percent.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Simple Retirement Planning

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Thinking about retirement can be overwhelming. The idea of planning for something that won’t happen for years, might last 30 years, and could cost millions is enough to make you leave it all to chance. But that’s the worst possible retirement plan. Would you be willing to substitute something much simpler?

That’s the concept behind the technique being urged by Michael Falk, an investment advisor and strategic consultant who has the gift of simplifying important financial concepts. He and I have talked over the years, and he’s influenced my thinking along the way. But when I heard Falk’s keynote address given at the recent Morningstar conference, I knew I had to share it with you. It is probably the most compelling and game-changing way you will approach the topic of retirement planning.

So even if you’ve given up on ever being able to retire, you’ll want to watch this video on the Morningstar website.

The concept is a simple one that doesn’t need computerized forecasts and models, or retirement withdrawal rates, or even professional guidance. Once you understand the basic principle, it will help you save up for retirement, plan a retirement lifestyle, and take a lot of the worry out of handling your money during retirement.

Please let me know if I’m overstating the case — but it’s an issue that has preoccupied me ever since a decade ago when I wrote “The Savage Number: How Much Do You Really Need to Retire?” It’s the issue facing people who do have the possibility of living well in retirement because they are employed and thus can save money during their working years. But they don’t know “how much” they need, or equally important, how much they can draw out of their savings to make their money last as long as they do.

Here’s how Falk states the principle: “You must immunize for your needs before you even try to optimize (in risky assets) for your wants.”

Those words are a fairly profound way of saying that if you can arrange enough regular income to cover your basic expenses of living, then you can sustain the risk of investing other assets strategically to cover desirable retirement dreams such as travel and entertainment. Or as they say in the stock market, find your “sleeping point” and make sure you are covered with income that lets you sleep.

Cover Your Overhead

If you know what your Social Security check will bring in, and if you have an annuity or pension that will bring additional monthly income — and then if you can get your overhead down to the point where your income covers the basics–you will find retirement peace of mind.

Suggestions for doing that include paying down the mortgage before you retire or buying a fully paid up car that you plan to keep for 10 years, eliminating a car payment. Once your overhead is manageable and balanced with your secure income, you can make riskier investments to grow your remaining money to give you the retirement you want, above the basic needs.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Gold, Again?

Everyone seems to have the same attitude toward gold: three jeers!

Despite some truly frightening conflicts in the Middle East and Ukraine, despite signs of inflation in the United States, and despite promises to “print” from both the Japanese and European central banks, the price of gold has barely managed to climb above $1300 an ounce.

In fact, gold was the worst performing asset class in 2013 — down 24.8 percent. Yet gold is still the best-performing asset of this century!

All of which goes to show you that, when investing, it pays to take the long-term view — unless you are a day-trader, of course. Instead of chasing the best-performing asset, it often makes sense to quietly accumulate a small position in the seemingly least attractive asset.

And if you’re interested in taking that route with gold, there’s a new game in town.

The Merk Gold Trust

The Merk Gold Trust is a new exchange traded fund listed on the New York Stock Exchange under the trading symbol OUNZ. Here’s a brief description of what makes this fund slightly, but significantly, different from other exchange-traded gold funds. But for all the details, you should go to

There are other ETFs that are based on the price of gold. But none is actually “deliverable” in gold. That’s a pretty sophisticated distinction, and one that you hope will remain meaningless. But at some point in the future, if you actually wanted to hold physical gold — either in the form of bars or bullion coins — this is the only ETF that actually has physical gold in a warehouse, ready for delivery to each and every fund shareholder.

In fact, the distinction between this ETF and others is so significant that on January 7, 2014, Merk Investments LLC was issued patent No. 8,626,641 by the United States Patent and Trademark Office for a “Deliverable commodity investment vehicle.”

Unlike other gold ETFs, which allow physical delivery only to very large holders, every shareholder in the Merk Gold Trust has the right to take delivery of physical gold. And you don’t have to SELL your shares to do it!

That is, you don’t have to make a sale and pay taxes on your profits to convert your shares into physical gold. You can convert to bullion or coins at any time — and can continue to hold them without any tax consequence until you decide to sell your bullion or coins.

There might just be a time when you would rather have gold coins than paper money. In the meantime, this investment allows you to benefit from all the positive aspects of owning a NYSE-listed security: the low cost of purchase, low annual fee of 0.4 percent, and ease of entry and exit simply by selling your shares through your broker. Plus, you have the ability to take possession of the actual gold.

Gold in the Vault

That gold is stored in bonded vaults in London. The fund’s chief investment officer and president, Axel Merk, recently visited the London vaults, holding the bars of gold that are separately allocated to the fund’s account. He sent this message to shareholders:

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

FATCA — The Creeping Reach Of The IRS

It’s a very small world when it comes to money and banking, as we all learned in 2007. Now the Internal Revenue Service is extending its reach to financial activities of U.S. citizens who have money in foreign financial institutions.

On July 1, 2014, FATCA goes into effect — the Foreign Account Tax Compliance Act, which is an effort by the IRS to “improve reporting compliance of U.S. taxpayers who have foreign financial assets and earn income outside the country.” The United States is one of the few developed countries that taxes income earned by its citizens, regardless of where they are residents. So U.S. citizens living and working abroad often must pay taxes to two countries!

FATCA is designed to make sure financial institutions report not only income but assets of U.S. citizens held in foreign countries. In other words, there will be no easy way to hide money offshore from IRS scrutiny — unless, of course, you are a major U.S. corporation that has earned money abroad, paid taxes there, and chosen not to bring those profits back to the U.S. to be taxed again. But that’s another story.

Now U. S. citizens not only must report the existence of foreign bank accounts (as is currently the case) but, under FATCA, those foreign institutions that hold accounts for U.S. citizens must go through onerous reporting obligations to the IRS. They must report the owner’s name, address, Social Security or tax ID number, and the combined balances if the amount is over $50,000. The reporting is so complex that many foreign banks are simply turning American clients away — even if they are ex-pats, living and being paid in that foreign country by their U.S. employers.

The IRS has entered into intergovernmental agreements with these foreign countries, and they in turn are putting the pressure on the financial institutions. Not only financial institutions abroad are subject to FATCA, but also corporations that pay dividends, interest, or capital gains. Big Brother is truly watching your money worldwide.

A Dollar Collapse?
Some are calling this a critical moment in government overreach and are predicting some sort of global financial collapse will ensue. But that’s not the likely result. Instead, the burden of financial reporting will close off certain aspects of global finance to all but the largest corporations.

Pessimists say this is the first step toward government extending control over your right to move money out of the United States, much as South Africa and other countries imposed currency controls on their citizens as they attempted to flee repressive or changing regimes.

Of course, as the markets have demonstrated so far, the U.S. dollar is still viewed as the “safest” global currency, despite our debt problems. And that is likely to remain the case, even after FATCA takes effect on July 1.

And it is doubtful that Americans will flee, although there have been a significant increase in the number of Americans voluntarily giving up their citizenship. A record 1780 Americans gave up their passports in the most recent year reported. But that pales beside the numbers of foreigners who seek to come to America.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom