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Financial Mistakes People Make at Different Ages

There's a saying that with age comes wisdom, but this may not always be true in the financial world. As people move through different life stages, there are new opportunities--and potential pitfalls--around every corner.

In your 20s

Living beyond your means. It's tempting to want all the latest and greatest in gadgets, entertainment, and travel, but if you can't pay for most of your wants up front, then you need to rein in your lifestyle. If you take on too much debt--or don't work diligently to start paying off the debt you have--it can hold you back financially for a long, long time.

Not saving for retirement. You've got plenty of time, so what's the rush? Well why not harness that time to work for you. Start saving a portion of your annual pay now and your 67-year-old self will thank you.

Five Tax Tips about Hobbies that Earn Income

 

Millions of people enjoy hobbies. They can also be a source of income. Some of these types of hobbies include stamp or coin collecting, craft making and horse breeding. You must report any income you get from a hobby on your tax return. How you report the income is different than how you report income from a business. There are special rules and limits for deductions you can claim for a hobby. Here are five basic tax tips you should know if you get income from your hobby:

USCIS Issues Final H-1B Simeio Guidance

USCIS Issues Final H-1B Simeio Guidance

 

On Tuesday, USCIS issued final guidance on a recent decision requiring new H-1B petitions for workers who change job sites, stating the agency will generally not punish employers that don’t file new petitions based on location changes that occurred before April 9. According to the new guidance, if an H-1B employee was moved to a new location on or before April 9, which is the date the Administrative Appeals Office handed down its decision in the Matter of Simeio Solutions LLC, the agency will generally not pursue adverse actions, even if the employer doesn’t file an amended petition. 

However, USCIS will not cancel any adverse actions that it has already started or completed before July 21. 

Homeowners Brace for Cash Crunch as HELOCs Come Due

During the height of the housing bubble, home equity lines of credit (HELOCs) were an extremely popular way for homeowners to tap into their home equity to fund a variety of purchases, such as home improvements and education expenses. In fact, $265 billion in outstanding HELOCs were originated between 2005 and 2008. (Source: Experian, May 2015) Unfortunately, many homeowners who took out HELOCs during this time period now find themselves bracing for a cash crunch as these loans enter their repayment phases.

What is a HELOC?

A HELOC is a revolving line of credit based on the amount of equity in your home. With a HELOC, you can borrow what you need (up to the maximum allowed) when you need it (subject to any time limit on the borrowing period--typically 10 years). With a HELOC, you can use the line of credit while making interest-only payments.

What is the "repayment phase"?

If You Get an IRS Notice, Here’s What to Do

 

Each year the IRS mails millions of notices and letters to taxpayers. If you receive a notice from the IRS, here is what you should do:

What is the Roth IRA five-year rule?

Actually, there are two five-year rules you need to know about. The first five-year rule determines when you can begin receiving tax-free qualified distributions from your Roth IRA. Withdrawals from your Roth IRA--including both your contributions and any investment earnings--are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies:

What is the Roth 401(k) five-year rule?

The Roth 401(k) five-year rule determines when you can begin receiving tax-free qualified distributions from your 401(k) plan Roth account. While it's similar to the five-year rule that applies to Roth IRAs, there are important differences.

Withdrawals from your Roth 401(k) plan account--including both your contributions and any investment earnings--are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies: