Apply for Homestead Exemption before March 1, 2013

Apply for Homestead Exemption before March 1, 2013Nassau County, FL – In an effort to assist new homeowners with filing for their Homestead Exemption, Property Appraiser A. Michael Hickox will open his office on the last two Saturdays in February.

Many homeowners have the option to homestead their property. This exemption allows up to a $50,000 tax benefit, but forms must be complete and turned in to the Property Appraiser’s Office before March 1st.

“Homesteading your property is one of the most important things a home owner should do”, said Hickox.” Reducing the taxable value by as much as $50,000 is a great benefit, especially in this economy.” Based on current millage rates, if the assessed value is $100,000, the tax savings could be as much as $700 for City residents, $500 for County and Hilliard residents, and $600 for Callahan residents.

An estimated 1,000 people will file for homestead this year in Nassau County.

To make things easier for people to file their exemptions, Hickox will open his Yulee office in the James Page Governmental Complex on February 16th and 23rd from 10am-2pm.

“Many people rush to our office on their lunch break or are forced to take time off from their job in order to file. I’m hoping that this initiative will make things a little easier on them”, said Hickox.

“It’s important that you have everything needed to file”, said Exemptions Supervisor Judy Tiner. “Not having the necessary documents could delay your exemption.”

Information on what is needed to qualify can be found on the Property Appraiser’s website at under the Exemptions tab.

Other property tax breaks include, Senior Exemption, Agriculture Exemption, Veterans Exemption, and Disability Exemption. Please call the Property Appraiser’s Office at 904-491-7300 for more information.

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What You Need to Know about the 2013 Tax Season

What You Need to Know about the 2013 Tax SeasonWe are well into tax season and there are some changes for 2013 that you may need to know. The following information from, Government Made Easy, may help you navigate the waters.

Washington DC – When it comes to tax season, every year is a little different. Laws change, some benefits kick in while others end, and natural disasters can have an impact on your tax return. The deadline for filing your taxes is April 15, 2013. While this is the normal deadline, there are some important new things you should know for the 2013 tax season.

Tax Season Started Late This Year
The 2013 tax season started about a week later this year due to tax law changes enacted by Congress at the beginning of January. Most people can file their individual income tax returns starting January 30, but you might have to wait until the end of February or March if you’re filing certain forms, including:

    Form 5695 (Residential Energy Credits)
    Form 4562 (Depreciation and Amortization)
    Form 3800 (General Business Credit)

The IRS has a complete list of forms it will begin accepting in late February or March.

Tax Relief for Disaster Survivors
The IRS offers tax relief programs to individuals and businesses affected by disasters such as flooding, earthquakes, wildfires, and hurricanes, including last year’s Hurricane Sandy. Tax relief can include some of the following help:

    Additional time to file your taxes
    Additional time to pay your taxes
    Quick tax returns for losses related to disasters
    New Process to Apply for an Individual Taxpayer Identification Number (ITIN)

Individual Taxpayer Identification Numbers are issued to people who want to file their taxes but do not have a Social Security Number.

Starting January 1, 2013, important changes were made to the application process, including the following:

    The IRS will only accept original identification documents such as passports and birth certificates or certified copies from the agency that issued them
    Notarized copies of documents will not be accepted
    New Individual Taxpayer Identification Numbers (ITINs) will be valid for a period of five years

The IRS offers more information about Individual Taxpayer Identification Numbers (ITINs) on its website, including how to apply for one and where to get help.

Scams and Fraud
While tax seasons can vary slightly each year, there’s one thing that rarely changes: scammers are always trying to steal your personal information. Identity theft is one of the most common types of fraud. It often starts when a scammer sends out an e-mail pretending to be the IRS and asks for your personal information. It’s called phishing and may also occur through other types of electronic communication such as text messages, so be careful. The IRS does not initiate communications via e-mails and provides these tips to help you protect your personal information.

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How Does the American Taxpayer Relief Act Affect You?

How Does the American Taxpayer Relief Act Affect You?Washington DC – On January 2, 2013, President Obama signed the American Taxpayer Relief Act (ATRA) into law. This new law addresses many of the tax issues that were debated by Congress at the end of 2012, and which were referred to by many as the “fiscal cliff.”

Here is what the law addressed, and how it could affect you:

The “Bush-era tax cuts”
The new law permanently extended reduced tax rates on income and capital gains and dividends if you make less than $400,000 ($450,000 if you’re married and file jointly). If you make more than that, the marginal tax rate for income beyond the new levels rose from 35 percent to 39.6 percent.

This change also increased the top tax rate on long term capital gains and dividends from 15 percent to 20 percent and made changes to several other tax credits, the marriage penalty and education-related incentives.

The Estate Tax Rules
ATRA permanently extended the estate tax laws as they currently exist, except for the top tax rate, which was increased from 35 percent to 40 percent. Now up to $5 million of an estate’s worth is exempt from taxes.

The American Recovery and Reinvestment Act of 2009 Tax Provisions
The child tax credit, some provisions surrounding the Earned Income Tax credit and an education tax credit, the American Opportunity Tax Credit, were all temporarily extended through 2017.

The Payroll Tax Reduction
There was a two percent reduction in the amount of money you paid through the Social Security payroll tax that Congress put in place in 2010. This tax reduction was not extended as part of ATRA. As a result, the tax rate reverted back to the original amount, 6.2 percent for employees and 12.4 percent for the self-employed. You may notice a change in the amount of your take-home pay in your first paycheck of the 2013 calendar year.

The ATRA also addressed several other issues, including unemployment, Medicare and other health provisions and the farm bill. You can read more about this issue HERE.

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The Fallacy of Predictions

Market Experts Prove to be more wrong than right

Market Experts Prove to be more wrong than right

Another year and another stream of fallacious predictions. One of the more interesting myths in the investment world is that large financial institutions, with their access to mountains of data pored over by teams of staff economists, can determine where the markets are going and profit accordingly.  Gullible investors believe this even though, every year, we can go back to the confident predictions of brokerage firm leaders and leading hedge fund managers and see a hard-to-explain gulf between expectation and reality.

This past 12 months, the broad U.S. markets delivered roughly a 16% return, depending on which of the indices you’re measuring–a good year by any standard.  So let’s jump into a time machine and see whether the brokerage firms were telling us to go all-in on stocks and take full advantage of this nice little bull market run.

They weren’t.

Adam Parker, who serves as the U.S. equity strategist for the mighty Morgan Stanley organization, boldly predicted that the S&P 500 index would fall 7.2% in 2012.  He recently said that he underestimated the impact of central bank stimulus.(!?!)

Credit Suisse’s “strategist” Andrew Garthwaite, Wells Fargo “strategist” Gina Martin Adams and Bank of America/Merrill Lynch “strategist” Savita Subramanian forecast essentially flat returns for U.S. equities,

David Kostin of Goldman Sachs, meanwhile, predicted that the S&P 500 would drop 25% in the midst of a Euro collapse, and boldly predicted that Europe’s sovereign debt crisis would worsen “almost daily.”  John Paulson, founder of what may be the most famous global hedge fund, based in NY, told clients in April that he was wagering heavily against European sovereign bonds.  UBS economist Jonathan Golub forecast struggling equities in the face of European recession.

Eurozone Threw Experts Off

In fact, the Eurozone became practically the epicenter of bad Wall Street predictions; crafty traders watched in dismay as Greek bonds surged in value in 2012, and the Euro itself strengthened about 9.4% from its July 24 low against the dollar.  Germany’s DAX Index managed to survive the predicted freefall by returning 29% to investors who ignored their brokers and stayed the course in Europe.  The direst predictions came from Citigroup economist Willem Buiter in London, who told reporters last February that there was a 50% chance Greece would leave the euro within 18 months.  In May, he raised the risk to 75%, and cited a 90% chance of departure in July–and said he was assuming that there would be an exit by January 1.

2012 is not an isolated incident; in fact, last year a company called CXO Advisory Group–which tracks more than 60 market “gurus” (the company’s term)–calculated that the average Wall Street expert forecaster had been accurate only 48% of the time over the long term.  Translated, that means that a coin flip is a slightly more accurate predictor of the future than the experts you see on cable’s financial TV channels.

But of course this is the season when, once again, the experts, economists and visionaries put on their gypsy shawls, get out their crystal balls, and tell you with calm certainty where the markets are going in 2013.  You are about to be deluged with confident predictions from Wall Street, along with Money Magazine telling you “the smart place to put your money now,” and once again it will all sound believable.  Perhaps the best advice is to imagine, as these gurus come on the tube, that they are wearing tall, floppy wizard hats with a bright crescent moon inscribed on the front.
Or you can turn off the TV and pull out a more reliable guide to the future: any one of the coins in your pocket that happens to have a head and a tails.

Charitable Tax Tips From the IRS for 2012

Charitable Tax Tips From the IRS for 2012This is a popular time of the year to make a donation to your favorite charity and the IRS has some 2012 tax tips for your charitable donations:

“As 2012 comes to a close, individuals and businesses need to remember some key tax provisions for making contributions to charity. The IRS offers these reminders for year-end giving:

    -To deduct monetary donations you must have a bank record or written document from the charity stating the name of the charity, the contribution amount and the date.
    -Contributions are deductible in the year made, even if the credit card bill isn’t paid or the check isn’t cashed until 2013.
    -Only donations made to qualified organizations are tax deductible. Make sure the organization you want to donate to is qualified before making any contribution.
    -Individuals must itemize their deductions on Form 1040 Schedule A or use a short form (Form 1040A and 1040EZ) to claim the standard deduction.

Find more year-end giving tips from the IRS HERE.

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Opposite Day Investing

A stock market of apples and oranges

Apples or Oranges?

When the stock market rises, as it mostly has since early 2009, the overall wealth of investors goes up, sometimes by billions or even trillions of dollars.  When the stock market falls, you read that investors lost billions or even trillions of dollars in aggregate.

Have you ever wondered where that money comes from when people get wealthier?  Or where it goes when the market turns south?

In an interesting essay, mutual fund manager John Hussman -who has an economics background -offered a great explanation.  He started by talking about investment choices.  Let’s say you want to buy a $100 bill ten years from today.  You decide that you’re willing to pay $46.31 now for the chance to take that bill home with you in late 2022.  Using simple math, Hussman calculates that you have bargained for an 8% annual return on your investment.

Suppose the market for $100 bills ten years in the future gets a bit more competitive, and people are willing to pay higher prices.  Let’s say you join the bidding, and eventually agree to pay $67.56 for that future $100. You have now bargained for a 4% annual return.

In a highly-competitive bidding frenzy, when everybody and his sister is frantic to buy those future $100 bills, you find that you have to pay $84.49 today for $100 ten years from today. You are now an investor in 10-year Treasury securities, which are currently yielding 1.7% a year.

This is how security prices work.  People bid for the right to own a set of expected future cash flows, a more complex version of that $100 bill.  In bull markets and market rallies, people are willing to pay more for that future cash; in bear markets, people have to be coaxed into the market with lower prices and higher anticipated returns.

The interesting thing about this dynamic is that the expectations of the people who are doing the bidding are often just the opposite of what mathematics tell us.  Meaning?  When the market has gone up dramatically, people expect more of the same and bid prices up even higher.  They pay such high prices that the difference between the purchase price and the future cash flows–the value of that $100 bill–will be an investment return in the low single digits.  Of course, they’re expecting the market to give them double-digit returns as it has in the past.  In grade school terms, they are experiencing “opposite day.”

Over time, as they get closer to claiming that $100 bill, they receive the (predictable) single digit returns that they paid for.  Meanwhile, the herd of investors who we call “the market” recover from their frenzy and realize that paying eighty dollars today for $100 in ten years is not a bargain.  They reduce their bids accordingly, and the investor who paid eighty dollars is now looking at a market that is willing to pay fifty, tops.

Now you can see where the money comes from in a bull market, and where it goes when the market heads south: nowhere.  The investments purchased at higher prices were never actually worth what people paid for them at the top of the bull market, so the loss of wealth was built into the original purchase price, even though it only shows up on the investor’s balance sheet when the market returns to normal pricing.  The lower prices that people pay at the dismal bottom of a bear market, when everybody seems to expect the losses to go on forever, allow you to purchase more future cash flow per dollar invested.  When the market recognizes what a bargain this was, and bids up the price, that is no more than a reflection of the value built into the original price.

There is, of course, another way to invest: steadily, over time, with an eye to bargains when they’re available.  The goal there is simply to accumulate future cash flows at the best current price available, to buy as many future $100 bills as you can at a variety of prices, which will, over time, average out to an average valuation which is probably pretty close to a fair price.  Meanwhile, you participate in the growth of a range of companies, and steadily benefit from the work and innovation and value that is produced by millions of people who get up in the morning and go to the factory floor or the office and do their jobs effectively–probably a lot like you do (or did).

As the markets rise and fall, you’ll experience paper gains and paper losses that will feel real, but will actually be nothing more than a reflection of our collective emotional state.  Somewhere under all the noise, under wealth that daily appears out of nowhere and vanishes back where it came from, there is the underlying growth of the business enterprises that you own, the growth in earnings, the new factories, new products, increased sales.

That value is real.

Stepping Back from the Fiscal Cliff

Fiscal Cliff Right Ahead of You

The Fiscal Cliff is Upon Us

We’re hearing a lot about the fiscal cliff in this post-election time period, and surprisingly, considering the angry partisanship of the campaign, some of the news is encouraging.  The White House and Congressional leaders, elected officials from both sides of the aisle, are saying that they believe they can reach agreement before the end of the year.

What is this fiscal cliff?

The term refers to a lot of different tax and budget provisions that are all scheduled to take place automatically at midnight on December 31.  These include:

Higher tax rates. When the clock strikes twelve, the Bush-era tax cuts will expire, eliminating the 10% income tax bracket altogether, and moving the current 25%, 28%, 33% and 35% brackets up to 28%, 31%, 36% and 39.6% respectively on earned income and dividends.  At the same time, the 0% capital gains tax rate for lower-bracket Americans would bump up to 10%, and it would revert to 20% for higher income tax payers.  The tax rate on dividends would again be taxes as ordinary income according to the recipient’s income tax bracket.

The loss of deductions–including a provision that eases the so-called “marriage penalty,” some deductions for college tuition, child tax credits, dependent care credits, and a particularly harsh phase-out would eliminate up to 80% of some taxpayers’ itemized deductions for mortgage interest, state and local taxes, and charitable donations.

Random across-the-board budget cuts that nobody intended to see enacted.  The Budget Control Act of 2011–what most of us remember as the tense compromise that ended last year’s budget standoff–calls for automatic government spending cuts of $1.2 trillion from the federal budget over the next 10 years.  The cuts apply to just about every discretionary (non-Social Security, Medicare, Medicaid) program in Washington, although most of what you’re hearing about are reductions in the defense and education budgets.

The expiration of stimulus measures:  The Obama-era payroll tax cuts will go away, raising taxes by about two percentage points for workers.

Why do we call this a “cliff?”

Because everything on that list would take money out of the hands of taxpayers and, at the same time, lower government spending—essentially providing the U.S. economy with the opposite of a government stimulus, what some have called a hard punch in the gut. The Congressional Budget Office estimates that if we go over the cliff–that is, if Congress and the President don’t act between now and the end of the year–a total of $560 billion would exit the economy.  The CBO estimates that this would reduce America’s total economic activity in 2013 by four percentage points.  Hello recession!

So what are the odds that Washington will get its act together and choose a course that doesn’t take us over the cliff?  As it happens, there is reason to hope.  Leaders on both ends of the partisan divide agree on many things in this negotiation: that the tax cuts are too painful and random to allow in their present form, and that tax rates on American taxpayers with less than $250,000 in income should continue as they are today.  The sticking points are if or how much tax rates should rise for Americans in the higher tax brackets, and where to apply the budget knife.

This rare moment of meaningful negotiation offers Washington policymakers a chance to expand the discussion and come up with a long-term solution to the nation’s debt problem—which is, after all, the topic of debate which led Congress to create this fiscal cliff in the first place.  If you’re optimistic, then cross your fingers that the leaders in the room will want to do something more with this conversation than just address the immediate problem.

As you follow the debate, pay attention to whether our elected officials are actually tackling the issues or just kicking the can down the road yet again.  If you hear discussion about permanent laws, such as a balanced budget amendment, or a framework that forces Congress to offset any expenditures with cuts elsewhere, or a change in tax rates, or some kind of entitlement reform (Means testing?  Raising eligibility ages?), that will be a sign that Washington is getting serious about addressing real issues.

If, on the other hand, you hear about caps on future appropriation bills, or frameworks for deficit cutting, or solutions which sunset in 12 or 24 months, that means that we’ll be going through a version of this debate for the foreseeable future, and the can could be kicked, once again, far enough down the road to become a 2016 Presidential election issue and a headache for the next president to deal with.

We should also pay attention to the timing.  The longer the U.S. economy continues to march straight toward the edge, the longer businesses will be reluctant to hire or invest in the future.  But for now, this moment may be something to enjoy.  How often do we see Democratic and Republican leaders in the same room together, promising to get something done?  Maybe it will become a habit.

Stop, Drop and Rollover Retirement Assets – Carefully

Mark Dennis gives input on Retirement Assets: sit, stay or rollover?

Mark Dennis gives input on Retirement Assets: sit, stay or rollover?

Have you switched jobs recently and are wondering what to do with the retirement plan assets at your previous employer? You could roll them over into your new employer’s plan, but a rollover IRA may be a better choice. A rollover IRA can provide you with the broadest range of investment choices and the greatest flexibility for distribution planning, and can typically be operated with fewer restrictions.

For example, a rollover IRA gives you:

• More control: As the IRA account owner, you make the key decisions that affect management and administrative costs, overall level of service, investment direction, and asset allocation. You can develop the precise mixture of investments that best reflects your own personal risk tolerance, investment philosophy, and financial goals. You can create IRAs that access the investment expertise of any available fund complex, and can hire and fire your investment managers by buying or selling their funds. You also control account administration through your choice of IRA custodians.

• More flexibility: IRAs can be more useful in estate planning than employer-sponsored plans. IRA assets can generally be divided among multiple beneficiaries in an estate plan. Each of those beneficiaries can make use of planning structures such as the Stretch IRA concept to maintain tax-advantaged investment management during their lifetimes. Beneficiary distributions from employer-sponsored plans, in contrast, are generally taken in lump sums as cash payments. Also, except in states with explicit community property laws, IRA account holders have sole control over their beneficiary designations.

Efficient Rollovers Require Careful Planning

One common goal of planning for a lump-sum distribution is averting unnecessary tax withholding. Under federal tax rules, any lump-sum distribution that is not transferred directly from one retirement account to another is subject to a special withholding of 20%. This withholding will apply as long as the employer’s check is made out to you — even if you plan to place equivalent cash in an IRA immediately. To avert the withholding, you must first create your rollover IRA, and then request that your employer transfer your assets directly to the custodian of that IRA.

Keep in mind that the 20% withholding is not your ultimate tax liability. If you spend the lump-sum distribution rather than reinvest it in another tax-qualified retirement account, you’ll have to declare the full value of the lump sum as income and pay the full tax at filing time. In addition, the IRS generally imposes a 10% penalty tax on withdrawals taken before age 59½.

Also, if you plan to roll over the entire sum, but have the check made out to you rather than your new IRA custodian, your employer will be required to withhold the 20%. In that event, you can get the 20% refunded if you complete the rollover within 60 days. You must deposit the full amount of your distribution in your new IRA, making up the withheld 20% out of other resources. When you file your tax return for the year, you can then include a request for refund of the lump-sum withholding.

If you have after-tax contributions in your employer plan, you may opt to withdraw them without penalty when you roll over your assets. However, if you wish to leave those funds in your retirement account in order to continue tax deferral, you can include them in your rollover. When you begin regular distributions from your IRA, a prorated portion will be deemed nontaxable to reimburse you for the after-tax contributions.

Potential Downsides of IRA Rollovers

While there are many advantages to consolidated IRA rollovers, there are some potential drawbacks to keep in mind. Assets greater than $1 million in an IRA may be taken to satisfy your debts in certain personal bankruptcy scenarios. Assets in an employer-sponsored plan cannot be readily taken in many circumstances. Also, you must begin taking distributions from an IRA by April 1 of the year after you reach 70½ whether or not you continue working, but employer-sponsored plans do not require distributions if you continue working past that age.

Remember, the laws governing retirement assets and taxation are complex. In addition, there are many exceptions and limitations that may apply to your situation. Therefore, you should obtain qualified professional advice before taking any action. Talk to a Certified Public Accountant or your local Certified Financial Planner™ professional about retirement plan assets.

School Board Should Contract with Local Photographers

School Board Should Contract with Local PhotographersThe Nassau County School Board really should find a way to give a local photographer the business for senior pictures at our local high schools!

As the mother of three, my youngest is now a senior and having to go to Jacksonville to have a picture taken for the yearbook was the worst! Sure, they said you could make an appointment at the school, but NO sittings were available in Fernandina Beach when we set up the shoot… and we checked it out as soon the information became available to us.

It was an unpleasant experience, think of a long line at Disney World, or a herd heading to slaughter. It was horribly inconvenient and don’t get me started on their overpriced photo packages! I sure hope the school system gets a piece of that action.

At the very least, the yearbook picture is a “required” $25.00 sitting fee! That’s right, if you don’t let them take your students picture, your senior won’t even be in the yearbook!

I know many local photographers and several of them are well qualified to take amazing pictures of our children; at least let one of them make a little dough taking the yearbook photo here in town.

I wonder if the school board accepts bids for this project each year?

When my oldest two graduated Fernandina Beach the pictures were taken on the stage of the multi-purpose room and we could buy a package of photos for a reasonable amount of money. Needless to say, I was not prepared to fork over hundreds of dollars for a package of senior pictures that included required “poses” designed to make you want to buy them all – for a mere $750.00!

The smallest package included one pose, (4) 5 X 7s and (4) 4 X 5 photos for $129.00, their “Most Popular” was $495.00, and don’t even get me started on all of the additional ala-carte pictures you could purchase starting at $35.00 each! Even the cute little portfolio of pictures they send you to view is only $99.00 if purchased WITH a package… otherwise, it is $179.00!

Be warned parents of high school aged children, “Save up half a mortgage payment for senior pictures alone!”

This issue really struck a chord with me, why wouldn’t the School Board want to “Buy Nassau?”

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Smart Calling Plans for International Travel

Smart Calling Plans for International TravelBy: Melisa Cammack

If you frequently take vacations overseas or are thinking of moving overseas in the near future, making calls home using a regular cell phone will be a costly expense. There are many cheap alternatives to your costly U.S. based cell phone plan.

Cell phone companies will likely charge you per minute for roaming if you travel overseas. Many companies will even charge you if your cell phone is caught “pinging” cell towers located in foreign countries.

There are many options available to you that will drastically reduce the cost of using a cell phone overseas.

Sim Cards
One cheap way to use cell service overseas is to purchase an unlocked cell phone. While cell phones that are sold in the United States do not come unlocked, many people offer unlocking services for a small fee. Some cell phones may be harder to unlock than others, so you may not always have the best of luck with this method.

Once you have an unlocked cell phone in your possession you can purchase a sim card when you arrive at your destination. Depending on what country you are located in, the cost of these ranges from a couple of dollars to over twenty dollars.

Once you have inserted the sim card into your unlocked cell phone, you will be able to make calls to the United States for much less than you normally would through a U.S. based cell service.

Skype has been around for quite a while now, and has evolved along with the needs of its users. Using Skype you are able to call computers, land lines and cell phones all from your Mac or PC.

Skype normally charges a low fee to call land lines and a nominal fee to call cell phones. A service offered by Skype called SkypeIn allows you to keep your own U.S. based phone number while traveling overseas.

Once your preferences are correctly set, Skype forwards all your calls from your U.S. based phone number to a local number in your respective foreign country. Be mindful, however, that this service is only available in twenty three countries.

Use your iPhone
The iPhone can make this process much easier for you. Fring, a 3rd party iPhone application (but also works on other smart phones) allows you to connect to your Skype account as long as you have a Wi-Fi signal. Skype then allows you to make calls through Fring on your iPhone to your loved ones in the U.S.

Because the iPhone5 from Bell makes international calling much easier and more convenient with the Fring application, this should be the preferred choice when calling your family back home.

Author Bio
Melisa Cammack is an avid traveler, and working as a freelance writer allows her to keep on the go. Not having a particular preference on Apple or Android phones for traveling with, Melisa recommends this article to make a decision yourself on what phone is the best for you.

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Smart Financial Tips for Single People

A single Red rose personifies careful financial planning for singles

A Red Rose to personify careful financial planning for singles

Single people face unique challenges when it comes to financial planning. It is important to consider retirement planning, parenthood, insurance, health care planning, and housing issues when managing your finances at all stages of life.

Living the single life no longer is an anomaly: According to the U.S. Census Bureau, 45% of households nationwide are maintained by a single person. Being single affects many areas of financial planning, including retirement, financing health care later in life, and other key issues.

If you are single, recently widowed, or expect to become single as a result of a pending divorce, consider the following as you plan your finances.


An increasing percentage of pre-retirees are planning for retirement on their own. What steps should solo planners take to shore up their finances for a comfortable retirement?

• Set long-term retirement savings goals. If you have access to an employer-sponsored retirement plan, contribute as much as you can afford. For 2012, the maximum employee contribution is $17,000, and workers aged 50 and older can contribute an additional $5,000 catch-up contribution. The maximum contribution goes up a bit in 2013 to $17,500.

• Consider funding an IRA. For 2012, the maximum contribution is $5,000, and investors aged 50 and older can contribute an additional $1,000.

• Invest as much as you can. Investing as much as you can afford for retirement over the long term is beneficial because you will not have the luxury of falling back on a partner’s pension. In addition, your household will have one Social Security check to fund retirement expenses.


• Fund for your children, but don’t forget yourself. If you have children, your financial planning could be especially challenging because you may be required to fund tuition, child care, and other costs on one salary. As you raise your family, be sure not to shortchange your needs. Put away something for retirement, even if it is only a small amount each week. Over time, this amount may compound and serve as the basis of your retirement nest egg. Be sure to appoint a guardian for your children in the event that you are not able to care for them.

Insurance and Health Care

• Review your options for disability insurance and long-term care insurance. It is critical to purchase these types of insurance while you are healthy and the premiums are affordable. These insurance purchases increase the chances that you will have adequate cash flow if you are not able to work because of a disability, or if you require assistance with activities of daily living later in life.

• Prepare for health care expenses. You may need to direct a lawyer to draft a health care proxy in which you designate a loved one to make medical decisions on your behalf if you are not able to do so yourself.


• Think carefully about the type of housing situation that suits your needs. Carrying a single-family home, especially in an expensive housing market, frequently is difficult on one income. Be sure that your home is affordable enough to permit you to invest for retirement and other financial goals.

Your situation may present additional considerations, but the suggestions mentioned here may help you manage your finances successfully. When in doubt, talk it out. Look for a Certified Financial Planner™ professional in your area who provides free initial consultations to chat about your specific concerns.

The End of Garage Sales as we Know it?

Illegal-Yard-Sale removed as a result of Second Circuit Ruling

If the Supreme Court rules in favor, yard sales are in the past.

An entrepreneurial young man by the name of Supap Kirtsaeng, a native of Thailand, came to the US in 1997 to study at Cornell University. Soon after enrolling he discovered that his textbooks, produced by Wiley & Son, were substantially cheaper in Thailand than they were in Ithaca, N.Y. and when we say substantially, we mean like enough to pack and ship them to the US and still make a very nice profit. So young Supap contacted his relatives back home to buy the books and mail them to him in the United States.

Wiley and Sons, admitting that it charges (a lot) less for books sold abroad than it does in the United States, sued young Suppa for copyright infringement after they discovered that Supap sold the books on Ebay and had already pocketed some $1.2 million in sales revenue. Kirtsaeng’s Lawyers countered with the first-sale doctrine .

A jury awarded textbook publisher John Wiley & Sons $600,000 after deciding that math graduate student Supap Kirtsaeng infringed on the company’s copyrights. But of course that borders on insanity as it turns the whole world of online sales and discount Brands upside down, so the almighty Supreme Court has now decided, under pressure no doubt from stake-holder giants like Ebay, Amazon, Costco and a boatload of other brands, whether the First Sale Doctrine applies to products made with parts sourced from outside the United States.

Should the outcome be negative and the Supreme Court upholds the appellate Second Circuit court’s ruling, we may as well say goodbye to the “right” to re-sell the stuff we once bought that contains copyrighted goods or parts. Technically the ruling requires that the IP (Intellectual Property) holders of anything you own that has been made in China, Japan or Europe or anywhere else in the world for that matter, would have to give you permission to sell it. You want to sell your old used CDs, cell phone, books, TV or even that Ford truck with foreign parts? It may not be yours to sell unless you get explicit permission and presumably pay royalties.

All endangered events

All endangered events

Under the doctrine, which the Supreme Court has recognized since 1908, you can resell your stuff without worry because the copyright holder only had control over the first sale, as the permission is monetized in the sales price. For example Apple Inc. has the copyright on the iPhone, as Wiley and Sons has the copyright on its text books and if purchased here in the States, you can still sell your copies to whomever you please and whenever you want….presumably if this does not cross a Homeland Security line as was the case in the refusal to sell an iPhone at the Apple store in Atlanta GA, that could end up in the hands of an Iranian national. But that is another a completely different story that underscores however, how incredibly absurd and complicated life has become in recent decades.

Impact on Discount Retailers and Online Stores

In the case Wiley and Sons versus Supap Kirtsaeng, the consequences maybe a thousand fold severe according to a group of American Law Professors, as it would mean, if upheld by the Surpreme Court, that it’s going to be harder for consumers to buy used products and harder for them to sell them. The word “Harder” euphemism as it necessarily implies here that if you want to sell your personal electronic devices or the family jewels that have been passed down from your great-grandparents who immigrated from Italy a century ago, you will have to obtain permission from the copyright owner(s) or ignore the ruling and BREAK THE LAW.

Supap Kirtsaeng had his family buy the books published and printed in the Far East by a subsidiary of Wiley and Sons, which makes the whole case even more complicated as it questions if the copyright on the text books remains with Wiley and Sons in the US or was transferred to its fully owned subsidiary. Another huge can of worms, considering how many products companies like Walmart, Apple, Costco, Target, Best Buy etc. have manufactured in China and other parts of the world, through fully owned companies and third party manufacturers. According to the Second Circuit, if you purchase an item from any of these companies, that was made in China , India, Japan, Europe, Mexico, Canada etc. which is protected by US copyright, you cannot resell it without permission from the copyright holder!

What does Future hold for Charity Fundraisers and Yard Sales

A Thing of the Past?

Second hand stores, Thrift Shops, Garage sales, Yard Sales, Storage Sales, Estate Sales, Classified Sales, Charity sales, Farmer’s Markets, Church Sales and Mission Sales, on top of a $63 billion dollar discount stores and online retailers market segment, will be seriously impacted if the Supreme Court is upholding the Second Circuit court’s jury decision to ignore The First Sale Doctrine. Not entirely impossible that in the current economic stagnation, it On the sale end here are also huge implications for a variety of wide-ranging U.S. entities, including libraries, musicians, museums and even resale juggernauts eBay Inc. and Craigslist. U.S. libraries, for example, carry some 200 million books from foreign publishers.

And since laws and rulings are written without prejudice, meaning that ignorance of the law is no excuse for breaking the laws, even donations of books and goods to charities like Micah’s Place, Barnabus, Cat’s Angels and many more are potentially illegal if these goods and books have foreign origins.

Ebay has alerted its millions of sellers to petition this little known case, quietly tucked into the US Supreme Court’s Agenda this fall, which if  upheld, will have a huge impact on our society, and create an enormous set-back for a globalized economy.

To be absolutely clear and largely impartial, the Supreme Court may still find against Mr. Kirtsaeng for a variety of other trade/imporation violations and yet NOT uphold the sweeping and in my opinion absurd ruling of the Second Circuit Court. But if the Supreme Court upholds the ruling in its entirety, we will absolutely lose the right to resell any copyrighted good manufactured overseas, even if purchased in the US. Like your iPhone, your vehicle, your record collection, your antiques, your French designer made handbag collection and so on.

And in terms of recycling and sustainability, making the resale of copyrighted goods illegal, unless permission has been acquired from the copyright holder, would certainly result in many products ending up in garbage dumps around the country.
I would love to get some reactions on this potential reality.

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Is a REIT Right for You?

REIT investments are consistently returning 10% plus annually

Hotels, shopping malls. industrial complexes etc. offer REIT opportunities

We recently discussed whether or not to refinance a home mortgage in today’s low-interest rate market, and for most Americans, an investment in real estate begins and ends with the purchase of a home. Yet affordable investments in shopping centers, office buildings, and even hotels may be available to investors, thanks to real estate investment trusts (REITs).

REITs invest in groups of professionally managed properties such as industrial facilities, office buildings or apartment complexes. REIT performance has varied historically, with a total annualized return of 11.7% over the past 10 years, and an 8.3% return in 2011.(1)

Investing Beyond the Backyard

There are more than 100 publicly traded REITs, according to the National Association of REITs (NAREIT). Equity REITs, which directly own real estate assets, make up most of the market and have had an annualized return of 10.9% over the past 20 years.1 There are mortgage REITs, which loan money to real estate owners or invest in existing mortgages or mortgage-backed securities, and hybrid REITs, which combine the investing strategies of both equity and mortgage REITs.

REITs resemble closed-end mutual funds, with a fixed number of shares outstanding. REITs are also traded like closed-end funds, offering a price per share. Unlike a closed-end fund, however, REITs measure performance by funds from operations (FFO) rather than by net asset value. FFO is defined as net income plus depreciation and amortization, excluding gains or losses from debt restructurings and from sales of properties. REITs’ growth benchmark is FFO growth, while valuation is reflected in an FFO multiple (share price divided by FFO) rather than in a price-earnings ratio.

The REIT Appeal

Today’s REITs offer an array of advantages, including:

• Diversification. REITs can help to diversify an equity portfolio weighted to stocks in other industries. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not ensure against market risk.

• Built-in management. Each REIT has a management team, sparing investors the effort of researching each property’s management team.

• Liquidity. Because REIT shares are traded on the major stock exchanges, they are more readily converted into cash than direct investments in properties. Like direct property investments, REITs may lose value.

• Tax advantages. REITs pay no federal corporate income tax and are legally required to distribute at least 90% of their annual taxable income as dividends, eliminating double taxation of income. Investors can also treat a portion of REIT dividends as a return of capital, although those classified as dividends are taxed at ordinary rates.

Weighing the REIT Risks

As with all investments, REITs have specific risks that are worth considering, including:

• Lack of industry diversification. Some REITs limit diversification even further by focusing specifically on niche developments such as golf courses or medical offices.

• Potential changes in the value of underlying holdings. These changes can potentially be influenced by cash flow of real estate assets, occupancy rates, zoning, and other issues.

• Concern about performance metrics. Critics contend that FIFO could be misleading because it adds depreciation back into net income. NAREIT counters that real estate values fluctuate with the market rather than depreciate steadily over time, making FFO a realistic performance measure. Also, REITs may average the rent they will receive over a lease’s lifetime rather than report actual rent received, which critics say can further cloud performance figures.

• Interest rate sensitivity. If rates and borrowing costs rise, construction projects with marginal funding may be shelved, potentially driving down prices across the REIT industry.

• Environmental liability. Companies in the real estate industry are subject to environmental and hazardous waste laws, which could negatively affect their value.

REITs can be a way to add total return potential to a diversified, long-term portfolio. You financial advisor can help you decide whether an allocation to a REIT could help you pursue your financial goals.

(1)Source: NAREIT Equity REIT Index, for the period ended December 31, 2011. Past performance is not a guarantee of future results. Individuals cannot invest directly in an index.

The Power of Women in the Economy

The Power of Women in the EconomyMark Dennis is offering another free educational workshop entitled “The Power of Women in the Economy” at 6:00 p.m. on Tuesday, October 16, 2012 at Café at the Hamptons in Fernandina Beach, located at 95742 Amelia Concourse.

“Women are shaping the economic landscape and taking on more financial responsibility than ever before,” says Dennis. “Longer life spans, lower earnings, and their roles as caregivers take a big bite out of retirement assets for women as a group, placing many of them at risk of poverty in their golden years. Only about one in three women have any sort of financial plan in place to help them navigate these challenges.”

This workshop is designed for women (and the men who care about them) to learn more about unique financial struggles faced by women and how to avoid or overcome these planning obstacles.

Topics discussed at the workshop will include:

    -Why the economic crisis is a “wake-up call” for everyone’s retirement security – and what you can do about it.
    -Why women are (and should be) more involved in household financial and investment decisions.
    -How to feel more confident and better informed about important financial choices.

Seating for this free workshop is limited and reservations are highly recommended. Reserve seats by calling Mark Dennis at 904-491-1889 or reserve online at

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Consumers Get Smart(er) About Credit Scores

Don Adams as Maxwell Smart listening to his credit report

Over the past year, consumers’ knowledge about credit scores and what they can mean to their overall financial outlook has improved significantly, but there is still much room for improvement.

Americans have become more informed about certain aspects of their credit scores during the past year, but most still don’t know enough about the risks associated with low scores and alleged “credit repair” services.

A large majority of consumers now know many of the most important facts about credit scores.

For example:

• Mortgage lenders and credit card issuers use credit scores.

• Many other service providers also use these scores — landlords, home insurers, and cell phone companies.

• Missed payments, personal bankruptcy, and high credit card balances influence scores.

• The three main credit bureaus — Experian, Equifax, and TransUnion — collect the information on which credit scores are frequently based.

• Consumers have more than one generic score.

• Making all loan payments on time, keeping credit card balances under 25% of credit limits, and not opening several credit card accounts at the same time help raise a low score or maintain a high one.

• It is very important for consumers to check the accuracy of their credit reports at the three main credit bureaus.

However, most still falsely believe that credit scores are influenced by their age (56%) and marital status (54%), while 21% think ethnic origin plays a role in determining their scores. And approximately half (51%) are under the false impression that credit repair companies are typically helpful in fixing errors and improving scores, even though such firms often charge high prices to perform services that consumers could do on their own.

What You Can Do

A typical credit score will range between 300 and 850 points. Although all lenders make decisions based on the particulars of the lending situation, generally speaking, the higher your score, the lower the perceived risk to the lender, and the more attractive the interest rate you will be offered.

A few tips for raising or maintaining a higher credit score include:

• Pay your accounts on time and keep your balances low. Lenders are looking for a proven track record of making timely payments. Payment history determines about 35% of your credit score.

• Be conservative in the amount of available credit you use at any given time. About 30% of your score is determined by what the industry refers to as your “utilization ratio,” which is the amount you owe in relation to the amount of credit available to you. If that percentage is more than 50%, your score will be lower.

• Hold on to older, unused accounts. The longer an account has been open and managed successfully, the higher your score will be.

Maintain a diversified credit mix. If you hold an auto loan, a home mortgage, and credit cards that are well managed, you will generally have a higher credit score than someone whose credit consists mainly of finance companies.

Source: The Consumer Federation of America, May 2012.
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