Archive - January 2018

1
Don’t Buy Bonds Out of Fear
2
What We Know about How the IRS Treats Taxation of Cryptocurrencies
3
Will Millennials Be More Likely than Boomers to Leave a Financial Legacy?
4
No K-12 Tax Break for Using Illinois’ Brightstart
5
Financial resolutions for 30 and 40 somethings

Don’t Buy Bonds Out of Fear

I read John Waggoner’s October 23, 2017 article in Investment News entitled “Why are investors still flocking to bonds?” in which he wrote:

Bond funds have been astonishingly popular, despite an eight-year, rip-snorting bull market. The past five years, investors have poured $634 billion into taxable bond funds and ETFs, according to the Investment Company Institute, the funds’ trade group. At the same time, investors have yanked $9.5 billion from domestic stock funds and ETFs.

How has that worked out? For bond investors, not so well. The bellwether 10-year Treasury note yield has risen to 2.31% from 1.61%

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What We Know about How the IRS Treats Taxation of Cryptocurrencies

THURS, JAN 25th, 2018

The IRS has provided little guidance regarding virtual currencies such as bitcoin, Ethereum, and Litecoin. The most notable IRS publication, Notice 2014-21, states “For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.”

What does this IRS statement mean to virtual currency users? It means that you will need to file and/or pay taxes if you traded, sold, or used virtual currencies to make a purchase. Consider the following scenarios:

1. If you bought a virtual currency and sold it for a gain, …

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Will Millennials Be More Likely than Boomers to Leave a Financial Legacy?

In ” Leave a Financial Legacy? Boomers and Millennials Slug It Out,” a Boomer writing for Money magazine examined statistics that seem to show that Millennials are not as selfish as news reports would have you believe:

Baby Boomers like to point out that our famously self-absorbed generation advocated for many good causes as youngsters and turned the corner to greater giving in retirement. Much of it is true. But younger generations are way ahead of us, new research suggests Boomers are the least likely generation to say it is important to leave a financial legacy—even though they

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No K-12 Tax Break for Using Illinois’ Brightstart

One of the provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) included the ability for an owner of a 529 education savings plan (such as Illinois’ Brightstart) to use the funds for K-12 private schooling just the same as for post high school expenses. This means that, at least at the federal level, owners of these plans will not pay tax on the growth of these funds if used for any private K-12 schooling. Previously this option was only available with a Coverdell savings plan, but TCJA extends this treatment to 529 plans.

In Illinois however, the …

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Financial resolutions for 30 and 40 somethings

I’ll control the amount of money I spend on a house. What lenders will loan you is not necessarily what you should spend. Your housing decision drives the costs of many other things in your budget: upkeep, insurance, repair costs, and maybe status decisions such as where you send your kids to school and what car(s) you drive. Once you commit, it’s a fixed cost that isn’t easy to reduce. Keep your housing cost (mortgage+interest+taxes+homeowner’s insurance) to 28% or less of your gross and you’ll reduce stress and free up money for savings.

I’ll increase my retirement savings with every

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