Can I put money into a Roth IRA?

Roth IRAs are getting to be more and more popular, and for good reason.  We have no certain knowledge about future tax rates, but it seems quite likely that they've no place to go but up.  With a Roth IRA, you pay taxes now on the money that goes in, and in the future, that money -- and whatever it's grown to -- comes out tax free.

But wait, there's more!  Unlike traditional IRAs or other pre-tax employer-based retirement plans, there are no Required Minimum Distributions from a Roth IRA.  Once you turn 70-1/2, you must start taking money out of traditional IRAs -- and paying taxes on those distributions.  …

Who should own your kid's 529?

There is no single way to save for college which is best for everybody.  The 529 plan, a recent innovation, may be one of the best, but it creates as many questions as answers.  An earlier generation of savers used UTMA and UGMA accounts to save in their kids names in order to save in income taxes along the way, but UTMA and UGMA accounts lost much of their value with some recent tax updates, and they've always suffered certain defects with respect to what happens when someone else - the child in this case - actually ends up owning the assets.

UGMA, UTMA and 529 Plans

A question often comes up amongst folks of a certain age regarding UGMA/UTMA accounts.  Namely, since many of our parents used them for us about a generation ago, are they still tools that we should be considering for our college savings for our kids today.  Or, perhaps of slightly greater complexity, if they already have a UGMA or UTMA account for their kids, what, if anything, should they do with them?

So what are UGMA/UTMA accounts, anyway?  UGMA stands for the Uniform Gifts to Minors Act, which was passed in 1956 to provide a uniform set of rules which individual States could adopt to make it more convenient for folks to transfer assets to minors.  …

When Losses are a Good Thing

It's time for year-end tax management moves and there are a variety of strategies to consider this year, particularly with respect to the special treatment of Roth conversions in 2010, the potential expiration of the '01 and '03 tax cuts, not to mention the fact that the Estate Tax is coming back (and similarly, but more subtle in the implications, the Generation-Skipping tax).  And perhaps we'll have time to address them in another News and Notes article, but today's topic is about a tax management strategy which is useful almost every year: harvesting capital losses.

Credit Card Rewards

With so many credit card rewards programs out there, it may be difficult to figure out exactly which ones actually reward you the most.  There are various affinity cards, cash-back, frequent-flier miles, points of various sorts.  So how does one figure out which one actually will generate the most useful benefits?

First, a couple of points which may seem obvious, but because of how confusing the programs may get, these points may get lost in the mess:

One - it doesn't matter how generous a rewards program is if the reward is one you don't actually use.  …

Which bank should I use to save for college?

While everyone's circumstances are different, in many cases, the best way to save for college, especially if one's kids are fairly young, is through a 529 plan.  529s are tax-advantaged savings plans offered by each state.

With a 529 plan, your investments grow tax-free.  You put in after-tax money (meaning you do not get a tax deduction for putting the money in -- if you're familiar with IRAs, it's more like a Roth IRA rather than a deductible traditional IRA) and when the money is ultimately spent for your kids college expenses, it comes out with no taxes due on the growth of the investments.  …

By law, you are entitled to a free credit report. Get it on a regular basis!

Your credit report is more important now than ever.  A recent survey indicated that one in six employers run a credit report on prospective employess -- and this at a time when folks credit is potentially at risk with the recession and credit crisis.  Landlords often run credit reports on potential renters.  And, of course, if you expect to borrow any time soon, you need to know your credit report is correct.  Your credit report is also an important means by which you can keep vigilant against identity theft - such thieves often open a new credit line in your name, charge things up and ruin your credit.

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