First Capital Advisors, LLC

Low to moderate income individuals still have a chance to take advantage of the savers credit for 2011. The savers credit is a great motivator for saving for retirement.

Those who can claim the credit must meet the flowing criteria:

• Married couples filing jointly with incomes up to $56,500 in 2011;
• Heads of households with incomes up to $42,375 in 2011; and
• Married individuals filing separately and singles with incomes up to $28,250 in 2011.

The great benefit of the credit is that it allows individuals to balance off part of the first $2,000 that is contributed to a 401K or IRA.

The April 17^th, 2012 tax filing deadline is also the deadline for opening an IRA. Contributions to a 401k must be made before January 1^st in order to qualify.

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December 31st, 2011 | Category: education, investing, personal finance, Savings, Taxes | Leave a comment

As with anything else, it’s vital for military personnel to understand their tax rights and benefits.  Too often many tax benefits are overlooked because military personnel are not aware of their rights.  Among these are:

• Unreimbursed expenses related to moving can be deducted. For more information refer to IRS Publication 3, Armed Forces’ Tax Guide.
• Combat Pay is not taxable for any period served in a combat zone.
• Tax filing deadlines are usually extended for members of the military.
• Certain costs associated with the upkeep of uniforms are deductible.
• Power of Attorney is allowed for spouses unable to file joint returns due to military duty.
• Members of the US Armed Forces Reserves can deduct unreimbursed travel expenses for traveling over 100 miles away from home to perform duty. 
• Certain allowances paid to ROTC Students in advance training are non taxable.
• Job Hunting expenses are also deductible for military personnel who are making the transition to the workforce from the military.
• Lastly, free tax assistance is available for military personnel at tax time. 

Your tax accountant is a great resource for understanding your tax rights and benefits. Additionally, IRS Publication 3, Armed Forces’ Tax Guide is also a great resource.

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November 18th, 2011 | Category: consumer laws, education, personal finance, Taxes | Leave a comment

Many people often need prior year tax records for various reasons.  Some of these reasons include loan applications or other legal matters.  Often people don’t know how to obtain this information or that the information is even available.   Taxpayers can make a request to get free copies by going on line, through the mail, or calling the IRS directly.

• There is no fee for transcripts for the current or past three years.
• A tax return transcript can be ordered on line at www.irs.gov using the online tool called Order A Transcript.
• Phone orders can be made by dialing l 800-908-9946.
• Individuals wishing to order by mail should complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.  Form 4506T, Request for Transcript of Tax Return should be used by businesses.
• Online or phone orders are fulfilled within 10 days. Mail orders are fulfilled within 30 days.

Your tax professional is always a good resource for any tax questions that you have or if you need assistance ordering your transcripts.

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October 18th, 2011 | Category: education, loans, mortgage, personal finance, Taxes | Leave a comment

I recently read an article about what makes people feel rich.  Immediately, I started to think about myself and my current financial situation.  I am not a millionaire.  I do not have rich parents and I have a 9 to 5 like most of the population.   Sometimes my 9 to 5 feels like a 9 to 9.  But you get my point.

Given the current economic state of our country, most people do not feel rich. The prices of basic necessities like food and gas keep rising and our paychecks are not increasing.  I recently spoke to a friend who told me how his job temporarily gave everyone a 25% pay cut.  When I asked about the pay cut, he told me that it was a either a pay cut or layoff.  In this case the choice or lack of is pretty clear.

So what makes people feel rich?  Many people that I know feel rich when they possess material possessions.  The possessions can be anything from the latest cell phone or the expensive car. For others it’s having the biggest house on the block.  Being rich is a state of mind.  Some people feel rich because they are surrounded by loving family and friends.  Growing up I always said that I am not rich in money but I am rich in blessings.  I always had a roof over my head and a comfortable bed to sleep in.  Like I mentioned before, I did not grow up rich.  But I was rich in blessings.

As an adult, I have to now revisit the topic of what makes me feel rich.  I now have bills and a mortgage.  Do I still feel rich?  The answer is yes.   Having more financial responsibilities has not taken away from my feeling of being rich in blessings.  I feel rich not only because of having a roof over my head and a comfortable bed.  I also feel rich because I have choices and options.  Every day that I wake up, I have a choice regarding decisions I will make and the course of actions that I will take.  I feel rich because I have resources to guide my decisions so that I can make educated decisions.  I feel rich because I choose to be debt free.  I feel rich because I always have the option to start over fresh each day.  All of these things make me feel rich.

What makes you feel rich?

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September 15th, 2011 | Category: credit cards, education, investing, personal finance, Savings | Leave a comment

If you are in the process of selling your home, it’s very important that you know the tax implications involved:

1.  If you have owned and used your home as your primary residence for two years out of the five years prior to the date of its sale you do not have to report the gain on the sale as part of your income. If all of the gain is excludable, you do not need to report the sale on your tax return.
2. Losses from the sale of your primary residence are not excludable.
3. Only the gain from the sale of your primary residence can be excluded on your tax return. You can’t exclude the gain on a second home.
4. Up to $250,000 of the gain for single taxpayers and $500,000 for joint filers can be excluded from your income.
5. Gains that are not excludable are considered taxable and must be reported on Form 1040, Schedule D, Capital Gains and Losses.

More information can be found on IRS Publication 523, Selling Your Home

August 21st, 2011 | Category: education, personal finance, Savings, Taxes | Leave a comment

This summer, many students will be taking on summer jobs.  However, many are unaware of the tax consequences involved with employment.  Additionally, many students fail to establish a savings goal. 

For example:

1. Form W-4, Employee’s Withholding Allowance Certificate must be completed.  Employers use this form in order to withhold taxes from your paycheck.  The IRS website has a useful Withholding Calculator on to assist with completing Form W-4. Visit www.irs.gov.

2. Use the summer job as an opportunity to set a savings goal. The website www.YoungAmericaSaves.org is a very useful tool.

3.  Remember that money received from tips are taxable and so are earnings from self-employment.

3. Do your research and find a good a savings account.  The website bankrate.com is a great tool for finding the right account to suite your needs. 

4. Lastly, parents should try to serve as role model for their children.  Setting clear expectations and making the most of your savings will enable your children to follow a good example.  

July 16th, 2011 | Tags: education, employment, personal finance, Savings | Category: education, employment, personal finance, Savings | Leave a comment

So you have a lot of credit card debt?  So what now?  Many people find themselves in this situation and feel helpless and hopeless.  The key is to not give up.  There are many resources out there to help you. Among them are:

• Credit counseling: There are several nonprofit agencies out there dedicated to helping you.  Do not fall for those agencies that are asking you to pay up front.  The real agencies will not charge for their services.

• Consolidation loan: This technique has been useful for many people. Consolidation loans can be obtained through many resources.  Check with your local bank or consider peer to peer lending.

• Debt settlement: Consider contacting your credit card company and negotiate to settle your debt for a lower amount.  For example, try to settle half of your debt.  You can accomplish this by calling or writing to your credit card company.  Explain the situation to them and see if they are willing to negotiate and settle a portion of your debt.

• Pay off your high interest cards: Prioritize your debt so that you are paying off your high-interest credit cards first. This will take some practice.  Be sure to take into account all of the debt that you owe so that you can come up with the right strategy.

For more useful information on credit cards and balance transfers, visit the bankrate.com website and search on credit cards.

June 25th, 2011 | Category: credit cards, education, personal finance | Leave a comment

Credit card balance transfers are very common.  We usually think we are getting a good deal if we are offered a zero percent APR balance transfer.  This is a great offer.  However, too often we fail to think about the long term effects of a credit card balance transfer.

For example, can you avoid incurring new charges on the old card?  For many people this is a difficult task.  Additionally, what do you plan to do with the old card?  It is recommended that you keep the account open.  This helps build up your FICO score.

Other important factors to consider are whether you will get approved for the new card.  Applying is the easy part. However, the challenge is getting the approval in the first place.  Lastly, be sure to consider fees that will be incurred as a result of the balance transfer.  Most if not all major credit card companies charge fees for balance transfers.

For more useful information on credit cards and balance transfers, visit the bankrate.com website and search on credit cards.

May 25th, 2011 | Category: education, personal finance | Leave a comment

Many people have already discovered this great new way to save.  What is it you may ask?  Tax time is a great time to save because many people receive refunds.  In 2010 President Obama created the tax time Savings Bond Program.  The program gives tax payers the opportunity to put away part of their refunds into a U.S. Savings Bond.

The process is as easy as checking a box on your return.  Those filing paper returns can fill out Form 8888 Allocation of Refund (Including Savings Bond Purchases). Tax time savings bonds can be purchased in any amount from $50 to $5,000 and up to three bonds can be purchased.

Some of the main reasons for saving using the savings bonds include:

• · The bonds are safe and secure.
• · They never lose value.
• · You can earn interest for 30 years.
• · There are never any fees or charges.
• · After one year, you can redeem them at a bank or credit union.

More information can be obtained by visiting the Treasury Direct page.

April 28th, 2011 | Tags: personal finance, Savings, Taxes | Category: education, investing, personal finance, Savings, Taxes | Leave a comment