- Guide to Mark to Market: How Do Hedge Funds Use It?
Hedge funds are known for their sophisticated strategies and dynamic approaches to investment. The mark-to-market accounting method is one of the tools that hedge funds employ. This approach involves valuing assets based on their current market price rather than their purchase price. This provides a real-time snapshot of a fund’s financial health. Mark-to-market lets hedge… read more…
- Ask an Advisor: Should I Move Some of My $650k from Stocks to Precious Metals?
My total investment value is approximately $650,000, mostly in stocks. Should I keep a percentage of my portfolio in precious metals? – Rex Investing a portion of a portfolio in precious metals is a common practice. If you keep the allocation modest — around 5% — I think it’s okay to use precious metals for… read more…
- Form 1099-Q: What Is It, Who Files It and Who Gets It?
The Form 1099-Q tax document goes out to taxpayers involved in educational savings plans, such as 529 plans or Coverdell Education Savings Accounts. Financial institutions issue these forms to report distributions made from these accounts. Typically, the financial institution managing the account has the responsibility of filing the form with the IRS. The institution also… read more…
- How Much Do You Need to Retire at 35 Years Old?
Retiring at 35 is a bold financial goal and one that requires a high level of planning, aggressive saving and a lifestyle that aligns with early financial independence. Whether you are drawn to the principles of the FIRE (Financial Independence, Retire Early) movement or simply want more freedom in life, figuring out how much you… read more…
- Risk Appetite vs. Risk Tolerance: What Are the Differences?
Risk appetite and risk tolerance are often used interchangeably, but these financial terms represent distinct concepts. They also play somewhat different roles in shaping investment strategies and financial planning. Risk appetite refers to the level of risk an entity is willing to pursue to achieve its financial goals. It is a strategic choice that aligns… read more…
- Risk Appetite: Types, Purpose and How to Determine It
Risk appetite is a term for the level of risk an individual or organization is willing to accept in pursuit of their goals. This concept is relevant to investors as well as businesses aiming to align their strategies with their risk management frameworks. Understanding and addressing risk appetite enables individuals and companies to better navigate… read more…
- Ask an Advisor: I’m 69 With $370k in Equities, But I’m ‘Getting Nervous’ About the Stock Market. What Should I Do?
I am a healthy, active 69-year-old with $370,000 in equities but I’m getting nervous that stocks are overvalued. My portfolio has no bonds. I am interviewing financial planners but due to a negative experience with a firm a few years ago, I am having a hard time trusting anyone else with my hard-won savings. What… read more…
- Corporate Income Tax: How It Works and Deductions
Understanding how corporate income taxes work is crucial for companies aiming to optimize their financial strategies and ensure compliance with tax regulations. At its core, corporate income tax is a levy placed on the profit of a corporation, calculated as the company’s revenue minus the costs of goods sold, general and administrative expenses and other… read more…
- Social Security Fairness Act: Are Payments Retroactive?
The Social Security Fairness Act addressed long-standing concerns related to the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP and GPO had reduced Social Security benefits for millions of public sector employees. The act’s provisions have significant implications for retroactive payments and the anticipated timeline for benefit adjustments. Consulting a financial… read more…
- Installment Sale: What It Is and Tax Benefits
An installment sale is a way of selling an asset that calls for the seller to receive payments over time rather than in a single lump sum. This type of sale is commonly used in real estate and business transactions. It can allow the seller to spread out capital gains taxes and potentially reduce their… read more…
- Personal Banker vs. Financial Advisor: Who to Work With?
When it comes to managing your finances, choosing the right professional to guide you can make all the difference. Two common options are personal bankers and financial advisors, each offering distinct services tailored to different financial needs. A personal banker typically works within a bank, assisting with everyday banking needs such as opening accounts, securing… read more…
- I Have $3 Million Invested With My Financial Advisor and Pay a 1% Fee. Am I Paying Too Much?
“Financial advisor” covers a wide range of services, ranging from simple counsel and budgeting to tax preparation, long-term planning and portfolio management. What you pay, and how much, will depend on the services you engage and the kind of firm you hire. You’ll generally pay less for smaller and more discrete services. For example, a… read more…
- What Percentage of Retirees Have $1.5 Million?
A million dollars simply isn’t what it used to be, but it remains a wealth level that relatively few people reach. Only 4.7% of Americans have $1 million in retirement savings and just 1.8% have $2 million, according to the Employee Benefit Research Institute. The estimate is based on data from the Federal Reserve’s Survey… read more…
- Ask an Advisor: My Wife Will Retire 2 Years Before Her Full Retirement Age (FRA). How Do We Calculate Her Spousal Benefit?
I am 76 and I have been receiving my benefit since age 62—four years before my full retirement age (FRA). My wife is now 61 and will retire at age 65—two years before her FRA. She will begin drawing her teacher retirement from the State of Texas, which is no longer subject to the Government Pension… read more…
- What Is a Closed-End Second Mortgage and How Does It Work?
A closed-end second mortgage is a type of home loan that allows homeowners to borrow against their home’s equity while keeping their primary mortgage unchanged. This type of loan provides a lump-sum payment upfront with a fixed repayment schedule and interest rate. Unlike a home equity line of credit (HELOC), which allows for repeated borrowing… read more…
- Community Property States vs. Common Law States
Property division in a divorce depends on whether the state follows community property or common law rules. In community property states, most assets acquired during the marriage belong equally to both spouses and are typically split 50/50. In common law states, assets generally belong to the spouse who acquired them unless they are jointly owned.… read more…
- Form 1099-INT: What Is It, Who Files It and Who Gets It?
When tax season rolls around, one of the most common documents taxpayers receive is Form 1099-INT. This form, issued by banks, credit unions and other financial institutions, reports interest income earned over the tax year. If you’ve earned at least $10 in interest, you can expect to receive a Form 1099-INT from the institution that… read more…
- Form 1099-B: What Is It, Who Files It and Who Gets It?
Form 1099-B is a tax form issued by brokers or barter exchanges to both the IRS and the taxpayer. It provides details about sales of stocks, bonds, or other securities. Typically, brokers are responsible for filing this form with the IRS, while investors receive a copy. Investors then use the information on the form to… read more…
- Form 1310: How to Claim a Refund for a Deceased Taxpayer
Form 1310, officially known as the “Statement of Person Claiming Refund Due a Deceased Taxpayer,” is a document that allows you to request a tax refund on behalf of someone who has passed away. If you are an executor or personal representative of a deceased individual, you may need to know to properly complete and… read more…
- Form 1095-C: What Is It, Who Files It and Who Gets It?
Form 1095-C is a tax form many larger employers have to send to their full-time employees, detailing the health insurance coverage offered to them. This document confirms whether an employee was offered health insurance and provides information about the coverage itself, including the months it was available. Employees need this form to verify their health… read more…
- Amortization vs. Depreciation: Differences and Examples
Amortization and depreciation are accounting methods used to allocate the cost of assets over their useful lives. Amortization applies to intangible assets like patents and trademarks. Depreciation deals with tangible assets like buildings, machinery and vehicles. A financial advisor can help you apply both methods as part of a broader tax strategy to reduce taxable… read more…
- Ask an Advisor: I Need $3500 Per Month to Cover My Expenses. Should I Take Social Security or Tap My 401(k)?
I’m retired and receive a pension but I still need to supplement my monthly income. My choices are to claim Social Security or start withdrawing money from my 401(k). I’m 64 and have $200,000 in a 401(k). My Social Security estimates are around $2,600 a month. I need $3,500 a month to pay bills. Your… read more…
- How the Alternative Minimum Tax (AMT) Affects Stock Options
Stock options can be a powerful tool for wealth building, but they come with tax implications that many investors overlook—especially when it comes to the Alternative Minimum Tax (AMT). This parallel tax system was designed to ensure that high-income earners pay a minimum level of tax, but it can unexpectedly impact employees who exercise incentive… read more…
- Complete Guide to California’s Alternative Minimum Tax (AMT)
California’s tax system is complex, and for certain taxpayers, the Alternative Minimum Tax (AMT) can add an extra layer of financial obligation. California’s AMT operates alongside the state’s standard income tax. It employs a separate calculation that disallows many common deductions. If your income exceeds certain thresholds or includes specific tax preferences—such as incentive stock… read more…
- What Are the Tax Rates for the Alternative Minimum Tax (AMT)?
The Alternative Minimum Tax (AMT) is a parallel income tax system designed to ensure that high-income individuals pay a minimum level of tax, regardless of deductions and credits that might otherwise lower their tax liability. Unlike the regular income tax, which has a progressive structure with several tax brackets, the AMT operates under a separate… read more…