European Stars And Stripes Newspaper Archives Dec 5 1999, Page 57

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European Stars and Stripes (Newspaper) - December 5, 1999, Darmstadt, HessePage 2 shafts and stripes Money sunday december 5, 1999 your Money before the season takes Over plan ahead for year end finances by Diana Mccabe the Orange county Register Runch time is upon us the holi Day Rush. End of year tax plan Ning. Before your life gets too hectic unless it already is use what s left of the year to think carefully about your year end finances. Some tasks can t wait until the new year. And if you do wait you could miss out on some great financial savings. Here s a fall checklist to get you started Check out flexible spending arrange ments. These accounts offered by some employers allow workers to use pretax dollars to cover medical expenses and dependent care c6sts a it s really Worth looking at Reen Tsu a certified financial planner in san Juan Capistrano Calif. Employees determine How much Money to contribute to the account based on their expected expenses during the plan year. The higher the contribution the lower the taxable pay. But be careful. If you Don t spend All of the Money you be set aside you Don t get what s left. If you Over contributed this year lower your contribution for next year. Be aware of Wash Sale Rule. With All of the and Downs investors have seen in the Stock Market lately some investors will opt to sell stocks at the end of the year for tax loss purposes. Just remember that the internal Revenue service does t allow the deduction of a loss for a Security Sale if you buy that same Security Back within 30 Days says Dale Quelle an enrolled agent in Buena Park. As Long As you wait 31 Days or More there s no problem and you la avoid the Wash Sale Rule. Paper proof yourself against possible y2k glitches. While experts Don t expect any major problems with the Date change Many Consumers Are still a bit nervous about the impending arrival of year 2000. To protect yourself financial experts suggest keeping printed copies of All Finan Cial documents such As Bank statements 401 k statements mortgage and car pay ments credit card Bills and insurance statements. Tsu recommends keeping All statements dated sept. 30 through the end of the year. That Way you la have a record to take to your Bank or creditor should any mix occur. ,. Update your beneficiaries. Do you have your sex spouse listed As a beneficiary on your pension plan now s a Good time to review exactly who s listed. It s easy to forget who you selected says Mark Wil son a certified financial planner with Tarbox equity in Newport Beach. Some times a beneficiary you named a decade ago has perhaps you Haven t named any beneficiaries. It s better to Check now than let the government decide who gets your Money Wilson says. Review your beneficiaries of your life insurance policy 401-k a Wiir qualified plan variable annuity arid individual retirement account. Check your retirement distributions when you reach age 70 Viz you Are required to Start taking distributions from your iras and qualified plans. You need to do this before the end of the year. Even if a person does t need the Money Tough. You must take it out Wilson says. Some people Don to and they re hit with a 50 percent penalty. For example if you have a $200,000 Ira and you need to draw out one sixteenth of that $12,500and Don t you la be socked with a $6,250 penalty. So Check. Time your Mutual fund sales. Don t buy yourself a tax headache. If you plan to Purchase a Mutual fund at the end of the year try to do it after the dividend is paid out says Wilson. If you buy just before the dividend Date you la get Back part of the Money you just invested and have to pay tax on it Wilson says. Fully fund your 401 k. Bump up your contributions if you re not already giving the maximum experts advise. Most companies allow you to make this adjustment at various times throughout the year. Review your latest statement and think about putting away a Little extra for your retirement. Distributed by Knight Ridder Tribune information services. Breaking into the ipod Market postmark on Bill does t count by Liz Pulliam los Angeles times Money talk Liz pull Lam i tried to get in on recent hot initial Public offering of a new company but my broker told me All the shares had already been taken by Mutual funds and Large institutional investors. Is this True in t that a monopoly " there Are no stupid questions in personal that Mark the questioner As a newbie. Nelsh a can i make a Safe 10 percent return the other is tie one you just asked v or the. Short an Eris yes it s True. As to Vav Hethie i Teton com use a Mono f to nip in me. Classic sense because there is plenty of Competition map Vej. It s just that not much of the Competition incl Les the utile Guy. Individual investors can and do get hold of ipod shares typically in one of three ways 1 brokers usually Reserve hot shares for their biggest individual clients. If you have More than $100,000 or so in your account and you Trade a lot you might qualify. 2 a few online brokerages notably wit capital and a Trade sometimes have shares of certain ipos available to smaller Fry on a first come first served basis. 3 Many people get shares either by working for the company that s going Public or by copying up to someone who should t assume that an ipod is a ticket to riches. Ipos can and do Flop it s just that the big winners grab the head lines. Many studies have shown that ipos tend to Trade below their offering Price within a few months. If you really like the company and think it has Long term Poten tial you might wait until the juror has died Down if you re interested in trying to break into this Tricky Market however track Down Tom Taulli s Book investing in ipos $24.95, Bloomberg press. I was very much interested in your column about payments to credit card companies that were not properly credited. I clearly remember that Congress passed a Law requiring that the postmark be accepted As the Date of receipt for any payment made through the . Mail. This was maybe a couple of years ago but recently the Issue came up when i was dealing with payments to a Utility. I was astonished to be unable to find Docu mentation of any such could t find the documentation because the Bill proposing it the Post Mark prompt payment act of 1995 . 1963never made it out of the congressional subcommittee where it had been sent to Bill had 31 co sponsors but also significant opposition from Surprise Banks credit card issuers and credit card company is required by Law to Post your payment the Day it is received by the company itself or by the processing company that handles its payments. Postmarks Are irrelevant. Which Means customers must rely on the credit card company s competence an honesty in posting payments. You can imagine How Well that works. Readers have sent me a raft of horror stories about companies that claimed payments had t been received in Tim and were thus imposing late charges and higher interest rates. In fact two major credit card issuers Providina and first Usa have confessed that processing problems led to hundreds of thousands of customers being charged undeserved late fees in the last year. The companies say the affected accounts have since been credited that said Many credit card issuers will remove a late charge if a Good customer complains particularly if other recent payments have been on time. That s the level of customer service we should sex pet. Pulliam will answer questions submitted or inspired by readers but cannot respond personally to queries. Questions can be sent to at or mailed to in care of Money talk business Section los Angeles times times Mirror Square los Angeles Ca 90053. Investing and almost avoiding taxes tax manged funds i by Gail Mark Jarvis Saint Paul Pioneer press investors who Don t like the sting of taxes can consider a new Breed of Mutual fund called tax managed funds. These funds Don t simply try to provide investors with the highest possible return. They try to keep the return High while managing investments in a Way to mini Mize capital gains taxes. Investors can do better than they would in a fund that ignores taxes and earns a higher pretax return. The pretax return is what you usually see in Mutual fund statements Magazine rankings and marketing materials. The securities and Exchange commission is debating whether reporting practice should be changed so investors realize that a fund s tax inefficiencies can erode returns the same Way loads and fund expenses do. About 40 funds currently Are focused on tax efficiency. Some Don t include the. Words tax managed in their names but their prospectuses Tell investors tax efficiency is a focus. Even if funds pay attention to tax consequences Mutual fund investors can t avoid capital gains taxes completely. If fund increases in value investors will owe taxes when they sell their shares and this time of the year some funds leave investors with sizable capital gains distributions if a fund has made More than it has lost Selling stocks and Bonds throughout the year. Portfolio managers in tax manage funds use techniques to try to reduce these tax burdens on shareholders. Fre Quentin they will try to offset gains from stocks that have gone up with losses from stocks that have gone Down. When individual investors buy stocks they do this themselves by Selling their losers so the losses can lower or even wipe out taxes on the some Mutual fund managers pay Little attention to taxes As they move Inland out of stocks quickly to get the highest pretax return for funds May charge investors a fee if they leave a fund within two years of getting into it the idea is to Dis courage people from redeeming a lot of investors bail out of a fund at once the manager has to sell stocks to provide the Cash. And since winners rather than losers generally Are sold the capital gains taxes can be Large. Fund managers to cured on taxes May avoid stocks that pay dividends. And they May try to keep turnover Low. Turnover Means Selling stocks in a portfolio and replacing them with new ones investors who want to avoid High capital gains taxes sometimes look at a Mutual fund s turnover rate to see if it is High they Are Wise to put funds with a lot of turnover often technology or Small Cap funds into tax deferred accounts like iras. But turnover in t a perfect Indica Tor of tax consequences people who have Access to the internet can Check the after tax returns for Man Mutual funds by searching for them at wow Morningstar com looking up a Quick take report and clicking on Trail ing returns remember not to becomes preoccupied with taxes that you forget to notice returns. Gail marksjarvis1 can be reached at Mark Jarvis Pioneer . Distributed by Knight Ridder Tribune information services. I Jod Bafundo photo Grable is. Bowers chess 202 761-0724 United states Call 202 76l 0910or_fax i20217.6vq890 biis@tripes1osd,. New 340j9m7jorfaxi.03 3423-8257

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