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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
Six Tax Items For Small Businesses
Published Tuesday, July 18, 2017 at: 7:00 AM EDT
The IRS marked National Small Business Week in 2017—the first week of May—by issuing a series of tax tips and reminders to small-business owners. Here are six items covered during the week:
1. Sharing economy: The sharing economy, which includes everything from ride-sharing services to spare room rentals, is taking the nation by storm. The IRS cautions that income derived from these activities is generally taxable, though you may be entitled to offsetting deductions. If you're making money from such ventures, you'll need to pay estimated taxes and payroll taxes for any employees every quarter.
2. Worker credits: A business can claim the Work Opportunity Tax Credit (WOTC) for hiring workers from one of 10 target groups. Generally, the WOTC equals 40% of a worker's first-year wages for a maximum credit of $2,400. If you hire a disabled veteran, you may be eligible for a credit of as much as $9,600. You have to meet special certification rules to claim these credits.
3. Hobbies: Even if you engage in an activity mainly for personal pleasure, income you earn from this passion usually is taxable. Normally, you can deduct related expenses, but only up to the amount of your hobby income. If you're truly trying to turn a profit, however, you may deduct a loss. The IRS relies on nine key factors to determine whether your activity is a hobby or a business.
4. Research credits: Your firm may qualify for a 20% research credit on qualified expenses to offset income taxes. Plus, under a 2015 tax law change, a qualified small business can apply up to $250,000 of its available research credit against payroll tax liability. To qualify for the current tax year, your business must have gross receipts of less than $5 million and can't have had gross receipts prior to 2012.
5. Home office deductions: To qualify for these deductions, you generally have to use a portion of your home regularly and exclusively as your principal place of business or as a place to meet customers, clients, or patients in the normal course of business. The IRS reminds taxpayers that they can deduct actual expenses proportionately, based on the size of the home office, or claim a simplified deduction of $5 per square foot up to $1,500.
6. Worker classification: The IRS has outlined the rules for classifying workers as either employees or independent contractors. The difference is important, because an employer has to withhold income taxes and pay payroll taxes on wages for an employee, but not for payments to independent contractors. The control the employer has over the worker and the nature of the relationship are two key elements.
Don't leave matters to chance. Seek professional tax assistance for your situation.
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