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Investing in your financial future SAMIE HARTLEY
“I
t’s never too early to start saving for the future.” It’s the hallmark phrase
of financial planning and a mantra revived by a slow-recovering economy. Pundits decree what’s hot and what’s not, urge you to do this or that, but your financial future ultimately comes down to what you want. Now is the time to assess your situation, set goals and lay ground rules for establishing a realistic financial plan. And that’s where Oscar Peccorini comes in. “The turn in the economy has forced us to take a look at our spending and pinch our pennies,” said Peccorni of American National Insurance Company in Brentwood. “People are re-evaluating their finances and looking to save wherever possible, and it’s a good time to step back and set the stage for a strong foundation for a sound financial future.” Peccorini’s partner Nic Mutulo agrees: ON THE COVER: Some of the equipment used at Cre’me dela Gem in Brentwood to determine the gold content of jewelry.
“Our generation isn’t a saving generation. We come from buy-now, pay-later mindset. But in the down economy, we’re starting to look at how we spend and how we save. What we do is look at your entire financial picture and help you find the best strategy to achieve your financial goals.” The first step in that process is a factfinding assessment. Peccorini and Mutulo take a “helicopter approach” to look at every facet of your financial situation. They look for areas where you may be investing too much money, such as car insurance, and areas where you aren’t investing enough, such as homeowner’s insurance. Once a road map of your finances has been laid out, an agent at American National Insurance Company hosts a financial planning workshop to go over potential strategies for achieving your goals. The workshop isn’t clientspecific, but a general overview of ways you can invest – and protect your investments. Finally, Peccorini and Mutulo offer recommendations. That’s right. Up to this point, no fees have been charged and no contracts have been signed. These consulting services are complimentary. “We’re not trying to sell you a product,” Peccorini said. “We serve as consultants to get you thinking about your financial future. We offer the analysis free of charge. If you end up signing with us, great, but at the very least we’ve educated you about how to prepare for
Nic Mutulo and Oscar Peccorini of American National Insurance Company help clients develop strategies for a solid financial future.
Photo by Samie Hartley
the future. “We’re willing to put in the sweat equity at the ground level to help establish trust because we care about your income and what’s going to happen to you. Clients value that approach, and we get most of our business from referrals.” Peccorini said the most is important part is for you to be invested in your future and committed to making the changes that help you reach your goals. While he and Mutulo can’t wave a magic wand to make
your financial future crystal clear, they offer a strategy to help you invest in yourself. As representatives of an insurance company, the agents put together a basic contract without all the financial planning consultation, but Peccorini encourages clients to consider doing so. American National Insurance Company is located at 325 Town Centre Terrace, Suite D in Brentwood. For more information, call Peccorini at 925-684-7055 or Mutulo at 925-684-1001. To comment, visit www.thepress.net.
Do you have a Junior Mortgage on Your House? Lien Stripping in Chapter 13 by Joan Grimes, Esq. One of the great advantages of a Chapter 13 bankruptcy at this time is ability to strip a lien on your principal residence that does not attach to any equity. Here is a common example: Principal residence has current fair market value of $300,000. The first mortgage has a balance of $400,000 and the second mortgage has a balance of $100,000. Because the second mortgage does not attach to any equity in the property, the lien can be avoided or “stripped” in a Chapter 13 thereby removing the balance of $100,000 at the completion of the Chapter 13 case. When does a Chapter 13 lien stripping case make sense? First, the residence must be your principal residence i.e. where you sleep at night. Second, you don’t want to file a Chapter 13 to strip a lien unless you really, really want to stay in this
house. Third, the balance on the junior lien needs to be large enough combined with other debt to make a Chapter 13 advantageous i.e. you don’t want to file Chapter 13 to avoid a lien of $10,000. If a Chapter 13 is sounding like something that might work for you, there are several other things to consider. First, we must make sure all of the owners of the property and all of the people who signed on the mortgage note we need to strip are filing bankruptcy. For example, if the property is owned by both you and your spouse, we cannot strip off the mortgage unless both of you are filing bankruptcy. Second, in order to strip off the mortgage, we have to prove that your real property is not worth more than the payoff balances on the other senior mortgages. That is, we need to prove that there is no value, not even one dollar, left in
your real property to “secure” the mortgage we are trying to strip in the Chapter 13. Third, you need to have a “real” senior mortgage or at least a reasonable “hope” of one through a modification. The best senior mortgages for lien stripping cases are 30 year fixed that you can really afford or a mortgage that has been modified into a loan you can afford. If the senior mortgage is going to reset into a payment you cannot afford in 1,2,3 or 4 years, there is no reason to spend the money to strip a junior lien and then lose the house to a foreclosure by the senior lender later. In conclusion, there has never been a better time for Chapter 13 lien stripping cases. Home values are low and the number of junior liens that do not attach to any equity are at an all time high. This is truly the lemonade out lemons recipe
if you are intending on staying in your current residence and meet the requirements for a Chapter 13. Prior to simply walking away for your current residence, it may be a good idea to consider a Chapter 13 and see what it can do for you. WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE. THIS INFORMATION IS NOT PROVIDED AS LEGAL ADVICE AND SHOULD NOT BE RELIED UPON IN MAKING ANY DECISION REGARDING A SHORT SALE OR FORECLOSURE. THIS INFORMATION IS NOT A SUBSTITUTE FOR OBTAINING TAX & LEGAL ADVICE REGARDING AN INDIVIDUAL SITUATION. GRIMESBKLAW. COM PHONE (925) 323-7772 © 2011 Joan Grimes – Advertisement
Are you sailing around the storm or into it?
Navigating through this economic storm is not easy. Is anyone helping you? Stocks • Tax Free Bonds • Mutual Funds • IRAs • 401K Rollovers • Retirement Planning
Kelly C. Althar Financial Consultant Direct 415-274-3208 Toll Free 800-316-9901 x3208 kalthar@fwg.com Member FINRA SIPC Financial West Group 100 Spear Street, Suite 930, San Francisco, CA 94105
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Informed Investors Choose Solar Michael Wulfman, Spectrum SolarWinds Some say that for homeowners with savings or credit, a solar system is a no-brainier. Others believe solar doesn’t make financial sense yet. Should you take the bull by the horns and go solar now or leave your money in the bank … or should you buy that car you have had your eye on? Ask yourself, as an investment does solar compare sensibly to other safe investments? How much can an ordinary family household save with solar? What about looking at system payback, opportunity costs of other investments, the ongoing positive cash flows from owning a solar system and your annual rate of return? Are there provable benefits in home value and marketability? We try to answer those questions here. Direct Savings from Solar First, let’s look at the direct savings of a solar photovoltaic (PV) system. This is a good first step in judging the gains of going solar. A 5.9-kilowatt AC PV system is typical of many middleclass homes with air-conditioning and a family of four. A 5.9kilowatt system will save about $320 per month to begin with. Keep in mind: This savings will grow every year as PG&E rates keep rising. You will save $4,232 or more, in the very first year and well over $200,000 over the warranted life of the system. Now, accounting for average inflation of 3 percent, the combined savings will actually come closer to $300,000. Next, think about PG&E rates increasing annually. Historically, they have risen annually by about 7 percent, as stated on PG&E’s website. However, we saw a 15 percent overall PG&E increase last year alone. So I feel safe using 8 percent here. Those increases are also compounded yearly! That’s an annual raise on the raises too! Your actual savings from what you otherwise would be paying to PG&E now rises very steeply, more than tripling the aggregate savings from solar when compared to projected PG&E rates over the life of the solar system! Your neighbors, perhaps afraid of committing to solar, are still paying for PG&E five, 10, 15, 20 years from now. They have cause to resent you! Because of your solar system, you now pay comparatively less and less each year. In a few years, you essentially pay nothing, … indefinitely. During the same period their bills rise from hundreds per month to thousands of dollars per month … at over twice the rate of yearly compounded inflation. Solar System Payback Payback period, also referred to as the break-even point, is a common, however limited, evaluation tool. System payback is simply the amount of time in months and years that it will take to recover your up-front cash outlay in terms of the total monthly utility bills that add up to equal your solar system’s cost. Adjusting actual dollar-to-dollar payback for inflation only, a standard system usually has a break-even point of six to eight years. To be accurate, take projected utility price increases into account of approximately 8 percent annually. Now the true breakeven point you should actually experience typically falls to only four to 6½ years for solar. So systems pay for themselves many years before the warranted output life of the panels is approached. After the solar system has paid for itself in offset electric bills, expect to generate free electricity for another 25 years, given a 30-year system life. Some solar panels have been producing since the 1950s. And the technology has vastly improved! In truth, the system could be operational well beyond even that time. Yet, prudent buyers may be mistaken to focus on the “payback” for solar. In fact, “paybacks” of 10 and even 20 years often are a very good investment financially. The payback method of determining if a solar system makes sense does not reflect the best form of money-wise valuation of solar, according to The Contra Costa Times financial columnist Steve Butler (June 16, 2011). Paraphrasing Butler, far better financial advice is to
compare solar with other taxable investments rather than view the solar installation as an appliance with planned obsolescence, as the payback method does. Taking taxation into account Butler advises comparing the return in your solar system’s reliable electricity savings with the earnings on a safe financial investment that also has guaranteed monthly returns. Take the current rate of return on a $30,000 guaranteed investment (the gross cost of a typical solar system). In a money-market fund or certificate of deposit, the investment would now be making about $250 a year max, right? The marginal tax bracket would reduce that to around $200 of spendable income. “Zilch.” Compare this with the after-tax value of your thousands of dollars per year of free electricity from the same amount of invested capital. There is no comparison: There are no taxes on this financial benefit to you “freed up” from solar because of not paying a PG&E bill. Your total return is the full amount of savings that can be spent or invested elsewhere. The tax-free $4,232 of savings is comparable to your having to earn about $6,000 of additional taxable income. Again: You would need to earn about $6,000 of additional taxable income to have this tax-free benefit of $4,232 of savings from solar. That’s predictably, at very least, a 13-percent pretax return on the original investment in a PV solar system. Can you beat that return by putting your money elsewhere than into your solar system? That’s unlikely. Positive Cash Flow from this Typical Solar System Financing is a practical option for obtaining a PV system for homeowners or small businesses. Most solar customers now buy or lease a solar system for little or no out-of-pocket money and save on their monthly utility bills immediately. In fact, a lease that would take out this $320 per month power bill would typically have a monthly lease payment of only about $160. The other side of that coin is that more is paid for the solar system in the end because of the added financing charges. But it works out well just the same. Loans with longer years’ repayment periods provide immediate and permanent savings from fluctuating and rising utilities bills. The monthly savings more than offsets the monthly fixed-loan payments replacing the PG&E bills. The small monthly payment gets you a significant and increasing net positive cash flow each month. Apply some of the monthly savings from paying no electric bill to paying the lower loan or lease payments. Then pocket the remaining monthly savings from your former PG&E bill. Again, your net savings, compared to not using solar, increases as PG&E rates are raised annually. But it gets better You get thousands of dollars of federal tax credits back. Thirty percent of your gross system cost is paid to you in a refund check if you own your system! If you apply this to your loan balance, even greater monthly savings are provided to you by your new smaller loan payments. The reduced monthly payment yields new net cash flow of 25 to 30 percent more than you had before paying down the loan.
But, wait for it … Since interest on the loan is tax deductible, the net cash flow annually will really be even more than the reduced monthly payment savings! As you can see, savings pile up as one becomes mindful of the collective financial elements working to the solar consumer’s advantage. Loan payments are a fixed cost but the monthly savings grow each year as utility rates increase. Over time, the tax benefit of the interest on the loan shrinks to nothing, but this tax deduction loss is balanced by the compound growth of the savings. But that is not all: Annual Rate of Return If financing is not required, the Compound Annual Growth Rate (CAGR) evaluation tool compares a PV system to other common investment means. Historically, (pre-recession), cashshort term treasuries yield 4.1 percent, bonds yield 4.8 percent, and stocks have had the highest return, about 10.1 percent. In recent years, the return has been about half of that. The comparable CAGR of the average PV system (approximately 5.8 kilowatts) will actually be around 27.6 percent once you factor in inflation. This CAGR return rises above 40 percent over time, again, considering utility rate increases. Therefore, even compared to high growth rate stocks – a far riskier place to invest than a PV system – experts will quickly point out that PV systems provide better and more reliable return on your investment (ROI). Home Value Increase Now consider that you haven’t even saved a penny on electricity from solar yet but you need to sell your house quickly. Have you wasted your money on solar? Not at all! You profit. You made a wise move. Your house will sell faster than comparable homes. Your house will sell for a higher price, thousands over the cost of the solar system, than like houses. An overlooked benefit of investing in solar is the substantially increased value and a quicker sale of a home or business that has a PV system installed. For one, a PV system reduces the operating costs, usually by hundreds per month, consequently increasing the value of the property. An extensive research article published by the Appraisal Journal determined that for each one-dollar decrease in annual utility bills, the selling price of homes increased by $20.73 (Horizon Solar, LLC). The Appraisal Journal argues that increases the resale value of the property by an immediate 400 to 500 percent return on your solar investment! In today’s real estate market, this return does seem unlikely. However, The Lawrence Berkeley National Laboratory (LBNL) released a formal research study in mid-2011. This report gives specific statistics for the increased value of over 2,000 homes with solar recently sold in California. The report’s data establishes those homes sold for well over the additional price of the solar system and were on the market weeks less than similar homes that did not have solar. Download the LBNL full report and analysis from www.eetd.lbl.gov/ea/emp/reports/lbnl-4476e. pdf. Finally, note, that in California, increases in assessed value due to solar are exempt from property taxes! Don’t neglect to account for this additional money you also save each year by not having to pay taxes on the real value solar added to your home! Is solar a no brainer? We think so.
“GIVE US AN HOUR AND WE’LL SAVE YOU THOUSANDS$$”
1-888-305-SOLAR Ext. 101 (7652) Lic. #905549
SPECTRUM-SOLARWINDS.COM
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• Lease • Purchase • Financing Avail. (OAC) • Residential • Commercial
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Take control of your retirement.
FEBRUARY 10, 2012
Options at tax time CHERRY COMSTOCK, JET TAX
T
axpayers find tax return preparation confusing. Do you need a tax pro? How
about software? Why not just “do it
Financial Advisor Jeff McKannay is here to help customers work towards their goals. He looks forward to meeting you! Stop by the branch or call to schedule a one-on-one appointment today. Jeff McKannay, VP Sr. Financial Advisor Jennifer Blackburn, Financial Advisor Asst. Sr.
Antioch.............................. (925) 754-1845 Brentwood ......................... (925) 634-2161 Lonetree Landing............... (925) 755-2327 Oakley ............................... (925) 625-2211 Pittsburg ........................... (925) 432-2911 A BancWest Investment Services Financial Professional can help you evaluate your retirement options based on your unique situation. With analytical tools, industry experience, and an interest in your investment success, we are ready to help you plan for your retirement.
401(k) Rollovers | IRAs | Mutual Funds Tax Deferred Annuities | Long Term Care
by hand”? Well … it depends. I hate that answer. It does depend – on your familiarity with software, tax code, and confidence with tax research. The “on your own – by hand” method should be avoided. There are many options on the IRS website (www.irs.gov) for free online assistance and even some in-person sites for lower income taxpayers. Commercial tax software has grown incredibly over the last few years. TurboTax, TaxAct, 1040.com are a few affordable options you can find by doing a Google search online. Finally, you can hire a tax professional. When you first start your working career, your income and finances might be simple. But as you progress through life, they can become complicated. Children, home, work, investments, business and rental property all have special tax credits and deductions that change every year. Just when you begin to understand the tax law, Congress changes it again. No matter what you decide, preparation is the key to accurate tax preparation. If you’re
not sure of what documents you need, discuss it with a tax preparer. As you start receiving your documents in the mail (usually around the end of January), put them in a tax folder to stay organized. If employed, you’ll need to include your W-2. If you received income from interest, dividends, pensions, self-employment, government payments, or the sale of property or stock, you’ll receive a Form 1099. Bring the actual statements to your appointment. Remember that not all forms will look alike; be sure to check the bottom of year-end statements that might be substitute 1099s. Also, include Schedule K-1s you receive from a partnership, an S corporation, or estate. If you had any income not reported on the forms listed above, make a note for your tax preparer to include it. For many taxpayers, it helps to itemize deductions. Home mortgage interest, property taxes, vehicle license fees, medical expenses, charitable contributions, plus work and investment related expenses could all be deductible. Many credits are also available to filers, including child tax credit, child care credit, earned income tax credit, saver’s credit, education credits – these are just a few. This general information for taxpayers isn’t all-inclusive. Each tax situation may be different, so don’t rely on this information as your sole source of authority. Seek professional advice see Tax time page 11B
Protect your future. And theirs. Long-term care insurance makes certain that you won’t be a burden on your family. If you have experienced a friend or a relative’s stay in a nursing home, you already know the financial and emotional distress it can cause to a person’s family and estate.
It can happen to you. LONG TERM CARE INSURANCE: • Insurance to help keep you out of a nursing home, with home care. • Insurance to preserve your independence, self-respect and the integrity of your estate.
Ensure A Secure & Comfortable Future We Provide Long Term Care Solutions BancWest Investment Services is a wholly owned subsidiary of Bank of the West. BancWest Corporation is the holding company for Bank of the West. BancWest Corporation is a wholly owned subsidiary of BNP Paribas. Investments and variable annuities are offered through BancWest Investment Services, a registered broker/dealer, Member FINRA/SIPC. Financial Advisors are registered representatives of BancWest Investment Services. *Fixed annuities/insurance products are offered through BancWest Insurance Agency in California (License # 0C523210). INVESTMENTS, ANNUITY, AND INSURANCE PRODUCTS ARE: NOT FDIC INSURED NOT A DEPOSIT
NOT BANK GUARANTEED
MAY LOSE VALUE
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Kelly C. Althar Financial Consultant CA Insurance Lic.#OB65551
Direct 415-274-3208 Toll Free 800-316-9901 x3208 kalthar@fwg.com
Member FINRA SIPC
Financial West Group 100 Spear Street, Suite 930, San Francisco, CA 94105
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Tax prep essentials What to bring to your tax preparation session:
Personal Data Social Security Numbers (including spouse and children) Child care provider tax I.D. or Social Security Number
Employment & Income Data W-2 forms for this year Tax refunds and unemployment compensation: Form 1099-G Partnership and trust income Pensions and annuities Alimony received Jury duty pay Gambling and lottery winnings Scholarships and fellowships Unemployment compensation
Homeowner/Renter Data Residential address(es) for this year Mortgage interest: Form 1098 Sale of home or other real estate Real estate taxes paid Rent paid during tax year Moving expenses
Financial Liabilities Business auto loans and leases (account numbers and car value) Student loan interest paid Early withdrawal penalties CDs and other fixed-time deposits
Automobiles Personal property tax information Department of Motor Vehicles fee
Expenses Gifts to charity (receipts for any single donations of $250 or more) Unreimbursed expenses related to job (travel expenses, entertainment, uniforms, union dues, subscriptions) Investment expenses Job-hunting expenses Education expenses (tuition and fees) Child care expenses Medical savings accounts Adoption expenses Alimony paid
Self- Employment Data Estimated tax vouchers for the current year Self-employment tax Self-employment SEP plans K-ls on all partnerships Receipts or documentation for businessrelated expenses State and local income taxes IRA, Keogh and other retirement contributions Medical expenses Casualty or theft losses Other miscellaneous deductions
· Income Tax Preparation · Small Business Consulting · Bookkeeping · Payroll · IRS Representation · Taxes prepared/reviewed by Enrolled Agent
10. S. Lake Dr., Ste. 8 Antioch www.jettax.org
(925) 778-0281
As licensed Loan Officers at one of the nation’s largest independent residential retail mortgage lenders, we can offer expert advice and a wide selection of loan programs with competitive rates including:
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
All Certified QuickBooks ProAdvisors ® are specially trained experts who have earned their credentials by passing a rigorous QuickBooks certification course. They offer a wide range of services, including QuickBooks setup, training, and troubleshooting. In addition, some Certified QuickBooks ProAdvisors ® are small-business consultants and tax experts.
HomePath® Renovation
Agency Conforming – Fixed,
– With only a 3%* down payment requirement, this loan allows you to buy and renovate a home in one loan.
adjustable and interest only loans available; great for nearly every borrower.
Deduction Documents
Tax and financial services since 1977
JetTax
Prospect Mortgage Offers Home Loans for Every Need!
FHA Loans – A great choice for
203K, Conventional Renovation
first-time homebuyers, buyers with little down payment, or with lessthan-perfect credit.
(HomeStyle®) – Great financing choice for those buying a home in need of renovation through FHA or FNMA.
Veteran’s Administration (VA) Loans
– Perfect for active and reserve military; spouses may also qualify.
HARP 2.0
– Coming in March, call for more information.
Contact us today to find out how we can help you meet your financial and homeownership goals!
Kathy Zickenberg
Paul Kelly
Patti Shaner
Loan Officer NMLS # 265957
Loan Officer/Sales Manager NMLS # 288486
Senior Loan Officer NMLS # 255604
Direct: (925) 706-6706 Fax: (877) 629-1619 Kathy.Zickenberg@ProspectMTG.com www.myprospectmtg.com/kzickenberg
Direct: (925) 706-6703 Cell: (925) 437-5831 Fax: (925) 779-3136 Paul.Kelly@ProspectMTG.com
Direct: (925) 706-6705 Cell: (925) 584-1614 Fax: (877) 806-6033 Patti.Shaner@ProspectMTG.com www.myprospectmtg.com/pshaner
*Second homes and investment properties are excluded from this incentive. The Incentive request must be submitted with the purchase contract to be eligible. Fixed-rate only, conforming loan amounts. Restrictions May Apply. Ask for details. HomePath and HomeStyle are registered trademarks of Fannie Mae. Loan inquiries and applications in states where I am not licensed will be referred to a Loan Officer who is licensed in the property state. Equal Housing Lender. Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC (Unique Identifier #3296) is a Delaware limited liability company licensed by the Department of Corporations under the California Residential Mortgage Lending Act. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. 1211-1275
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Trevor’s Weekly Mortgage Matters Annual Percentage Rate The annual percentage rate, or APR, for either a first time home buyer, or an individual looking for their next home, is truly one of the most useful tools setup in their favor – “its purpose was to allow consumers to shop for credit by comparing the fine print,” according to an article in United States Banker. The annual percentage rate is important as it allows consumers to compare apples to apples, or even apples to oranges – if, of course, we consider apples to equal fixed rate loans, and oranges to represent adjustable rate mortgages, or ARMS. It is essential when comparing loans/ interest rates and should not be overlooked. As part of The Federal Truth in Lending Act of 1968, the annual percentage rate is calculated much differently than the actual note rate and can always be found on your Truth in Lending disclosure. While the note rate simply represents the yearly rate at which your lender will collect interest for permitting you to borrow money for a specific length of time, your APR represents the total cost of credit on a yearly basis after all charges – points, appraisal, credit report, processing, and document fees etc. are taken into consideration. It is typically higher than your actual interest rate because it includes these additional items and assumes you will keep the loan for the full term. Let’s look at how APRs are calculated. For our illustration we will assume a note rate of 5.50% on a fixed rate loan. On a 30
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2010 2011
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By Trevor Frey
year term, and a loan amount of $150,000, the monthly payments would be $851.68. In order to calculate the APR for this loan we would first subtract out the fees: $1500 (one point), $425 for the appraisal, $500 for processing and $16.50 for a credit report. $150,000 minus $2441.50 equals $147,558.50. This new figure of $147,558.50 would reflect on our Truth in Lending disclosure as the amount being financed, when in fact we are borrowing $150,000… here is where APR comes into effect. We take the new figure of $147,558.50 and use it as our present value/loan amount to determine the true cost of the loan. By working the equation backwards until we receive the same $851.68 monthly payment as if the loan amount were still $150,000, we come up with our annual percentage rate. In this case, our APR is 5.65%, the true cost of borrowing the amount of the loan being applied to the actual purchase, after paying all the fees. Remember, although the note rate is what you calculate your monthly payment off of, and is the figure you’ll compare with your neighbors at the dinner table, the APR is the figure you should be most interested in. It is the only way to truly compare the cost of one loan versus another, and was put in place to protect you. As always, I welcome all questions and or concerns pertaining to real estate lending on my cell phone, 925-726-1444, or via email, tfreymortgages@yahoo.com. – Advertisement
Protect your family. Prepare for their future. Mark Murray, Agent Lic# 0D64403 2051 Main St., Oakley 925-679-1500 888-679-1501 www.markmurray.org
1001386
I can help with both. Stop by for your free State Farm Insurance and Financial Review®. Like a good neighbor, State Farm is there.® Call me today for more information.
State Farm, Bloomington, IL
FEBRUARY 10, 2012
Effects of the economic recession have created negative marks on many credit reports. The good news: there are things you can do to help get a favorable rating back. Photo courtesy of ARA Content
Fixing your credit is a doable thing
I
f you find yourself with less-than-
2 million Americans look to credit coun-
Before your finances fall into the bankruptcy category, take steps to help turn your bad credit around. Just ask James Cheslek, dean of academic affairs at Brown Mackie College Albuquerque and retired corporate and trial law attorney, who helps college students with bad credit get back on track. “If you want to be successful, it’s important to not let credit card debt get out of control,” said Cheslek. “Many people get
selors each year to avoid bankruptcy.
see Credit page 10B
good credit, you’re not alone. Business Insider, an online busi-
ness news website, reports that one in 50 households owes more than $20,000 in credit card debt, and that more than
MONEY MATTER$
FEBRUARY 10, 2012
THEPRESS.NET
Cut college costs at tax time
P
aying for a college education ranks right up there with buying a home and automobile as one
of the largest investments Americans make. On average, in-state tuition and fees at a four-year public college increased by more than 8 percent (to $8,244) for the 2011-12 academic year, and room and board now averages more than $17,000 per year. A variety of credits, deductions and savings plans, however, should help you cut your college costs come income tax time. The American Opportunity and Lifetime Learning Credits are likely to result in the greatest tax rewards on your 2011 federal return, due April 17. The following basic requirements apply to both credits: ♦ Filing status on the return cannot be “married filing separately.” ♦ The student must be you, your spouse or a dependent for whom you claim an exemption. ♦ A dependent cannot claim the credits if claimed on another person’s (e.g., parents’) return. ♦ If you do not claim the dependent exemption (even if entitled to the exemption), you cannot claim a credit based on that dependent’s expenses. ♦ Claim credits on Form 8863 and file with your Federal 1040. According to Jessi Dolmage, spokeswoman for TaxACT, both credits cannot be claimed for the same student: “If multiple students are claimed on a return, the taxpayer should choose the credit that yields the biggest benefit for each student.” The American Opportunity Credit is a modified version of the Hope Credit. It’s worth up to $2,500 for tuition, fees and course materials per student for the first four years of postsecondary education. Even if you have zero tax liability, you can get up to 40 percent as a refund. It phases out at higher incomes. The Lifetime Learning Credit is worth up to 20 percent of the first $10,000 in higher-education expenses per family for an unlimited number of years. Like the American Opportunity Credit, it phases out at higher incomes. Several other college and highereducation tax breaks can also be claimed on this year’s federal tax returns: Up to $2,500 in student loan interest paid each year for qualified highereducation expenses can be deducted, even if you don’t itemize. The deduction phases out at higher incomes and is reduced by nontaxable distributions from a Coverdell Education Savings Account; savings bond interest used for education expenses and scholarships; or veterans’ education benefits. Married taxpayers filing separately and those claimed as dependents on another return don’t qualify. Additional exceptions might apply to the aforementioned tax breaks, and
other educational tax benefits exist for Qualified Tuition Programs, student loan cancellations and repayment assistance, Coverdell Education Savings Accounts, education savings bonds, employer-provided educational assistance and workrelated education. Learn more about all education tax benefits in Publication 970 at www.irs.gov. You can also use TaxACT’s College Tax Whiz, a free interactive tool (at www.taxact.com/college-taxwhiz) that breaks down 10 college tax benefits.
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Arturo’s Tax Service & Associates
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*APR as low as 3.99% ¿xed for 15 years, based on 80% loan-to-value or less. For $200,000 loan, payment would be $1,478.37. **APR as low as 4.49% ¿xed for 30 years, based on 80% loan-to-value or less. For $200,000 loan, payment would be $1,012.18. Rates as of February 2, 2012, subject to change until locked. Financing available up to $417,000 (or the conforming loan limit for your county) for owneroccupied California primary residence properties only. Applies to no cash-out re¿nances. With cash-out, loan-to-value limit is 75%. Payment example does not include insurance or taxes. Property insurance required. Some restrictions may apply. If impound account for taxes and insurance is desired, you are responsible for those set-up amounts and any charges assessed by your current lender such as reconveyance fees, payoff demand fees, pre-payment penalties and any interim interest collected at closing. Please consult your tax advisor regarding the deductibility of interest and charges. Offers cannot be combined with other discounts or promotions. Everyone who lives, works, or attends school in Contra Costa or Alameda County, part of our 12-county area, is eligible to join. Certain membership requirements may apply. NMLS registered. Equal Housing Lender
Cherry’s Tax Facts... By Cherry Comstock
Didn’t Get Your W-2? What to do – 1. Contact your employer If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or issue the W-2.
2. Contact the IRS If you do not receive your W-2 by Feb. 14, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, Social Security number, phone number and have the following information: • Employer’s name, address and phone number • Dates of employment • An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2011. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.
3. File your return You still must file your tax return or request an extension to file by April 17, 2012, even if you do not receive your Form W-2. If you have not received your Form W-2 in time to file your return
by the due date, and have completed steps 1 and 2, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.
4. File a Form 1040X On occasion, you may receive your missing W-2 after you file your return using Form 4852, and the information may be different from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return. Should you have questions about this or any other tax matter feel free to contact our office. www.jettax.org, info@www.jettax.org, or call (925)778-0281. One of our enrolled agents will be happy to assist you.
What is an EA? The term Enrolled Agent mean --Enrolled means authorized to practice before IRS and Agent means they represent you before the IRS. To say this differently an Enrolled Agent is someone who has passed extensive tax law Testing administrated by US Department of Treasury, they are experts in tax law and since they are licensed by Federal Government they can represent you before the IRS – Advertisement
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Gold from page 1B said Ross. “I just tell people to bring in their pieces and we can tell them if it’s gold-plated or what.” Experts recommend consumers do a little homework before offering up their family heirlooms, including getting their items appraised, checking out the dealer with the Better Business Bureau and above all, knowing what you have. While some vintage pieces aren’t worth much when melted down, an item stamped by a well-known artist or designer could be worth significantly more. But for those looking for a little fun while they sell their gold, in-home parties can be the way to go. Certified gold representatives attend these private parties – for which the host or hostess receives a percentage of the entire evening’s sales – weigh the pieces and pay cash on the spot. “It’s a nice way sell your pieces,” said Jilda Fairhurst, a certified gold representative. “People have leftover jewelry and they cash it in and get paid right on the spot. It’s the first
THEPRESS.NET
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party you’ll ever go to where you don’t have to buy anything; you’re receiving something.” And there are definitely deals to be had. Fairhurst recalls one woman who attended an in-home party and arrived with an armful of jewelry and unused pieces. “This one lady had $4,500 worth of gold,” said Fairhurst. “And she said she was going to use it to pay some doctor bills. So in many ways it’s very rewarding that we get to help others – people who can really use the money.” If you’re shipping pieces through the mail to an online dealer, you should insure your packages. Know what your jewelry is worth before sending it, and insure accordingly. You should also check the buyer’s reimbursement policy should the package get lost or stolen. While there’s no guarantee that your class ring or old gold necklace is worth a king’s ransom, selling off odd pieces of gold jewelry can render results if you’re educated, realistic and ready to part with them. To comment, visit www.thepress.net.
Thieves from page 4B Guard your trash. Identity thieves have been known to gather personal information from trash. Be sure to tear or shred your charge receipts, copies of credit applications, insurance forms, bank statements and the credit card applications you get in the mail before throwing them away. Exercise caution online. Before making purchases online, look for the icon of a lock in the lower right-hand corner of your browser window. If it’s there, you’re dealing with a secure site. If not, you’ll be safer finding a different merchant. Remove personal information from
Tax time from page 6B for all tax situations. Tax professionals – experts who keep current on tax law changes – can save you time and offer insight on how to use the tax breaks available to you.
old computers. If you delete personal files using your keyboard or mouse, the files might remain on your computer’s hard drive, where they can be easily retrieved. To make sure your files are unrecoverable, use a “wipe” utility program to overwrite the entire hard drive. In the event of a security breach, not all identity theft solutions provide complete restoration of your identity to pre-theft status. Ask questions and research the best solution for your family or business. – Contributed by Lisa Bass, courtesy of www.thewholeskinny.com. To reach Lisa, e-mail www.llbass.legalshield.com.
Cherry Comstock is an enrolled agent at Jet Tax, which has been providing tax expertise in Antioch since 1979. For more information, e-mail info@jettax.org, call 925-778-0281 or visit www.jettax.org.
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