Archive: December, 2009

The Obama government is clear in its focus of creating jobs in the current economic scenario. The intentions are definitely good but the results so far don’t look so positive. Let us look at the facts. Last week the labour department announced a second month of 10% plus unemployment. Coinciding with this the White House called a meeting of prominent executives, labour leaders and academicians to discuss as to how the Federal Government can increase job growth. The president commented that his government is looking for fresh perspective and every good demonstrable idea is welcome. Definitely sounds promising but can the government really create jobs at such short notice. Economists feel that creating new jobs in short notice isn’t exactly the government’s cup of tea. In the long term however the government can definitely impact the health of the labour market. The tool kit that the  [...]

On Tuesday US stock markets declined mainly due to weak global markets, a rising dollar, falling oil and gold prices, and some disappointing profit news from 3M, McDonald's and Kroger. The Dow Jones industrial average declined by 104 points (1%) to close at 10,285.97 points. Other indices also declined with the S&P 500 index declining by 11 points (1%) to close at 1,091.94 points. The Nasdaq composite declined by 17 points( 0.8%) to close at 2,172.99 points. Sector wise all sectors registered decline on Tuesday with the energy and materials declining the maximum by 1.7% each. Other sectors which declined include industrials (decline of 1.3%), consumer staples (decline of 1.2%), telecom (decline of 1.0%), financials (decline of 0.9%), consumer discretionary (decline of 0.8%), technology (decline of 0.8%), health care (decline of 0.8%) and utilities (decline of 0.4%). Stocks declined  [...]

Bury your credit cards Credit cards if not used sensibly can land you in a soup with debt accumulated that you will end paying for many months. True by spending on credit card the burden is postponed in the short run however some day you have to pay the money back. Also the interest charges will add further burden to your wallet. If you are one compulsive shopper who cannot use credit card responsibly then we suggest that bury your credit card before embarking on that great shopping trip. Paying by cash will help you to keep a track of the amount you have spent vis-a-vis your budget. With credit card you just keep on swiping getting to know the pinch only a month later when you receive your statement. However if you have the ability to use credit card responsibly then it can be a great boon. Even then we suggest that you use credit card only when necessary to avoid spending too much.  [...]

Christmas shopping So you have embarked on that great shopping adventure. Before doing so we suggest that first  make a list of gifts you want to buy or else you would end up just wasting your time at the shopping centre. We suggest that you always keep a stock of extra gifts like chocolates else somebody unexpected drops in or you forget somebody. In fact the best strategy would be to start shopping as early as possible. Another important way to save money is to look for sales. Keep your eyes and ears open for sales. A lot of money can be saved by buying during sale season. Also almost everything you want eventually goes under sales. Shop as much as you can during the sale season. There are people who shop all year around for Christmas. Typically you get excellent bargain in the post Christmas sales. Why don’t you use these sales to accumulate gifts for the next Christmas. Post  [...]

In the current bleak economic scenario Christmas shopping can bring in lot of stress both mentally and financially. There is stress of buying expensive gifts for everyone, stress of last minute shopping, stress of long lines at shopping centres, stress of family get together and many more. The biggest worry that haunts many families is the worry of impending huge credit card bills. Below are few practical tips that will keep you smiling even after the festive season. First of all budget for Christmas Christmas for many families’ results in huge credit card bills that takes months to clear. These families are typically those who don’t budget and plan for Christmas. If you plan ahead half of your problem will be solved. Ideally we suggest that one should start planning for Christmas as early as the beginning of the year. However as the saying goes better late than never, there is still  [...]

Tax Credits Having fully worked on taxable income lets now focus on various tax credits which reduces tax. In fact this element is what almost all tax planners focus on because tax credits can be easily manipulated to one’s benefit. There are various tax credits like tax credit for college expenses, for retirement saving, and for adopting children. The maximum tax credits are for adoption and college expenses. It is not possible for everyone to adopt a child but one can always take advantage of the college expenses credit. There are broadly two types of education-related tax credits namely the hope credit and the lifetime learning credit. Students in their first two years of college can take advantage of the Hope Credit. Anyone taking college classes is eligible for the Lifetime Learning Credit irrespective of whether the classes are related to your career or not. If you earn less  [...]

Increase Tax Deductions Another way to reduce your tax bill is by playing around with deductions. Income on which tax is calculated is called the taxable income. It is calculated by reducing deductions and exemptions from AGI. Standard deduction can be taken by almost everyone. However you can play around with your expenses and itemize deductions. Deductions can be of various kinds. The most common deductions are for health care expenses, state and local taxes, personal property taxes, mortgage interest, charity, job-related expenses, tax preparation fees, and investment-related expenses. We suggest that one should keep track of these itemized expenses either using a spreadsheet or personal finance program to enable quick comparison of your itemized expenses with your standard deduction. Also always take the higher of your standard deduction or your itemized deduction. Mortgage interest,  [...]

It is that time of the year again when everyone has taxes on their mind. Not everyone is born a tax expert and for a layman taxes can be quite a confusing topic. This year confusion has only been compounded given the current economic situation. Plus the temporary stimulus tax breaks for housing, cars and energy efficiency announced has further complicated the situation. Below are few tips that will help you to minimise your tax bill. The basics first The age old tax saving rules still applies. This is the time to make charities and invest in tax saving investments. Also we suggest that you give a thought to the kind of accounts for your retirement savings. Until you file your taxes you can fund an individual retirement account for 2009. Before the year end you will however have to declare how much you want to put in the company's 401(k) plan in 2010 and whether you want to invest the money  [...]