Author: Service2Client

5 Affordable Ways to Share the Holiday Spirit

3 min read

Holiday SpiritThe holidays are a season of giving. While much of this involves financial expenditures, you can also give in ways that are more affordable and may hold more meaning. Here are some suggestions about how you can engage in acts of generosity and return to what the season is all about.

Cook Food

Nothing nourishes the heart and soul, not to mention your stomach, like food made with love from your own kitchen. Baking cookies is always an easy and fun thing to do, but a main dish (with protein) or hearty casseroles are also good options. People who are homebound due to an illness, those going through financial difficulties or even new moms will appreciate the gift of a warm meal. You might also ask co-workers, local churches or homeless shelters if they’re looking for some extra sustenance during this time of year.

Create Necessity Bags

Giving to those on the streets during the holidays is an easy, inexpensive way to make a difference. Fill a gallon-sized food storage bag with things like gloves, toothpaste and toothbrush, hand sanitizer, sanitary wipes, bottled water, snacks and a gift card to a grocery store. Then contact your local organizations and charities to see where the needs lie. You might also carry these bags in your car and when you see someone, give it to them. Moments like these are invaluable to those in need and for you, too.

Volunteer Time

Showing up with an extra pair of hands is often what someone needs. A great place to check out is VolunteerMatch. Just type in your ZIP code and you’ll find all kinds of opportunities to help everyone from seniors to children in many sectors, including education, arts and health. You might also find ways to help animals or read to the blind. These are feel-good, money-free ways to experience the joy of giving.

Donate Craft Items

How many times have you thrown away your toilet paper rolls or egg cartons? This year, save and donate them to nearby schools or community centers. All it takes is a few phone calls to find out what their craft needs are. You’ll also be helping the environment – sharing some love for Mother Nature. How simple is that?

Declutter Your Dwelling

This one has so many terrific benefits. You can get rid of clothes and belongings that crowd your closets, which is a wonderful feeling. One option is to sell them on eBay Charity and donate to a nonprofit of your choice. You choose what percentage of the sale goes to the organization (from 10 to 100 percent). eBay will even give you a credit on your selling fees based on the percentage you choose. If you want to give away gently used professional clothes, Dress for Success and Jails to Jobs, are groups that empower people to look their best when making a fresh start. If you’d like to rid yourself of shoes you’ll never wear again, Soles4Souls is a great resource and you can ship up to 15 pairs of shoes without paying a fee through the Zappos for Good program. Talk about good for the sole, er, soul!

For the most part, should you choose to get into the holiday spirit with these activities (aside from a few costs here and there), the main thing you’ll be spending is time. However, experiencing the joy of the giving is priceless.

Sources

https://www.discover.com/online-banking/banking-topics/affordable-ways-to-spread-generosity-holiday-season/

Potential New Tax on Stock Buybacks and What it Could Mean for the Financial Markets

3 min read

Tax on Stock BuybacksPresident Biden’s latest spending bill could result in a new tax on corporate stock buybacks. In its most recent incarnation, the Senate version of the plan includes a 2 percent excise tax on stock buybacks. Still, this isn’t enough for many critics of stock buybacks, who claim they incentivize short-term behavior in lieu of long-term investment.

Short-Term Incentives

Stock buyback programs have long been criticized for giving a short-term boost to share prices with funds that could have been used for long-term investment instead. Critics, including the current president, believe stock buybacks come at the expense of capital investment in new or updated factories, research, worker training, etc. These critics believe this type of long-term investment is the key to sustainable growth.

Changing Behavior with Taxes

Some critics advocate for an outright ban on stock buybacks, but they are in the minority. Instead, the recent Senate bill proposes a 2 percent tax on stock buybacks. This tax is dual purpose. First, it aims to discourage buybacks and encourage longer-term investment. Second, it’s a revenue generator to help fund the trillions in new spending in the bill.

Will the 2 Percent Tax be Enough to Matter?

While a 2 percent excise tax on buybacks may not be draconian, it appears to be significant enough to drive a change in behavior. In a CNBC poll, more than half of CFOs indicated the 2 percent tax is enough for them to curtail their buyback program. Only 40 percent said they would not change their buyback program plans (CNBC Global CFO Council Survey).

Impact on the Capital Markets      

Stock buybacks have had a significant impact on the markets. Not only are companies using excess cash to buy back shares, but with interest rates so low for so long, many companies have even taken on debt to buy back shares. Still, excess cash that can’t just sit on the corporate balance sheet is the main driver of the largest buyback programs. Established, cash-flush tech companies such as Apple, Alphabet and Microsoft are the dominant players, accounting for nearly one-third of all buyback activity in the first half of 2021.

Given the recent run-up in the markets, buyback programs have not kept up. Couple this with the proposed increases in corporate tax rates from 21 percent to 25 percent, and there’s even less cash to fund buyback programs. Generally, most experts believe these macro-economic factors combined with the new 2 percent tax will cause a shift toward dividend payouts as they will be more favorable to shareholders.

Conclusion

The main idea behind the proposed 2 percent excise tax on stock buybacks is to both raise revenue and encourage corporate investment. Critics of stock buyback programs believe this is better for the economy and workers, whereas buybacks favor corporate shareholders at their expense. While a 2 percent tax might not be enough to create wholesale change, it appears to have enough teeth combined with corporate tax rate changes to change most public company CFOs.

10 Ways to Pay Off Student Debt Faster

4 min read

Pay Off Student DebtIf the thought of paying off your student loan causes a bit of anxiety, worry no more. Here are some ways to pay it off faster. Check them out.

Sign Up for Auto-Pay

This might seem like the most obvious thing to do, and yet, some alums don’t take full advantage of it. The psychology of this works well. When you decide to put your payment on auto-draft, you never miss it. You get used to living on a certain amount of money. Better still, there are lenders who offer refinancing at lower rates, ranging from 1.8 percent to 7.84 percent. But there’s more: Some lenders offer cash-back bonuses. With that said, the catch is you give up important benefits like income-driven repayment and student loan forgiveness. However, refinancing can help you save a bunch – like thousands of dollars.

Pay Bi-Weekly

If you can swing this, it makes good sense. Why? Interest on your student loan accrues daily. Just cut your monthly payment in half and make two payments per month. This way, it might be easier to juggle your finances, as opposed to doling out one big chunk every month. Also, paying more often gives you the feeling that you’re making progress – and you are because of the daily accrual. #WinWin

Use the Debt Avalanche Method

With this approach, you’re paying off your highest interest debt first. Makes sense, right? After you do this, make minimum payments on all of your other loans. If you have any extra cash left over, pay your highest interest loan. Keep at this until you’re paid in full.

Claim the Student Loan Tax Deduction

This is cool. You can write off up to $2,500 of your student loan interest. Now, the amount you can write off depends on your income because there are phaseouts and gradual reductions in place. Just use the 1098-E form (you can get this from your loan servicer) to figure out how much interest you’ve paid. Then get going.

Pay While Still in School

Talk about getting a head start.You’ll cut down on interest (a good thing) while forgoing in-school deferment, and start paying down your debt pronto.

Pay Off Private Student Loans First

Should you have public and private student loans, this is the best strategy. Here’s why: private loans don’t offer student loan forgiveness or income-driven repayment. And they have limited deferment options. You’ll be better off doing this, given all the stipulations that exist for these kinds of loans.

Use Employer Repayment Assistance Programs

This is a sweet deal. Check with your employer to see if they offer such a program. Generally, they offer reimbursement or allocate funds to help you. Don’t forget to ask!

Pay During the Grace Period

This is the six-month period after graduation. While this might not be something that’s initially appealing, think it through. It helps keep interest in check and prevents your balance from growing during your grace period. Also, starting earlier means you’ll finish earlier. Gotta love that.

Consolidate Federal Student Loans

This is a great idea for those with limited resources. You can lower your payment and extend the repayment terms. You’ll most likely pay more interest, but for a short-time solution it’s a good one.

Exceed the Minimum Payment

If you have the means to make this happen, by all means, do it. Another great way to make incredible progress is to make double payments. If you can’t pay double, at least try to pay over the required amount. It’ll help eat away at the interest and eventually, the principal.

Student loans are great while you’re in school, right? They enable you to get the education you want. And while paying them off might be overwhelming, if you use these methods, you’ll be ahead of the game and pay them off sooner than you think.

Sources

107 Ways to Pay Off Student Loans and Save

How to Develop Company Travel Policies Post-COVID

5 min read

Company Travel Policies Post-COVIDAccording to a recent U.S. Travel Association forecast, only about one-third of companies are requiring their employees to travel. With business travel still at a low, how can companies develop a travel policy that reduces the risk of COVID-19?

Occupational Safety and Health Administration

When it comes to business travelers, whether employees are traveling domestically or internationally, OSHA recommends employers consult the Centers for Disease Control and Prevention (CDC) for guidance.

Travel Guidance

The CDC advises against traveling internationally if someone is not vaccinated, is exposed to, sick with, tests positive and/or is waiting results from COVID-19 exposure. Even for travelers who are fully vaccinated, the CDC reminds us that becoming infected and/or spreading the virus is still possible.

Travelers should similarly follow all guidelines at their point of departure, on the airline, and at their destination (e.g., wear face masks, get tested to show proof of being COVID-19 negative, maintain social distancing) to be compliant with requirements during each point of the journey.

For those returning to the United States, fully vaccinated travelers must have a negative COVID-19 test taken within 72 hours of travel. Fully vaccinated individuals are suggested to test three to five days post travel, keep an eye out for symptoms and test and isolate if there are symptoms. Travelers who are not fully vaccinated must have a negative COVID-19 test within 24 hours of travel. Travelers who are not fully vaccinated are advised to test three to five days after, along with self-quarantining for seven days, post return. Even if the COVID-19 test is negative, self-quarantining for seven days after travel is advised. If the COVID-19 test is positive, travelers should isolate. If you don’t get tested, stay at home and self-quarantine for 10 days post travel. If symptomatic, test and isolate.

When it comes to domestic travel, differences exist between fully vaccinated and partially/non-vaccinated travelers. Along with masking and government mandates for fully vaccinated travelers, upon return they need to keep an eye out for symptoms and isolate if any develop. However, there are no recommendations for testing or self-quarantining for fully vaccinated or those who have recovered from an infection within the past three months.

For unvaccinated travelers, along with following masking, social distancing, hand hygiene practices, and government mandates, testing 24 to 72 hours before departure is recommended. Upon return, travelers are advised to get tested three to five days later and isolate for one week. If non-vaccinated travelers don’t test, a 10-day quarantine is recommended. If a test is done and it’s negative, a one-week isolation period is recommended.

Assessing Financial/Legal Risk

Employers must determine if the work that requires travel is truly essential, and if it is in all jurisdictions, it should be documented. There are a few types of potential financial and/or legal liabilities if employees travel to perform their work duties. If an employee becomes infected, a workers’ compensation claim could be opened. If an employee does not receive an accommodation, either not having to travel or unable to work safely in the office with a worker who may have been exposed to COVID-19, legal issues may develop. Additionally, a whistleblower lawsuit may exist if an employee alleges the company has violated public health requirements. However, if business travel can’t be delayed, there must be guidelines to reduce the risk of travel becoming a way to catch COVID.

Protect Employees Before Travel Begins

Businesses are advised to give their employees adequate personal protective equipment (PPE). Depending on how and where the employee is traveling, he or she is required by federal law to wear a mask in and on mass transit (e.g., airplanes, trains). It also may help to provide gloves, hand sanitizer and wipes.

Study Transit and Destination COVID-19 Policies

Whether it’s domestic or international travel, different cities, states and countries have different requirements for those who are vaccinated and those who are not. Depending on where the traveler has a layover, there could be testing, proof of vaccination or masking/social distancing requirements in place at various spots.

Agree to Travel-Related Activities

By highlighting the risks of visiting certain venues that may pose higher risks (e.g., restaurants, gyms), an employer also can mandate employees to wear masks, socially distance, wash hands frequently, etc., regardless of the locale’s requirements.

Plan Ahead for Post-Travel Office Work

Another important component of a travel policy is how the business and its employee(s) will return safely to work and interact with co-workers and clients. For the most extreme cases, there could be a 14-day work-from-home policy to reduce the risk. Businesses can mandate testing for employees as long as they cover testing costs and testing requirements are applied fairly companywide.

While the world is reopening to commerce, especially instances when business deals necessitate face-to-face meetings with people from different cities and continents, safety with COVID-19 is paramount.

Sources

https://www.ustravel.org/press/new-forecast-signals-long-road-recovery-business-travel

https://www.osha.gov/coronavirus/control-prevention/business-travelers

https://www.cdc.gov/coronavirus/2019-ncov/travelers/travel-during-covid19.html

https://www.cdc.gov/coronavirus/2019-ncov/travelers/international-travel-during-covid19.html

Increasing the Debt Limit, Extending Government Funding, and Protecting Vets, Veteran Moms and the Capitol Police

3 min read

Increasing the Debt Limit, Extending Government Funding, and Protecting Vets, Veteran Moms and the Capitol PoliceIncrease of Public Debt Limit(S 1301) – This bill was enacted on Oct. 14 in order to increase the public debt limit. The debt was increased by $480 billion, the amount projected by the Treasury Department to be needed through early December in order to avoid surpassing the public debt limit. Had this stopgap legislation not been passed, it would have created the potential for a severe economic crisis in which the government would have run out of money to pay back existing debts, government salaries and other pre-existing obligations. The bill was initially introduced by Sen. Sherrod Brown (D-OH) on April 22; it passed in the House on Sept. 29 and in the Senate on Oct. 7. It was signed into law on Oct. 14.

Extending Government Funding and Delivering Emergency Assistance Act (HR 5305) – The bill was both introduced by Rep. Rosa DeLauro (D-CT) and passed in the House on Sept. 21; then passed by the Senate on Sept. 30. It authorizes appropriations for federal agencies for the fiscal year ending Sept. 30, 2022, including providing emergency assistance for activities related to natural disasters and evacuees from Afghanistan. The bill is also known as a continuing resolution (CR), which prevented a government shutdown that would otherwise have occurred if the 2022 appropriations bills had not been enacted by Oct. 1, when the new fiscal year began. The legislation was signed and enacted in the nick of time by the president on Sept. 30.

Protecting Moms Who Served Act of 2021 (S 716) – This bill was introduced by Sen. Tammy Duckworth (D-IL) on March 17. The purpose of the legislation is to codify maternity care coordination programs at the Department of Veterans Affairs. Specifically, the VA must work with local non-VA maternity care providers for training and support related to the unique needs of pregnant and postpartum veterans, particularly with regard to mental and behavioral health conditions. The bill passed in the Senate on Oct. 7 and is currently under consideration in the House.

A bill to direct the Secretary of Veterans Affairs to designate one week each year as Buddy Check Week for the purpose of outreach and education concerning peer wellness checks for veterans, and for other purposes. (S 544) – This bill directs the Department of Veterans Affairs to designate one week each year as Buddy Check Week for veterans to conduct peer wellness checks. It also mandates that the VA ensure the Veterans Crisis Line has a plan to handle potential increases in calls during that week. The bill was introduced by Sen. Joni Ernst (R-IA) on March 2 and passed in the Senate on Oct 7. It is currently under consideration in the House.

Emergency Security Supplemental Appropriations Act, 2021 (HR 3237) – This legislation provides $1.9 billion in emergency supplemental appropriations for the legislative branch and federal agencies for preventive measures in response to what happened at the U.S. Capitol Complex on Jan. 6. Because this funding is designated as emergency spending, it is exempt from discretionary spending limits. The funding is allocated for expenses such as security-related upgrades, repairs to facilities damaged by the attack, reimbursements for the costs of responding to the attack, support for prosecutions, the establishment of a quick reaction force within the District of Columbia National Guard to assist the Capitol Police, and mandatory use of body-worn cameras by Capitol Police officers who interact with the public. The bill was introduced by Rep. Rosa DeLauro (D-CT) on May 14. It was passed in the House on May 20, in the Senate on July 29, and signed into law by the president on July 30.

Why you should automate your accounts payables

4 min read

automate your accounts payablesAccounts payable (AP) is a crucial function to any business, as errors in the process put a company in problems. Although many businesses still use manual methods as they find the system to work fine, it requires a lot of precision from the accounts payable team. There are better – and more efficient – ways to manage AP through automation.

Challenges of the Process 

An AP team is responsible for receiving invoices, reviewing invoices, approving invoices, and paying suppliers and vendors. Some AP departments also handle other functions, depending on the nature of the business. However, AP can be a time-consuming, strenuous and paper-intensive process.

An AP team helps a business control costs, maintain a good supplier relationship and analyze spending. Various challenges might indicate that your business is using outdated practices. Such challenges might include:

  • Dealing with double payments
  • Difficulties in tracking invoices, especially when your business has many transactions
  • Forgotten payments
  • Fraud
  • Disappearing invoices
  • Missing purchase orders
  • Poor business reputation as suppliers lose trust in your business
  • Negative cash flow
  • Too much paperwork taking up employees’ time to sort and organize
  • Skipped processes
  • Manual processes that result in errors and delays

These challenges not only affect your business negatively, but they also affect your supplier’s business. Consider that late payments cost small businesses $3 trillion per year, which means your late payments create a domino effect. Your business will also be subjected to late payment fines.

To avoid the challenges mentioned above, you should automate the accounts payable process.

Accounts Payable Automation 

Automation removes slow and repetitive manual tasks and lets you digitally submit and approve purchase orders and invoices.

However, when making any investment, businesses are more concerned about the return on investment (RIO). Rest assured that through automation, you can achieve ROI through reduced employment costs, fewer late fees, savings on invoice processing costs, and reduced losses caused by errors, among other non-financial benefits.

Following are the benefits achieved by streamlining the accounts payable workflow through automation:

  1. Get a more accurate picture of your finances – using automation software gives you access to reporting capability that makes it is easy to get a quick overview of business spending.
  2. Have a better command over cash flow – manage cash better with the help of reports that can be created and reviewed in real-time, which improves AP team visibility and forecasting. Automation will help in invoice prioritization as well.
  3. Improve user productivity – employees do not have to waste time sorting documents. With the data centrally stored, employees only need to run a query to find the necessary invoice or purchase order.
  4. Enable remote work – using cloud-based software makes remote access possible and enables approvals to be done remotely.
  5. Auditing is easy – all data is stored in a central database and can be easily accessed.
  6. Cost-effective – it enables timely payments and helps avoid unnecessary penalties and interest fees.
  7. Reduce overhead staff costs – automation will help reduce the accounts payable team, with no need to hire more staff even when a business grows.
  8. Dashboard and analytics tools – allow access to separate dashboards for the team and approvers, each using individual login credentials. At the same time, analytics gives a quick overview of the whole process.
  9. No manual data entry – scan documents to capture data and avoid manual data entry.
  10. Standardized accounts payable workflow – ensures consistency even if your business has different teams responsible for handling the invoicing data.
  11. Payment reminders – set your system to have reminders when pay dates are near. This will help avoid late or forgotten payments.
  12. Qualify for discounts – with a smooth workflow, the accounts payable cycle will require less time, and you may qualify for discounts from suppliers for early payments.

Conclusion 

A disorganized accounts payable process can run your business down. Choosing the right AP automation software will help improve accuracy, efficiency, quality and speed for your business accounts payable function. Your business also will have a balance between a healthy cash flow and, at the same time, maintaining a good supplier relationship.

How Businesses Can Help Employees Improve their Skills

4 min read

Employees Improve their SkillsBased upon a recent McKinsey Global Survey, nearly 9 in 10 (87 percent) of management and above level respondents affirmed they are currently, or within the upcoming five years, dealing with the skill gap among their employees. With the vast majority of businesses experiencing or forecasting a skills-gap, how can they close or reduce this challenge?

Due to the so-called “Fourth Industrial Revolution,” as the World Economic Forum (WEF) explains, the best scenario it sees is 54 percent of workers requiring “reskilling and upskilling by 2022.” However, the WEF points out that 3 in 10 workers susceptible to occupation disruption due to advancements in applied science obtained additional training in 2018.

It’s important to clarify the differences between re-skilling and up-skilling. Re-skilling is where workers who are displaced by industries becoming obsolete, such as coal miners, are forced to retrain for a new career, such as coding, teaching, etc. Up-skilling, in contrast, involves building and staying current in one’s field – a programmer learning the newest programming language or a marketing manager learning the latest search engine optimization (SEO) techniques.

Carve Out Skill-Improvement Time Blocks

Even for companies that strive to provide their employees with flexible time for a work-life balance, it doesn’t always guarantee companies foster a culture of self-improvement and upskilling. When personal, professional and/or global crises occur, there’s not always time for employees to learn new computer programs or the latest programming language. However, by providing employees with a few hours a week dedicated to professional development, businesses give employees the opportunity to up-skill, leading to more satisfied employees, along with limited strain on the budget.

Arrange Worker-Guided Study Groups

When it comes to learning a new skill, according to Degreed via Harvad Business Review (HBR), workers will go to their peers 55 percent of the time, second only to reaching out to their supervisor for guidance, when looking to up-skill.

Few businesses are known to have developed a system for peer-to-peer learning in the workplace. According to McKinsey, “Learning & Development officers” reported businesses letting their employees put their skills into practice to develop additional skills, along with holding academic-type instruction and “experiential learning” for developing role competency. When it comes to structured peer-to-peer learning, fewer than 50 percent of businesses have anything established. Thirty-three percent of those surveyed responded that there’s no system established to facilitate skills development opportunities between co-workers.

From HBR’s “The Expertise Economy,” one reason that peer-to-peer learning is not the first choice for employee learning is due to a common belief that those who are proficient at a particular skill often exist outside the organization, such as a paid training consultant. This belief also is reinforced due to external educational experiences normally condensed into a single session, compared to smaller and more frequent in-house sessions.

HBR argues that peer-to-peer learning leverages the business’ internal expertise more effectively. If more experienced employees share their expertise with less seasoned co-workers to increase their skills, it can be very productive. In fact, HBR lays out a four-point plan for peer-to-peer learning to maximize employee up-skilling.

By using HBR’s “Learning Loop,” businesses can help employees learn new skills and knowledge through four steps:

  1. Employees obtain new information.
  2. After assimilating the new information, they practice implementing the new information.
  3. After it’s been applied, they obtain feedback on the application.
  4. The employee then reflects on what has been learned to further assimilate the new information.

While this program must be tailored to every organization, it shows that by taking a personal approach to up-skilling employees and building on their existing knowledge and skill sets, peer-to-peer learning can be one effective approach to helping employers and their employees close the skills gap.

Sources

https://www.weforum.org/agenda/2019/04/skills-jobs-investing-in-people-inclusive-growth/

https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Beyond%20hiring%20How%20companies%20are%20reskilling%20to%20address%20talent%20gaps/Beyond-hiring-How-companies-are-reskilling.ashx

https://hbr.org/2018/11/how-to-help-your-employees-learn-from-each-other

7 Ways to Save for a Home Down Payment

4 min read

Save Home Down PaymentSo you want to save for a down payment for your dream house, but you aren’t sure how to get there. It might even feel overwhelming. But take heart, here are some tried and true methods that you can start today that will help you save sooner than you think.

Save a Fixed Amount Monthly

This is super easy, but first you need to figure out how much of a down payment you want to make. Remember, the higher your down payment, the lower your loan and monthly mortgage payment will be. With that said, put this amount on auto draft and deposit it into your savings account. Once you get used to this, you won’t miss it. Never use this savings for any other purpose except your down payment. Keep your eyes on the prize and stay the course.

Lower Your Expenses

If you don’t have a budget, make one. Review how much you’re spending on necessary items like rent, utilities and food. Also look at how much you’re spending on discretionary things, like going out to eat, subscriptions to magazines, driving instead of walking, etc. You might also evaluate how much those short-term indulgences mean to you. Only you can decide, but if you stick to a budget and start saving, the dream of a down payment can become a reality.

Skip Vacations For a Year

This one might be hard to swallow. However, if you save the money you’d otherwise spend on your vacation, you can make a significant contribution toward your down payment. If skipping a vacation is out of the question, try a staycation; or at least drive or take a bus or train to someplace near you that won’t cost an arm and a leg, like a natural park, an area lake or even, if you’re lucky enough to live near one, a beach. With every decision you make to delay gratification and focus on your long-term goal of home ownership, you’ll be more likely to stay on track.

Reduce Your High Interest Rate Debt

Credit card interest rates can really eat into the amount of money you are trying to save. If you can pay them off, do so – and start with the one that’s the highest. When you’ve paid it off, close the account and move on to the next one. You can also apply for a card with a temporary 0% interest rate (for maybe 15 months) and transfer your other balances to this one card. Good options include Bank of America’s Unlimited Cash Rewards credit card, Discover it Balance Transfer and Citi Double Cash Card.

Borrow From Your Retirement Plan

If you want to expedite getting into a house and are comfortable doing this, the look for penalty-free withdrawals from your retirement plan. Many company-sponsored 401(k) or profit-sharing plans allow you to borrow against your nest egg to purchase a home. Just ask your HR or payroll department.

Sell Some of Your Investments

While this option might not be instantly appealing, think of this as a way to move some of your current investments into another – your house. Once you’ve moved in and are paying your mortgage, you’ll be building equity. As your house increases in value, so does your investment.

Look Into Down Payment Assistance

Yes, this is a thing! There are organizations that might be able to help you, like the Federal Housing Administration, the U.S. Department of Agriculture Rural Housing Service and the Veterans Administration. Another source is your local housing authority.

These are a few options to help you move toward a down payment. But no matter what you choose, don’t wait. Get started today. This way, you’ll be packing up and moving in no time.

Sources

https://www.bbt.com/education-center/articles/top-10-ways-to-save-down-payment.html

https://www.creditkarma.com/credit-cards/balance-transfer?gclid=Cj0KCQjwtMCKBhDAARIsAG-2Eu8NmKerM3dO4cPjC0KvMCj_S3HPjJ_r4ge6MV50wWiQf51VLK4HOwUaAncZEALw_wcB

New Proposed Tax Laws

3 min read

New Proposed Tax Laws 2022The House recently released a nearly 900-page proposed bill that would make major changes to current tax laws. The bill is intended in large part to help pay for both the Biden Administration’s budget and infrastructure stimulus bill.

It’s important to keep in mind that the provisions and changes outlined below are by no means settled. Changes can (and likely will) still be made as the Senate ratifies the bill; however, the remainder of this article should give readers a good idea of the most significant provisions.

Income Tax Rates are Rising

The increase in the top income tax rate is probably the most talked about proposed change in the bill, bringing it up from 37 percent to 39.6 percent. The top marginal rate would apply to single filers with taxable income over $400,000, heads of household over $425,000 and married filing jointly taxpayers making over $450,000. The impact starts with income earned on Jan. 1, 2022, and after.

Capital Gains

The highest capital gains rate would increase from 20 percent to 25 percent and apply to qualified dividends. The increase is effective on gains made from sales that happen on or after Sept. 13, 2021, but any gains from sales incurred before or that result from binding contracts executed before this date fall under the old rate. For example, gains received post-Sept. 13, 2021, under an installment sale entered on Aug. 31, 2021, would be subject to the old 20 percent rate.

Expansion of the Net Investment Income Tax

The bill also would redefine net investment income (NIIT) to include any income earned in the ordinary course of business. Currently, the 3.8 percent NIIT surcharge applies only to passive income. The NIIT is applied to single taxpayers with more than $400,000 in taxable income and joint filers with over $500,000, and would start Jan. 1, 2022.

New 3 Percent Surcharge on High Income Individuals

Starting after Dec. 31, 2021, a new 3 percent tax will be placed on Adjusted Gross Incomes (AGI) over $5 million ($2.5 million if married filing separately).

Small Business Tax Increases

Under the bill, the current 21 percent flat corporate (C-Corporation) tax rate would change to a three-tiered system. The structure would tax net income at 18 percent up to $400,000; 21 percent from $401,000 to $5 million; and 26 percent on net income over $5 million.

Other Miscellaneous Changes

As you can imagine in an 881-page bill, there are only so many changes that can be covered in this article, but here is a smattering of miscellaneous provisions.

  • Crypto currencies would become subject to the constructive and wash sale rules (like most marketable securities such as stocks) starting Jan. 1, 2022. This means that if you are holding a position at a loss, you have until the end of 2021 to harvest the loss and immediately buy back in.
  • IRAs will no longer be allowed to invest in an entity where the IRA owner has a 10 percent or greater ownership interest (down from the current 50 percent threshold) or if the IRA owner is an officer of the entity.
  • $80 million is earmarked for the IRS to step up enforcement and audit more taxpayers.
  • Smokers will feel the pain as the bill also doubles the excise taxes on cigarettes, small cigars and roll-your-own tobacco.

Conclusion

Remember that this is only the House version of the bill, and nothing is final. Also remember that Democrats control the House, and the Senate is split 50/50 with the Democratic VP as the tiebreaker. As a result, while there will be changes, the major provisions outlined above will likely be in the final law in some form or another.

Enhancing Agency Budget Transparency, Opportunities to Study Science and Environmental Protections

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Congressional Budget Justification Transparency Act of 2021 (S 272)Congressional Budget Justification Transparency Act of 2021 (S 272) – This bill mandates that federal agencies must make budget justification materials publicly available online. The Office of Management and Budget will be required to publish details regarding the agencies that submit budget justification materials to Congress and dates the materials are posted online, along with links to the materials. The bill was introduced by Sen. Gary Peters (D-MI) on Feb. 8, passed in the Senate and the House on Aug. 23 and is awaiting enactment by the president.

National Science Foundation for the Future Act (HR 2225) – Introduced by Rep. Eddie Johnson (D-TX) on March 26, the bill authorizes appropriations for the National Science Foundation for fiscal years 2022 through 2026. It is designed to assess opportunities and award grants for Pre-K through 12 science, technology, engineering and mathematics programs, including computer science and STEM education research. The legislation passed in the House on June 28 and is in the Senate for consideration.

Driftnet Modernization and Bycatch Reduction Act (S 273) – This bill was introduced by Sen. Dianne Feinstein (D-CA) on Feb. 8. The purpose of the legislation is to prohibit the use of large-scale gillnets with a mesh size of 14 inches or greater. Gillnets are used for driftnet fishing, in which nets with panels of webbing are placed in the water and allowed to drift with the currents and winds to passively catch fish by entangling them in the webbing. Presently, gillnets are limited in size to less than 2.5 kilometers in length. However, the bill will not go into effect within the U.S. exclusive economic zone for five years in order for the Department of Commerce to facilitate the phase out of large-scale driftnet fishing and promote the adoption of alternative practices to minimize the incidental catch of living marine resources. Furthermore, the bill authorizes the Commerce Dept. to award grants to program participants. The bill passed in the Senate on Sept. 14 and is currently under consideration in the House.

PFAS Action Act of 2021 (HR 2467) – This legislation would require the Environmental Protection Agency (EPA) to limit the use of and designate perfluoroalkyl and polyfluoroalkyl (PFAS) as hazardous substances. These are manmade materials used in a variety of products, such as nonstick cookware and weatherproof clothing, that may have adverse human health effects. The legislation would classify PFAS under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, which in turn would require appropriate remediation of those substances released into the environment. This bill was introduced by Rep. Debbie Dingell (D-MI) on April 13. It is currently in the Senate after passing in the House on July 21.

Divided Families Reunification Act(HR 826) – This bill directs the State Department to make regular reports to Congress on its work with South Korea to reunite Korean Americans with family in North Korea. The legislation was introduced by Rep. Grace Meng (D-NY) on Feb. 4 and passed in the House on July 19. It is currently under consideration in the Senate.