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☆ What everyday taxpayers can learn from the Biden, Harris 2023 tax returns
▼ + stars: | 2024-04-16 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

President Joe Biden and Vice President Kamala Harris deliver remarks about healthcare in Raleigh, North Carolina on March 26, 2024. While both couples made extra tax payments, they each incurred a small estimated tax penalty, based on underpayments from each quarterly deadline and interest. Tax planning for self-employment incomeOver the years, the Bidens have reduced self-employment taxes by receiving some wages through their companies, which are structured as S corporations. After paying "reasonable compensation" to shareholders, S corporation owners can take distributions without paying 15.3% for Social Security and Medicare taxes. Work with a tax professionalTypically, filers get a tax refund when they overpay levies throughout the year.

Persons: Joe Biden, Kamala Harris, Peter Zay, David, Harris, Catherine Valega, filers Organizations: Anadolu, Getty, Eisner Advisory, Social Security, Boston, Bee Advisory Locations: Raleigh , North Carolina, New York

☆ Higher yielding CDs are coming due. Here’s where savers are redeploying their cash
▼ + stars: | 2024-04-04 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +3 min

Today's higher rates on CDs aren't going to last , however. For investors contending with maturing CDs, that means they're running out of places to stash their idle cash and still generate an attractive yield. "The issue is reinvestment risk," said Michael Carbone, certified financial planner and financial advisor at Eppolito Financial Strategies in Chelmsford, Massachusetts. That's because once the Fed begins cutting rates, fixed income with longer-dated maturities will allow investors to lock in those higher yields. An opportunity to diversify fixed income In addition to adding exposure to longer-dated bonds, advisors have also been diversifying across different classes of fixed income.

Persons: Wells Fargo, Banks, Jerome Powell, Michael Carbone, Catherine Valega, Valega, Carbone, Josh Nelson, he's Organizations: Green Bee, Keystone Financial Services, MBS Locations: Chelmsford , Massachusetts, Winchester , Massachusetts, Loveland , Colorado, BlackRock

☆ An 'often overlooked' retirement savings option can lower your tax bill, advisor says. Here's how it works
▼ + stars: | 2024-03-26 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

10'000 Hours | Digitalvision | Getty ImagesThere's still time to lower your 2023 tax bill or boost your refund with a lesser-known retirement savings strategy for married couples. One requirement for individual retirement account contributions is "earned income," such as wages or salary from a job or self-employment earnings. But there's an exception for single-income households: the spousal IRA. With income phaseouts for IRA deductibility and Roth IRA contributions, many wait until March or April for the previous year's IRA deposits. Even a $500 or $1,000 spousal IRA contribution could provide tax savings.

Persons: Roth, —, Judy Brown, Catherine Valega, Brown, deductibility Organizations: Getty, SC, H, D.C, Pew Research Center, Green Bee, Green Locations: Washington, Baltimore, Boston

☆ Self-made millionaire Vivian Tu went from 'scrimping and saving' to creating wealth with this mindset shift
▼ + stars: | 2024-03-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

"I was still living below my means and then investing that larger proportional difference," she said. Those raises helped Tu invest and grow her wealth more quickly. Why both saving and investing are criticalTu's mindset shift is one other women can learn from. Lifelong saving and investing are both critical for women, according to Boston-based certified financial planner Catherine Valega, founder of Green Bee Advisory. Leaving the workforce reduces earnings and the chance to save and invest for retirement, Valega said.

Persons: Vivian Tu, Heidi Gutman, Tu, Catherine Valega, Valega Organizations: Green Bee, Federal Reserve Bank of Minneapolis Locations: Boston

☆ Here’s where to invest your cash to save on taxes in 2024
▼ + stars: | 2023-12-04 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

"While any additional income earned from higher yields is taxed at a progressively higher rate, IRMAA applies as a surcharge," he said. "This means that even $1 of additional income could trigger higher premiums." With terms ranging from one month to one year, most Treasury bills, known as T-bills, are currently paying well over 5%, as of Dec. 4. However, T-bills offer a tax benefit over products like high-yield savings, certificates of deposit or money market funds: no state or local taxes on earnings. T-bill interest is still subject to federal income taxes.

Persons: Eric Audras, Mullikin, Catherine Valega Organizations: PhotoAlto, Getty, Medicare, Green Bee Locations: Boston, TreasuryDirect

☆ Rates may have hit their peak. How to get the biggest bang out of cash heading into 2024
▼ + stars: | 2023-11-27 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

"It's important to keep sharing this idea to do something with your cash; these rates won't be here forever." Municipal money market funds Rather than tying up money in CDs or T-bills, Sachs prefers municipal money market funds for investors in the highest income tax brackets. Vanguard's Municipal Money Market Fund (VMSXX) has a 7-day SEC yield of 3.53% and carries an expense ratio of 0.15%. Residents in high-tax locales may also want to consider state-specific muni market funds, which have the additional benefit of providing income that's free of state taxes. For instance, there's the Vanguard California Municipal Money Market Fund (VCTXX) and the Fidelity New York Municipal Money Market Fund (FSNXX) .

Persons: –, Catherine Valega, Sallie Mae, Jeremy Keil, Keil, There's, Charles Sachs, Kaufman, Sachs, Michael Bloom Organizations: Federal, Green Bee, Synchrony, Financial, Keil Financial Partners, Federal Deposit Insurance Corp, FDIC, ., CFP, Money Market Fund, SEC, Residents, Vanguard, Fidelity New York Municipal Money Market Fund Locations: Winchester , Massachusetts, New Berlin , Wisconsin, Miami, Vanguard California

You shouldn't expect high-yield savings account interest rates to drop anytime soon. High-yield savings accounts are a great choiceDespite the fact that APYs will likely fall eventually, high-yield savings accounts can still be a really good place to put your money. "By its nature a high-yield savings account will still provide more interest than an ordinary savings account at a major bank," Herzog says. In fact, now may be the time to take advantage and put funds into a high-yield savings account if you haven't already. "If we see more talk of interest rates slowly declining, I think there will be more interest in longer-term securities or options to lock in those interest rates," Valega says.

Persons: —, you'll, we're, Andrew Herzog, Herzog, Catherine Valega, It's, Valega, it's Organizations: Service, Federal Reserve, Fed, Green Bee

☆ Trying to choose Pretax vs. Roth 401(k)? Why it's trickier than you think, experts say
▼ + stars: | 2023-07-10 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

While pretax 401(k) contributions reduce your adjusted gross income, you'll owe levies on growth upon withdrawal. By comparison, Roth 401(k) deposits won't provide an upfront tax break, but the money can grow tax-free. Experts say these expected changes may also factor into the pretax versus Roth contributions analysis. Plus, recent changes from Secure 2.0 have made Roth 401(k) contributions more appealing for some investors, she said. Consider your 'legacy goals'"Legacy goals" are also a factor when deciding between pretax and Roth contributions, said Lawrence from Mariner Wealth Advisors.

Persons: Roth, —, Ashton Lawrence, Lawrence, Lawrence Pon, There's, Catherine Valega, Valega, pretax Organizations: Mariner Wealth Advisors, Lawrence Pon CPA, Pon &, Green Bee, Green Locations: Greenville , South Carolina, Redwood City , California, Boston

☆ These 3 unique challenges have an 'overarching effect' on LGBTQ people's finances
▼ + stars: | 2023-06-30 | by ( Ryan Ermey | ) www.cnbc.com time to read: +5 min

The challenges unique to the queer community are present year-round. "David and I like to say that 80% of personal finance is the same for everybody. That's the finance in personal finance," he says. "But the other 20%, which is the personal side of personal finance, is based on our backgrounds, our histories, our socioeconomic status, race, creed, segmentation, all of that." Here are three unique financial challenges queer people face, and how LGBTQ-focused financial planners say they can overcome them.

Persons: John Schneider, David Auten, David, Schneider, Laura LaTourette, Frank Summers, Summers, Catherine Valega Organizations: Human, D.C, Family Wealth Management, Cetera Advisors, CFP, Green Bee Locations: San Francisco , New York, Chicago, Dahlonega , Georgia, Charlotte , North Carolina, Winchester , Massachusetts

☆ Your 401(k) match is 'free money'—but you might not be able to take it with you when you leave
▼ + stars: | 2023-06-23 | by ( Ryan Ermey | ) www.cnbc.com time to read: +4 min

Here's what she and other financial pros say you should know about your 401(k) match. How a 401(k) match worksFirst, a quick reminder of how 401(k) matches work and why financial planners love them so much. "I would invest enough to get the company match first, before paying off high interest rate loans," says Jeremy Finger, a CFP and founder of Riverbend Wealth Management. What is a 401(k) vesting schedule? Any 401(k) match you receive from your employer likely comes with some strings attached.

Persons: Kevin Brady, Catherine Valega, Jeremy Finger, they've, you'll Organizations: Wealthspire Advisors, CNBC, Green Bee, Riverbend Wealth Management, Employers Locations: New York City, Winchester , Massachusetts

☆ Retirement vs. emergency savings: How to prioritize in a shaky economy
▼ + stars: | 2023-03-23 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Jamie Grill | Getty ImagesWhen you're on a tight budget, It can be tough to decide between contributing to your retirement savings or to your emergency fund — especially during periods of economic uncertainty. Although the 401(k) contribution limit jumped to $22,500 for 2023, experts say you shouldn't forgo emergency savings to max out your plan. More than half of savers are prioritizing short-term financial goals in 2023, including emergency savings, according to a recent study from Fidelity Investments. While maxing out your 401(k) should be the goal, your emergency savings is also important, she said. If your emergency savings are short after that, you should "definitely" divert any additional funds to build up that cash reserve, she said.

☆ Pre-tax vs. Roth 401(k): Deciding which to use for retirement is trickier than you think
▼ + stars: | 2023-02-11 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Prathanchorruangsak | Istock | Getty ImagesWhether you're starting a new job or updating retirement savings goals, you may need to choose between pre-tax or Roth 401(k) contributions — and the choice may be more complex than you think. While pre-tax 401(k) deposits offer an upfront tax break, the funds grow tax-deferred, meaning you'll owe levies upon withdrawal. By contrast, Roth 401(k) contributions happen after taxes, but your future earnings grow tax-free. Experts say these expected changes may also factor into the pre-tax vs. Roth contributions analysis. Plus, recent changes from Secure 2.0 have made Roth 401(k) contributions more appealing for some investors, she said.

☆ How to balance retirement and emergency savings in a shaky economy
▼ + stars: | 2023-01-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

It's not easy to prioritize financial goals, especially when choosing between two essentials in an unsteady economy: saving for retirement or building your emergency fund. Indeed, more than half of savers are prioritizing short-term financial goals in 2023, including emergency savings, according to a recent study from Fidelity Investments. While maxing out your 401(k) should be the goal, your emergency savings is also important, she said. Leslie Beck, a Rutherford, New Jersey-based CFP and owner of Compass Wealth Management, said she has a "rule of thumb" for how to decide between retirement and emergency savings. Then, if your emergency savings are short after that, you should "definitely" divert the funds, she said.

☆ It's time to boost 401(k) contributions for 2023: 'You're smart to jump on this,' says advisor
▼ + stars: | 2023-01-03 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you're eager to boost your retirement savings, there's good news for 2023: higher 401(k) contribution limits. And now is the time to adjust your deferrals, financial experts say. You can funnel $22,500 into your 401(k), 403(b) and other such plans for 2023, up from the $20,500 limit in 2022. "Most people set [401(k) contributions] once and never look back." If you aim to max out 401(k) contributions for 2023, it may pay off to start early, as spreading it out may be easier than contributing more later in the year.

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