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☆ There's still time to avoid a penalty for fourth-quarter estimated taxes — but the clock is ticking
▼ + stars: | 2023-01-17 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

There's still time to avoid a penalty if you didn't pay enough taxes in 2022 — but the clock is ticking. If you are self-employed or receive income from gig economy work, investments and more, the deadline for your 2022 fourth-quarter estimated tax payment is Jan. 17. Your payment may reduce your 2022 tax bill and bypass extra penalties and interest, according to financial experts. You can also make payments through your IRS online account, which provides access to payment history, or digitally through the Electronic Federal Tax Payment System. You can see other options through the IRS payments website.

I thought I wouldn't need life insurance until I was earning a lot of money or became a parent. My household relies on my salary, and a permanent policy could supplement my retirement plan. I shared my financial portfolio and my current life plans to see what he thought: Should I get a life insurance plan in 2023? Life insurance would cover my household contributionsMy husband and I both work full-time. That's when he mentioned life insurance can be a relatively inexpensive supplemental retirement plan.

The wealth gap remains a harsh reality for women of color, which makes it harder to build wealth. "Decide on what you're going to save and invest on a monthly basis," she says. You might not have been exposed to building wealth, the tenets of investing and paying taxes, and basic financial planning. Don't worry about getting it perfectFor first-generation women of color, it starts with learning more and doing more. You're going to make mistakes and you're going to trip along the way.

☆ If federal regulators ban noncompete agreements, 'I'd be the first person to start working again,' advisor says
▼ + stars: | 2023-01-12 | by ( Jessica Dickler | ) www.cnbc.com time to read: +1 min

Ted Jenkin signed a noncompete agreement when he sold his financial advisory practice in 2019. Bound by this clause, Jenkin, who is a member of CNBC's Financial Advisor Council, stayed on as an employee until the end of last year. The proposed rule would require companies with existing noncompete agreements to rescind them and inform current and past employees that they have been canceled, in which case Jenkin would be free to pursue other employment. "I'd be the first person to start working again," Jenkin said. "I wouldn't have the fear of getting into a legal battle just because I'm working in my profession."

☆ 2 brothers quit their Wall Street jobs to build ETFs that help everyday investors reach their money goals. They explain how a Ray Dalio-inspired strategy helped their funds outperform the S&P 500 in 2
▼ + stars: | 2023-01-12 | by ( Kathleen Elkins | ) www.businessinsider.com time to read: +10 min

Brothers Taylor and Brett Sohns have worked on Wall Street for most of their careers. These parameters can be found in what's called the "prospectus," which is a document that outlines the ETF's investment strategy and potential risk. Consider the process of buying cereal, explained Taylor: "Say you want Lucky Charms. The S&P 500 is down about 18% year-to-date, so we're outperforming that by about 5%," explained Taylor. While you may not do exceptionally well, you'll also never do exceptionally bad, explained Taylor: "In a rip-roaring up market, his product and our product will underperform.

☆ Hoping to win the $1.35 billion Mega Millions jackpot? Take these 3 steps to prepare for any cash windfall
▼ + stars: | 2023-01-11 | by ( Kamaron Mcnair | ) www.cnbc.com time to read: +3 min

Of course, the size of the cash windfall and your own financial situation may completely change how you decide to spend it. But in any case, having the right mindset around extra cash can help you avoid squandering the opportunity when it arises. Sometimes you know a windfall is coming, like if you're expecting a decent tax refund. In any case, here are three steps you can take to prepare for a cash windfall. That can mean having a plan for all or part of your tax refund to go directly to your savings.

☆ Did Trump donate his presidential salary in 2020? Tax returns don’t tell full story
▼ + stars: | 2023-01-11 | by ( Greg Iacurci | ) www.cnbc.com time to read: +2 min

When former President Donald Trump's tax returns were issued publicly Dec. 30, some news reports suggested he didn't donate his salary in 2020 — thereby breaking a campaign pledge — because the tax returns showed $0 of charitable gifts. However, it's unclear from the available data if he did or didn't break his promise, due to how certain information is reported on tax returns, accountants said. He didn't pay federal income tax because he didn't have any taxable income. But that's not the case if you report negative income and don't pay income tax; you can't get a tax deduction if there's no income from which to deduct. However, taxpayers can "carry forward" that unused tax break to future years — effectively using past charitable donations to reduce their tax bill later.

☆ ‘Don’t wait until March’ to hire a tax pro, says advisor — 3 moves to make before the 2023 tax filing season opens
▼ + stars: | 2023-01-11 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Take steps to reduce your 2022 tax billWhile many tax planning opportunities vanish after year-end, experts say there are still a few ways to trim your 2022 tax bill. I believe there is tremendous value in thinking ahead and coordinating both your tax and financial planning strategies. You can also still make individual retirement account contributions until the tax-filing deadline on April 18, 2023, said Brown, who is also a CPA. "If you have not already done so, review last year's records and create a checklist of the forms" you're expecting, he suggested. For deductions, you may have 1098 for mortgage interest, 5498 for individual retirement account deposits, 5498-SA for health savings account contributions and more.

☆ Mega Millions jackpot is $1.1 billion. How big winners can prep for 'the inevitable asking for money' from family, friends
▼ + stars: | 2023-01-10 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +4 min

Scott Olson | Getty ImagesIf you've never had family or friends hit you up for money, that is likely to change if you were to win the $1.1 billion Mega Millions jackpot. It also may make you a target for people who want a piece of your newfound wealth, experts say. When "the inevitable asking for money occurs," she said, "how can you make sure you feel comfortable saying yes or no?" Set up boundaries for money going to family, friendsFor sharing with family and friends, you also should set up parameters, Irwin said. "I think it's helpful to think about under what terms you would gift money," Irwin said.

☆ 2022 was the worst-ever year for U.S. bonds. How to position your portfolio for 2023
▼ + stars: | 2023-01-07 | by ( Greg Iacurci | ) www.cnbc.com time to read: +6 min

Interest rates started 2022 at rock-bottom — where they'd been for the better part of the time since the Great Recession. Bond prices move opposite interest rates — as interest rates rise, bond prices fall. Duration is a measure of a bond's sensitivity to interest rates and is impacted by maturity, among other factors. We can see why long-dated bonds suffered especially big losses in 2022, given interest rates jumped by about 4 percentage points. The traditional dynamics of a 60/40 portfolio — a portfolio barometer for investors, weighted 60% to stocks and 40% to bonds — will likely return, advisors 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.

☆ IRS: fourth-quarter tax deadline is Jan. 17. How to avoid penalties
▼ + stars: | 2023-01-05 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you didn't pay enough taxes in 2022, there's still time to avoid a "surprise tax bill" and bypass extra penalties, according to the IRS. The deadline for fourth-quarter estimated tax payments for 2022 is Jan. 17, which applies to income from self-employment, investments, gig economy work and more. The IRS says Direct Pay is the "fastest and easiest" way to make payments, with online scheduling options before the Jan. 17 deadline. You can also make payments through your IRS online account, which provides access to payment history, or digitally through the Electronic Federal Tax Payment System. You can see other options through the IRS payments website.

☆ How to be a better investor in 2023
▼ + stars: | 2023-01-05 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +5 min

New York CNN —If you’re planning to invest your hard-earned money in stocks, bonds and other assets this year, let humility be your guide. In response, stocks and bonds, which typically don’t move in the same direction, moved down in tandem in 2022, with both ending the year deep in the red. Ignore the noiseWhether 2023 is great or awful for stocks — or, more likely, both at different times — that shouldn’t sway your investing decisions. Given recession concerns, Wilson noted that value stocks, which represent companies with strong fundamentals but are considered underpriced, tend to perform better during economic downturns. For those with a long time horizon and a high tolerance for risk, Wilson suggests looking for buying opportunities among stocks that have been hammered.

☆ 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.

☆ Secure 2.0 changes 3 key rules around required withdrawals from retirement accounts
▼ + stars: | 2023-01-03 | by ( Greg Iacurci | ) www.cnbc.com time to read: +2 min

President Joe Biden signed a $1.7 trillion legislative package on Dec. 29, 2022 that has several updates for retirement savers. Raising the RMD age to 73 (and eventually 75)Currently, savers have to start taking RMDs at age 72. The new law raises the RMD starting age in two tranches: to 73, starting in 2023, and to 75, starting in 2033. Eliminating RMDs from a Roth 401(k)Starting in 2024, investors in employer retirement plans likes Roth 401(k) accounts will no longer have to take RMDs. This change aligns Roth 401(k) with Roth IRAs, which don't require distributions during one's lifetime.

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☆ Don't assume the interest on your savings account is keeping up with Federal Reserve rate hikes. Here's why
▼ + stars: | 2023-01-03 | by ( Lorie Konish | ) www.cnbc.com time to read: +1 min

As the Federal Reserve continues to hike interest rates, you may assume you're earning more on the money in your savings account. The interest rate on his Capital One account was 0.3%, far lower than the 3.3% annual percentage yield the firm is currently advertising for new savings accounts. McClanahan discovered the same situation when she checked her own Capital One account. While a call to Capital One's customer service revealed it was possible to access the higher interest rate by opening a new account, McClanahan decided it was better to move the money elsewhere. "I've been recommending Capital One for a long time, and they are now off my list," McClanahan said.

☆ 5 tax and investment changes that could boost your finances in 2023 amid economic uncertainty
▼ + stars: | 2022-12-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

Bigger contribution limits on retirement accountsIf you're eager to boost your retirement savings, there's good news for 2023: higher contribution limits for your 401(k) and individual retirement account. The contribution limits have also increased for IRAs, allowing you to save up to $6,500 for 2023, up from $6,000 in 2022. Higher income limit for Roth IRA contributionsThe 2023 inflation adjustments also mean more investors may qualify for Roth IRA contributions, experts say. "But how about Roth [IRA] contributions?" While some investors may seek "complicated" moves, like so-called backdoor Roth conversions, which transfer after-tax 401(k) contributions to a Roth IRA, Pon urges investors to double-check Roth IRA contribution eligibility first.

☆ Building emergency savings is a top financial resolution for 2023, survey finds. Here’s how to get started
▼ + stars: | 2022-12-30 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

Jenkin, who co-wrote a book called "The 21-Day Budget Cleanse," recommends people take a detox-type approach to their household budgets. "Most people really haven't taken the time to see where they're overspending and size up what the difference is," Jenkin said. That's "troubling" now, as interest rates on those debts are poised to continue to climb, according to Matt Schulz, chief credit analyst at LendingTree. Look for higher rates on your cashAs interest rates climb, that's good news for the money you stand to earn on your cash. Online savings accounts and certificates of deposit, or CDs, are providing the highest interest rates in more than a decade.

☆ Here are some key things to consider before tapping your retirement savings to pay off credit card debt
▼ + stars: | 2022-12-30 | by ( Annie Nova | ) www.cnbc.com time to read: +3 min

As a result, they may be wondering if it's a good idea to tap their retirement savings to pay off the debt. Stopping your 401(k) contributions for a while — or at least cutting back — and redirecting those funds to debt payoff might make sense. For most others, though, there are more appealing options than a withdrawal, Rossman said. "Using a 401(k) loan to pay off high-interest debt, like credit cards, could reduce the amount you pay in interest to lenders," said Jessica Macdonald, head of editorial content at Fidelity Institutional. Other benefits to a 401(k) loan, Macdonald said, are that they don't require a credit check and they don't show up as debt on your credit report.

☆ The Mega Millions jackpot is $640 million. These are 4 key things to do if you actually win
▼ + stars: | 2022-12-30 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +3 min

That's the Mega Millions jackpot amount for the next drawing, set for Friday night. The top prize has been growing since Oct. 14 when it was reset to $20 million after two tickets — sold in Florida and California — matched all six numbers to split a $502 million jackpot. "People can lose tickets, and no ticket means no money." Build a team of advisorsWinning such a large amount of money means having some pretty weighty financial decisions to make. For this $640 million Mega Millions jackpot, the cash option — which most jackpot winners choose — is $328.3 million.

☆ New retirement account rules make it easier to tap savings early for emergencies
▼ + stars: | 2022-12-27 | by ( Greg Iacurci | ) www.cnbc.com time to read: +7 min

But they said the rules also amount to another source of so-called "leakage" that run contrary to the overall goal of retirement savings: to build a nest egg for the future. Participants can also access 401(k) savings via loans or non-hardship withdrawals. Non-hardship distributions also hit an all-time high in October — almost 0.9% of participants took one that month, according to Vanguard. And the share of workers taking 401(k) loans rose to 0.9% in October from 0.8% at the beginning of 2022. Beyond the apparent acute financial need among households, hardship withdrawals carry negative repercussions like tax penalties.

I started picking stocks and pouring money into crypto when I was bored during the pandemic, and haven't touched my portfolio since. Financial advisors told me I should diversify my investments and bring in professional help. Diversify your investmentsWhen I first started investing in 2020, I made the mistake of buying individual stocks that were mostly in the same sectors (technology and travel). "A financial advisor can help the person understand their options and advise them on the best way to move forward," says Marquardt. If you're looking into the tax implications of your investments, consult a tax professional for the details on your specific situation.

☆ Two of the 'best' ways to donate to maximize your tax deduction for charitable gifts, according to financial advisors
▼ + stars: | 2022-12-23 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Members of the Salvation Army play music during the lighting of the world's largest Red Kettle in the Times Square neighborhood of New York, U.S., on Tuesday, Dec. 1, 2020. This holiday season, it may be possible to lower your taxes while supporting your favorite charity, experts say. Despite the shaky economy, most Americans plan to donate similar amounts this year as they did last year, a recent Edward Jones study found. While tax breaks typically aren't the main reason for giving, experts say some donors may be missing out on the chance for a deduction. Here's what to know about the charitable deduction before opening your wallet, and two of the "best" ways to give, according to financial advisors.

☆ Families can make a tax-free rollover from 529 plans to Roth individual retirement accounts starting in 2024
▼ + stars: | 2022-12-23 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

Maskot | Maskot | Getty ImagesMillions of 529 accounts hold billions in savingsThere were nearly 15 million 529 accounts at the end of last year, holding a total $480 billion, according to the Investment Company Institute. watch nowHowever, that investment growth is generally subject to income tax and a 10% tax penalty if used for an ineligible expense. A transfer would skirt income tax and penalties; investments would keep growing tax-free in a Roth account, and future retirement withdrawals would also be tax-free. The rollover can only be made to the beneficiary's Roth IRA — not that of the account owner. Some education savings experts think 529 accounts have adequate flexibility so as not to deter families from using them.

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