Friday Financial Five—April 11th, 2014
Friday, April 11, 2014
Still time for IRA funding
April 15th is almost here, but there’s still time to fund a traditional IRA, a Roth IRA, or a non-deductible IRA. Contributions are limited to $5,500 for those that have earned at least that much and are under the age of 50. For those 50 and over, the limit is increased by $1,000. Married couples may see the deductibility of their Traditional IRA contributions phased out as their MAGI (Modified Adjusted Gross Income) increases. There is no income limit for converting an IRA to a Roth, allowing those above the allotted MAGI to make non-deductible IRA contributions followed by a Roth conversion.
Tax Court ruling on IRA rollovers
An important decision was handed down by the United States Tax Court as it pertains to IRA rollovers. The ruling, which doesn’t pertain to IRA transfers, clarified the IRS position on the act of rolling over separate IRAs in the same twelve month period. If an individual has two IRAs and rolls over distributions from each one within a year, only one of the rollovers is valid. The other would be considered a taxable distribution.
Tax foundation favors lowing capital gains tax
The debate over the consequences of tax policy continues. The Tax Foundation in Washington, D.C. recently issued a http://taxfoundation.org/article/high-burden-state-and-federal-capital-gains-tax-rates " target="_blank">report that finds the current capital gains rate “places a heavy tax bias against saving and investment”. Those in the top bracket face a long-term capital gains rate of 20 percent, plus a 3.8 percent tax on unearned income to fund the Affordable Care Act. The state where the individual resides can add additional tax, such as the additional 13 percent Californians face. Meanwhile, the Tax Foundation calculates the average top capital gains rate in the industrialized world to be just over 18 percent.
Big banks will have higher “leverage ratio”
The facelift for big banks continues, as federal regulators approved a seismic shift in holding requirements for banks over $700 billion. By 2018, the eight largest banks will have to increase capital held against all assets from 3 percent to 5 percent, an increase amounting to almost $68 billion. These are dollars that must be held in the event of financial disaster, but it also means the banks will have reduced assets to put to work or pay out in dividends. Further restrictions may be in store in a continued effort to curtail risky activity such as the use of credit default swaps.
The best countries for retirement
For those able to project a retirement date, attention shifts to where that retirement will take place. Florida and Arizona rank high as attractive destinations, but for the second year in a row, the United States as a whole ranks 19th as a country in the Natixis Global Retirement Index. Eight of the top ten countries are European, with Switzerland coming in first. The index measures countries for twenty indicators, including the quality of health and financial services and the ability to live in a safe and clean environment.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
Related Slideshow: Worcester’s Tech Startups
Buzz Lanes started out as a small idea for a Business Model Competition at Worcester Polytechnic Institute. Success there led to the semifinalist round at Harvard, and a new business that aims to accelerate the careers of talented musicians that don’t have big marketing campaign resources.
“As graduates of WPI’s School of Business, and with several years of experience in the entertainment world, we decided to push forward and make Buzz Lanes a reality,” said Gonazlo Cruz Blanco, the man behind Buzz Lanes.
A native of Spain, Blanco's passion for music and business led to the creation of this monthly subscription music platform. One of the bands he’s promoting right now is Heffay, a Worcester Hip Hop band.
“It’s a win-win situation: musicians grow their fan base and connect with new fans, and the fans will always have the opportunity to find new music they haven’t heard before.”
The company's online Beta version launches April 4, 2014
Salespod makes mobile/cloud software for organizations to manage field teams and the data that they collect.
“We currently have 2200 users in 31 countries, and are growing 10 to 15 percent per month. We are getting ready to launch a major marketing initiative and expect to grow to over 10,000 users this year,” said Mat Brogie, Salespod, Inc. COO.
“The software runs on Apple and Android smartphones and tablets, and there is a web based management console that managers use to see where and when field reps perform their activities, and to analyze the data these field reps generate.”
Salespod has a research and development office in Zagreb, Croatia, and has established the Worcester office to launch its US presence. The company started in Worcester last year with only 800 users.
“There is a growing culture entrepreneurism in the city, and the physical changes in town add to the energy that is building … not to mention the economics are extremely friendly for a start-up trying to maximize the use of cash.”
Salespod announced in March that they would be making a name/logo change to Repsly.
Incite Advisors, Inc
Incite Advisors, Inc. provides Web application development services for applications in the healthcare and life sciences.
“We are focused on data driven applications and visualizing big data. Our largest client has hired us to develop a web/mobile application that allows doctors to capture patient diagnostic information in the natural course of their work,” said Incite founder and President Ronald Ranauro.
“The application will allow for rapid updates as medical knowledge advances. The idea is that by using the computer care teams can more easily coordinate services. We are also developing a web application for visualizing and searching big picture trends in clinical trials. In support of our work, we have developed an open source software toolkit called BoxspringJS.”
Ranauro grew up in Central Massachusetts and graduated from WPI. He said his company is reaching out to the student population to offer training and real world experience on paid customer projects.
Technocopia is a non-profit (tax-exempt status pending) geared towards creating open-source technologies that will benefit the whole world. As part of this mission they are opening a “hackerspace” in Worcester, which will serve as a home-base for their research and development of these technologies, as well as a common collaborative space for anyone in Central Massachusetts to make their own projects into reality.
Their hackerspaces feature a lounge, kitchen, conference space and computer stations. Technocopia intends to support the development of open-source technology that will allow any individual, family, or community to sustainably and independently satisfy their own humanitarian needs. These needs are defined loosely as things such as nutritious food, clean water, shelter, electricity, medicine, and free access to knowledge (the internet).
Self-described as “World class incubators for world class science,” Massachusetts Biomedical Initiatives (MBI) is dedicated to job creation and innovative healthcare throughout Massachusetts by promoting the growth of start-up biomedical companies. MBI is committed to collaborating with the academic, business and government communities to promote Massachusetts as the world leader in the health sciences industry.
Kevin O’Sullivan is the President & CEO of MBI, located on Prescott Street. O’Sullivan describes the company as a private, independent economic development organization that serves as a catalyst for life science and healthcare innovation.
“We help start biomedical companies and create jobs within the Biotechnology, Medical Device, Informatics, and Biomanufacturing industry by providing secure, clean bench and sink surface, staff trained and fully licensed laboratory space for usage by ‘seed stage’ companies. Building and maintaining collaborative affiliations and partnerships are essential to our success.”
What would a tech company list be without a little fun? While neighboring Rhode Island smarts over Curt Schilling’s 38 Studios disaster, MassDiGI is pushing academic cooperation, entrepreneurship and economic development across the Massachusetts digital and video games ecosystem.
MassDiGI is a US Department of Commerce Economic Development Administration (EDA) University Center. Since starting up, MassDiGI has launched several initiatives that support entrepreneurship and strengthen the talent pipeline between higher education and the game industry.
Timothy Loew, Executive Director of MassDiGI, formerly held senior positions in business, development and academic planning at Becker College.
Jonathan Vo, Principal and Founder of Compex Software, is another Worcester Polytechnic Institute grad succeeding in the WPI neighborhood.
Vo’s software company has successfully deployed many of its software applications at hundreds of specialized operations throughout the US. Like others on this list, Compex Software came about as result of a student project. Vo did so well that he was recommended to an independent company and he’s never looked back.
Compex Software designs, develops and implements integrated business management software solutions to help small- and medium- sized businesses manage their operations. This includes manufacturing, inventory tracking, job costing, quality control, and accounting.
Yumei Huang is the Founder, President & CEO, CellMosaic, Inc. The company recently signed a collaboration research agreement (CRADA) with the National Cancer Institute to co-develop two AqT based conjugate drugs. One is an antibody-drug conjugate for the treatment of hepatocellular carcinoma and another is a protein-drug conjugate targeting CA125 for the treatment of ovarian cancer.
Under the agreement, NCI will provide its proprietary antibody and CellMosaic will design and synthesize an antibody-drug conjugate and protein-drug conjugate using its proprietary AqT linker and advanced conjugation processes. The CRADA grants CellMosaic an exclusive license option from NCI for any new products developed under this CRADA.
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