Friday Financial Five – February 26, 2016
Friday, February 26, 2016
Trump tax plan
IRS releases “Dirty Dozen” tax scams for 2016
The IRS released its yearly list of scams for the public to be mindful of this tax season. Included in this year’s list are fake charities, the hiding of income in offshore accounts, and the possibility of a fraudulent tax preparer. That tax preparer scam can often be avoided by requesting the preparer’s Preparer Tax Identification Number (PTIN). The IRS also warns against padding deductions, inflating a refund claim, or trying to take excessive business credits.
Social Security addresses identity theft
Included in the “Dirty Dozen” list of tax scams released by the IRS is identity theft. Tax time is an opportune occassion for thieves to target Social Security numbers in an attempt to file fraudulent returns. The Social Security administration issued a publication to address this issue. It’s also a good idea to check your record with the department at least once a year to make sure they have earnings information correct.
IRA details to keep in mind
Morningstar has compiled a great list of 20 considerations for the use of IRAs. Many one income households don’t realize it’s possible to fund an IRA for a non-working spouse. It may also make sense to gift money into a Roth IRA for children that have earned income. Those with the available funds can contribute as early as possible instead of waiting until the last minute. The article also encourages IRA holders to reconsider doubling up on tax shelters.
Financial hot buttons for couples
Arguments within a marriage often center around finances. According to a Google Consumer Survey taken across the country, the top financial deal breakers for couples include a spouse not earning enough, overspending, poor credit, and a spouse being secretive about finances. Other problems involve the husband or wife being too cheap or the couple carrying too much debt. Over half of all respondents in all states said that overspending would be their biggest deal breaker, followed closely by being secretive about their finances. Answers amongst participants across the board were varied according to the cost of living and transportation, tax rates, divorce rates and the average credit card balances of the area they lived in.
Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].
Related Slideshow: Massachusetts Business Rankings
See how Massachusetts stacked up.
Massachusetts has 2015's 28th highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Mass is behind Colorado and New Mexico who come in at 26 and 27 spots respectively while Mass is ahead of Tennessee and the District of Columbia who rank 29 and 30 respectively.
Massachusetts ranks 14th overall in the category of DUI conviction annual premium increase with an amount of $756.
Massachusetts ranks 20th overall in the category of speeding over 20 mph annual premium increase with a total of $261 while ranking 21 overall in the category of two accidents annual premium increase with a total of $1,364.
Massachusetts has been ranked as the 5th most eco-friendly state in the country, according to a recent study by WalletHub.
Mass ranks tenth in environmental quality and fourth in Eco-Friendly Behaviors landing them in 8th overall.
Mass is behind Minnesota and New York who are in the fourth and third spots respectively, and in front of Washington and New Hampshire who come in at the six and seven spots.
Small Business Friendliness Grade: D+
The Economist grades states on an A+ to F grading scale for its small business climate. Massachusetts ranks near the bottom of the nation, joining New Mexico and New York in receiving D+ grades. 9 states scored worse than a D+ in the Economist rankings.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Forbes ranks each state in business costs, economic climate, and growth prospects.
The most damning in the commentary:
Massachusetts’ business costs, including labor, energy and taxes, are the highest of the 48 contiguous states—only Hawaii is higher—at 20% above the national average.
ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.
The most damning in the commentary:
Taxation and regulation are always the key barometers. Massachusetts and Oregon are the worst.
ALEC ranks each state in economic performance and outlook.
Although Massachusetts ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
#18 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Massachusetts's reputation as a hotspot for science and technology endures in this year's rankings. The commonwealth is a center for STEM jobs and university research and development, ranking 4th and 2nd, respectively, in those two categories. It also ranks 6th as a center for high-tech establishments. Massachusetts is taking aggressive steps to bolster economic activity with high-impact university-industry R&D projects and new tools for tech-based startup companies.
The Pew Charitable Trusts
#45 The Pew Charitable Trusts
The Pew Charitable Trusts ranks each state in job growth and job creation.
Massachusetts added 38,368 jobs in 2014.
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