Summer Camp Fees Can Qualify for a Tax Credit

Image via WikipediaSummer time is coming to an end and it's time to get the kids ready for the new school year. But before you put away the summer fun and start to get ready for the new school year, get out those receipts for the summer camp you sent the kids to. If you have enrolled your kids in summer camp and they attended while you were at work or while you were looking for work, you are eligible for a tax credit.

According to the IRS website, at IRS.gov, under the existing rules up to 35% of qualifying camp expenses is allowed to be claimed as a federal child care tax credit for children under 13.

The IRS wants the public to know that a summer day camp does qualify for a tax credit. It's looked at as the same as a day care center or even hiring a baby sitter does just like during the school year. The federal child and dependent care tax credit allows a 35% credit. For incomes above $43,000, it's 20 percent. Qualifying expenses for the tax credit are limited to $3,000 per year for one child or $6,000 for two or more. So if you're eligible for the maximum 35 percent with one child, you could claim a credit of $1,050.

Also note that overnight camps do not qualify toward the tax credit. Only expenses that occur when the parent is at work or looking for work.

6 Money Rules For A Successful Retirement

Retirement is a fact of life, an event that someday will happen to all of us. We budget and plan for other situations like college costs, home purchases and life events but often we put off preparing for the longest lasting time of our lives. 

If I told you that you would be unemployed for more than 25 years of your life, wouldn't you prepare for such an event. Yes you would, but being it's so far away when we are younger we tend to put it off. I have listed 6 money rules that must be considered to have a great retirement.

Save Early For Retirement. Waiting to save for retirement is the biggest mistake you will ever make. When you get that first job always be putting money away for the future. Paying off debt is a a top priority, but don't let it get in the way of your long term goals. If your employer offers a 401(k) with matching, save at least enough to get the matching. It's free money and you can't get a sweeter deal than that. 

Your ideal goal is to save 15 % of your income. If you have maxed out the 401(k) then start a Roth Ira. Start small with a 3% contribution and work your way up slowly to 10%. As you eliminate debt bump up your savings.

Cut your debt, but not your credit cards. Cutting your debt to zero is a great idea. But don't cancel your credit cards, you could take a big hit on your FICO score. You still need to maintain a good credit score even in retirement. Also the cards are a safety net of last resort. Sure having a large emergency fund is important, but your credit cards are a second line of defense in an emergency. But never to be used unless for dire emergency.

Reasonable housing, not Beverly Hills mansion. Let's face it your home is not an investment and the less you put into it the more you will have for investing and retirement. The typical rule of thumb used to be, you could afford a home 3 times you annual salary. But that rule went by the wayside,  your house payment including principle, interest, insurance, and taxes should be no more than 28% of your gross income. This also goes long with a 20% down payment. 

You will find many mortgage brokers allowing you to borrow a lot more but you have to be smart and stay away from a too large home. You will end up putting too much money into your payment and don't forget all the never ending maintenance of your home. After making the mistake of not saving for retirement, buying a to expensive home will crash your financial plan leaving your retirement sorely lacking.

An emergency fund built for your individual situation. It was always called a savings account but it's better known as your emergency fund. We all can agree an emergency fund is a necessity, but how large a fund is the the question. If you work on a commission basis, have irregular income, or think your job is going to be eliminated you need a larger fund. It should be at least 6 months of expenses. If your job is stable then you only need 3 to 6 months of expenses. The goal is to keep enough cash available to see you through the emergency with out having to cash in investments or use credit cards. 

Renting is sometimes better than buying. In a environment of rising home prices, buying a house is better. If prices are falling or flat, like they are today, then only buy if you can get the house for a steal. Renting may be an option if you don't want to deal with the extra costs of home ownership or maybe you are tired of the constant work of owning a home. 

Renting does have it's advantages in lower costs and hassle. Find a renting vs. buying calculator and do the math before doing either. But home ownership is the American dream, but with the extra costs and hassle it does come at a price.

Quit your mortgage when you quit your job to retire. It makes sense to lower costs in retirement and finishing your mortgage when you retire would be the right thing to do. Many people argue that having all your money tied up in a paid for house is the wrong thing to do. They think you need to have your money working for you in investments. 

But for many, not having a mortgage gives a sense of peace that your home will never be lost through foreclosure. But mathematically, we all agree that reducing expenses in retirement is the safest thing to do.

Making good retirement decisions means following a plan. The plan must be based on a good financial foundation. 

It's Tax Free Weekend, Time To Get Ready For School

Image via WikipediaIn 8 states this weekend you will not have to pay sales tax on back to school items. During the month of August eight other states will also have tax free weekends. During this tax free holiday the items allowed to be tax free are clothes, school supplies, books, and computers. Each state has certain limits to the amount of the purchase and which items are allowed to be tax free in the particular state.

Originally the weekends were meant to get junior outfitted with new clothes and shoes for returning to school but the items covered by the tax free rules have expanded. Now you can purchase computers, school supplies, and even appliances. The amount of the items can go as high as $2,500 as in Louisiana.


The Louisiana Sales Tax Holiday provides an exemption from state sales tax on the first $2,500 of the purchase price of most individual items of tangible personal property for non-business use. The state sales tax is payable on the portion of the purchase price of any individual item in excess of $2,500.This Means you can buy anything except vehicles that require a tag and title.

Missouri allows you to buy software up to $350 without paying tax and computers up to $3,500 without paying sales tax.

Check out this chart for purchasing rules and links to specific states information.

State	Items and Maximum Cost (Per Item)	2011 Dates	More Information
Alabama	clothing – $100 computers – $750 school supplies – $50 books – $30	August 5-7	revenue.alabama.gov
Arkansas	clothing and footwear – $100 Clothing accessories – $50 school supplies, art supplies, school instructional material	August 6-7	www.dfa.arkansas.gov
Connecticut	clothing and footwear – $300	August 21-27	www.ct.gov
Florida	school supplies – $15 clothing – $75	August 12-14	dor.myflorida.com
Iowa	clothing – $100	August 5-6	www.iowaccess.org
Louisiana	all TPP – $2,500 hurricane preparedness items – $1,500	August 5-6	revenue.louisiana.gov
Maryland	clothing and footwear – $100	August 14-20	www.marylandtaxes.com
Massachusetts	TVs, clothing, personal items – $2,500	August 13-14	www.mass.gov
Missouri	clothing – $100 computers – $3,500 school supplies – $50	August 5-7	dor.mo.gov
New Mexico	clothing – $100 computers – $1,000 school supplies – $15	August 5-7	www.tax.newmexico.gov
North Carolina	clothing – $100 school supples – $100 instructional material – $300 computers – $3,500 other comp. – $250 sports equip – $50	August 5-7	www.dornc.com
Oklahoma	clothing – $100	August 5-7	www.tax.ok.gov
South Carolina	clothing school supplies computers other (Check SC site for explicit items’ exemptions)	August 5-7	www.sctax.org
Tennessee	clothing – $100 school supplies – $100 computers – $1,500	August 5-7	tn.gov
Texas	clothing, backpacks, and school supplies – $100	August 19-21	www.window.state.tx.us
Virginia	clothing – $100 school supplies – $20	August 5-7	www.tax.virginia.gov

Washington's Debt Crisis Is Over With Social Security and Medicare Spared - For Now

Image via WikipediaThe Congress and the President have come together and deflected the debt crisis. They have worked out a solution that both parties can hold their noses and live with. These last two months have been nerve racking for the folks dependent on Social Security. Not only for them, but the rest of the country is finally seeing how close we are to the precipice of default.

Unconscionable spending over the last 30 years by both parties has led to an environment of thoughtless borrowing. President Obama is the unfortunate president who will take the brunt of the anger of the American people over this insane borrowing and deficit. Luckily for him, the deal that was worked out will spare him another debt crisis before the next election. But before the end of 2012, we will be back where we started.

One point of the debt deal that was made is, Social Security and Medicare are off the table on budget cuts. This is not forever and when the next round of deficit discussions come around Social Security and Medicare could be on the chopping block. The gloves are off for Social Security activists and recipients. They will have to fight long and hard to keep their benefits in the years ahead. It' almost funny that our so called guaranteed benefits will have to be fought for.

What happened to the sacred promise made to the American people by our government about the Social Security Trust Fund. It seems with the stroke of the pen all that could be over. Washington says they might have to reduce benefits to keep the fund viable.

All Americans have paid faithfully to the Social Security Fund only to have it mishandled and raided for it's funds over the years. Now the raiders want to balance the budget on the backs of retiree's. We all know that Social Security and Medicare have not caused this economic crisis and we do not support cutting these programs to pay down the debt. Then why are important programs on the table as bargaining chips as a way to balance the budget?

For over three decades, millions of older Americans have counted on annual Social Security benefit increases to help them afford their basic needs. Unfortunately, the benefits they've earned will again be frozen next year, leaving millions who are struggling in this economy without money they depend on to make ends meet.

I suggest you contact your representatives in Washington DC and let your voices be heard on this matter.

Click Here for a list of your Representatives Email and Phone numbers.

Before Buying A House Try A Financial Dress Rehearsal

Image via WikipediaYou have heard it all before, don't waste your money on renting, buy a house and pay yourself. Owning a house is one of the greatest pleasures you can have. Your place, with your name on the deed, there is no better feeling. I have owned two homes in my life and would highly recommend it. 

But what I wouldn't recommend is all the money it costs to own a house. You can never fully plan for all that will go wrong in your home. Whether it's the water heater leaking, the roof leaking, or the constant upkeep; sometimes you may wish you were back in that no maintenance apartment.

When buying a home there are many things to be considered. You need good credit. You need a down payment. You have to know the housing market so you don't over pay. That's just for starters, the real challenges begin when you move in.

I am the type of person who can sit down and write up a monthly budget with no problem. The numbers come easily after doing it for so long. I know my expenses and my income. It's easy to do because I know what I need to budget for. When you buy a home you are faced with the unknown of what to get ready for. Things will eventually break or need maintenance. It's not, if it will break, but when will it break.

Many people buy that first home and really don't know what they are getting into financially. So why not do a dress rehearsal to see how it could all fold out.

Make a list of all the new expenses you will have when owning your home. Find a perspective home you would probably purchase and use a mortgage calculator to figure out the payment. Add to it what the insurance, taxes, and expenses of owning that home. Take that number and subtract your current monthly rent. Are you able to save that amount every month for two years. If you can't save that amount every month, then you are not ready to buy a house.

Most people believe they can afford the monthly payment and all the extra expenses. It's true some people will be able to afford it, today. But in five years from now, what will be the expenses? They will surely be more. With a home being larger than your apartment, you will have the expense of more furniture and electric. Your yard will be bigger and your responsibility to maintain. What about a nice pool for the kids to swim in during the hot summer days. Don't forget the chlorine and other maintenance items.

You finally have that nice house all fixed up and decorated, but it's empty, it needs the sound of little feet running through it. Now the children start to arrive. Now your costs are rising and seem to never end.

A house is a big expensive financial burden that can sneak up on you with unforeseen expenses. Before you take the big leap into purchasing one, sit down and make a list of what it will REALLY cost you every month and year. Actually put the money aside with a phantom house budget and see if it will really work for you.

Citi's Simplicity No-Penalty, No-Fee Credit Card: HUH!

Citigroup has launched a credit card that combines the three most requested benefits, card holders have been requesting. They are not late fees, no penalty interest rate, and a single interest rate for purchases, balance transfers, and cash advances.

The new Simplicity card will be sold as a way for busy people with busy schedules who want a credit card with simple terms, said Jud Linville, CEO of Citi Cards. “It lets them not have to worry that they’re going to be late on a payment. It provides some flexibility,’’ he said.

It sound like a good deal at first, but this new card comes with an interest rate 16.99 percent interest. The national average interest rate is 14.40% according to Bankrate.com. If you carry a balance, the extra conveniences may not out way the higher interest rate. But if you're prone to have late payments, you won't be penalized a late fee, which could range from $35 to $45 dollars. At least with the higher interest you know every month what you will be paying. Also if you are already paying a high monthly interest already, another percent or two makes very little difference.

No Late Fees?

The no late fee feature is an uncommon occurrence in the world of credit cards. Cardhub.com states that only 5% of credit cards do not charge a late fee and only 8% of cards charge a single interest rate for purchases, balance transfers and cash advances.

The Simplicity card also doesn’t offer any rewards, which can be a deal breaker for some. Or it may turn out you won’t qualify for the card. Citi declined to specify what type of credit background is required. But CardHub.com, which lets consumers search and compare card offers, lists the Simplicity card for those with “excellent’’ scores of 720 or higher.

Citi has revamped this card to coincide with the new regulations coming out of the Consumer Financial Protection Bureau. Many credit cards will be moving to these types features. They will be losing quite a bit money in cutting these fees so with the interest rate increase they will be making it up in some way.

The upside to this card is the elimination of theses pesky fees. If you carry a balance you will have to deal with the higher interest rates. If you pay off your credit card bill every month you will never have to pay a fee, even if you are late on a payment. It's a good deal if you don't carry a balance.