What you need to know after the death of a loved one

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After a loved one passes there can be many tasks thrown your way all at once. If this is your first time experiencing the death of a close family member, the overall estate process can be foreign and very confusing. There are three paths in which your loved one’s assets will take to be delivered to their respective heirs: Through Probate This is when property of the loved one is either left to a specific individual through their will or the loved one died without a will (intestate) and the assets must be divided by the state. The probate process includes identifying all the deceased person’s assets and distributing them to creditors and heirs. This process begins by petitioning the probate court in one of two ways depending on whether the decedent passed with or without a will. With a will (testate): the executor named in the will presents the will for probate...

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3 Ways to Reduce Your Tax Bill When Paying for College

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1) American Opportunity Tax Credit - Did you attend college for an undergraduate degree in 2016? Then you may be eligible for the American Opportunity Tax Credit. The credit is available up to $2,500 for qualified tuition, fees, and course materials. Also up to 40% of this credit is refundable. This means that even if you do not owe any taxes this year you will still be eligible for a refund of up to $1,000. The credit may not be available if you are single and have income over $90,000 or if you are married and have income over $180,000. Other limitations apply; you should check with your tax preparer to see if you qualify. Another thing to consider is that the credit is also only available for the first four years of post-secondary education. So what if you’re in grad school? You may not be out of luck! 2) Lifetime Learning Tax...

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Why Comparing Your Diversified Portfolio to an Index Doesn’t Make Sense

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It is a common financial practice to compare investment returns to a benchmark in order to evaluate performance. Most investors impulsively compare their portfolios to those indexes the financial news outlets commonly report on such as the Standard & Poor’s 500 Index and the Dow Jones Industrial Index. The problem with this is these indexes were designed to track the fortunes of large American companies only, not the average investor’s diversified portfolio. The S&P 500 is made up of the 500 largest corporations listed on the New York Stock Exchange. It would make sense to use it to track the performance of the U.S. large company stock portion of your portfolio. But usually your portfolio contains other asset classes too, such as small company equity, international equity, and bonds. These asset classes within your portfolio are not included in the composition of the S&P 500, so comparing them to it does...

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A Potential IRA Change with Big Tax Implications

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Congress may be eliminating a prominent tax advantage of inheriting an IRA. The Senate Committee on Finance voted 26-0 in September to end the “Stretch IRA” for non-spousal beneficiaries. A “Stretch IRA” is a tax efficient way to pass assets to your heirs after death. Your beneficiaries inherit your IRA and are required to take the annual minimum distributions. However, they only owe tax on the withdrawals. The rest of the account continues to grow tax deferred. If this new rule is passed, it will dramatically speed up the liquidation process and eliminate the ability to stretch an IRA out to multiple generations. It will force non-spousal beneficiaries to pay tax on the entire IRA balance within a 5-year period. For example, Jack Doe passes away with a $500,000 IRA whose sole beneficiary is his daughter, Jane. Under current law, Jane can keep that money in her Inherited IRA, only paying tax...

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Tips for Dealing with Student Loan Debt

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The average student loan debt for an individual graduating from a 4-year New York State institution in 2015 was $30,104, according to a state-by-state study by the Institute for College Access & Success. This number increased 4% from 2014 and is expected to continue to rise in future years, according to industry experts. In an economic environment where it is nearly impossible to attain a high-paying job without a college degree, student loan debt is increasingly affecting the country’s financial health. There is some good news, however.  The availability of refinancing tools for students to manage and minimize their debt after graduation is on the rise. Refinancing student loans is very similar to refinancing a mortgage. Banks will start by looking at your credit score, annual income, savings, and college degree type to determine if you are eligible for refinancing and possible loan consolidation opportunities. Refinancing is possible for both private...

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