Payroll Direct Form For 529 College Savings Plan Accounts: Fill & Download for Free

This question is a bit of a brain puzzler, and there does not seem to be a very clear answer to this Question Resources and Information. a quick glance, I would say investments would pay more money to the bank than fees would, however, let's examine the facts and that way, one would come to their own conclusion, as it is also very obvious that fees bringing tremendous amounts of money to the bank. So we will start by defining like the bank, fees, and investments, and glean as much information as we could as we navigate the question and answer. Let's do this:BankDescriptionA bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries.How Banks WorkBY LEE ANN OBRINGERAccording to Britannica.com, a bank is:an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively.Banks are critical to our economy. The primary function of banks is to put their account holders' money to use by lending it out to others who can then use it to buy homes, businesses, send kids to college...When you deposit your money in the bank, your money goes into a big pool of money along with everyone else's, and your account is credited with the amount of your deposit. When you write checks or make withdrawals, that amount is deducted from your account balance. The interest you earn on your balance is also added to your account.Banks create money in the economy by making loans. The amount of money that banks can lend is directly affected by the reserve requirement set by the Federal Reserve. The reserve requirement is currently 3 percent to 10 percent of a bank's total deposits. This amount can be held either in cash on hand or in the bank's reserve account with the Fed. To see how this affects the economy, think about it like this. When a bank gets a deposit of $100, assuming a reserve requirement of 10 percent, the bank can then lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that $81 goes into the economy to purchase goods or services and ultimately is deposited into another bank that proceeds to lend out a percentage of it.In this way, money grows and flows throughout the community in a much greater amount than physically exists. That $100 makes a much larger ripple in the economy than you may realize!What do banks charge fees for?To make a profit and pay operating expenses, banks typically charge for the services they provide. When a bank lends you money, it charges interest on the loan. When you open a deposit account (checking or savings) there are fees for that as well. Even fee-free checking and savings accounts have some fees.Bank FeesREVIEWED BY WILL KENTONDEFINITION of Bank FeesBank fees are nominal fees for a variety of account set-up and maintenance, and minor transactional services for retail and business customers. Fees can be one-time, ongoing or related to penalties.BREAKING DOWN Bank FeesBanks fees seemingly lurk everywhere. There is a comprehensive disclosure of the menu of fees on banks' websites and in pamphlets with fine print. Customers must carefully read the disclosures to avoid surprises. Certain fees apply to all customers across the board, while others may be waived under certain conditions. While competition is a natural regulator of where a bank may apply fees and how much it thinks it can get away with, government authorities such as the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) stand by to field complaints and concerns from the public about fee-charging practices by banks.Sample List of Bank FeesWells Fargo charges retail customers fees for ATM transactions (with some exceptions), cashier's checks, money orders, overdrafts, bounced checks, overdraft protection, stop payment requests, wire transfers, safety deposit boxes, minimum account balance requirements, and others. Fees for merchant, payroll, and bill payment services apply for small businesses, while treasury management and corporate trust services offered by a bank to larger businesses carry fees. Also, fees for establishing and maintaining loans or lines of credit, the bread-and-butter of all banks, apply to all.Importance of Bank Fees to ProfitabilityThe primary source of revenue for a bank is net interest income, but a material portion of total revenue comes from bank fees. In 2017, fee income (booked under "noninterest income") for Wells Fargo accounted for approximately 35% of aggregate revenue. An individual fee may be nominal but they add up nicely for a bank. When the net interest margin for a bank is squeezed in a low-interest rate environment, bank fees provide a measure of stability to bank earnings.Investments:According to Wikipedia, investments are:To invest is to allocate money in the expectation of some benefit in the future.In finance, the benefit of an investment is called a return. The return may consist of a gain (or loss) realized from the sale of property or an investment, unrealized capital appreciation (or depreciation), or investment income such as dividends, interest, rental income, etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in foreign currency exchange rates.Investors generally expect higher returns from riskier investments. When we make a low-risk investment, the return is also generally low.Investors, particularly novices, are often advised to adopt a particular investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.An investor may bear a risk of loss of some or all of their capital invested. Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk.Savings bear the (normally remote) risk that the financial provider may default.Foreign currency savings also bear foreign exchange risk: if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavorably, so that the value of the savings account decreases, measured in the account holder's home currency.In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors and a greater level of uncertaintyBelow Finra describes the types of investments:Types of InvestmentsThink of the various types of investments as tools that can help you achieve your financial goals. Each broad investment type—from bank products to stocks and bonds—has its own general set of features, risk factors and ways in which they can be used by investors.Learn more about the various types of investments below.StocksWhen you buy shares of a company’s stock, you own a piece of that company. Stocks come in a wide variety, and they often are described based on the company’s size, type, performance during market cycles and potential for short- and long-term growth. Learn more about your choices—from penny-stocks to large caps and more.BondsA bond is a loan an investor makes to an organization in exchange for interest payments over a specified term plus repayment of principal at the bond’s maturity date. Learn how corporate, muni, agency, Treasury and other types of bonds work.Investment FundsFunds—such as mutual funds, closed-end funds and exchange-traded funds—pool money from many investors and invest it according to a specific investment strategy. Funds can offer the diversification, professional management and a wide variety of investment strategies and styles. But not all funds are the same. Understand how they work, and research fund fees and expenses.Bank ProductsBanks and credit unions can provide a safe and convenient way to accumulate savings—and some banks offer services that can help you manage your money. Checking and savings accounts offer liquidity and flexibility. Find out more about these and other Bank productsOptionsOptions are contracts that give the purchaser the right, but not the obligation, to buy or sell a security, such as a stock or exchange-traded fund, at a fixed price within a specific period of time. It pays to learn about different types of options, trading strategies and the risks involved.AnnuitiesAn annuity is a contract between you and an insurance company, in which the company promises to make periodic payments, either starting immediately—called an immediate annuity—or at some future time—a deferred annuity. Learn about the different types of annuitiesRetirementNumerous types of investments come into play when saving for retirement and managing income once you retire. For saving, tax-advantaged retirement options such as a 401(k) or an IRA can be a smart choice. Managing retirement income may require moving out of certain investments and into ones that are better suited to a retirement lifestyle.Saving for EducationFunding education begins with savings. Learn smart ways to save, including 529 Education Savings Plans and Education Savings Accounts. We’ll help you navigate your savings options.Alternative and Complex ProductsThese products include notes with principal protection and high-yield bonds that have lower credit ratings and a higher risk of default than traditional investments but offer more attractive rates of return. Learn about their features, risks and potential advantages.Initial Coin Offerings and CryptocurrenciesThese are speculative investments that come with significant uncertainty and many risks. Before you consider an investment in ICOs or cryptocurrencies, learn more.Commodity FuturesCommodity futures contracts are agreements to buy or sell a specific quantity of a commodity at a specified price on a particular date in the future. Commodities include metals, oil, grains, and animal products, as well as financial instruments and currencies. With limited exceptions, trading in futures contracts must be executed on the floor of a commodity exchange.Security FuturesFederal regulations permit trading in futures contracts on single stocks, also known as single stock futures, and certain security indices. Learn more about security futures, how they differ from stock options and the risks they can pose.InsuranceLife insurance products come in various forms, including term life, whole life, and universal life policies. There also are variations on these—variable life insurance and variable universal life—which are considered securities. See how insurance products may fit into an overall financial plan.Ever wonder how banks make their money? They can't be offering to store your money for free? You're right; here's how banks earn money.How do banks make money?Yes, banks make a lot of money banks from charging borrowers interest, but the fees banks change are just as lucrative.Account fees. Some typical financial products that charge fees are checking accounts, investment accounts, and credit cards. These fees are said to be for “maintenances purposes” even though maintaining these accounts costs banks relatively little.ATM fees. There will be times when you can’t find your bank’s ATM and you must settle for another ATM just to get some cash. Well, that’s probably going to cost you $3. Such situations happen all the time and just mean more money for banks.Penalty charges. Banks love to slap on a penalty fee for something a customer’s mishaps. It could a credit card payment that you sent in at 5:05 PM. It could be a check written for an amount that was one penny over what you had in your checking account. Whatever it may be, expect to pay a late fee or a notorious overdraft fee or between $25 and $40. It sucks for customers, but the banks are having a blast.Commissions. Most banks will have investment divisions that often function as full-service brokerages. Of course, their commission fees for making trades are higher than most discount brokers.Application fees. Whenever a prospective borrower applies for a loan (especially a home loan) many banks charge a loan origination or application fee. And, they can take the liberty of including this fee amount into the principal of your loan—which means you’ll pay interest on it too! (So if your loan application fee is $100 and your bankrolls it into a 30-year mortgage at five percent APR, you’ll pay $94.40 in interest just on the $100 fee).Banks are just like other businesses. Their product just happens to be money. Other businesses sell widgets or services; banks sell money -- in the form of loans, certificates of deposit (CDs) and other financial products. They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors' accounts.The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the amount of money the bank has available to lend. As we mentioned in the previous section, the amount available to lend also depends upon the reserve requirement the Federal Reserve Board has set. At the same time, it may also be affected by the fund's rate, which is the interest rate that banks charge each other for short-term loans to meet their reserve requirements. Check out How the Fed Works for more on how the Fed influences the economy.Loaning money is also inherently risky. A bank never really knows if it'll get that money back. Therefore, the riskier the loan the higher the interest rate the bank charges. While paying interest may not seem to be a great financial move in some respects, it really is a small price to pay for using someone else's money. Imagine having to save all of the money you needed in order to buy a house. We wouldn't be able to buy houses until we retired!Banks also charge fees for services like checking, ATM access, and overdraft protection. Loans have their own set of fees that go along with them. Another source of income for banks is investments and securities.How investment banks make their money. ... They make most of their money by charging a higher rate of interest to borrowers than they pay to savers. Investment banks, on the other hand, make their money by selling services to customers such as companies, governments and investment funds (fund managers and hedge fundsHow Investment Banks Make Money (JPM, GS)BY SEAN ROSSUpdated Sep 22, 2016Investment banks are designed to finance or facilitate trade and investment on a large scale. But that's a simplistic view of how investment banks make money. There's a lot more to what they really do. When they work properly, these services make markets more liquid, reduce uncertainty and get rid of inefficiencies by smoothing out spreads.Brokerage and Underwriting ServicesLike traditional intermediaries, investment banks connect buyers and sellers in different markets. For this service, they charge a commission on successful trades. The trades range from megadeals to simple stock trades.Investment banks also perform underwriting services for capital raises. For example, a bank might buy stock in an initial public offering (IPO), market the shares to investors and then sell the shares for a profit. This works like an arbitrage opportunity. There is a risk that the bank will be unable to sell the shares for a higher price, so the investment bank might lose money on the trade. To combat this risk, some investment banks charge a flat fee for the underwriting process.Mergers and AcquisitionsInvestment banks charge fees to act as advisors for spinoffs and mergers and acquisitions (M&A). In a spinoff, the target company sells a piece of its operation to improve efficiency or inject cash flow. Acquisitions occur whenever one company buys another company. Mergers take place when two companies combine to form one entity. These are often extremely complicated deals and require a lot of legal and financial help, especially for companies unfamiliar with the process.Creating Collateralized ProductsInvestment banks might take lots of smaller loans, such as mortgages, and then package those into one tradeable security. The concept is somewhat similar to a bond mutual fund, except the instrument is a collection of smaller debt obligations rather than corporate and government bonds. Investment banks have to purchase the loans to package and sell them, so they profit by buying cheap and selling at higher prices on the market.Proprietary TradingIn the proprietary trading process, the investment bank deploys its own capital into the financial markets. Company traders look for arbitrage opportunities or other strong, shorter-term investments. Traders who guess correctly can make a lot of money very quickly. Alternatively, poor traders tend to lose money and risk losing their jobs. Proprietary trading has been much less prevalent since the financial crisis of 2008 and 2009.Dark PoolsSuppose an institutional investor wants to sell millions of shares, a value that's large enough to impact markets right away. However, the market might see a big order come through. This leaves an opportunity for an aggressive trader with high-speed technology to front-run the sale in an attempt to profit from the coming move.Investment banks established dark pools to attract institutional sellers to a secretive and anonymous market to prevent front-running. The bank charges a fee for the service. Dark pools are very controversial and came under added scrutiny after Michael Lewis authored "Flash Boys," which shed light on shady dark-pool activity.SwapsInvestment bankers sometimes make money through swaps. Swaps create profit opportunities through a complicated form of arbitrage, where the investment bank brokers a deal between two parties that are trading their respective cash flows. The most common swaps occur whenever two parties realize they might mutually benefit from a change in a benchmark, such as interest rates or exchange rates.Market MakingMarket making works best when the bank has a large inventory of stock with high trade frequency. The bank can quote a buy price and sell price and earn the small difference between the two prices, also known as the bid-ask spread.Investment ResearchMajor investment banks can also sell direct research to financial specialists. Money managers often purchase research from large institutions, such as JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc. (NYSE: GS), to make better investing decisions.Asset ManagementIn other cases, investment banks directly serve as asset managers to large clients. The bank might have internal fund departments, including internal hedge funds, which often come with attractive fee structures. Asset management can be quite lucrative because the client portfolios are large.Investment banks also partner with or create venture capital or private equity funds to raise money and invest in private assets. These are the fix-and-flip experts in the business governance world. The idea is to buy a promising target company, often with a lot of leverage, and then resell or take the company public after it becomes more valuable.As I said at the beginning, it is easy to look at the big investments that banks engage in and be tempted to say that investments would make much more money for banks, but also remember that investments are also very risky business, while fees are deducted from your account regardless to your say-so and at the banks convenience. So there you are, there’s a lot of information to absorb, hopes that it helps.

You can achieve wealth and financial freedom in your future, no matter what your situation looks like today. You just need some sound financial advice and that’s what I’m about to give you!Everything you do in life starts with steps. When you’re a baby, you need to take your first few steps to walk and then soon after you’re walking on your own, and eventually running wild.With your finances, you have to take that first step as well, and then the next, and eventually you keep growing financially.Start by reading this post and immediately after implement at least one point on this list.Also, new laws passed that will allow American’s a chance to save more for retirement. The details of these law changes will also get revealed.The author of this post, Paul J Paquin, is an entrepreneur and the CEO at Golden Financial Services.Mr. Paquin provides his best financial tips inside this post, to prepare consumers for a prosperous new year.Tip 1: New Law Change: IRA Contributions IncreaseAs of 2019, you can invest up to $6,000 per year into an IRA.Before 2019, you could only invest up to $5,500 per year into an IRA.Tip 2: Invest Weekly, Not Once Per YearDollar–cost averaging (DCA) is an investment strategy, where you buy a fixed dollar amount of a particular investment on a regular schedule (like weekly, or bi-weekly), regardless of the share price. By using dollar-cost averaging, you’ll end up buying more shares when prices are low and fewer shares when prices are high, minimizing your chances of losing money.Invest $125 per week, which will get you to the $6,000 limit for 2019Set up autopay so that automatically $125 per week goes into your Roth or Traditional IRATip 3: What’s better, a Roth or Traditional IRA?I prefer the Roth IRA because I would rather pay the taxes now, when the funds are at their smallest, and not have to worry about paying taxes later in life. However, you will also need a Traditional IRA set up through your employer, to benefit from a SEP or 401(k).Why open a Roth IRA?You pay the taxes when the funds are at their smallest, right when you initially invest the money, allowing you to pay the least amount of taxes.Watch your money grow, TAX-FREE, and withdraw it without having to pay taxes when you’re retired.FLEXIBILITY: “Roth contributions can be withdrawn penalty-free at any time”, according to Maria Bruno, CFP professional and senior investment analyst with Vanguard’s Investment Strategy Group. You can make withdrawals from your Roth IRA prior to retirement and without a penalty, if you are using the funds to pay for certain “emergency-related expenses”, like disability-related, or for a first time home purchase of up to $10,000, and postsecondary education, and there are a few other exceptions that you can read about here.Why open a Traditional IRA?Since you’re investing before the taxes come out, more of your money gets put to work. When you’re ready to use the funds during retirement, you will have to pay the taxes at that point.A business offers either a 401(k) or SEP-IRA to their employees. Both of these types of retirement accounts are connected to a Traditional IRA, allowing your employer to invest your money before the taxes come out.Most people are in a higher income-bracket when they are younger, so would rather pay the taxes later in life when they anticipate being in a lower tax bracket. In this case, the traditional IRA would benefit you more than the Roth.Tip 4: The Power of Compound InterestWhat is “compound interest”? Compound interest is when you earn interest on your total accumulated funds. (i.e., Regarding investing in a Roth IRA, your first year you are only receiving 10% on $6,000, which is $600, but the following year you’ll earn 10% off $12,600, giving you $1,260 in tax-free earnings. The third year you’ll make $1,860 off your investment, and so forth!According to Wikipedia: “Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. Compound interest is standard in finance and economics.”Thanks to compounding interest, if you are 28-years-old and invest $6,000 per year into a mutual fund that earns 10% per year on average, you will be a millionaire by the time you reach 60 years of age.Tip 5: Credit Card Debt (3 Points You Need to Know)Never carry a balance on your credit cards.First of all, if your balance is over 35% of what your credit limit is, your credit score will be negatively affected. As your balance grows on a credit card, your credit score goes down.Second: when you carry a balance on a credit card, you pay interest every month.If you have $20,000 in credit card debt, with a 29% interest rate, when paying $500 per month towards this debt it would take you 11 years and 11 months to pay the debt in full. And, you’d end up paying $71,218 in total (including interest). Here is the debt calculator that we used for this calculation if you want to try it yourself.Wow, that’s well over double what your debt was worth in the first place!You would be just as well-off, by flushing your money down the toilet, as you are when carrying a balance on your credit cards and paying interest every month – it’s a complete waste of money.By paying your credit card balance in full every month, you avoid 100% of interest.Third: for the savvy financial wizards out there, by paying your balance in full every single month, you can increase your income by earning cash-back from your purchases that month.Make sure you have a card that pays you at least 2% cash-back on all purchases, especially including gas and groceries, and at all of your favorite stores that you shop at most often – it’s free money, why not take it!You may need to have 4-6 credit cards in total, to earn cash-back on all of your purchases. But that’s free money, so get it!Tip 6: Increase Your Credit Limits & ScoreIncrease your credit limit at least once per year on each of your credit cards.As your available credit increases, your credit score goes up.As you pay down your credit card balances, the reason that your credit score goes up is that your credit utilization ratio improves simultaneously.Your credit utilization ratio is “how much credit you have.”Tip 7: Hire a Competent AccountantHire a competent accountant who knows how to write off expenses to reduce a person’s tax liability. Having one child can offer lots of tax reductions. If you have two children, you have twice as many write-offs.So many people pay more in taxes than what they need to pay if they only hired an accountant who had a better understanding of the tax laws.Do you have any mutual funds that took a loss this year? If so, you can use what’s called “tax harvesting.” Tax harvesting is selling off your losing stocks and mutual funds that took a loss this year, and you can then use these losses to offset gains from the sale of winning investments.Tip 8: New Law Change: 401(k) Contributions IncreaseAsk your employer about how you can invest in a company 401(K). Most employers will match your investment.As of 2019, you will be able to invest up to $19,000 per year into a 401(K).Tip 9: New Law Change: For Seniors With an IRAIf you are older than fifty years of age, you can now invest an additional $6,000 per year into your IRA. The IRS lets you play catch-up for past years that you forgot to contribute.Tip 10: Own a Business?A lot of small business owners never open a 401(k) because it’s complicated and expensive. A SEP-IRA is an alternative to a 401(k) for a small business owner, and it’s easy to open, plus free!The limits are even higher than a 401(k), and a SEP is much easier and quicker to set up.With a SEP-IRA you can invest up to $54,000, or 25% of your qualifying income, per year.Tip 11: Max-Out a 529 Plan For RetirementWith a 529 plan, each parent and grandparent can contribute up to $14,000 per year. The funds invested in a 529 plan are tax-free if used for educational purposes.You can also make additional gifts for medical, dental, and tuition expenses that do not count toward the $14,000 limit as long as you make those payments directly to the provider.In addition to federal tax savings, 34 states offer state income tax deductions for 529 contributions. If you’ve had a bunch of money blown your way this year, you can also take advantage of up to five years of gift tax exclusions to set aside up to $70,000 in a 529 plan in a single year.It costs over $60,000 per year to send your child to college (on average).It’s never too early to start saving for college.Tip 12: Buying Delinquent Property Tax Liens (to Make $$$)Imagine being able to buy a $300K house, for $10,000.You can.Even if you can’t afford to buy a house, have you considered buying delinquent property tax liens? You will have to first read about your state’s laws before investing in delinquent property tax lien, but in many cases, you could pay $10,000 or less and walk away with a house. All you are paying for is the property taxes!In New Jersey, if you don’t pay your property taxes, they become a tax lien. The different counties in New Jersey then sell these tax liens at a county auction once per year.You can buy someone’s delinquent property taxes, and they will then have to pay you back, at up to 18% interest, plus attorney fees and any other related fees.What if a mortgage and credit card judgment is attached to the home and it’s not only property taxes that are owed?Will you get stuck having to pay all this debt?Nope, you are in the clear!A property tax lien is the senior debt with all priority. Any debt under this senior debt gets eliminated by the property tax lien, which is why this type of investment is an investor’s dream come true.Tip 13: Make a Budget and Pay Off DebtMake a budget analysis to get a clear visual of your expenses. There are many apps that you can use or even a Google Spreadsheet Template to make your budget for free.Once you make a budget, now start lowering your expenses. Your goal is to increase your available cash-flow (how much extra money you have each month). Scroll down through your budget and find ways to reduce your expenses, like by lowering your grocery bill. You can start using coupons and doing whatever it takes to achieve your cash flow goals.Once you find extra money, now use either the debt snowball or avalanche method and pay off all of your credit card debtsas a starting point.After paying off your debt, now start putting this extra money into an IRA or one of your retirement accounts.If you can’t afford to pay off your debt on your own, here you can explore debt relief programs.Tip 14: How to Setup & Manage All My Investment Accounts?Do I need to hire an expensive financial advisor to set up all of these retirement accounts and manage them?No, you can set up an account at Vanguard and invest on your own for free. It’s not that hard.Vanguard offers Target Retirement Mutual Funds, which are age specific.Vanguard manages what stocks these funds are made up of, so it’s kind of like having a financial advisor for free. Call Vanguard, and they will walk you through setting it up.The older you are, the more conservative the investments will be, primarily consisting of bonds, instead of stocks. If you are young, Vanguard will invest more aggressively in stocks because they know that you have a longer time to achieve your financial goals.The problem with having a financial advisor manage your funds is that they are usually very conservative in their investments, ensuring they play it safe to avoid losing money.Keep in mind; financial advisors usually get around 1% of the total amount that they are managing as “their fee.” Financial advisors don’t get paid based on how much money they make you. Therefore, their objective is to keep your money safe and bring you a positive return.In a firing market like today when interest rates are at a near all-time-high, you want to have your money in stocks. Stocks are where you can make the most money.It’s easy to find out which mutual funds are performing best. Simply click on Vanguard’s page that says “all mutual funds” and voila! From there, sort the list by Year to Date (YTD) and start investing in the funds that have been making the most money over the last year.Dive into what specific stocks make up each fund. You do this by clicking on any fund and then click on “portfolio and management.”Once you get the list of stocks (companies), you can research each company to ensure it’s a safe investment.Financial advisors will often allocate most of your budget into bonds, which are very safe, but you’ll be lucky to get a 5% return on your investment, which isn’t that great if you ask me.Tip 15: Open a Health Savings Account (HSA)A Health Savings Account (HSA) offers you a way to save for medical expenses and avoid paying federal income taxes on the money you invest.Unlike a flexible spending account (FSA), HSA funds roll over and accumulate year to year if they are not spent.Like the Roth IRA, after you receive your paycheck and the taxes are taken out, now you can invest this money into an HSA. But as the money grows with compound interest, you won’t have to pay a single cent in taxes on that growth; it’s tax-free.With most retirement accounts you will need to start taking distributions at around seventy-in-a-half years of age, but with HSA’s you don’t have to.If your contribution goes into an HSA (via payroll deduction), it is not subject to FICA rules and regulations. FICA, short for Federal Insurance Contributions Act, is the federal income tax that goes toward Social Security and Medicare.Why this is important is because you can save an additional 7.65% with an HSA, compared to what you can save through your 401(k) and IRA. Just invest the funds from your bank account, into an HSA, and let your accountant figure out the math and how to document the details!In 2018, the yearly limit that a person could invest into an HSA was $3,400, but for a family, that limit is $6,750. To qualify, you must be enrolled in a high-deductible health insurance plan (HDHP).The IRS defines an HDHP for an individual as a plan with an out-of-pocket maximum of $6,550 and a minimum deductible of $1,300. For a family plan in 2017, the out-of-pocket maximum is $13,100, and the minimum deductible is $2,600.You will receive a debit card or checks linked to your HSA balance, and you can use the funds on eligible medical expenses.HSA’s do come with some restrictions and not every related medical expense is covered. For example, over-the-counter medicine is not covered by an HSA.Also be aware that insurance premiums usually cannot be paid for with HSA funds.Taxes and penalties. If you withdraw funds for non-qualified expenses before you turn 65, you’ll owe taxes on the money plus a 20% penalty. After age 65, you’ll owe taxes but not the penalty.Most people have no idea about how to set up an HSA, but it’s relatively simple. All you need to do is ask your insurance company about it, and they will direct you on how to set it up, whether that be through them or if they use a third-party like a bank, credit union or financial advisor.One of the most significant downsides to an HSA is if you don’t save enough to cover your medical expenses.Tip 16: Start an LLC or Corporation if Running (ANY TYPE) of BusinessStart a corporation or a limited liability company so that you can write off items including depreciation on your car, miles to and from work, office lunch, office supplies and much more!If you are running any small business from your home, a limited liability company (LLC) protects you and your assets, just in case someone tries to sue you.Here’s some additional information on how to set up an LLC and some of its benefits, from an article in entrepreneur.com:Tip 17: Say Good-Bye to Student Loan DebtIf your income has been reduced this year, or even over the last few months, it’s time to consolidate your federal student loans and get on an affordable monthly payment. To consolidate your federal student loans, here are step by step instructions.Once you consolidate your federal student loans, you can then get on an income-driven repayment plan that offers loan forgiveness. You only want to consolidate student loan debt and get on an income-driven plan, If you have a reduced income and strategically can come up with a plan to use the loan forgiveness laws to cut your debt down significantly.When you get on a low payment through an income-driven student loan relief plan, the downside is that interest is still accumulating.However, if you know that more than half your balance is going to end up getting forgiven at some point, then strategically, income-driven repayment plans can be your best solution.Your monthly payment can be as low as zero dollars per month. And what’s best is that after 10-25 years, your remaining balance would get forgiven.There are many cases where consumers will end up getting more than half of their debt forgiven. Plus, by consolidating you stay current on your monthly payments, and this is good for your credit score.Teachers and police officers, and anyone working in a public service job can qualify for the Public Service Loan Forgiveness Program (PSLF). On the PSLF program, your student loan balance gets forgiven after only ten years.If you have private student loans, refinance these with a low-interest loan. Or, you can contact a private student loan relief company to help you reduce your student loan debt.As of 2018, new rules are being enforced regarding student loan relief. If you attended a college that is now shut down, you could be eligible to have your student loan debt discharged.Where can I get financial advice?Golden Financial Services offers debt relief for credit cards and student loans. We can get you a credit report, and if you have debt, we can provide you with options to get out of debt.Call now for a free consultation at 866-376-9846.You can talk with an IAPDA certified debt expert and get free financial advice today.Keep in mind; Golden Financial Services is not a licensed financial advisor that charges a compensation. We can only help you with your unsecured debt, like with credit cards and student loans, but not with investing in the stock market. If you need a licensed financial advisor, contact one of the investment firms like Vanguard or Merrill Lynch, and many other reputable financial advisors can help you invest.If you’ve enjoyed this post, check out 31 ways to get rid of credit card debt next:Sources:Investopedia, Investopedia - Sharper Insight. Smarter Investing.The Balance, The 8 Best Budgeting Apps to Download in 2018Wikipedia, Compound interest - WikipediaGet more from your money, What is an HSA?Entrepreneur - Start, run and grow your business., The Many Benefits of Forming an LLCBankrate, Roth IRA - 6 Benefits You Should Know About | Bankrate.com

There are many deductions which may help to lower your tax, I’ve listed several that you may qualify for depending on your own situation. I’ve also provided links where you can find additional information. I hope you find this helpful.What Is a Tax Credit?Subtract tax credits from the amount of tax you owe. There are two types of tax credits:A nonrefundable tax credit means you get a refund only up to the amount you owe.A refundable tax credit means you get a refund, even if it's more than what you owe.What Is a Tax Deduction?Subtract tax deductions from your income before you figure the amount of tax you owe.Business TaxpayersFind credits and deductions for businessesCredits for IndividualsFamily and Dependent CreditsIncome and Savings CreditsHomeowner CreditsHealth Care CreditsEducation CreditsDeductions for IndividualsWork Related DeductionsItemized DeductionsEducation DeductionsHealth Care DeductionsInvestment Related DeductionsRE: Deductions for IndividualsTaxpayers may deduct contributions made to retirement plans. But, you need to understand the difference between two retirement plan categories.A Simplified Employee Pension (SEP) plan is for self-employed people.An Individual Retirement Account (IRA) is available to both employees and self-employed workers.When you contribute after-tax dollars into these plans, your contribution is tax deductible.Student Loan Interest: in the 2018 tax year, if you’re not “married filing separately,” you can deduct up to $2,500 in interest on qualified student loans.Educator Expenses: Many educators pay for school supplies and equipment out of their own pockets.For tax year 2017, you can deduct up to $250 of the qualified expenses that you paid during the year. If your expenses are more than $250, you may be able to deduct the higher amount as an unreimbursed employee expense on Form 1040, Schedule A.To be eligible for this deduction, you must be a K-12 teacher, counselor, principal, or aide. You also must work at least 900 hours during a school year.Qualified expenses include:Professional development course feesBooksSuppliesComputer hardware or softwareItemized Deductions: Page 2 of Form 1040 asks you to take the standard deduction or to compute your itemized deductions.The standard deduction for 2018 is $12,000 for individuals and $24,000 for married couples filing jointly.Always use Schedule A and calculate your total itemized deductions. Take the higher amount if itemized deductions are greater than the standard deduction.Here are some itemized deductions that you should take:Casualty and Theft LossesCasualty and theft losses are losses due to:TheftVandalismFiresStormsCar accidentsAs of 2017, you can deduct the dollar amount of the loss over $100. If you have more than one loss, you deduct $100 from the dollar amount of each loss to calculate the tax deduction. You also subtract any funds received from an insurance policy claim.Charitable Contributions: This deduction may be the most difficult to track if you make dozens of small donations throughout the year. Keep a log of the donations you make in cash, and document the checks that you write to a charity.If you donate clothing or other items, ask the charity to give you a written receipt.Donations above a certain dollar amount require a letter from the charity for tax documentation purposes, and the dollar amount changes frequently.Home Mortgage Interest: The tax deductibility of home mortgage interest can have a huge impact on your tax bill.The IRS allows you to deduct interest on mortgage loans used to buy, build, or improve your home.To deduct the interest, mortgages taken out before December 15, 2017 cannot exceed $1 million for married couples filing jointly or $500,000 for married taxpayers filing separately.Our friends at TurboTax have written a great F.A.Q about deducting home mortgage interest that is well worth the read.Medical and Dental Expenses: If the total amount of your medical and dental expenses exceeds 7.5% of your AGI, you may deduct them on your Schedule A .If your total expenses are below the 7.5% floor, they are not deductible at all.Keeping track of this deduction during the tax year can be challenging. If you have a large medical bill in a given year, you’re likely distracted.This deduction is a good reason to find a CPA to help you with your tax return. A tax professional can ask the right questions to help you maximize your deductions.State and Local Taxes: This tax deduction is particularly important if you live in a state with a high state tax rate.You can deduct state and local income taxes on Schedule A of your federal return. But federal contributions such as Social Security, Medicare, or Federal Unemployment are ineligible.401(k) Matching Contributions: This isn’t a deduction but rather a tax strategy that’ll have a long-term impact on your retirement.Many employer-sponsored retirement plans offer an employer matching contribution to your 401(k). If your employer offers a matching contribution, take full advantage of the benefit.Here’s an example. Assume that your company offers a 3% match on 401(k) retirement plan contributions. You decide to contribute 3% of your annual salary, or $1,800. These are pre-tax dollars, meaning that 100% of the $1,800 you earn is invested.Since you contributed 3%, your employer invests another $1,800. You now have $3,600 invested, and you don’t pay taxes on the earnings until you start to withdraw funds in retirement.It may be the most valuable tax strategy available to you.Keep Detailed Records: Preparing to file your taxes can be time-consuming, but getting the most out of your available tax deductions will save you money. Use these tips and keep detailed records during the tax year. Consider working with an experienced tax preparer who can help you file your taxes accurately.RE:10 Tax Deductions You Should Take In 2018 - QuickBooks20 popular tax deductions and tax credits for individualsThere are hundreds of deductions and credits out there. Here’s a drop-down list of some common ones, as well as links to other content that will help you learn more.Student loan interest deductionAmerican Opportunity Tax CreditLifetime Learning CreditChild and dependent care tax creditChild tax creditAdoption creditEarned Income Tax CreditCharitable donations deductionMedical expenses deductionDeduction for state and local taxesMortgage interest deductionGambling loss deductionIRA contributions deduction401(k) contributions deductionSaver’s CreditHealth Savings Account contributions deductionSelf-employment expenses deductionHome office deductionEducator expenses deductionResidential energy creditRE:Tax Deductions Guide and 20 Popular Breaks for 2018 - NerdWallet1. Charitable Donations: Donations to a qualified charitable organization are deductible (qualified organizations should be able to give you proof of status). Make sure that you can supply all necessary receipts or acknowledgement letters to the IRS. If you receive any goods or services in exchange, subtract the value of the goods and services from the contribution amount.For tax year 2017, you may deduct donations worth up to 50% of your income. Starting next year, this cap will be raised to 60% per the TCJA. The new law eliminates your ability to deduct donations made to a college in exchange for the right to buy athletic tickets.2. Medical and Dental Expenses: You can deduct the amount of your unreimbursed medical and dental expenses that exceeds 7.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $50,000, you may deduct the portion of your medical expenses over $3,750. Under the TCJA, this threshold will increase to 10% of your AGI in tax year 2019.3. Performing Artist Expenses: Are you the stereotypical starving artist? Certain unreimbursed business expenses of performing artists, as well as reservists and fee-basis government officials, are handled separately from other deductible business expenses. See the instructions for Form 2106, "Employee Business Expenses," for details. This tax season is the last time you will be able to claim this deduction, as it has been eliminated completely under the TCJA.4. Tax Preparation Fees: Generally, you can deduct fees that you pay for tax preparation in that year. This means that on your 2017 return, you can deduct the fees incurred in 2017 for preparing your 2016 return. Fees for tax preparation software, tax publications, and electronic filing fees are all included, but the TCJA has also eliminated this deduction starting in tax year 2018.5. Mortgage Interest, Points, and Insurance: The mortgage interest that you pay on your home, as well as a portion of the points you paid to reduce your interest rate, may be deductible if you meet the criteria listed in IRS Publication 936, "Home Interest Mortgage Deduction." This applies to mortgage debt of up to $1 million for home loans taken before December 15, 2017, and mortgages of up to $750,000 taken after that date. Mortgage insurance premiums also qualify under the mortgage interest deduction through tax year 2017, but they are subject to phase-out beginning at $100,000 AGI (for married filing jointly status).6. Home Equity Loans: Interest on home equity debt of up to $100,000 may be deducted in 2017. For next year, experts say interest on HELOCs should still be deductible provided that homeowners use the proceeds of the loan to make home improvements, and the first mortgage balance plus the HELOC does not exceed $750,000.7. Gambling Losses: Was it a bad year for you at the racetrack but a good year with lottery tickets? Believe it or not, you can deduct gambling losses with sufficient documentation – but only to the extent that you offset other gambling winnings.8. Real Estate and Personal Property Taxes: Generally, taxes that are levied through home ownership, such as real estate taxes are deductible.9. State/Local Taxes: You can deduct your state and local taxes paid in the previous year, or you can deduct the sales taxes that you paid (preferable for states that levy no state income tax). If you choose to deduct sales taxes, consult the 2017 Schedule A instructions to get a baseline value and then add the tax on big-ticket items that were purchased during 2017.Despite attempts to eliminate this deduction, the TCJA keeps it in place, but limits the total deductible amount of income, sales, and property taxes to $10,000, beginning in tax year 2018.10. Job-Hunting Expenses: If you are looking for a new job within your present occupation and meet other criteria in IRS Publication 529, "Miscellaneous Deductions," you may deduct certain job-hunting expenses such as fees to employment agencies, even if you don't get a new job. Good luck with the job hunt, because thanks to the TCJA, you won't be able to deduct these expenses going forward.NOTE: The following deductions have even greater value, as they are "above the line" deductions. These deductions are subtracted off your AGI directly and are available to you whether or not you itemize.11. Moving Expenses: If you succeeded in the above job hunt and must move because your new job is at least fifty more miles away from your current home, you can deduct some moving expenses. See Publication 521, "Moving Expenses," for details. The TCJA eliminates this deduction for the 2018-2025 tax years.12. Retirement Plan Contributions: Contributions to tax-deferred retirement accounts may be deductible. Roth IRAs are not since they are funded with post-tax dollars. This deduction has been kept in place by the TCJA.13. Alimony: Amounts that you pay to a former spouse, excluding child support payments, may be deductible. See Tax Topic 452 for details. The alimony deduction remains in effect through 2018, but disappears for couples divorced in 2019 or after.14. Health Savings Account Deductions: Your 2017 contributions to your Health Savings Account (HSA) are deductible, although employer contributions are not. To qualify, you must be covered by a high deductible health plan (HDHP) and have no other health coverage, except certain permitted coverage.15. Self-Employment Expenses: As a self-employed person, you pay both the employer and employee component of payroll taxes. Fortunately, you get to deduct the 50% considered the employer portion. In some cases, you can also deduct retirement fund and health insurance expenses.16. Home Office Deduction: You may be able to deduct some expenses for the business use of your home if there is a part of it that you use regularly and exclusively for work. To qualify, your home should also be your principal place of business, so even daycare providers may take this deduction. Refer to IRS Publication 587, "Business Use of Your Home" for details on how to calculate your deduction.17. Educator Expenses: K-12 educators can deduct up to $250 in qualified and unreimbursed educational expenses. These can be items used in the classroom or payments for professional development courses taken within your field. The TCJA has not made any changes to this deduction.18. Educational Deductions: You may be able to claim a deduction on student loan interest paid – but first see if you qualify for educational tax credits such as the American Opportunity Tax Credit and the Lifetime Learning Credit. Tax credits subtract directly and fully from your tax bill, compared to deductions that reduce your tax bill proportionally to your tax rate.RE:18 Top Tax Deductions For 2018