March 25, 2025 • 50 mins
Join Mark Rothstein, aka Mr. Money, as he breaks down the latest tax deductions for parents, explores the rising credit card debt crisis, and analyzes the current economic landscape. Learn about home business deductions, child tax credits, and strategies for managing personal finances in uncertain times.
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Episode Transcript
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Unknown (00:00):
The Information and opinions presented are for
(00:01):
general information only, andare not intended to provide
specific advice orrecommendations for any
individual you should contactyour investment professional,
attorney, accountant or taxadvisor regarding your
individual situation. Theopinions of the presenter are
not necessarily those of avantexWealth Management. It's
subsidiaries, officers ordirectors. Mark Rothstein, aka
Mr. Money, is a financialadvisor and the owner of tri
star financial LLC and tri starIncome Tax Services LLC. Mr.
(00:23):
Money is a marketing name onlyand is not intended as anything
other than a marketing name forentertainment purposes.
Securities offered through a vanTech's investment services,
Incorporated Member FINRA SIPCinvestment advisory services
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(00:46):
other named
Mark Rothstein (00:48):
entity. Good afternoon. This is Mr. Money. We
are live. We are sitting righthere in downtown Boise in the K
I do talk radio studios, 580 onthe am dial, one Oh, 7.5 on the
FM dial, and Mr. Money's here toeducate. Mr. Money's here to
help you, giving you theknowledge. And then hopefully,
(01:09):
you will take action with yourfinances. And those finances
could be in the world ofhousing, maybe it's helping you
in the world of yourinvestments, maybe it's helping
you and raising the kids aboutmoney. This is a statistic out
only half of the states inAmerica require high school
students to take a personalfinance class before graduating.
(01:33):
If you notice how there isn'tmuch education around money.
That's what my show is about.It's all about money and
teaching 80 What's it? 63% ofAmericans live paycheck to
paycheck. 73% of American adultsrank finances as their primary
stressor. Is that true for you?Again, you'll have less stress
(01:55):
you listen to Mr. Money everyweek, Saturdays, two o'clock
this knowledge does help youhave less worries. All you got
to do is take some action on allthe things we speak about. And
again, this week, I got plentyto speak about. We're going to
concentrate a lot on incometaxes today, since it's income
tax season right now, and Icertainly want you to take all
(02:17):
the tax advantages you can. Idon't expect someone who's not a
tax person to know those 10s and10s and 10s and 10s and 10s of
1000s of pages the IRS code is,and we're going to cover a lot
of that today. Let you know whatyou can deduct. But first, let's
just talk about the economy likeI open most every show and what
(02:41):
a whirlwind it's been in thefive weeks since President Trump
began his second term, he'sissued an extraordinary,
extraordinary number ofexecutive orders, threatened to
impose tariffs, and has done itand initiated sweeping changes
across nearly every level ofgovernment, he's attempting to
(03:03):
deliver on his campaign promiseto make government more
efficient. Some people love it.Some people less love it. The
rapid pace of decision makinghas been unnerving for many
people, particularly forfinancial decision makers and
markets that thrive onstability. That's right Wall
Street likes to know. They don'tlike to see what it happened
(03:25):
today, what executive order wasissued today that's going to
change things. So this rapid,rapid, rapid pace tends to be
very unnerving for thesefinancial decision makers,
including the Federal Reserveand so federal policy makers
regarding our interest rateshigher, lower and things to do
(03:46):
to navigate the economy hasincreased uncertainty, and
that's what's going on rightnow. Wall Street has a lot of
uncertainty. It's why you'veseen the market not do so well
the last two weeks, and that'sbecause of this uncertainty. In
fact, the markets have been downthese last two weeks in a row.
In this last week, the S and p5100 down 1% the NASDAQ, with
(04:11):
those technology stocks, thoseAI Artificial Intelligence
stocks, was down 3.5% and if youlook at it monthly, the S P was
down 1.4% the last month, theDow Jones down 1.6% and that
NASDAQ technology Stock Exchangedown 4% so it's a lot of lot of
(04:34):
lot of the uncertainty.Remember, there was a release of
the AI models from China. And sothe tech sector, the NASDAQ
sectors face significantpressures in 25 again, they
strongly outperform the s, p inboth 2023, and 202, for both
those years, with cumulativeoutperformance of 58% Wow. That
(04:58):
was a good place to be. Those 23and 24 in that NASDAQ. But now
the tech sector has laggedbehind the S P by about 5.6%
year to date. So it actuallymarks the worst under
performance at this point in theyear since 2008 and given that
the tech holds the largestweighting in the S p5 100 to 31%
(05:22):
this recent on performance hasraised questions for people.
Where do I place my money? Mr.Money believes this recent
weakness in the tech sector ismisguided. Beneath the surface,
the sector's fundamentals andtechnology remain robust. That's
my word, robust with a whole lotmore to come, I absolutely
(05:44):
expect to achieve much higherearnings per share with these
companies. And so take a look.Do you have some in that sector?
Again, talk to your financialplanner and see am I
appropriately asset allocatedto? Yes, have some of the tech
sector, and yes, have some ofthe all the other sectors that
(06:04):
are out there. Again, don'tbecause it's been down recent.
Means throw the baby out withthe bathwater. Think that's how
the saying goes. So again, Mr.Money says, again, review your
portfolio. But don't over worryin this potential slowdown in
the AI investment world.Remember, a record number of
(06:25):
companies have mentioned AI andall their conference calls.
Money is being spent there. Itis. Another thing that's causing
this market up and down for allof us who are in the marketplace
is simply uncertainty, policyuncertainty, as I mentioned with
Trump, the economy entered 2025,on solid footing, and I reported
(06:46):
on that, but recent economicdata releases show retail sales
not doing so well, housing notdoing so well, and that's
disappointing. And again, we'relooking what has happened and
what's going to be in thefuture, and people just simply
have a whole lot of uncertainty.How about the tax cuts?
(07:07):
Congress, the Senate, President,they're all talking about the
tax cuts right now. Remember the2017
tax changes that Trump put in inhis last time in office were
excellent for all of us for allthese years, but they expire at
the end of this year. Again,Congress and Senate are trying
to decide, are we going to keepthose tax is where they are at
(07:30):
the moment, because if theydon't, taxes are going to go up
for every one of us at the endof 2025 so will they be keeping
them, and will they be makingsome of those updated changes to
the tax code, I believe I heard.Correct me if I'm wrong.
President Trump wants to not taxyou on tips. President Trump
(07:51):
doesn't want to tax people onsocial security received.
President Trump wants to doderegulation. He wants to do a
whole lot of things. But again,that's all uncertainty. And then
when you start adding tariffannouncements, immigration
policies, government layoffs,all the cost cutting efforts
(08:11):
from Doge, oh boy, oh boy.What's my confidence like? In
fact, right at this moment,consumer confidence is a low
right now, people are a bitworried about these tariffs,
about the government debt, aboutthe immigration, all the
government layoffs that aregoing on. So again, things are a
(08:32):
little slow. That's what'scausing Wall Street to not do so
well these days. And again,what's the biggest thing I
should mention it again, istariffs. Those concerns are
front and center. You watch TV,they talk about the tariffs. So
concerns over tariffs haveunleashed a big wave of
uncertainty, and again, a bigwave despite all the tariff
(08:56):
discussions, only China's 10%tariffs have been officially
implemented. So far we found outthat they delayed tariffs on
Mexico and Canada, but thatdelays over they're going into
effect on March 4 again, andTrump plans to impose an
additional 10% tariffs on China.So that's a lot of uncertainty
(09:18):
with those tariffs, thoseproducts come in at a higher
price. Does that mean I'm buyingthose products at a higher
price? Inflationary prices,therefore inflation is back.
That's worrying people. IsTrump, right? That with all
those tariffs, that's all bigamount of income coming in,
money coming in to pay off thedebt that we have, bring it all
(09:43):
down, and then eventually,companies in America will make
the products and bring theprices right down. That's what
he's saying. And of course,those tariffs are also there to
help with the immigration issueof keep immigrants in your
country. Don't have them flowinto ours. I. Heard the words
that are said, let's see whathappens with all of that. And by
(10:03):
the way, how about this? In thecoming weeks, the tariffs you
put on other countries is goingto be reciprocated, and there's
going to be countries that puttariffs back on America. Well,
that could cause some concern.And again, that's what's going
on on Wall Street. They're veryworried about that. How about
those steel autos, the steelindustry, the auto industry will
(10:24):
be affected. Pharma, the medicalwill be affected. The
semiconductors, the chips willbe affected. So a whole lot is
going to be affected by this.Tariffs around the world, not
just here, but around the world.The other key issue I see is
government shutdown that's infocus right now on Wall Street,
despite the narrow majority inthe House, which they currently
(10:47):
have only one seat, Republicansdid manage to pass a budget
guidelines proposing a 4.5trillion trillion in tax cuts
and a 4 trillion increase in thedebt. I'm scratching my head. I
thought it was all aboutreducing the debt, but what
they've proposed increases thedebt. So again, the Senate has
(11:11):
already passed its own scaledversion of the budget
resolution. Two chambers nowneed to agree on a unified
version, notably absent in bothversions is a plan to avoid a
government shutdown. It's noteven mentioned how they going to
avoid the shutdown, which isfast approaching with the
(11:32):
funding deadline just 14 plusdays away on March 14. That's
right, that deadline is March14. Best of my knowledge,
today's March number one, leasthere in Boise, it is. So that's
another one in the marketplaceright now. I should mention,
while governments shutdowns haveled to increased volatility,
(11:53):
it's true, like we're seeingnow, the average market
performance during the last 20shutdowns since 1976 has been
flat. More importantly, I shouldmention, from my research,
shutdowns have not halted themarket's long term upward
trajectory. Let me say thatagain. More importantly,
shutdowns have not halted themarket's long term upward
(12:17):
trajectory. In fact, in the 12months following a shutdown, the
market has risen by an averageof 13% and has been positive 80%
of the time. So remember that,so we don't want to worry it
over. Worry it, but again, it isworrisome right now. There is no
(12:39):
agreement. There is differencesin the Senate and the Congress,
and I still believe economic andearnings growth is solid right
now. Fundamentals continue todrive the equity market, and
I've always said that, we lookat the economic numbers, are
they looking good? Whatcompanies are reporting? They're
not looking good. Look at theeconomic numbers of people
(13:02):
working. Are people working? Notworking? In other words, is
unemployment high or low? Thatmatters? At the moment, it is a
low number people are working.What about what they're getting
paid? They're getting paid agood, healthy number right now.
So again, a lot of thosefundamentals are good. Yes, I
know retail sales were downrecently a bit, but again, that
(13:23):
could be the cold weather, couldbe a whole host of things. I'm
not prepared to say allconsumers are now cutting back
because of their fears at themoment. So that's what's going
on in the world right now, andthat's why your stocks are being
affected. And how do I feel thefuture will be I happen to think
Congress, the Senate, will gettogether, they will come to an
(13:46):
agreement of sorts, a governmentshutdown. If it happens, I don't
think it's the end of the world.They will work it out. I do
believe that, and they'll haveone big, beautiful budget
blueprint going forward. I dothink the tax laws will stay and
be good. I do think Trump willget across some of the things he
campaigned on, which I think aregood for all of us, good in the
(14:08):
sense I get to keep more of mymoney and pay less income tax.
So I'll keep you abreast of itas each week goes by. Mr. Money
will be reporting on it and letus know where we are when we
come back, Mr. Money's gonna goto a tax section. It's tax
season. Mr. Money spending sixplus days in my office working
on taxes every hour withclients. And I got a whole host
(14:31):
of questions people just keepasking me. People want to know
the answers too. Thought I'dbring some of those questions
and answers to us when we comeback. This is Mr. Money. Let me
tell
Unknown (14:51):
you, there's one for you, 19 for me, because I'm the
tax man.
On the tax man.
Mark Rothstein (15:05):
This is Mr. Tax man, Mark Rothstein, Mr. Money,
teaching, acting, doing. Moneywith you every single week at
two o'clock here on the Idahostation of K I do want to remind
you of a couple things. We arein March. March 15, two weeks
and a day from now, we have taxreturns due. I did not say April
(15:29):
15. I said, March 15. If youhave a partnership tax return,
also known as a 1065, form, youuse due. March 15, multi member
LLC, not a regular LLC, of oneperson, a single member. This is
a multiple member LLC due March15. If you're an S corporation,
(15:51):
due date, March 15, 14 days inone day from now, you got to
file those. But Mr. Money, can'tI file an extension and get six
months till September 15?Answer, yes, you can, but I'm
here to say it's ideally due onMarch 15. Make sure you file
that extension if you want toSeptember 15. Very important to
(16:13):
do. Speaking of important. Guesswhat happened recently? Doji
staffor arrives at InternalRevenue Service headquarters.
That's right. A key staff memberfrom the Department of
government efficiency arrivedThursday at the headquarters of
the IRS to review the taxagency's operations. That's
(16:38):
right, Department of governmentefficiency, you keep hearing
about. They've knocked on thedoor, they've entered the door,
and they are now inside the IRSbuilding. That's right. Guy's
name is Gavin kleiger, an aideto Elon Musk in his effort to
overhaul spending across thefederal government. He is now
hanging out at the IRS offices.Mr. Kleiger doesn't have access
(17:01):
to tax agencies computer systemsor individual taxpayer
information. He has not made anyoperational changes as of yet,
but he's certainly over therenow. He is meeting with staff
officials, senior officials,interested in the agency's head
count, and they have, by theway, the IRS has over 100,000
(17:24):
workers. That's what they've gotafter a recent expansion.
Anybody remember that last yearthe Senate, Congress President
Biden gave 80 billion to the IRSto expand. Well, they got
100,000 now, people workingthere and the Trump people,
those people are now looking atit to see what's going on there.
(17:46):
What did President Trump say theInternal Revenue Service will be
looked at like everybody else,just about everybody's going to
be looked at end of quote fromPresident Trump. And again, he's
picked a new IRS commissioner,former representative, Billy
long of Missouri, to run theagency. In the meantime, there's
(18:08):
a whole lot of people quittingover there. Commissioner Danny
werfield resigned oninauguration day rather than
waiting to be fired. So there'sa lot going on there. And
Treasury Secretary Scott Bassettsaid on Fox, he had three goals
with the IRS, collections,privacy and customer service,
and it's going to go through abig it upgrade. All right, all
(18:32):
the power to you. And since thatday, what is the current
numbers? Now, the IRS hasfinally begun to fire 6000
workers. And what's that? Thisis from my Wall Street Journal
article here by Brian Schwartzand Ashley Ebeling and Katherine
Long dated February 20, thatsome collections and audits are
(18:54):
likely to be paused, and one onone, personal service is set to
be more limited. That'supsetting to me. Mr. Money deals
with the IRS, and already I havetroubles getting a hold of them
on the phone, or waiting foreverfor them to pick up, getting a
lot of nowhere with them, and toknow that fire 6000 workers has
(19:14):
begun already and they're juststarting. This could absolutely
lead to delays in tax season andreduced personal service for
taxpayers and again, this layoffis part of the broader effort by
the Trump administration toreduce the size of the federal
workforce. Despite layoffs, theIRS is expected to keep key
personnel on duty through atleast May 15, to minimize the
(19:38):
impact on tax season, so peoplethat may want to leave may not
be allowed to leave till atleast May 15, so we can properly
take care of everyone during taxseason. Again. Will it disrupt
the agency? Now the tax seasonis in full swing. 10s of
millions of people are seekingtheir tax refunds. We're hoping.
(20:00):
Not we just don't know. Thetermination memo, I should add,
was sent last Thursday. IRSemployees read quote, your
continued employment at theagency is not in the public
interest. That's what the emailsaid. And again, they're set to
lay off at least 6000 people.It's already those are the
(20:20):
numbers they've got. And theIRS, you should know, is already
struggling with recruitment andretention, already people just
don't want to work at the IRS. Ican understand that the layoffs,
which are mostly in ComplianceDivision, means some collections
and audits are likely to bepaused so that 6000 looks like
it's going to be in thatcompliance area, collections and
(20:42):
audits are likely to be pausedthat brings a smile to my face,
and one on one, personal serviceis set to be more limited that
doesn't bring a smile to myface. So again, the
administration also limiteddeferred resignation program to
at least May 15, to keep peoplearound. So that's what's going
(21:03):
on at the IRS. There is changesgoing on there. They are not
immune to the government reviewof them, and they're going to
try to get to the properstaffing levels, not excess. And
so we may all end up facinglonger waiting times, delayed
return processing refunds andreduced access to the
(21:24):
experienced assistance that wewould like to have. By the way,
one other quote there, I shouldsay, the IRS has received and
processed about 23 point 5million individual returns, down
close to 8% from the same timelast season, average refund was
2065 even as the agency keepskeep personnel on duty, as I
(21:47):
mentioned, through May 15, andthe pain may be felt by more
millions of taxpayers who filean extension through October 15.
By then, I'm sure there's goingto be more cuts and hopefully
more efficiency. We hope by thatOctober 15 deadline, is it good
to file now, in other words,yes, especially if you get money
back, yes, if you're going to beowing money again, yes, try to
(22:12):
file and pay what you owe. Or atleast if you file an extension
for more time. Remember, anextension of time does not give
you an extension of time to pay.If you're gonna owe some money,
got to get it in there by April15, or there will be interest
and penalties. Chris, Mr.Engineer, could you tell me
who's gotten a hold of Mr. Moneyon the website and what
(22:34):
questions do they got? Let'sYeah,
Unknown (22:35):
this is on the K I do app, by the way, if you don't
want to call in, you can alwaysmessage us there, sure. And this
is from Phil, can I deduct thebusiness use of my home? I need
deductions.
Mark Rothstein (22:48):
Got it. So let's answer that for Phil, many
Americans, and I mean manyAmericans. And I sat with
Americans all last week, maythink that because they work
from home, they can take taxdeductions for a portion of the
rent, the utilities, theirinsurance on the house or
renters insurance. Answer, notso fast, says Mr. Money, not
(23:12):
everyone qualifies to do that.Saying it another way wage
employees. All of you thatreceive a w2 wage statement. Who
choose to work from home take onthe full weight of their related
expense. In other words, youtake on the full weight. Can't
deduct it a w2 employee. The IRSrules are, you may not deduct
(23:33):
your house again. The 2017 taxcuts and Jobs Act eliminated,
unreimbursed itemized deductionsfor employees, your business
deductions. They stopped it.Congress never brought them
back, since 2017 the rule runsthrough 2025 so again, this
year, we cannot deduct. And lastyear, doing your tax return for
(23:56):
24 we cannot deduct the businessuse of home, and again, among
employed adults who have a jobthat can be done from home, 75%
are working remotely. Do youknow that I had to look that one
up? 75% are working remotelyfrom their home. Nearly half of
them. 46% say that theiremployer no longer allowed them
(24:20):
to work from home that would beunlikely to stay in their jobs.
So again, what's happening isemployers are saying to the
employees, get back to theoffice. Get back to work. And so
we're going to see people sayingno, thank you. I like working
out of my home. I am not goingto stay working. I read an
article, by the way, that sayslooking for work right now is
(24:42):
very hard to do to get jobemployment, so think twice
before you let go of the job.Might be better to go into the
office and keep your jobs. Sowhere does this business home
apply? Let me answer it for ourlistener. Answer it only applies
to small business owners whoare. Self Employed. Keywords,
(25:02):
self employed. If you dofreelance work unrelated to your
regular job at home, you mightqualify, because, again, you're
self employed for that and againso you can take your deductions.
So again, who qualifies? It'snot the w2 employee person, it's
the self employed person. Ifyou're self employed, yes, you
(25:22):
get to write off your homeoffice. What does that mean? We
take a look at your squarefootage of the house. Let's say
it's 2000 square feet, and youare using 200 of that. So 200
divided by 1000 square feet is20% is your business office
space. 200 divided by 2000exactly through 1,020% so you
(25:46):
get 20% of your interestdeduction on that page, 20% of
property tax, 20% of yourhomeowners insurance, 20% of
your gas, water, heat, electric.How about 20% of the maid at the
maid cleans your office. Howabout in your office? You went
ahead and bought a desk or achair write it off. It's
(26:07):
business related. But Mr. Money,you might say, I'm working at my
dining room table. You cannotdeduct that because it's not
used exclusively for work. Soagain, IRS code, if you're going
to write your business use ofhome, it must be exclusively for
work and regularly used forwork. But again, as I mentioned,
(26:29):
buy a desk. How about you got azoom lens you bought for your
computer? How about all yourcomputers, your computer
software, ink cartridges foryour computer that your paper.
No problem. Use it. Justremember the space has to be
exclusively and regularly forwork. Then there's no problems.
And again, you can deduct it, asI said, a certain percentage the
(26:52):
business space percentage. Youcan deduct that no worries
against all those expenses. Theyalso have another way, which is
simply figure out your squarefootage of business, multiply it
by $5 and there's yourdeduction. So that's another
way. $5 per square foot timesthe number of square feet, you
got up to 1500 Max, and thereyou go. You can take Mr. Money.
(27:15):
How about this? On it, I got awhole spare bedroom. I hear
clients ask me also, just to addto your question, spare bedroom.
Can I do that again? Sameanswer, what square footage of
the spare bedroom compared tothe square footage of the whole
house? What's your percentage?And we can write it off. You
built shelving in that newoffice. You got painting in that
room. Deduct it all. It's inthat area, period. And again,
(27:40):
therefore, yes. Keep track ofyour gas. Keep track of your
water, gas, as I said,electricity, all those
utilities, keep track of so youcan take your certain percentage
of it and what Mr. Money, ifthere's a personal piece of it,
no problem. And I meancomputers, too. If you buy your
(28:01):
computer for $2,500 let's say,and you use it 40% of the time
for work, then you should bewriting off 40% times 2500 for
the laptop, not 2500 for thewhole laptop, as if you never
use it for business or personal.Bottom line is the business and
the personal you've got to usewhen you do your return, if it's
(28:24):
100% business, write off 100% ofthe expense. If you're using it
for less, then take a lessernumber. By the way, it's true
for your internet. Don't forgetto write off your internet. Of
course, you could take some ofyour internet cost off, but I'm
not sure 100% of your internetcost should be deductible,
because it's probably somepersonal use. Same for your
telephone. Some of thetelephone, again, may be used
(28:47):
for personal and business only,right off the business part. And
one other thing I should Oh, Mr.Money, I'm eating with clients,
no problem. Yes, you can writeoff eating. Just remember,
business meals, you get todeduct 50% of the number. So if
you ate $1,000 you can deduct$500 worth of eating. Again, it
(29:09):
was a business meal, and again,you got to keep track of who you
met with, what you talk about,where were you, when was it?
Have to keep track of all thatso you can deduct it. And
entertainment costs are notgoing to a ball game together.
The Bronco game is not taxdeductible that you bought a
Bronco ticket for someone you dobusiness with. The eating is
(29:32):
something we can talk about, butnot the entertainment piece. IRS
took that one away, so do it.That's my answer to a caller is,
Do it? Do it? Take thatdeduction? Remember, your net
income from your business, youhave to pay income tax on the
net income after the deductions,your net income, you got to pay
(29:52):
income tax on and you have topay Social Security on it tax,
and that's 15.3% and you. Yes,it includes the Medicare so
remember, every deductionmatters on your schedule, C your
self employment page, becauseall those deductions bring you
lower and that lowest numberyour net income is what you pay
income tax on. You pay SocialSecurity tax on, they got the
(30:15):
Medicare tax. You got all thesetaxes on it. So yes, bring it
down. It's one of the key itemsa good tax person does is find
all those deductions when wecome back, Mr. Money's got more
to talk about with income tax.It's a double day on taxes. It
is tax season, and I've gotpeople asking me about I'm a
parent. I got people asking me awhole lot of things about that.
(30:38):
So we're going to follow up withthat when we come back, this is
Mr. Money. Let me tell
Unknown (30:52):
you how it will be. There's one for you, 19 for me,
because I'm the tax man. Yeah.This is
Mark Rothstein (31:06):
Mr. Tax man, talking about taxes, Chris,
what's that question we gotregarding more tax deductions?
What was that one?
Unknown (31:14):
Yeah, this one's from Becky. It is. I'm a parent. What
can I deduct? These munchkinscost a lot of money, assuming
she was referring to her kids.
Mark Rothstein (31:23):
Yeah. So what can you do? So I've got a guide
of some things you can do ifyou're a parent. And what
exactly can you do? Remember, itcosts a lot of money. It's a
high cost of raising children,or to use your word, Munchkins.
And Congress has sprinkledvarious breaks for parents
through the tax code. Mr. Moneyknows where to look for those,
(31:44):
so I'm going to share those withyou. Number one, don't forget
because you got kids. Don'tforget the child independent tax
credits. The maximum child taxcredit means dollar for dollar,
reduces your taxes or get you abigger refund for the year 2024
and for 2025 those two years is$2,000 per child under age 17 at
(32:10):
year end. And again, that'sreally good. So again, you got a
child Don't forget, you got achild tax credit, and it is 2000
per child, as long as they'reunder 17. Is there a catch?
There is a catch? The creditbegins to phase out because the
rich shouldn't be able to take acredit for their kids. Credit
(32:32):
begins to phase out at 400,000if your adjusted gross income
for married couples filingjointly, if you're single,
making 200,000 we want to stopyou from getting that $2,000 per
child tax credit. But if you'reunder that 400,000 and married,
under 200,000 and single, youcan absolutely get that $2,000
(32:54):
dollar for dollar credit. Dollarfor dollar means if you owe two
grand to the IRS because of thechild, you don't know, 2000 just
gets rid of that. If you'regetting a $2,000 refund now
you're getting a $4,000 refund.So it's a credit, not a
deduction, which is really good,by the way, the credit for
dependents who are 17 and older,like an older child, or you got
(33:17):
mom or dad living with you orliving on their own, but you're
paying the bills, there'sanother $500 credit. Again, if
you're rich, can't have it, likeI mentioned earlier, there's
those phase outs. 400,000 formarried, 200,000 for single.
When you're making over those,you ain't getting the credit. So
that's something you can takefor children, your munchkins, to
(33:39):
use your words, child care.Let's not forget that one is
good for your child to help youon your tax return. One way is
called the flexible spendingaccount, also known as an FSA.
Dealt with that with my clientsthis week. What's an FSA? An FSA
is from your employer you'reworking. They have a plan that
(34:00):
allows you to take out of yourpaycheck pre tax, so it reduces
your taxable wages, reduces yourw2 and you can reduce your wages
by, in most cases, up to $5,000so I can have out of my cheek
paycheck, $5,000 put on theside. I then get a reduced w2
Thank you. But then the fivegrand I then use to pay for
(34:23):
after school programs. I use the5000 to pay for my kid going to
camp, who's under 13. And again,you got to use it or you lose
it. So if you take 5000 out forthis child caring, then make
sure you spend it before the endof the year. And by the way,
some programs allow you tillMarch, which is now to spend it.
(34:45):
So if you didn't get it spent bythe end of December 31 last
year, make sure you get it outof there so you can have the use
of your money. And by the way,as I mentioned earlier, this is
not subject to federal payroll.Taxes, it reduces your wages, so
you're paying tax at a lowernumber. The other one we've got
is called child or DependentCare Tax Credit. And what is is
(35:10):
that child or dependent carecredit or dollar for dollar,
it's a good one, not deduction.Credit covers care expenses for
children under 13. And again,you're allowed a credit of 20%
up to the first three grand thatyou wrote a check for that you
weren't in the FSA. You didn'tuse that just simply, I brought
home money, and I had to pay formy child. So if they're paying
(35:34):
for after school care, so youcould work or before school
care, so you could workdependent care. In other words,
then again, you can get a taxcredit. You can have it up to
3000 for each child. You got twochildren. It's 20% up to 6000
you got three children. It stillstops at 6000 $3,000 eligible
(35:57):
expense for one dependent, up tosix grand for two or more. And
again, it's a credit. If you'rea low earner, you might even get
more than a credit of 20% soagain, don't forget to take that
on your taxes, because I've donethis so long. You might say, Mr.
Money, Should I do the FSA atwork and take money right out of
(36:18):
my paycheck at work to go towardchild care, or should I pay the
tax, bring home all my money andthen I'll pay for child care?
Usually, if you're in the middleand upper earning parents, then
the right answer is, use the F,S, A at work and suck it out of
your paycheck right up front.Another one, really good one for
(36:39):
your munchkins, for yourchildren to help you on your tax
returns, since it costs so much,is to fund a five to nine
college savings plan, where thatallows you for tax free growth
on the assets, and as long as itgrows for free, comes out for
free, it's just got to come outand be used for education, like
(37:01):
college tuition, room and board,etc. And yes, here in Idaho, you
get a tax deduction for puttingmoney into this college type of
program, by the way, again, fiveto nine program. It's from IRS
code section, five to nine.That's why they call it that. In
Idaho, we call it the ideal i,d, e, a, l, the ideal 529,
(37:24):
program. And again, you can putup to 6000 per child or 12 grand
into it, and deduct that 12,000on your tax return. Ain't that
great? So again, I'm puttingmoney away from a child. I'm
using it for schooling. And bythe way, schooling could be
defined as for college, butschooling could be defined as k1
(37:45):
to k 12. So you can put moneyaway, let it start growing,
comes out for free, and youcould take it out earlier
because they're going toreligious school or they're
going to a special program thatyou want for the child. Well,
ain't that great? You're puttingmoney and getting a tax
deduction. Idaho loves us, sothat's a very, very, very good
thing. And again, consider usingthat. By the way, if you give
(38:10):
more than 19,000 in any one yearfor your child, there's a
special form we got to use forthat, because the federal gift
tax return says you're allowedto give 19,000 anybody you want
each year. But if you go over19, then you've got a report
that you take gave away morethan 19,000 I didn't say how to
pay income tax. It's just foryou to know 19,000 per year for
(38:33):
a gift. So Mama can give thechild 19, Daddy can give the
child 19, put it away into the529 plan, you'll get a $12,000
deduction for it, or 6000 foreach child times two would be
12. And it grows tax free, comesout tax free again. It's got to
be used for education. Is thekey item there. And by the way,
(38:55):
you can use it also forapprenticeship you want to send
your child to to cost you somemoney. You can even pull money
out for some student loans thatmay be due. And if you you're
allowed 10,000 per borrower, ifit's for student loans. So
there's some fine print inthere, but again, ask your tax
woman. Ask your tax man aboutthat. And one other little
(39:17):
thing, it just came about. I'vementioned it a few times over
the last year. I'll mention itagain. There's a provision in
the 2022 retirement law thatallows your five to nine college
account, if you've not used itfor many, many years, you can
roll that money over tax free,to a Roth IRA owned by the five
(39:39):
to nine plans, beneficiary,lifetime amount you can roll
over 35 grand by the year. Andthe 529 account must be open for
at least 15 years, and onlyfunds that have been in the
account for at least five yearsare eligible. So again, fine
print there. But just know, ifyou don't use the 529 plan, you
can roll it on over to a Rothyou. Kind of account, and a Roth
(40:01):
is a good thing to have. Anotherone we've got is called the
Coverdale education Mr. Money.There's a lot going on here.
That's right. Coverdaleeducation savings account.
That's an education savingsaccount. It's another way for
parents to save tax free fortheir children's education.
Accounts offer more investmentoptions than the normal five to
(40:22):
nine plan. They may come withmore restrictions. You should
know the contributions arecapped at 2000 per beneficiary
and limits on your income.Again, the rich can't do it
applies to those who set up theaccount. Something good to know.
Last one I want to mention hereis this one. It's called the
American Opportunity Tax Credit.Mr. Money, there's certainly a
(40:45):
lot of this education stuffhere. And the answer is yes,
there is the AmericanOpportunity Tax Credit provides
a maximum tax reduction of 2500
per student per year. It'savailable for the first four
years of their post secondaryeducation. Yes, it applies to
tuition. You can grow it, pullit out and spend it on tuition,
(41:08):
other course expenses. The onlycatch, can't room. Use it for
room and board, and goes alongwith that as the Lifetime
Learning Credit, typically lessgenerous, but applies to a
broader range of expenses,maximum tax reduction, 2000 per
return per year can be used forgraduate education, continuing
(41:29):
ed, job skills classes inaddition to undergraduate
education. By the way, it's goodfor you. You could put you can
get one of those accounts foryourself and then have it grow
and pull it out for yourself togo to grad school, to go to
vehicle, don't Cooking School,etc. So it can absolutely be
used for all of that type ofeducation. And again, you can
(41:52):
taxpayers with student loaninterest, can typically deduct
up to 2500 of it each year. Andagain, you can use that so Mr.
Money says, For you parents, yougot a whole lot of things you
can do for your children and getsome tax benefit from it. When
we come back, Mr. Money's got tohave a serious talk. What's the
(42:12):
serious talk? I'm noticingcredit card debt going real
high, and I got answers for howhigh it is. This is Mr. Money.
Unknown (42:24):
Not just anybody. You know, I need someone.
Mark Rothstein (42:35):
Mr. Money's in the house. And Mr. Money's
talking about a concerning thingthat's concerning Mr. Money,
it's about minimum credit cardpayments hit 10.75% let me say
it in English here, Americansare not okay financially. And
this is, according to thePhiladelphia Federal Reserve,
(42:55):
the share of active credit cardaccounts that make just the
minimum payment. So I'm talkingabout credit cards, where you
owe money and you're paying justthe minimum, which is a very
small amount of what you owe,has now hit a 12 year high at
10.75% those are the stats fromJuly through September of 24
(43:18):
based on data from the largestbanks in the country again, as
credit card balance as well, theshare of delinquent balances is
also worsening so the peoplepaying the minimum, it seems
like it's leading to justwalking away and having
delinquencies, not good. Let'snot forget, when you owe money
(43:39):
on credit cards, it seems likethe average credit card rate is
21.75% holy moly, paying 21.75%for not paying it off. And lower
and middle income householdsavings rates have absolutely
turned negative in early 2022said the statistics. So those
rainy day funds, those emergencyfunds, those contingency funds
(44:03):
that Mr. Money believes in, aresimply diminishing and not
there. And maybe that's part ofwhy we're getting more and more
delinquencies of the 1065workers surveyed in December,
73% struggled to afford anythingbeyond their basic living
expenses, and about a third tookon debt to cover them. And
(44:26):
that's again, according toresumes now report, on average,
a household with revolvingcredit card debt owes 10,005 63,
that's according to anothersurvey, and again, carrying that
debt is cost later today thanother periods ever. How high it
is revolving card balance. Guesshow big that one is? It's now
(44:48):
reached 645 billion from Julythrough September. So just that
July through September, it wentall the way up to 640 5 billion,
representing. 52.5% growth sincea decade lower of 423 their
credit card balances more than30 days past due, also rose from
(45:11):
to 3.52% from July throughSeptember. So the numbers are
very worrisome. Mr. Money, ofcourse, has a few to do's around
this. And let me mention my todo's, if I may, number one to
do, if this is you I'm talkingabout, is this, make more than
the minimum payment, obviouslyon your credit card balances
(45:33):
whenever you can, because it'sjust too high in interest rate.
Otherwise, you're going to endup with more debt for decades
and decades and pay 1000s and1000s of dollars or more in
interest. Trans Union, one ofthe credit bureaus say the
average credit card balance forthem is 6003 80, assuming 20.27
(45:54):
credit card rate and onlymonthly minimum payments, you'll
be in debt for 218 months. Morethan 18 years, will end up
paying interest of 9003 44, ininterest. When you started with
a balance of 6380 what shouldyou do? Sign up for a balance
transfer card with a generous 0%interest term. You could pay
(46:17):
about 300 per month, then knockout the average credit card
balance in 21 months withoutowing any interest. So of
course, would you please look atbalance transfers? They may
charge you a one time fee upfront to move it over, but 0%
interest rate for a good 20months, 21 months, 24 months,
however long you get it, that'sa good thing. And so other thing
(46:40):
you can do again, if you have alow credit score and you've got
more than 5000 in credit carddebt, consider working with a
reputable nonprofit creditcounseling agency, get some
experts on your side to make aplan and stick with the plan.
And why is this sodisconcerting? Is the other
(47:01):
reason more seniors are retiringwith debt. That's right. It's
not just people use creditcards, but if you're a senior,
you're retiring. Statistics showthat seniors are going into debt
and retiring with debt. Used tobe we always tried to get all
our debt down to zero, get myhouse paid off to zero so I
(47:22):
could go into debt intoretirement and not be worrying
about it. Credit card debt isthe most common type among
seniors. Said the analysts, with93% carrying a balance owed,
followed by that's the creditcards, followed by auto loans.
37% had auto loans, personalloans. 19% had student loans.
(47:45):
Seniors retiring had 8% of themhad student loans. Still. But
again, credit card debt may bemore common among these seniors,
as we're seeing average monthlycar payment, though, is more
costs a whole lot for cars thesedays, and as a result, that car
one may be one of the firstCredit Car, one of the highest
(48:08):
debts to get rid of. And theother big debt, obviously, is
your credit card. Credit cardsat a lower, excuse me, higher
rate. So you want to pay thecredit cards first, please, with
extra money. But then, by allmeans, the car purchases are
high. Price. You may get a 6% 8%loan rate on it, but again, it
is still very high. It's a must.I'll say that again, it is a
(48:33):
must to get yourself debt freeif you can, should you therefore
take all your money out? I hearthis question, Should I take a
whole lot of money from mysavings and just pay off my
house. The problem is, if you'vegot no money left in your
investments, then it's not agood idea. I'd rather you,
slowly but surely be paying offyour house, not take a big chunk
(48:55):
of your emergency, yourcontingency, your investment
account, and deplete it so youcan get rid of that one payment
called the house payment. Andnot to mention, for some people,
interest paid on your house istax deductible. So the idea is
not necessarily to just pay offyour house and give up hundreds
(49:16):
of 1000s that's invested moneythat you could be living on in
retirement. Yes, you shouldcheck with your tax person. Yes,
you should check with yourfinancial person to see what
makes sense and what doesn't.Sitting with a producer of mine
in Los Angeles last week, heasked that question. I said,
it's not the right answer. Keepthat debt. So again, retirement
(49:38):
equals. Look for ways to savemoney. Look for ways you can cut
your expenses down. Look at allyour expenses and see if you can
cut that down. That's the trick.This is Mr. Money. We'll see you
next week. The Information andopinions
Unknown (49:52):
presented are for general information only and are
not intended to provide specificadvice or recommendations for
any individual. You shouldcontact your investor.
Investment professional,attorney, accountant or tax
advisor regarding yourindividual situation. The
opinions of the presenter arenot necessarily those of avantex
Wealth Management. It'ssubsidiaries, officers or
directors. Mark Rothstein, akaMr. Money, is a financial
advisor and the owner of tristar financial LLC and tri star
(50:14):
Income Tax Services LLC. Mr.Money is a marketing name only,
and is not intended as anythingother than a marketing name for
entertainment purposesSecurities offered through
avantex Investment Services,Incorporated Member FINRA SIPC
investment advisory servicesoffered through avantex Advisor
Services Incorporated, insuranceservices provided by avantex
Insurance Agency incorporatedand avantex Insurance Services
Incorporated. Tax and accountingservices offered through
(50:35):
Tristar. Avantex entities areunder separate ownership from
any other named entity.
The Information and opinions presented are for
(00:01):
general information only, andare not intended to provide
specific advice orrecommendations for any
individual you should contactyour investment professional,
attorney, accountant or taxadvisor regarding your
individual situation. Theopinions of the presenter are
not necessarily those of avantexWealth Management. It's
subsidiaries, officers ordirectors. Mark Rothstein, aka
Mr. Money, is a financialadvisor and the owner of tri
star financial LLC and tri starIncome Tax Services LLC. Mr.
(00:23):
Money is a marketing name onlyand is not intended as anything
other than a marketing name forentertainment purposes.
Securities offered through a vanTech's investment services,
Incorporated Member FINRA SIPCinvestment advisory services
offered through a van TexAdvisor Services, Incorporated
insurance services provided by avan tech Insurance Agency,
Incorporated and AvantsInsurance Services Incorporated
tax and accounting servicesoffered through tri star the
Antex entities are underseparate ownership from any
(00:46):
other named
Mark Rothstein (00:48):
entity. Good afternoon. This is Mr. Money. We
are live. We are sitting righthere in downtown Boise in the K
I do talk radio studios, 580 onthe am dial, one Oh, 7.5 on the
FM dial, and Mr. Money's here toeducate. Mr. Money's here to
help you, giving you theknowledge. And then hopefully,
(01:09):
you will take action with yourfinances. And those finances
could be in the world ofhousing, maybe it's helping you
in the world of yourinvestments, maybe it's helping
you and raising the kids aboutmoney. This is a statistic out
only half of the states inAmerica require high school
students to take a personalfinance class before graduating.
(01:33):
If you notice how there isn'tmuch education around money.
That's what my show is about.It's all about money and
teaching 80 What's it? 63% ofAmericans live paycheck to
paycheck. 73% of American adultsrank finances as their primary
stressor. Is that true for you?Again, you'll have less stress
(01:55):
you listen to Mr. Money everyweek, Saturdays, two o'clock
this knowledge does help youhave less worries. All you got
to do is take some action on allthe things we speak about. And
again, this week, I got plentyto speak about. We're going to
concentrate a lot on incometaxes today, since it's income
tax season right now, and Icertainly want you to take all
(02:17):
the tax advantages you can. Idon't expect someone who's not a
tax person to know those 10s and10s and 10s and 10s and 10s of
1000s of pages the IRS code is,and we're going to cover a lot
of that today. Let you know whatyou can deduct. But first, let's
just talk about the economy likeI open most every show and what
(02:41):
a whirlwind it's been in thefive weeks since President Trump
began his second term, he'sissued an extraordinary,
extraordinary number ofexecutive orders, threatened to
impose tariffs, and has done itand initiated sweeping changes
across nearly every level ofgovernment, he's attempting to
(03:03):
deliver on his campaign promiseto make government more
efficient. Some people love it.Some people less love it. The
rapid pace of decision makinghas been unnerving for many
people, particularly forfinancial decision makers and
markets that thrive onstability. That's right Wall
Street likes to know. They don'tlike to see what it happened
(03:25):
today, what executive order wasissued today that's going to
change things. So this rapid,rapid, rapid pace tends to be
very unnerving for thesefinancial decision makers,
including the Federal Reserveand so federal policy makers
regarding our interest rateshigher, lower and things to do
(03:46):
to navigate the economy hasincreased uncertainty, and
that's what's going on rightnow. Wall Street has a lot of
uncertainty. It's why you'veseen the market not do so well
the last two weeks, and that'sbecause of this uncertainty. In
fact, the markets have been downthese last two weeks in a row.
In this last week, the S and p5100 down 1% the NASDAQ, with
(04:11):
those technology stocks, thoseAI Artificial Intelligence
stocks, was down 3.5% and if youlook at it monthly, the S P was
down 1.4% the last month, theDow Jones down 1.6% and that
NASDAQ technology Stock Exchangedown 4% so it's a lot of lot of
(04:34):
lot of the uncertainty.Remember, there was a release of
the AI models from China. And sothe tech sector, the NASDAQ
sectors face significantpressures in 25 again, they
strongly outperform the s, p inboth 2023, and 202, for both
those years, with cumulativeoutperformance of 58% Wow. That
(04:58):
was a good place to be. Those 23and 24 in that NASDAQ. But now
the tech sector has laggedbehind the S P by about 5.6%
year to date. So it actuallymarks the worst under
performance at this point in theyear since 2008 and given that
the tech holds the largestweighting in the S p5 100 to 31%
(05:22):
this recent on performance hasraised questions for people.
Where do I place my money? Mr.Money believes this recent
weakness in the tech sector ismisguided. Beneath the surface,
the sector's fundamentals andtechnology remain robust. That's
my word, robust with a whole lotmore to come, I absolutely
(05:44):
expect to achieve much higherearnings per share with these
companies. And so take a look.Do you have some in that sector?
Again, talk to your financialplanner and see am I
appropriately asset allocatedto? Yes, have some of the tech
sector, and yes, have some ofthe all the other sectors that
(06:04):
are out there. Again, don'tbecause it's been down recent.
Means throw the baby out withthe bathwater. Think that's how
the saying goes. So again, Mr.Money says, again, review your
portfolio. But don't over worryin this potential slowdown in
the AI investment world.Remember, a record number of
(06:25):
companies have mentioned AI andall their conference calls.
Money is being spent there. Itis. Another thing that's causing
this market up and down for allof us who are in the marketplace
is simply uncertainty, policyuncertainty, as I mentioned with
Trump, the economy entered 2025,on solid footing, and I reported
(06:46):
on that, but recent economicdata releases show retail sales
not doing so well, housing notdoing so well, and that's
disappointing. And again, we'relooking what has happened and
what's going to be in thefuture, and people just simply
have a whole lot of uncertainty.How about the tax cuts?
(07:07):
Congress, the Senate, President,they're all talking about the
tax cuts right now. Remember the2017
tax changes that Trump put in inhis last time in office were
excellent for all of us for allthese years, but they expire at
the end of this year. Again,Congress and Senate are trying
to decide, are we going to keepthose tax is where they are at
(07:30):
the moment, because if theydon't, taxes are going to go up
for every one of us at the endof 2025 so will they be keeping
them, and will they be makingsome of those updated changes to
the tax code, I believe I heard.Correct me if I'm wrong.
President Trump wants to not taxyou on tips. President Trump
(07:51):
doesn't want to tax people onsocial security received.
President Trump wants to doderegulation. He wants to do a
whole lot of things. But again,that's all uncertainty. And then
when you start adding tariffannouncements, immigration
policies, government layoffs,all the cost cutting efforts
(08:11):
from Doge, oh boy, oh boy.What's my confidence like? In
fact, right at this moment,consumer confidence is a low
right now, people are a bitworried about these tariffs,
about the government debt, aboutthe immigration, all the
government layoffs that aregoing on. So again, things are a
(08:32):
little slow. That's what'scausing Wall Street to not do so
well these days. And again,what's the biggest thing I
should mention it again, istariffs. Those concerns are
front and center. You watch TV,they talk about the tariffs. So
concerns over tariffs haveunleashed a big wave of
uncertainty, and again, a bigwave despite all the tariff
(08:56):
discussions, only China's 10%tariffs have been officially
implemented. So far we found outthat they delayed tariffs on
Mexico and Canada, but thatdelays over they're going into
effect on March 4 again, andTrump plans to impose an
additional 10% tariffs on China.So that's a lot of uncertainty
(09:18):
with those tariffs, thoseproducts come in at a higher
price. Does that mean I'm buyingthose products at a higher
price? Inflationary prices,therefore inflation is back.
That's worrying people. IsTrump, right? That with all
those tariffs, that's all bigamount of income coming in,
money coming in to pay off thedebt that we have, bring it all
(09:43):
down, and then eventually,companies in America will make
the products and bring theprices right down. That's what
he's saying. And of course,those tariffs are also there to
help with the immigration issueof keep immigrants in your
country. Don't have them flowinto ours. I. Heard the words
that are said, let's see whathappens with all of that. And by
(10:03):
the way, how about this? In thecoming weeks, the tariffs you
put on other countries is goingto be reciprocated, and there's
going to be countries that puttariffs back on America. Well,
that could cause some concern.And again, that's what's going
on on Wall Street. They're veryworried about that. How about
those steel autos, the steelindustry, the auto industry will
(10:24):
be affected. Pharma, the medicalwill be affected. The
semiconductors, the chips willbe affected. So a whole lot is
going to be affected by this.Tariffs around the world, not
just here, but around the world.The other key issue I see is
government shutdown that's infocus right now on Wall Street,
despite the narrow majority inthe House, which they currently
(10:47):
have only one seat, Republicansdid manage to pass a budget
guidelines proposing a 4.5trillion trillion in tax cuts
and a 4 trillion increase in thedebt. I'm scratching my head. I
thought it was all aboutreducing the debt, but what
they've proposed increases thedebt. So again, the Senate has
(11:11):
already passed its own scaledversion of the budget
resolution. Two chambers nowneed to agree on a unified
version, notably absent in bothversions is a plan to avoid a
government shutdown. It's noteven mentioned how they going to
avoid the shutdown, which isfast approaching with the
(11:32):
funding deadline just 14 plusdays away on March 14. That's
right, that deadline is March14. Best of my knowledge,
today's March number one, leasthere in Boise, it is. So that's
another one in the marketplaceright now. I should mention,
while governments shutdowns haveled to increased volatility,
(11:53):
it's true, like we're seeingnow, the average market
performance during the last 20shutdowns since 1976 has been
flat. More importantly, I shouldmention, from my research,
shutdowns have not halted themarket's long term upward
trajectory. Let me say thatagain. More importantly,
shutdowns have not halted themarket's long term upward
(12:17):
trajectory. In fact, in the 12months following a shutdown, the
market has risen by an averageof 13% and has been positive 80%
of the time. So remember that,so we don't want to worry it
over. Worry it, but again, it isworrisome right now. There is no
(12:39):
agreement. There is differencesin the Senate and the Congress,
and I still believe economic andearnings growth is solid right
now. Fundamentals continue todrive the equity market, and
I've always said that, we lookat the economic numbers, are
they looking good? Whatcompanies are reporting? They're
not looking good. Look at theeconomic numbers of people
(13:02):
working. Are people working? Notworking? In other words, is
unemployment high or low? Thatmatters? At the moment, it is a
low number people are working.What about what they're getting
paid? They're getting paid agood, healthy number right now.
So again, a lot of thosefundamentals are good. Yes, I
know retail sales were downrecently a bit, but again, that
(13:23):
could be the cold weather, couldbe a whole host of things. I'm
not prepared to say allconsumers are now cutting back
because of their fears at themoment. So that's what's going
on in the world right now, andthat's why your stocks are being
affected. And how do I feel thefuture will be I happen to think
Congress, the Senate, will gettogether, they will come to an
(13:46):
agreement of sorts, a governmentshutdown. If it happens, I don't
think it's the end of the world.They will work it out. I do
believe that, and they'll haveone big, beautiful budget
blueprint going forward. I dothink the tax laws will stay and
be good. I do think Trump willget across some of the things he
campaigned on, which I think aregood for all of us, good in the
(14:08):
sense I get to keep more of mymoney and pay less income tax.
So I'll keep you abreast of itas each week goes by. Mr. Money
will be reporting on it and letus know where we are when we
come back, Mr. Money's gonna goto a tax section. It's tax
season. Mr. Money spending sixplus days in my office working
on taxes every hour withclients. And I got a whole host
(14:31):
of questions people just keepasking me. People want to know
the answers too. Thought I'dbring some of those questions
and answers to us when we comeback. This is Mr. Money. Let me
tell
Unknown (14:51):
you, there's one for you, 19 for me, because I'm the
tax man.
On the tax man.
Mark Rothstein (15:05):
This is Mr. Tax man, Mark Rothstein, Mr. Money,
teaching, acting, doing. Moneywith you every single week at
two o'clock here on the Idahostation of K I do want to remind
you of a couple things. We arein March. March 15, two weeks
and a day from now, we have taxreturns due. I did not say April
(15:29):
15. I said, March 15. If youhave a partnership tax return,
also known as a 1065, form, youuse due. March 15, multi member
LLC, not a regular LLC, of oneperson, a single member. This is
a multiple member LLC due March15. If you're an S corporation,
(15:51):
due date, March 15, 14 days inone day from now, you got to
file those. But Mr. Money, can'tI file an extension and get six
months till September 15?Answer, yes, you can, but I'm
here to say it's ideally due onMarch 15. Make sure you file
that extension if you want toSeptember 15. Very important to
(16:13):
do. Speaking of important. Guesswhat happened recently? Doji
staffor arrives at InternalRevenue Service headquarters.
That's right. A key staff memberfrom the Department of
government efficiency arrivedThursday at the headquarters of
the IRS to review the taxagency's operations. That's
(16:38):
right, Department of governmentefficiency, you keep hearing
about. They've knocked on thedoor, they've entered the door,
and they are now inside the IRSbuilding. That's right. Guy's
name is Gavin kleiger, an aideto Elon Musk in his effort to
overhaul spending across thefederal government. He is now
hanging out at the IRS offices.Mr. Kleiger doesn't have access
(17:01):
to tax agencies computer systemsor individual taxpayer
information. He has not made anyoperational changes as of yet,
but he's certainly over therenow. He is meeting with staff
officials, senior officials,interested in the agency's head
count, and they have, by theway, the IRS has over 100,000
(17:24):
workers. That's what they've gotafter a recent expansion.
Anybody remember that last yearthe Senate, Congress President
Biden gave 80 billion to the IRSto expand. Well, they got
100,000 now, people workingthere and the Trump people,
those people are now looking atit to see what's going on there.
(17:46):
What did President Trump say theInternal Revenue Service will be
looked at like everybody else,just about everybody's going to
be looked at end of quote fromPresident Trump. And again, he's
picked a new IRS commissioner,former representative, Billy
long of Missouri, to run theagency. In the meantime, there's
(18:08):
a whole lot of people quittingover there. Commissioner Danny
werfield resigned oninauguration day rather than
waiting to be fired. So there'sa lot going on there. And
Treasury Secretary Scott Bassettsaid on Fox, he had three goals
with the IRS, collections,privacy and customer service,
and it's going to go through abig it upgrade. All right, all
(18:32):
the power to you. And since thatday, what is the current
numbers? Now, the IRS hasfinally begun to fire 6000
workers. And what's that? Thisis from my Wall Street Journal
article here by Brian Schwartzand Ashley Ebeling and Katherine
Long dated February 20, thatsome collections and audits are
(18:54):
likely to be paused, and one onone, personal service is set to
be more limited. That'supsetting to me. Mr. Money deals
with the IRS, and already I havetroubles getting a hold of them
on the phone, or waiting foreverfor them to pick up, getting a
lot of nowhere with them, and toknow that fire 6000 workers has
(19:14):
begun already and they're juststarting. This could absolutely
lead to delays in tax season andreduced personal service for
taxpayers and again, this layoffis part of the broader effort by
the Trump administration toreduce the size of the federal
workforce. Despite layoffs, theIRS is expected to keep key
personnel on duty through atleast May 15, to minimize the
(19:38):
impact on tax season, so peoplethat may want to leave may not
be allowed to leave till atleast May 15, so we can properly
take care of everyone during taxseason. Again. Will it disrupt
the agency? Now the tax seasonis in full swing. 10s of
millions of people are seekingtheir tax refunds. We're hoping.
(20:00):
Not we just don't know. Thetermination memo, I should add,
was sent last Thursday. IRSemployees read quote, your
continued employment at theagency is not in the public
interest. That's what the emailsaid. And again, they're set to
lay off at least 6000 people.It's already those are the
(20:20):
numbers they've got. And theIRS, you should know, is already
struggling with recruitment andretention, already people just
don't want to work at the IRS. Ican understand that the layoffs,
which are mostly in ComplianceDivision, means some collections
and audits are likely to bepaused so that 6000 looks like
it's going to be in thatcompliance area, collections and
(20:42):
audits are likely to be pausedthat brings a smile to my face,
and one on one, personal serviceis set to be more limited that
doesn't bring a smile to myface. So again, the
administration also limiteddeferred resignation program to
at least May 15, to keep peoplearound. So that's what's going
(21:03):
on at the IRS. There is changesgoing on there. They are not
immune to the government reviewof them, and they're going to
try to get to the properstaffing levels, not excess. And
so we may all end up facinglonger waiting times, delayed
return processing refunds andreduced access to the
(21:24):
experienced assistance that wewould like to have. By the way,
one other quote there, I shouldsay, the IRS has received and
processed about 23 point 5million individual returns, down
close to 8% from the same timelast season, average refund was
2065 even as the agency keepskeep personnel on duty, as I
(21:47):
mentioned, through May 15, andthe pain may be felt by more
millions of taxpayers who filean extension through October 15.
By then, I'm sure there's goingto be more cuts and hopefully
more efficiency. We hope by thatOctober 15 deadline, is it good
to file now, in other words,yes, especially if you get money
back, yes, if you're going to beowing money again, yes, try to
(22:12):
file and pay what you owe. Or atleast if you file an extension
for more time. Remember, anextension of time does not give
you an extension of time to pay.If you're gonna owe some money,
got to get it in there by April15, or there will be interest
and penalties. Chris, Mr.Engineer, could you tell me
who's gotten a hold of Mr. Moneyon the website and what
(22:34):
questions do they got? Let'sYeah,
Unknown (22:35):
this is on the K I do app, by the way, if you don't
want to call in, you can alwaysmessage us there, sure. And this
is from Phil, can I deduct thebusiness use of my home? I need
deductions.
Mark Rothstein (22:48):
Got it. So let's answer that for Phil, many
Americans, and I mean manyAmericans. And I sat with
Americans all last week, maythink that because they work
from home, they can take taxdeductions for a portion of the
rent, the utilities, theirinsurance on the house or
renters insurance. Answer, notso fast, says Mr. Money, not
(23:12):
everyone qualifies to do that.Saying it another way wage
employees. All of you thatreceive a w2 wage statement. Who
choose to work from home take onthe full weight of their related
expense. In other words, youtake on the full weight. Can't
deduct it a w2 employee. The IRSrules are, you may not deduct
(23:33):
your house again. The 2017 taxcuts and Jobs Act eliminated,
unreimbursed itemized deductionsfor employees, your business
deductions. They stopped it.Congress never brought them
back, since 2017 the rule runsthrough 2025 so again, this
year, we cannot deduct. And lastyear, doing your tax return for
(23:56):
24 we cannot deduct the businessuse of home, and again, among
employed adults who have a jobthat can be done from home, 75%
are working remotely. Do youknow that I had to look that one
up? 75% are working remotelyfrom their home. Nearly half of
them. 46% say that theiremployer no longer allowed them
(24:20):
to work from home that would beunlikely to stay in their jobs.
So again, what's happening isemployers are saying to the
employees, get back to theoffice. Get back to work. And so
we're going to see people sayingno, thank you. I like working
out of my home. I am not goingto stay working. I read an
article, by the way, that sayslooking for work right now is
(24:42):
very hard to do to get jobemployment, so think twice
before you let go of the job.Might be better to go into the
office and keep your jobs. Sowhere does this business home
apply? Let me answer it for ourlistener. Answer it only applies
to small business owners whoare. Self Employed. Keywords,
(25:02):
self employed. If you dofreelance work unrelated to your
regular job at home, you mightqualify, because, again, you're
self employed for that and againso you can take your deductions.
So again, who qualifies? It'snot the w2 employee person, it's
the self employed person. Ifyou're self employed, yes, you
(25:22):
get to write off your homeoffice. What does that mean? We
take a look at your squarefootage of the house. Let's say
it's 2000 square feet, and youare using 200 of that. So 200
divided by 1000 square feet is20% is your business office
space. 200 divided by 2000exactly through 1,020% so you
(25:46):
get 20% of your interestdeduction on that page, 20% of
property tax, 20% of yourhomeowners insurance, 20% of
your gas, water, heat, electric.How about 20% of the maid at the
maid cleans your office. Howabout in your office? You went
ahead and bought a desk or achair write it off. It's
(26:07):
business related. But Mr. Money,you might say, I'm working at my
dining room table. You cannotdeduct that because it's not
used exclusively for work. Soagain, IRS code, if you're going
to write your business use ofhome, it must be exclusively for
work and regularly used forwork. But again, as I mentioned,
(26:29):
buy a desk. How about you got azoom lens you bought for your
computer? How about all yourcomputers, your computer
software, ink cartridges foryour computer that your paper.
No problem. Use it. Justremember the space has to be
exclusively and regularly forwork. Then there's no problems.
And again, you can deduct it, asI said, a certain percentage the
(26:52):
business space percentage. Youcan deduct that no worries
against all those expenses. Theyalso have another way, which is
simply figure out your squarefootage of business, multiply it
by $5 and there's yourdeduction. So that's another
way. $5 per square foot timesthe number of square feet, you
got up to 1500 Max, and thereyou go. You can take Mr. Money.
(27:15):
How about this? On it, I got awhole spare bedroom. I hear
clients ask me also, just to addto your question, spare bedroom.
Can I do that again? Sameanswer, what square footage of
the spare bedroom compared tothe square footage of the whole
house? What's your percentage?And we can write it off. You
built shelving in that newoffice. You got painting in that
room. Deduct it all. It's inthat area, period. And again,
(27:40):
therefore, yes. Keep track ofyour gas. Keep track of your
water, gas, as I said,electricity, all those
utilities, keep track of so youcan take your certain percentage
of it and what Mr. Money, ifthere's a personal piece of it,
no problem. And I meancomputers, too. If you buy your
(28:01):
computer for $2,500 let's say,and you use it 40% of the time
for work, then you should bewriting off 40% times 2500 for
the laptop, not 2500 for thewhole laptop, as if you never
use it for business or personal.Bottom line is the business and
the personal you've got to usewhen you do your return, if it's
(28:24):
100% business, write off 100% ofthe expense. If you're using it
for less, then take a lessernumber. By the way, it's true
for your internet. Don't forgetto write off your internet. Of
course, you could take some ofyour internet cost off, but I'm
not sure 100% of your internetcost should be deductible,
because it's probably somepersonal use. Same for your
telephone. Some of thetelephone, again, may be used
(28:47):
for personal and business only,right off the business part. And
one other thing I should Oh, Mr.Money, I'm eating with clients,
no problem. Yes, you can writeoff eating. Just remember,
business meals, you get todeduct 50% of the number. So if
you ate $1,000 you can deduct$500 worth of eating. Again, it
(29:09):
was a business meal, and again,you got to keep track of who you
met with, what you talk about,where were you, when was it?
Have to keep track of all thatso you can deduct it. And
entertainment costs are notgoing to a ball game together.
The Bronco game is not taxdeductible that you bought a
Bronco ticket for someone you dobusiness with. The eating is
(29:32):
something we can talk about, butnot the entertainment piece. IRS
took that one away, so do it.That's my answer to a caller is,
Do it? Do it? Take thatdeduction? Remember, your net
income from your business, youhave to pay income tax on the
net income after the deductions,your net income, you got to pay
(29:52):
income tax on and you have topay Social Security on it tax,
and that's 15.3% and you. Yes,it includes the Medicare so
remember, every deductionmatters on your schedule, C your
self employment page, becauseall those deductions bring you
lower and that lowest numberyour net income is what you pay
income tax on. You pay SocialSecurity tax on, they got the
(30:15):
Medicare tax. You got all thesetaxes on it. So yes, bring it
down. It's one of the key itemsa good tax person does is find
all those deductions when wecome back, Mr. Money's got more
to talk about with income tax.It's a double day on taxes. It
is tax season, and I've gotpeople asking me about I'm a
parent. I got people asking me awhole lot of things about that.
(30:38):
So we're going to follow up withthat when we come back, this is
Mr. Money. Let me tell
Unknown (30:52):
you how it will be. There's one for you, 19 for me,
because I'm the tax man. Yeah.This is
Mark Rothstein (31:06):
Mr. Tax man, talking about taxes, Chris,
what's that question we gotregarding more tax deductions?
What was that one?
Unknown (31:14):
Yeah, this one's from Becky. It is. I'm a parent. What
can I deduct? These munchkinscost a lot of money, assuming
she was referring to her kids.
Mark Rothstein (31:23):
Yeah. So what can you do? So I've got a guide
of some things you can do ifyou're a parent. And what
exactly can you do? Remember, itcosts a lot of money. It's a
high cost of raising children,or to use your word, Munchkins.
And Congress has sprinkledvarious breaks for parents
through the tax code. Mr. Moneyknows where to look for those,
(31:44):
so I'm going to share those withyou. Number one, don't forget
because you got kids. Don'tforget the child independent tax
credits. The maximum child taxcredit means dollar for dollar,
reduces your taxes or get you abigger refund for the year 2024
and for 2025 those two years is$2,000 per child under age 17 at
(32:10):
year end. And again, that'sreally good. So again, you got a
child Don't forget, you got achild tax credit, and it is 2000
per child, as long as they'reunder 17. Is there a catch?
There is a catch? The creditbegins to phase out because the
rich shouldn't be able to take acredit for their kids. Credit
(32:32):
begins to phase out at 400,000if your adjusted gross income
for married couples filingjointly, if you're single,
making 200,000 we want to stopyou from getting that $2,000 per
child tax credit. But if you'reunder that 400,000 and married,
under 200,000 and single, youcan absolutely get that $2,000
(32:54):
dollar for dollar credit. Dollarfor dollar means if you owe two
grand to the IRS because of thechild, you don't know, 2000 just
gets rid of that. If you'regetting a $2,000 refund now
you're getting a $4,000 refund.So it's a credit, not a
deduction, which is really good,by the way, the credit for
dependents who are 17 and older,like an older child, or you got
(33:17):
mom or dad living with you orliving on their own, but you're
paying the bills, there'sanother $500 credit. Again, if
you're rich, can't have it, likeI mentioned earlier, there's
those phase outs. 400,000 formarried, 200,000 for single.
When you're making over those,you ain't getting the credit. So
that's something you can takefor children, your munchkins, to
(33:39):
use your words, child care.Let's not forget that one is
good for your child to help youon your tax return. One way is
called the flexible spendingaccount, also known as an FSA.
Dealt with that with my clientsthis week. What's an FSA? An FSA
is from your employer you'reworking. They have a plan that
(34:00):
allows you to take out of yourpaycheck pre tax, so it reduces
your taxable wages, reduces yourw2 and you can reduce your wages
by, in most cases, up to $5,000so I can have out of my cheek
paycheck, $5,000 put on theside. I then get a reduced w2
Thank you. But then the fivegrand I then use to pay for
(34:23):
after school programs. I use the5000 to pay for my kid going to
camp, who's under 13. And again,you got to use it or you lose
it. So if you take 5000 out forthis child caring, then make
sure you spend it before the endof the year. And by the way,
some programs allow you tillMarch, which is now to spend it.
(34:45):
So if you didn't get it spent bythe end of December 31 last
year, make sure you get it outof there so you can have the use
of your money. And by the way,as I mentioned earlier, this is
not subject to federal payroll.Taxes, it reduces your wages, so
you're paying tax at a lowernumber. The other one we've got
is called child or DependentCare Tax Credit. And what is is
(35:10):
that child or dependent carecredit or dollar for dollar,
it's a good one, not deduction.Credit covers care expenses for
children under 13. And again,you're allowed a credit of 20%
up to the first three grand thatyou wrote a check for that you
weren't in the FSA. You didn'tuse that just simply, I brought
home money, and I had to pay formy child. So if they're paying
(35:34):
for after school care, so youcould work or before school
care, so you could workdependent care. In other words,
then again, you can get a taxcredit. You can have it up to
3000 for each child. You got twochildren. It's 20% up to 6000
you got three children. It stillstops at 6000 $3,000 eligible
(35:57):
expense for one dependent, up tosix grand for two or more. And
again, it's a credit. If you'rea low earner, you might even get
more than a credit of 20% soagain, don't forget to take that
on your taxes, because I've donethis so long. You might say, Mr.
Money, Should I do the FSA atwork and take money right out of
(36:18):
my paycheck at work to go towardchild care, or should I pay the
tax, bring home all my money andthen I'll pay for child care?
Usually, if you're in the middleand upper earning parents, then
the right answer is, use the F,S, A at work and suck it out of
your paycheck right up front.Another one, really good one for
(36:39):
your munchkins, for yourchildren to help you on your tax
returns, since it costs so much,is to fund a five to nine
college savings plan, where thatallows you for tax free growth
on the assets, and as long as itgrows for free, comes out for
free, it's just got to come outand be used for education, like
(37:01):
college tuition, room and board,etc. And yes, here in Idaho, you
get a tax deduction for puttingmoney into this college type of
program, by the way, again, fiveto nine program. It's from IRS
code section, five to nine.That's why they call it that. In
Idaho, we call it the ideal i,d, e, a, l, the ideal 529,
(37:24):
program. And again, you can putup to 6000 per child or 12 grand
into it, and deduct that 12,000on your tax return. Ain't that
great? So again, I'm puttingmoney away from a child. I'm
using it for schooling. And bythe way, schooling could be
defined as for college, butschooling could be defined as k1
(37:45):
to k 12. So you can put moneyaway, let it start growing,
comes out for free, and youcould take it out earlier
because they're going toreligious school or they're
going to a special program thatyou want for the child. Well,
ain't that great? You're puttingmoney and getting a tax
deduction. Idaho loves us, sothat's a very, very, very good
thing. And again, consider usingthat. By the way, if you give
(38:10):
more than 19,000 in any one yearfor your child, there's a
special form we got to use forthat, because the federal gift
tax return says you're allowedto give 19,000 anybody you want
each year. But if you go over19, then you've got a report
that you take gave away morethan 19,000 I didn't say how to
pay income tax. It's just foryou to know 19,000 per year for
(38:33):
a gift. So Mama can give thechild 19, Daddy can give the
child 19, put it away into the529 plan, you'll get a $12,000
deduction for it, or 6000 foreach child times two would be
12. And it grows tax free, comesout tax free again. It's got to
be used for education. Is thekey item there. And by the way,
(38:55):
you can use it also forapprenticeship you want to send
your child to to cost you somemoney. You can even pull money
out for some student loans thatmay be due. And if you you're
allowed 10,000 per borrower, ifit's for student loans. So
there's some fine print inthere, but again, ask your tax
woman. Ask your tax man aboutthat. And one other little
(39:17):
thing, it just came about. I'vementioned it a few times over
the last year. I'll mention itagain. There's a provision in
the 2022 retirement law thatallows your five to nine college
account, if you've not used itfor many, many years, you can
roll that money over tax free,to a Roth IRA owned by the five
(39:39):
to nine plans, beneficiary,lifetime amount you can roll
over 35 grand by the year. Andthe 529 account must be open for
at least 15 years, and onlyfunds that have been in the
account for at least five yearsare eligible. So again, fine
print there. But just know, ifyou don't use the 529 plan, you
can roll it on over to a Rothyou. Kind of account, and a Roth
(40:01):
is a good thing to have. Anotherone we've got is called the
Coverdale education Mr. Money.There's a lot going on here.
That's right. Coverdaleeducation savings account.
That's an education savingsaccount. It's another way for
parents to save tax free fortheir children's education.
Accounts offer more investmentoptions than the normal five to
(40:22):
nine plan. They may come withmore restrictions. You should
know the contributions arecapped at 2000 per beneficiary
and limits on your income.Again, the rich can't do it
applies to those who set up theaccount. Something good to know.
Last one I want to mention hereis this one. It's called the
American Opportunity Tax Credit.Mr. Money, there's certainly a
(40:45):
lot of this education stuffhere. And the answer is yes,
there is the AmericanOpportunity Tax Credit provides
a maximum tax reduction of 2500
per student per year. It'savailable for the first four
years of their post secondaryeducation. Yes, it applies to
tuition. You can grow it, pullit out and spend it on tuition,
(41:08):
other course expenses. The onlycatch, can't room. Use it for
room and board, and goes alongwith that as the Lifetime
Learning Credit, typically lessgenerous, but applies to a
broader range of expenses,maximum tax reduction, 2000 per
return per year can be used forgraduate education, continuing
(41:29):
ed, job skills classes inaddition to undergraduate
education. By the way, it's goodfor you. You could put you can
get one of those accounts foryourself and then have it grow
and pull it out for yourself togo to grad school, to go to
vehicle, don't Cooking School,etc. So it can absolutely be
used for all of that type ofeducation. And again, you can
(41:52):
taxpayers with student loaninterest, can typically deduct
up to 2500 of it each year. Andagain, you can use that so Mr.
Money says, For you parents, yougot a whole lot of things you
can do for your children and getsome tax benefit from it. When
we come back, Mr. Money's got tohave a serious talk. What's the
(42:12):
serious talk? I'm noticingcredit card debt going real
high, and I got answers for howhigh it is. This is Mr. Money.
Unknown (42:24):
Not just anybody. You know, I need someone.
Mark Rothstein (42:35):
Mr. Money's in the house. And Mr. Money's
talking about a concerning thingthat's concerning Mr. Money,
it's about minimum credit cardpayments hit 10.75% let me say
it in English here, Americansare not okay financially. And
this is, according to thePhiladelphia Federal Reserve,
(42:55):
the share of active credit cardaccounts that make just the
minimum payment. So I'm talkingabout credit cards, where you
owe money and you're paying justthe minimum, which is a very
small amount of what you owe,has now hit a 12 year high at
10.75% those are the stats fromJuly through September of 24
(43:18):
based on data from the largestbanks in the country again, as
credit card balance as well, theshare of delinquent balances is
also worsening so the peoplepaying the minimum, it seems
like it's leading to justwalking away and having
delinquencies, not good. Let'snot forget, when you owe money
(43:39):
on credit cards, it seems likethe average credit card rate is
21.75% holy moly, paying 21.75%for not paying it off. And lower
and middle income householdsavings rates have absolutely
turned negative in early 2022said the statistics. So those
rainy day funds, those emergencyfunds, those contingency funds
(44:03):
that Mr. Money believes in, aresimply diminishing and not
there. And maybe that's part ofwhy we're getting more and more
delinquencies of the 1065workers surveyed in December,
73% struggled to afford anythingbeyond their basic living
expenses, and about a third tookon debt to cover them. And
(44:26):
that's again, according toresumes now report, on average,
a household with revolvingcredit card debt owes 10,005 63,
that's according to anothersurvey, and again, carrying that
debt is cost later today thanother periods ever. How high it
is revolving card balance. Guesshow big that one is? It's now
(44:48):
reached 645 billion from Julythrough September. So just that
July through September, it wentall the way up to 640 5 billion,
representing. 52.5% growth sincea decade lower of 423 their
credit card balances more than30 days past due, also rose from
(45:11):
to 3.52% from July throughSeptember. So the numbers are
very worrisome. Mr. Money, ofcourse, has a few to do's around
this. And let me mention my todo's, if I may, number one to
do, if this is you I'm talkingabout, is this, make more than
the minimum payment, obviouslyon your credit card balances
(45:33):
whenever you can, because it'sjust too high in interest rate.
Otherwise, you're going to endup with more debt for decades
and decades and pay 1000s and1000s of dollars or more in
interest. Trans Union, one ofthe credit bureaus say the
average credit card balance forthem is 6003 80, assuming 20.27
(45:54):
credit card rate and onlymonthly minimum payments, you'll
be in debt for 218 months. Morethan 18 years, will end up
paying interest of 9003 44, ininterest. When you started with
a balance of 6380 what shouldyou do? Sign up for a balance
transfer card with a generous 0%interest term. You could pay
(46:17):
about 300 per month, then knockout the average credit card
balance in 21 months withoutowing any interest. So of
course, would you please look atbalance transfers? They may
charge you a one time fee upfront to move it over, but 0%
interest rate for a good 20months, 21 months, 24 months,
however long you get it, that'sa good thing. And so other thing
(46:40):
you can do again, if you have alow credit score and you've got
more than 5000 in credit carddebt, consider working with a
reputable nonprofit creditcounseling agency, get some
experts on your side to make aplan and stick with the plan.
And why is this sodisconcerting? Is the other
(47:01):
reason more seniors are retiringwith debt. That's right. It's
not just people use creditcards, but if you're a senior,
you're retiring. Statistics showthat seniors are going into debt
and retiring with debt. Used tobe we always tried to get all
our debt down to zero, get myhouse paid off to zero so I
(47:22):
could go into debt intoretirement and not be worrying
about it. Credit card debt isthe most common type among
seniors. Said the analysts, with93% carrying a balance owed,
followed by that's the creditcards, followed by auto loans.
37% had auto loans, personalloans. 19% had student loans.
(47:45):
Seniors retiring had 8% of themhad student loans. Still. But
again, credit card debt may bemore common among these seniors,
as we're seeing average monthlycar payment, though, is more
costs a whole lot for cars thesedays, and as a result, that car
one may be one of the firstCredit Car, one of the highest
(48:08):
debts to get rid of. And theother big debt, obviously, is
your credit card. Credit cardsat a lower, excuse me, higher
rate. So you want to pay thecredit cards first, please, with
extra money. But then, by allmeans, the car purchases are
high. Price. You may get a 6% 8%loan rate on it, but again, it
is still very high. It's a must.I'll say that again, it is a
(48:33):
must to get yourself debt freeif you can, should you therefore
take all your money out? I hearthis question, Should I take a
whole lot of money from mysavings and just pay off my
house. The problem is, if you'vegot no money left in your
investments, then it's not agood idea. I'd rather you,
slowly but surely be paying offyour house, not take a big chunk
(48:55):
of your emergency, yourcontingency, your investment
account, and deplete it so youcan get rid of that one payment
called the house payment. Andnot to mention, for some people,
interest paid on your house istax deductible. So the idea is
not necessarily to just pay offyour house and give up hundreds
(49:16):
of 1000s that's invested moneythat you could be living on in
retirement. Yes, you shouldcheck with your tax person. Yes,
you should check with yourfinancial person to see what
makes sense and what doesn't.Sitting with a producer of mine
in Los Angeles last week, heasked that question. I said,
it's not the right answer. Keepthat debt. So again, retirement
(49:38):
equals. Look for ways to savemoney. Look for ways you can cut
your expenses down. Look at allyour expenses and see if you can
cut that down. That's the trick.This is Mr. Money. We'll see you
next week. The Information andopinions
Unknown (49:52):
presented are for general information only and are
not intended to provide specificadvice or recommendations for
any individual. You shouldcontact your investor.
Investment professional,attorney, accountant or tax
advisor regarding yourindividual situation. The
opinions of the presenter arenot necessarily those of avantex
Wealth Management. It'ssubsidiaries, officers or
directors. Mark Rothstein, akaMr. Money, is a financial
advisor and the owner of tristar financial LLC and tri star
(50:14):
Income Tax Services LLC. Mr.Money is a marketing name only,
and is not intended as anythingother than a marketing name for
entertainment purposesSecurities offered through
avantex Investment Services,Incorporated Member FINRA SIPC
investment advisory servicesoffered through avantex Advisor
Services Incorporated, insuranceservices provided by avantex
Insurance Agency incorporatedand avantex Insurance Services
Incorporated. Tax and accountingservices offered through
(50:35):
Tristar. Avantex entities areunder separate ownership from
any other named entity.
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