One standout item from Trump’s 2005 tax return, revealed last night, was something called the “Alternative Minimum Tax” (AMT). If you’re not terribly familiar with it, here’s what the AMT is all about and why it matters.
The documents show Trump and his wife Melania paying $5.3 million in regular federal income tax—a rate of less than 4% However, the Trumps paid an additional $31 million in the “alternative minimum tax,” or AMT. Trump has previously called for the elimination of this tax.
It’s obviously not the only thing worth noting in this whole fiasco, but it brings to light the significance of the Alternative Minimum Tax, an important part of the IRS tax code.
The Alternative Minimum Tax was basically designed to keep wealthy people from taking advantage of so many loopholes that they don’t pay their fair share in taxes. As the Tax Policy Center explains, in 1968, Treasury Secretary Joseph W. Barr informed Congress that 155 taxpayers with incomes over $200,000 (which was an even more significant amount at the time)…
If you have money invested in a retirement plan, such as a 401K or an IRA, chances are high you’ll be impacted by an executive order issued recently by President Trump.
It centers on the “fiduciary rule,” one of former President Obama’s initiatives that was scheduled to go into effect on April 10th. President Trump put the brakes on it by ordering the Labor Department to study the issue further.
Whether the rule goes into effect or not, you would be wise to understand what all the fuss is about and how it could affect you.
Financial professionals, such as financial planners, insurance agents, brokers, and others, are legally bound to adhere to certain standards of conduct, the highest of which is a fiduciary standard. Anyone working under that standard, which today includes Certified Financial Planners and Registered Investment Advisers, is required to act in their clients’ best interests, detail all commissions and fees, and disclose any potential conflicts of interest.
Others, including many brokers and life insurance agents, are held only to a suitability standard. That means if two financial products could meet a client’s needs, but one would pay the financial adviser a higher commission, he or she could recommend that product to their client.
The Obama administration estimated that biased advice steering people to needlessly high-cost, high-commission financial products and services costs investors $17 billion per year in fees and lost investment income. Its fiduciary rule would require any financial professional recommending retirement-related financial products or services to adhere to a fiduciary standard.
What It Means for You
Here are some steps you can take to help make sure your retirement accounts are run in your best interest, rather than the managers’.
If you participate in a 401K, 403(b), or other workplace retirement plan, ask questions about how your investment options were selected. Some plans have a very limited set of choices or offer mutual funds with high fees. In particular, take a look at the “expense ratio” tied to the funds. That’s the percentage of the money you invest in the fund that goes toward the expenses of operating the fund. For example, if you buy shares of a fund with an expense ratio of 0.73%, for every $1,000 you invest, $7.30 will go toward the fund’s operating expenses. (See also: Watch Out for These Sneaky 401K Fees)
Students attend graduate school to gain more knowledge in a specific field, increase their future earning power, or switch careers. But depending on the type and length of the program, grad schools can cost tens or even hundreds of thousands of dollars. Whether you’re planning to get your master’s, Ph.D., MBA, or J.D. degree, here are nine things you should know about paying for grad school.
1. START RESEARCHING YOUR OPTIONS EARLY.
If you know what type of graduate program you want to attend, start researching your options early. Different schools offer a variety of scholarships, fellowships, grants and department funding, and starting the application process early will increase your odds of receiving money from a university’s limited funds. After reading about your options on the university’s website, speak to a representative from the school’s financial aid department.
If you’re willing to spend more time earning your degree, consider taking classes part-time instead of as a full-time student. Depending on the program, earning your degree part-time may cost less than a full-time program, and you won’t lose a year (or more) of income while you’re studying.
3. DON’T OVERLOOK YOUR PROFESSORS.
If you’re currently in college, ask professors in your area of study to recommend relevant scholarships, fellowships or grants for which you could apply. Even if you graduated years ago, get in touch with your old professors to benefit from their knowledge and contacts. And because most scholarship applications require letters of recommendation, your professors can also help by vouching for you.
4. ASK YOUR EMPLOYER TO FUND YOU.
If you’re currently working and your graduate degree will be in the same field, check with your company’s human resources department to determine if there is a tuition assistance or reimbursement program….