Interest

How “Carried Interest” May Affect Our Taxes

A lot has happened since now-president Donald Trump and candidate Hillary Clinton debated on October 9 at Washington University in St. Louis. If you’re like most taxpayers, you probably don’t remember the candidates bantering about something called “carried interest.”

During the debate, Trump was asked what steps he’d take to make sure that the wealthiest of U.S. taxpayers pay a fair share of taxes. Trump responded by saying that he’d eliminate carried interest. What Trump actually meant, though, was that he would change the way carried interest is taxed. Clinton, too, supported making this change. And so did former president Barack Obama.

You can be forgiven if you have no idea what carried interest is. That’s because it’s something that only benefits the general partners who manage private equity and hedge funds. And most of us can’t invest in these private funds because it is so expensive to do so. Investors must usually pony up at least $250,000 to make an investment in one of these funds.

Carried interest is one way that the managers of these expensive hedge funds and private equity funds make a profit. But just because carried interest only benefits a select few, doesn’t mean that it’s not important to the U.S. economy. According to the Tax Foundation, if Congress taxed carried interest as ordinary income, it could cost the country 2,200 jobs. On the positive side, the Tax Foundation said that changing how carried interest is taxed would also generate about $15 billion during the next 10 years in the form of more taxes…

Here’s How Your Taxes Will Change After Marriage

Life tends to get more complicated after marriage. And your taxes are no exception.

Getting married will change the way you file your taxes every April 15. There is good news, though: Many of the changes will be positive ones that can help boost your deductions and save you money.

Let’s look at five of the biggest tax changes you’ll face after the wedding bells stop ringing.

1. Filing Jointly vs. Separately

Once married, couples have to face a big tax decision: Should they file their taxes jointly or separately? In most cases, married couples who file their taxes jointly save more money. But there can be exceptions.

Couples who file their taxes jointly in 2017 will qualify for a standard deduction of $12,700. When married couples file separately, they each can claim a standard deduction of $6,350. Note that if your spouse chooses to instead itemize their deductions, you will have to as well.

Filing jointly makes especially good financial sense for married couples in which one person earns significantly more than the other. The averaging effect of combining two incomes can bring these couples out of higher tax brackets.

When couples file jointly, they might also qualify for several tax credits and deductions that they wouldn’t otherwise get if filing separately. This could include the earned income tax credit, child and dependent care tax credit, American Opportunity Act education credit, and the Lifetime Learning education tax credit. Couples who have adopted might also qualify for adoption tax credits when they file jointly. You also will not be allowed to deduct student loan interest if you and your spouse opt to file separately.

This doesn’t mean that filing jointly is always the right decision for married couples. Say one spouse has significant medical expenses, casualty losses, or miscellaneous itemized deductions. Taxpayers can deduct medical expenses and casualty losses only after they pass 10% of their adjusted gross…

Best Credit Cards to Use For a Home Renovation

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Millions of Americans enjoy repairing and maintaining their homes in their spare time. Many do it to save money on necessary repairs or to increase the value of their properties. And some just find the work itself to be rewarding.

When it comes time to invest in your own home renovation, you’ll want to use the right tools and materials for the job, including the right credit card. The best credit cards for a home renovation can offer you rewards for your purchases, promotional financing options, and perhaps both.

Here are the best credit cards to use for a home renovation.

1. Lowe’s Consumer Credit Card

Lowe’s is one of the largest home improvement stores, and while this card’s standard APR is a high 26.99%, it offers attractive rewards and promotional financing options. When you use this card, you can receive one of the following three benefits:

  • 5% off all purchases, OR
  • Six months of deferred-interest financing on purchases of $299 or more. Interest is waived if you pay off the entire amount within six months of purchase, OR
  • Project financing on purchases of $2,000 or more, for 36, 60 or 84 months, with rates of 3.99%, 5.99%, and 7.99% respectively (cannot be used at Lowes.com). Fixed monthly payments are required.

If you’ve got a big project that you can pay off within seven years or less, the card is a pretty good deal. It carries no annual fee, but it is not part of a larger payment network so you can only use it at Lowe’s.

2. The Home Depot Consumer Credit Card

If you prefer The Home Depot to Lowe’s, this card might make sense for you, though you won’t be able to get the long-term financing the Lowe’s card offers….

8 Most Common Mistakes When Doing a Balance Transfer to Eliminate Debt

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Many credit cards offer 0% APR promotional financing on balance transfers, allowing you to move debt from high-interest cards onto one that offers zero interest for an introductory promotional period. These promo periods are nothing to sneeze at. They can last as long 21 months.

So what’s the catch? The truth is that balance transfer offers can be incredibly valuable, but only when you use them properly and avoid making some common mistakes.

1. Assuming You’ll Get the Best Balance Transfer Deal

You might not always be approved for the balance transfer card you want. For example, the best 0% APR deals are only given to those with excellent credit. While you may have had excellent credit in the past, having a large balance for a long time might have caused your credit score to slip. (See also: One Ratio Is Key to a Good Credit Score)

Even if you are approved for the card, it may come with a credit line that’s substantially lower than you need. If that’s the case, you may want to consider applying for a second balance transfer card.

2. Trying to Transfer a Balance From the Wrong Card

Consumers sometimes don’t realize that you can’t transfer a balance between two cards issued by the same bank. So if you have an outstanding balance on your Chase Freedom Unlimited card, you can’t open up a new Chase Slate card and expect to transfer your balance to it.

Keep this in mind before you apply for a balance transfer card. Every time you apply for a credit card your credit score takes a little hit. It can usually recover fairly quickly, but there’s no need to ding it unnecessarily for a card that doesn’t even serve your needs. (See…

Avoid These 6 Mistakes Newbies Make With Their First Credit Cards

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Getting your first credit card is a financial milestone. Your credit card can become an essential tool that builds your credit and helps you manage your money. But too many credit card rookies have gotten in trouble with debt and fees, while others simply miss out on important benefits. (See also: What You Need to Know Before Getting Your First Credit Card)

If you are about to apply for your first credit card, or are already using it, be careful not to make these six common mistakes.

1. Failing to Read the “Fine Print”

Getting a credit card is an important financial decision, and you need to read the details before choosing one. Thankfully, the most important terms and conditions of credit cards aren’t even written in fine print anymore. By law, credit card offers must show all of the interest rates and fees in a standard format and in large print, in what’s called the Schumer Box. And while you don’t need to hire a lawyer to go over every single sentence, you should understand the interest rates being charged and all of the fees you could incur.

2. Applying for the First Offer Without Comparing Interest Rates

When you are considering a credit card offer, you should take a close look at the standard APR (annual percentage rate) for purchases, and compare it to competing cards. Interest rates vary widely from card to card. If your account…