I've written before about the ways homeownership in the United States is heavily subsidized by the federal government, at the expense of current and future taxpayers: preferential tax treatment of capital gains on primary residences, with $250,000 or $500,000 (depending on filing status) of a home's appreciated value being completely tax free; the tax deductibility of … [Read more...] about Idiosyncratic bets on real estate: homeownership or mutual funds?
I was listening to the latest episode of the "Animal Spirits" podcast with Michael Batnick and Ben Carlson, and they mentioned a statistic in this (paywalled) Wall Street Journal article: just 2% of the 285,000 professionals giving financial advice in the United States are fee-only financial advisors, who are held to a fiduciary standard that requires them to put the interests … [Read more...] about Why do so few people use non-conflicted financial advisors?
Like aircraft flying at very low altitudes, the US tax code does strange things when very low incomes are involved. Most people know about, or have at least heard of, the earned income credit, which phases in quickly as "earned income" (which includes wage and self-employment income) rises, then phases out somewhat more slowly. I think that's bad program design, since it … [Read more...] about Basics of IRA recharacterizations
This week I wrote about the prepaid tuition plans offered by Washington state and Virginia. To close out the week I wanted to share a brief roundup of the other prepaid tuition programs still out there. First, take a look at the overview, then I'll offer some brief commentary: State Plan Premium (discount) to current tuition In-state public benefit In-state … [Read more...] about Prepaid tuition plan roundup
Yesterday I described the best prepaid tuition plan I know of, Washington state's Guaranteed Education Tuition plan, which allows you to place a tax-free bet on the trajectory of tuition inflation at Washington public universities. It's a weird investment vehicle, but you could see how it might play a speculative role in the portfolio of a sufficiently wealthy person, … [Read more...] about How to think about prepaid tuition plans: Virginia Prepaid529