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529 Alternatives

Have you found pregnancy positive? How does it feel like the moment you get to know that you will be responsible for the entire life of the cute little being in another few months. As a responsible parent the first thing that comes to our mind is 529 plan for your kids education. 529 alternatives does not necessarily rule out the 529 investment opportunity. The goal of this post is to talk about pros and cons of many different investment options that parents have at their disposal if they are hesitant to consider 529 as investment option for kids future education savings option as this is a mutual fund option same as 401K retirement option that comes with market risk exposure. Check out to see what works best in your budget, thoughts on your kids future etc. Lets start with 529 plan and discuss the alternatives one by one
529 Plan Details – This is a traditional plan that came into existence around late 1980s. As per IRS a 529 plan is a plan that can be set aside for beneficiary. It can be child, grand child. The amount that goes as a contribution towards 529 plan can be used for qualified educational expenses. This amount can be used for college and post-secondary education expense.
Who does operate the 529 plan?
529 plan is operated by state, educational institution
Are 529 plans tax deductible?
Nope. 529 plans are offered on post-tax basis. Main tax advantage come into existence when the distribution earnings are used for qualified educational expenses that can be one of the following:
Tuition
Books
Fees
Board Rooms
Starting 2010 following items are eligible educational related expenses under 529 plan:
PC Computer
Computer related peripheral equipment – This includes keyboard, mouse
Computer software
Peripheral equipment like printer
Internet access
These earnings are 100% federal tax free as well as 100% state tax free
Some exceptions to this include states like NYC offering upto $10000 state tax deduction if married and filing jointly , $5000 as single. Check with your state to see if you qualify for state tax deduction. With changing rules the maximum deduction on state can be $10000 and see if availing this option can be beneficial. For NYC criteria is that account holder should be NYC state tax payer. If you work at NYC and lie in states like CT, NJ you still qualify for this
Is there a maximum contribution limit on 529 plan?
If the contribution and any other gifts to a particular beneficiary exceed $14000 there comes gift tax consequence. However, there is no limitation on number of 529 plans one can setup
Why should I think about 529 plan alternative?
In a real-time scenario say your kid becomes entrepreneur and does not end up going to college. In this scenario you end up paying 10% penalty, state tax, federal taxes. Henceforth, it would be appropriate to look at alternatives before zeroing down on 529 plan
529 plan alternatives:
Custodial Account – Also called the uniform gifts to minor act UGMA account/UTMA account this account offers minors to own securities without the need of trust to be governed by an attorney. The major difference between UTMA account and 529 is that there is no stipulation on how the amount in this account is to be spent as opposed to 529
Rental Apartments – This is an out of the box thinking. I’ve come across lots of blogposts and financial advisors talking about cash on cash return of more than 22% with real estate investments. As a matter of fact, I stumbled on a financial advice recently. according to him the wealthy community think about 18% to 22% return on an average in their investments every year. According to them warren buffet does consistent 20% return each and every year on his billion dollar net worth. If you choose to invest in rental units now, except for the down payment the rest is taken care of by your tenants
Pros of owning rental in my view:
Your child will have financial freedom from day 1 of his life, career and will not have to think about his abode investment to start with
Your child will inherit all your property without any issues
You will enjoy tax depreciation on rental, can deduct all expenses in taxes that you can count on during the big rainy days
Cons of owning rental in my own view:
If the apartment is empty you will end up paying money from your pocket
The association fee in case of condo, townhouse which is preferred rental investment in most cases does come with fees. Also, property taxes should be taken into consideration. If you do quick math all these would add up to meet 1% rule. Henceforth, it would be extremely difficult to save more than $100 per month after all the rental expenses in expensive towns. It depends on how you finalize your deal, interest rate etc
Non-payment of rent will be additional stress and you will end up in eviction process which is a legal procedure involving attorney fees etc. This is another worst case scenario every landlord should keep in mind
You expect property and rentals to appreciate in your locality. This depends on luck, how well economy performs etc
I spoke to a realtor about rental investment. Based on his information I happened to learn that in case of rental we are expected to make more down payment. It is about 30% to 40% of property value as opposed to 20%. Also, your mortgage rates are going to be atleast 1% more than normal rates. So, take to mortgage broker, shop around before you calculate rental deal and net profits
Saving Bonds from government
I’ve recently come across an information that talks about Series EE savings bond whose interest earned is tax exempt both federal and state tax exempt if being used for higher education. I did some research on this and found that these bonds are reliable, low-risk, government backed financial products whose interest rates happen to be fixed interest rate for about 30 years. Interest rate of new EE bonds is announced by US treasury every May 1st, november 1st. As of November 1st 2016 the interest rates on bond happens to be 0.10% which is taxable if not used for education purpose. Instead we can choose to invest in online banks like allybank, barclays, everbank that yield 1% APY per year, that happens to be more than this. Series I bond again yield less than the banks. So, I’d not recommend any of these bonds at current interest rate. You can choose based on your needs and preference. I’m not endorsing any of these banks and express my views that are 100% personal
Roth IRA For Educational expenses:
Typically Roth IRA contributions are after tax and the earnings are tax-free when withdrawn after 591/2 years of age. However, for qualified educational expenses they can be withdrawn tax free. One limitation is that you should have contributed over past five years to make use of this for educational expenses. IF you dont use it for education, this can be used for your retirement

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Ebates offers hefty cashback during Tax filing




Tax season is the favorite season to talk more on money, taxes, savings, Wouldn’t it be interesting to get rewarded for paying your taxes appropriately in the form of cashback. Now, ebates does offer fantastic cashback for simply starting your tax filing from within ebates. Choose from one of the many different taxstore options available, shop around and start tax filing
Ebates a popular cashback site literally offers free money for starting the purchase from their website. This free money comes in the form of cashback. I started using this last month. I got my first cashback cheque yesterday. Today morning I started shopping around for best fee with tax filing software inside ebates website. Interestingly I found lots of interesting cashback bonuses while using tax filing software from within ebates
Here are the cashback percentage that are calculated on total amount spent towards tax filing as fees before taxes while your taxstore shopping starts at ebates
H&R Block – 9% cashback
e-file.com – 31% cashback
FreeTaxUSA – 25% cashback
TaxAct – 10% cashback
e-smart Tax – 10% cashback
intuit Payroll – upto $22.50 cashback
Note that taxes for 2018 are due april 17th 2018. File taxes, save money as cashback today from ebates




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Walgreens prescription history for taxes




Now, it is possible to access your prescription records as well as you past payment history online form Walgreens. This is an interesting feature offered for free by Walgreens Pharmacy
Why do I need to access these records?
You can access details on prescription, payment history that can be used for filing your taxes
If you own HSA (Health Savings Account) account if there is an audit this comes handy
FSA (Flexible Spending Accounts) reimbursements mandates prescriptions that can be accessed from here
If you would like to share details on your health with family, friends this comes handy
How do I access my prescription records and payment history?
Navigate to the website of Walgreens Pharmacy
Register for free and access details




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Best budget mattress




Are you interested in purchasing a new mattress? Are you confused as to how to go about this process. Every task can be successfully accomplished through great planning. Plan perfect to achieve great is the strategy. All you have to do is prepare a checklist (even write it down in a piece of paper) before starting a mattress search
1) What is your budget ?
Maximum budget and minimum budget should be fixed. It is always possible to have a tolerance of +/-5% of this budget. Cheaper you make it best is the deal. This helps us locate the price range and look out for mattress easily
2) When should I go for a mattress?
Always look out for season deals. This is the halloween, thanks giving, christmas season and best time to look out for great deals. Have the list of major websites listed and search for deals online. Some stores offer interesting deals with shipping and handling free if the purchase is above certain limit. Read the instructions carefully before finally using the credit card to checkout the mattress. It is best time to get $200 and more money saved through deals. Use this money for bedding sets, and mattress maintenance
3) Is mattress financing good?
If you want to purchase a product look out for 0% interest financing. this helps us pay our money in installments at no extra cost. Most mattress makers and dealers offer financing as less as 6 months to about 2+years at 0% interest rate. This depends of cost of the mattress you purchase. This helps a lot. You can invest the money in Fixed deposits/CDs and make interest in that tenure. Be careful and see when the deal expires. If you miss it interest rate could go as high as 12%.Have an eye on it.
4) What type of mattress should I go for?
Having fixed everything else this is a important step – tempurpedic, latex foam, spring are the types. Pick the right one
5) Do I need a peer review?
Nothing is as great as peer review. If you don’t get a chance to try the mattress in shops ask for peer review. This helps us take good decision.




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Can i pay taxes with credit card




I filed my taxes yesterday and chose to pay the taxes using my Chase Freedom credit card instead of direct ACH transfer from my bank account. The CPA was against this as he had mentioned that I’m making a foolish decision by wasting 1.89% towards processing fees. Here is what I explained him that I’d like to share as money saving tip today
1) I applied for chase freedom credit card last month after doing rough math of my taxes. Chase freedom card comes with $150 cash back bonus that can also be redeemed in form of Chase ultimate rewards that can be used for many different purposes including travel. In my earlier post I’ve given full details on why I’m maintaining my Chase Sapphire reserve credit card inspite of paying $450 annual fees. The ultimate reward points that I earn towards meeting this spending limit can be redeemed towards travel 1.5 times its value as ultimate reward points can be combined and transferred from Chase freedom card onto Chase Sapphire card. The equivalent cash value becomes $150 x 1.5 = $225
2) In addition to this I earn 1% cashback on my spending in Chase Freedom credit card
3) Chase freedom comes with 15 months 0% APR on purchases. So, I dont have to repay this amount in full. Typically if I repay the minimum balance with $1 extra every billing cycle for next 15 months it is more than sufficient
4) I can park this money in safe instruments like one-year CD. Currently the average rate on one year CD is 2.10%. With 15 months interest it comes around 2.15% APY
Now, let us do simple math on processing fee and see if we make more
Processing Fee = 1.89%
Income Earned by Parking in CD’s = 2.15%
Cash back rewards = 1%
Cashback rewards + sign-on bonus rewards towards travel = 1.5 times $150 plus your tax bill
As a whole I save 0.50% minimum towards this if I make use of Chase Freedom credit card. You can apply for Chase Freedom credit card and get this approved today. Interestingly there is no annual fee ($0 annul fee) on Chase Freedom credit card




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NEW! DepositFriendly ATM From Chase Bank,NEW! DepositFriendly ATM From J.P Morgan & Chase Bank




J.P.Morgan & Chase Bank or Chase Bank has come up with an innovative customer-service solution which is the best user friendly solution I’ve ever used. Last week I went to chase for depositing my cheque. I hurried thinking that I should reach the bank during operating hours. Owing to traffic, I couldn’t make it. I was 15 minutes late. So, I thought of depositing my cash with the details entered in the deposit receipt . After that I put my deposit receipt and cheque in the envelope and headed towards my ATM machine. There’s wherein I found an interesting phamplet talking about the NEW! DepositFriendly ATM. I read the instructions from the phamplet which asked me to insert my cheque directly (Believe my its my cheque alone) after which I’ve to enter my authorization credentials and the transaction happened in 1 minute. I also received my receipt giving details on my account balance, transaction. WOW! Amazing service from Chase…Hereafter we don’t have to rush to Bank for depositing our cheque.We can do it at leisure…Even on weekends……Following are some of the features included in this NEW! DepositFriendly ATM Service :
1) We can insert stacks of upto 30 checks at a time
2) We can insert stacks of upto 50 bills at a time
3) We can verify the deposits on screen before completing the transaction
4) Receipt will have image of the cheque deposited, itemized list of deposited cheque
5) Checks need to be inserted facing upwards, with signature to the right
6) No paper clips or staples can be included
NO NEED OF DEPOSIT SLIPS OR DEPOSIT ENVELOPES ANYMORE!!!!!!!START USING IT TODAY AND ENJOY THIS SERVICE!!!!!!!!




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SBI Instapay Charges




SBI instapay is the instapay facility from SBI the state bank of India.SBI the premiere bank from India has come out with an exciting new facility named SBI Instapay to make online bill payment quite easy and simple. This is an easy online payment service making utility bill payments a piece of cake.SBI Instapay service a service alongside SBI oxi-pay service called oxigen offers payment possible using billdesk payment system to pay utility bills, credit card bills, insurance premiums liek annual LIC premium, magazine subscription like subscription of natioanl, local, regional magazzines which is easy and simple online, donations, recharge of mobile phones, recharge of dish services like DTH easy. The main advantage of either of these services sbi instapay from billdesk and sbi oxipay called SBI oxigen is that no prior registration is needed for using these services
Following are the types of payments that is possible using SBI instapay utility bill payments – Electricity bills covering most of the Indian states
APSPDCL- Southern Power Distribution Company Limited Of AP
BESCOM Banglore
BSES (Rajdhani)
BSES Delhi(NCR)
BSES (Yamuna) Delhi(NCR)
B.E.S.T
CESC LTD
Chhattisgarh state Electricity Board
Daman and Diu Electricity Department
Dakshin Gujarat Vij Company Limited
DNH Power Distribution Corporation Limited
India Power Corporation Limited
Jaipur Vidyut Vitaran Nigam Ltd.
Jodhpur Vidhyut Vitran Nigam Ltd
Jamshedpur Utilities and Services Company ltd
Madhya Gujarat Vij Company Limited
Meghalaya State Electricity Corporation Limited
MP Madhya Kshetra Vidyut Vitaran Co. Ltd (Bhopal)
Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd (Indore) – NONRAPDR
MP Paschim Kendra Vidyut Co. Ltd (Jabalpur)
MP Paschim Kshetra Vidyut Vitaran Co. Ltd (Indore)
MSEDC Ltd. Maharashtra
Noida Power Company Limited
Paschim Gujarat Vij Company Limited
Reliance Energy
Tata Power Distribution Ltd
TORRENT POWER LTD
TSSPDCL (Old CPDCL- Hyderabad)
TSECL – Tripura State Electricity Corporation Limited
Uttar Gujarat Vij Company Limited
Mobile bills – prepaid, postpaid
DTH service providers
Credit card bills
Broadband internet bills
landline bills
Fuel bills – gas, petrol, diesel
Insurance bills
Gift cards
loan repayment
tax payments
subscriptions
donations
So, what is the advantage of SBI Instapay?
No prior registration with billers is needed. This include range of billers/service providers like
1) Electricity bill
2) Water bill
3) DTH bill
4) Mobile recharge/topup bill
5) Donation
6) Insurance premium bill
7) Credit card bill
Who can avail this SBI Instapay?
This is available to retail SBI user . All that is needed to make use of this facility is an user with online transaction rights
From where can I access this feature?
It is again from usual simple online sBI portal
https://www.onlinesbi.com/
How to Use SBI Instapay Feature?
SBI Instapay is the latest feature from State bank of India the premiere Indian bank that serves local Indian community as well as NRI’s with its best quality service
Here are the simple steps to be followed to access and use SBI Instapay feature
1) Log onto https://www.onlinesbi.com/
2) Click on SBI Instapay link in the Homepage of the https://www.onlinesbi.com/
3) Disclaimer clause appears and click Accept to agree the clause. this will direct us to SBI Instapay page
4) Choose type of service and biller information like electricity, credit card, DTH,mobile topup etc and fillin needed information
5) This is followed by logging using username, password and transaction password needed to make a successful online transaction
6) Once transaction gets completed we get confirmation page
Where else can I contact to get more details on SBI Instapay feature?
18004253800 and 1800112211 are toll free number to get more details on this feature
SBI instapay is the online utility bill payment service from state bank of India. With its growing customer base SBI has been expanding its horizon into online space and SBI instapay is one such service. So, is there any charge associated with SBI Instapay service? Simple answer is no
SBI instapay is available in the form of mobile app as well




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18006521111 Bankofamerica Personal Checks and accessories




Bank of america offers plethora of options alongside banking. This includes personal checks that helps you pay your bills, accessories etc
How to order personal checks if I run out of check leaves?
It is simple and can be done online:
www.bankofamerica.com/checks
Look at catalog of cehcks and choose right option
Select checkprotect for secure and trackable delivery
It can be ordered over phone : 18006521111
Tis can be accomplished with help of Solutions for Business division from Bank of America:
They offer expert support
Best service
Satisfaction 100% guaranteed
18002346147 for English
18662396761 for spanish [Espanol]




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Validity of 15ca and 15cb




Reserve Bank Of India the premiere financial regulatory body in India has released a circular on May 7th 2012. According to this NRI’s (Non Resident Indians) who currently maintain NRO account with any of the banks present in India can have their funds transferred to their NRE account
This is a gift move much awaited by many NRIs ever since interest rates have been sky rocketing in NRE accounts. According to current rate on an average the investments gets doubled in about 7 years and 5 months to 7 years and 10 months in case of 10 year NRE fixed deposit
NRE has an additional advantage that NRI’s dont have to pay a single penny towards Indian Income taxes. However in case of countries like USA , the FBAR law that has come into effect since January 29th 2012 has mandated the declaration of investment and earnings on foreign investment of US residents. It is good to check with your CPA on this
What are the steps to move money from NRO to NRE?
NRO interest income is taxavle in India. Even with DTAA submission tax comes around 15% in case of US residents. Hence it is a good idea to make a move from NRO to NRE.
Though the steps are not properly documented RBI circular states the following facts
1) Transfer of about 1 million USD pr year is permitted
2) Taxes must be paid properly before moving NRO to NRE. TDS deduction is automatic in most banks and this is taken care of by them. Some banks are willing to waive penalty during this move. Please check with your banker to know more details
3) Forms including 15CA, 15CB and A2 must be filled with the help of your auditor in India and we need to submit the same to the bank
Utilize this opportunity to save and grow rich
Following the RBI policy change to transfer money from NRO to NRE account directly without repatriation need forms 15CA and 15CB have become the talk of the tow. So, NRI’s who make monthly income abroad make it a habot to transfer funds on a monthly basis. In the case most of them have multiple fixed deposits/special term deposits as banks call it variously opened under their NRO account.
If they wish to proceed with NRO to NRE transfer what should they do? Is it sufficient to submit one 15CA and 15CB form or more forms.
Here is the simple reply from banks on this question
Forms 15CA and 15CB are used for repatriation now in our case transfer from NRO to NRE account (internally referes to savings account as NRO FC to NRE FD is not feasible) on a ONE TIME BASIS
For each and every repatriation we need to provide different 15CA and 15CB forms.
Say you have opened FD’s from January to December of last year you need to wait until December (if you wish to take advantage of 1 year interest rate)  of this year break all FD’s put it onto NRO savings and have this transferred onto NRE in a single shot
If not close FD’s from January upto June, put it in NRO savings, transfer money from NRO to NRE savings. Submit one form 15CA and 15CB for this purpose
Wait for further maturity close it one by one, submit 15CA and 15CB for each and every transfer (remittance)
Plan good before you initiate this transfer process
Can I submit Multiple Form 15CA and 15CB during a year?
ARBI has opened gates to transfer money from NRO to NRE account. Since then this is a common topic of discussion. To give a lime light on how to safely transfer your money with minimal loss in interest here are the pointers to be followed
1) Obtain form 15CA from your auditor. Form 15CB and A2 are to be filled by you. Submit all the three documents to your bank
2) In a year we can transfer upto 1 million USD from NRO to NRE account
3) This internally means that we can submit any number of form 15CA and 15CB (multiple submission allowed) considering the fact that the amount to be trnasferred doesnt exceed 1 million USD
Do I need To Submit Form 15CA,15CB for NRO to NRE Transfer?
We have discussed about the RBI circular that permits the transfer of  money from NRO ro NRE account. This is high time to save on taxes at India. The next question is about the necessity to submit forms 15CA, 15CB to the bank branch to initiate this transfer.
So, is it needed to submit these documents?
Simple answer is YES. The logic works this way
1) Maximum 1 million USD can betransferred from NRO to NRE per year subject to payment of taxes
2) The user can choose to initiate transfer from NRE – This money needs to be properly validated by bank
RBI has clearly specified that the steps are the same as NRO repatriation onto foreign account except that it is a local NRE account
So, can I transfer my NRO FD’s to NRE FD’s?
Simple answer is it may be not possible. NRO savings to NRE savings is the possible way to have this transfer.
Talk to your bank manager and auditor to start next steps