America is still hurting from the recession. Unemployment is high and the economy is not doing well. The country is just not growing fast enough to handle the large numbers of unemployed people.

People who don’t have jobs, tend not to have much money. People who don’t have much money, don’t spend much money. The economy slows down when too many people stop spending and indicators such as unemployment rates start to climb.

It’s not just the unemployed who aren’t spending, many employed people have cut back on their expenses for fear that they might lose their jobs or face wage cuts.

Another problem is the real estate crash. Owning a house that has fallen in value or is under water will often make a person more careful with their spending.

Stimulus check in 2011

One solution to get people spending is another stimulus check in 2011. In 2008, the government gave out money in order to help the economy. Checks of up to $600 per person were mailed out. It’s hard to tell if that stimulus was successful or not. The economy hasn’t recovered, however the economy might be worse, had it not been for that $600 stimulus check.

The government has not announced any plans to give out stimulus check in 2011, but if the economy does not improve in the next few months then it has to be a consideration.

Recent stimulus checks

2009 – $250 stimulus check was mailed out for recipients of Social Security, SSI and others.

This stimulus check was intended to make up for the fact that the Social Security raise for 2009 was zero, because of low inflation.

2008 – $600 per adult, $300 per child.

These 2008 stimulus checks were mailed out to everyone, unless your income was too high to qualify. The idea behind these checks was to help stimulate the economy.

It was announced recently that the closing deadline to be eligible for the $8,000 tax credit was extended from June 30, 2010 to September 2010.  This will be a big benefit for people with new construction who are having trouble getting the house completed in time.

Originally, first time home buyers were eligible for an $8,000 credit for homes purchased before April 30, 2010 with a closing deadline of June 30, 2010.  Now the closing deadline has been extended to September 30, 2010.  Please note that to qualify for this credit, a purchase contract must have been entered into buy April 30, 2010 – that date has not been changed.

This change came about because of bill H.R 5623 – Homebuyers Assistance and Improvement Act of 2010. It was introduced and approved by the House (409-5) to extend the home buyer credit for new and existing home buyers

An $8,000 credit is available for first time home buyers.  Up to $6,500 is available for qualify current home owners.

How to claim for the home buyer tax credit

This information can be found on the IRS website.

You can claim this credit on your 2009 or 2010 return.

To claim on your 2009 return, the tax return must be file a paper return and attach Form 5405.  You must also include a properly executed copy of a settlement statement used to complete the purchase.

Purchasers of conventional homes

Include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names, property address, sales price and date of purchase.

Purchasers of mobile homes

If you are unable to get a settlement statement then include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.

Purchasers of newly constructed homes

If a a settlement statement is not available, then include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Note Regarding Signatures

While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Long-Time Residents

The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:

• Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
• Property tax records or
• Homeowner’s insurance records.

General Information

Home buyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit:

• Applies only to homes used as a taxpayer’s principal residence.
• Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

This page will contain the latest information on unemployment benefits extension information in 2010.

How the current unemployment benefits tiers work

Currently, Americans can qualify for the following unemployment benefits:

• 26 weeks of benefits offered by their state.
  Tier 1 – 20 weeks – paid by the government via the stimulus bill.
  Tier 2 – 14 weeks
  Tier 3 – 13 weeks if the state unemployment rate is 6% or higher.
  Tier 4 – 6 weeks if the state unemployment rate is 8.5% or higher.

Tier 1 through 4 are also known as Emergency Unemployment Compensation (EUC).

It is important to know is that the state unemployment benefits is the only permanent program on the list. All the unemployment benefit “Tiers” are temporary programs with expiry dates after which they won’t be funded anymore. Each tier has a “filing deadline” which is the date by which someone has to apply for a new tier of unemployment benefits.

All the four tiers have a filing deadline of June 2, 2010.

This means that in order to receive benefits for any given tier, you have to be eligible for that tier before June 2, 2010. This doesn’t mean your benefits will disappear on June 2, only that you can’t start a new tier of benefits after that date. You can’t be eligible for a new unemployment benefit tier until you have completed your current tier.

There have been several extensions given so far and the government is currently working to try to continue with these extensions.

I’m receiving EUC benefits right now – will they stop on June 2?

No, if you are currently receiving benefits as part of EUC or Tier 1,2,3 or 4 then you will receive benefits until the end of that tier. For example if you have received 5 weeks of benefits as part of Tier 3 (13 weeks) then you will still receive the remaining 8 weeks even though those payments will go past June 2.

My current tier of unemployment runs out after June 2 – can I still get the next tier?

No, that’s where the filing deadline comes into play. The filing deadline only affects people who are starting a new unemployment tier. If the filing deadline has gone past and you are trying to receive benefits for a new tier of unemployment then you will not be successful unless the filing deadline is extended.

Example – person continue to receive benefits after filing deadline

Susan is currently receiving benefits from Tier 3 which provides 13 weeks of benefits. She has 9 weeks to go but most of those weeks are after June 2. Since she has already started Tier 3 then she will continue to get benefits until her Tier 3 allocation is finished.

Example – Person can’t get to next tier after filing deadline

John is currently receiving benefits from Tier 3 which provides 13 weeks of benefits. He has just a couple of weeks to go but his Tier 3 runs out just after June 2. Since he will be applying for Tier 3 after the June 2 filing deadline then he won’t be eligible for anymore unemployment benefits unless the filing deadline is extended.

Does this have anything to do with creating new tiers of unemployment benefits?

No, there has been discussion of creating a Tier 5 extension for “99ers” who have exhausted all 99 weeks of available benefits but that is not discussed on this page.

http://washingtonindependent.com/77922/unemployment-extension-does-not-create-additional-benefits

http://washingtonindependent.com/85310/unemployment-extension-bill-coming-today

TradeKing

Customer-driven TradeKing is an award-winning online discount broker that charges a flat commission for any kind of equity order – be it market, limit or broker assisted. TradeKing only charges $4.95 per trade; Zecco is slightly lower at $4.50 per trade but has pricing tiers for different types of trade including $19.95 for broker-assisted orders.

Trade King charges only $0.65 for an option contract. There is no minimum to open or maintain an account, but margin accounts require $2,000 for equities and $25,000 for writing naked puts and $100,000 for writing naked calls. A naked option trade is executed by someone who does not have a position – long or short – in the underlying stock and is exposed to considerable risk.
Award-winning Customer Service

TradeKing is pretty nifty and has garnered awards from industry standard like Barrons and Smart Money in 2008 and 2009 for outstanding customer service – you are assured of speaking to a live person in minutes without having to punch a lot of buttons, expect an email reply within 2 hours on a trading day. Better yet, you can even have a live chat to get immediate feedback if you are still confused about an issue.

While every brokerage is obliged to get its customer the best price available, that does not always happen especially with a volatile stock. TradeKing promises best execution – such as speed of transaction and execution price, failing which, your trade is free. There are some exemptions to this, such as advanced orders and stop orders and it is best to be aware of what these are.

Impressive Suite of Free Tools

Another of TradeKing’s appeal lies in its easy user interface arsenal of free trading tools for stocks, options, EFTS and mutual funds. For stocks and options, it has scanners that will trawl through the market for those names that fit your criteria. You can save the criteria and not have to input them each and every time. There are useful interactive tools with views that you customize, such as easily zooming from short to long-term horizons, drawing trend lines or comparing performances against the stock indices.

It has intuitive tools for options trading. In the options scanner, there are 25 criteria to define the options you are looking for. There is a companion options strategy tool that will devise options strategies from basic puts and calls to straddles, strangles and collars. You can place an order without having to change screens.

Uses the profit and loss calculator to figure out the potential for making or losing money from possible or existing positions, and a probability calculator to work out how likely it is your stock or option will reach touch your desired price. Additionally, there is a very powerful tax manager which processes all transactions and corporate actions, works out, before you trade, short and long term gains or losses, and churns out tax reports on demand.

Special Offers and Education

TradeKing provides a whole range of educational materials in a variety of media such as videos mp3s, text and podcasts so that you can down load a seminar and listen to it on your iPod. Materials go from basic to sophisticated trading strategies. It is leveraging social media and has a trader’s community where you can follow the top trader, ask questions or chat with like-minded investors.

Currently, TradeKing is running some very attractive promotions. It will: -

• Reimburse up to $150 in account transfer fees
• Pay you $50 for every referral that opens an account with $1,000 and executes you a trade. The $50 bonus shows up in your non-Ira account.

Although there are slightly cheaper discount brokers around, TradeKing has a very impressive all round service. Operating since 2005, TradeKing has earned well-deserved kudos from both users and reviewers.

When making decisions about your financial future, it can be confusing and frustrating trying to understand the ins and outs of financial planning for retirement. Many people can’t afford to make a money mistake. Understanding IRA’s may be one of the more difficult aspects of planning for retirement savings goals. But gaining the knowledge of which IRA may be better for you, the Traditional IRA or the Roth IRA, can help to improve your money in the future.

Traditional IRA

First off, IRA stands for Individual Retirement Accounts. They are designed by the federal government. The Traditional IRA was first established in 1981 to help American citizens with a way to save for retirement through a means that is tax beneficial. Taxpayers are able to contribute a yearly total of $5000 or $6,000 (over 50 years old) into an account. The contributions are tax deductible and earnings on the account are then tax-deferred until the account holder reaches the age of 59 ½.

Roth IRA

The Roth IRA is a more recent venture, established in 1998 is not an option to individuals who have a gross yearly income of $110,000 for singles and $160,000 for married people. Also with the Roth IRA, the contributions are not tax-deductible in the year they were made. However, the money contributed and distributed from a Roth account is tax-free during the lifetime of the account.

Deciding which kind of IRA is the right one for you will ultimately be a personal decision. Each person may have their own opinion about which to choose so individuals are best to decide for themselves or upon the advice of a financial advisor. Many feel that the Roth IRA is the best choice because in the long run all the money in the account will be tax-free for life (provided laws remain the same), even if the contributions are not during the working years. If you meet the financial guidelines, the Roth can be viewed as having the more valuable option. Some individuals feel that they prefer the tax-deduction benefits during the working years through the Traditional IRA. Concern about the changing of laws in the future years is relevant because of the country’s growing deficits.

Making the Change

Some individuals will first choose one type of account over the other but then down the road change their minds. Regardless of which account you started first, you can make the switch. You can do what is called a ‘rollover’. While a rollover is possible, it doesn’t come without a cost. You will be required to pay taxes at ordinary rates on the amount transferred but you are not required to pay penalty fees for early distribution. Making the decision to rollover funds will require that you look at the end result and if the hit you took in taxes early will be less than what you would have spent in the long term. For instance, if an individual 35 or younger were to convert from a Traditional to a Roth account, the move would likely be smart and ultimately pay for itself but not work from those older than 35.

ShareBuilder is a subsidiary of ING Bank and is consistently rated as one of the top discount online brokerages.  If you have an ING Direct account, you can connected it with your ShareBuilder account which makes the entire process of investing simple – and creates the opportunity for ShareBuilder’s most notable feature of automatic investing.

Automatic Investing with ShareBuilder

While many investors push for frequent day trading and short investments, ShareBuilder promotes the idea that wealth is created through long term investing and automatic investments.  They are also a fan of reinvesting your dividends.

There are some very attractive rates for individuals using ShareBuilder with automatic trades.  You can purchase fractional shares which means every cent of that investment is going toward the cost of buying your selected stock.

Automatic investing allows you to purchase specific dollar amounts of stocks on a weekly, bi-weekly or monthly schedule.

Real Time Trades with ShareBuilder

If you decide you don’t want to use the automatic investing feature of ShareBuilder, or that you would like to supplement it with real time trades, you can do that as well.  You can buy or sell your stocks in share amounts real-time, act immediately on your investment decisions and conduct orders in seconds during market hours.

Open a ShareBuilder Account

If you have about ten minutes, you have enough time to open an account.  You just need to have your standard personal and financial information available to open the account online – including your social security number, employer, bank account data, identification and address.  They also ask you about your trading experience.

Once you’ve opened your ShareBuilder account, you have some options for the plan you’d like to use.  There is a Basic Plan, Standard Plan and Advantage Plan available.  On the Basic Plan, you don’t pay a monthly fee but you pay $4 for each automatic investment.  The Standard Plan is $12 per month, and you get up to 6 automatic investments included at that price, with additional automatic investments at $2 each.  For individuals who want to use more frequent automatic investing schedules, the Advantage Plan is $20 per month and includes 20 automatic investments and additional automatic investments at $1 each.

Real-time trading will cost the same per trade no matter which ShareBuilder plan you select and seem a bit pricey at $9.95 per online trade.  For more info on ShareBuilder’s pricing, visit their pricing page.

How to Use ShareBuilder

If you have an ING Direct savings account or an Electric Orange checking account through ING, you can connect them to your ShareBuilder account and transfer money for free, instantly.  If you use another bank account, you can transfer money to your ShareBuilder account through ACH, checks, or wire transfer. If you’d like to place a real-time order and cover the cost of the order from your bank account immediately, ShareBuilder uses Express Funding and charges $5 per trade to do so.

You can set up automatic transfers from your bank to your ShareBuilder brokerage account to fund your automatic investing, or you can make real-time trades via the internet or phone.

One of the immediate changes which will result from the historic 2010 health care bill will be a $250 payment to help with prescriptions.  There are quite a few Americans who have a drug coverage gap known as the “doughnut hole”.   This gap in Medicare D Drug benefit program means that assistance from Medicare for different levels of annual drug costs is not consistent through different levels of annual costs.

Right now the following costs (which include drug costs and Medicare payments)  are covered as shown:

• $0 to $295 – No coverage – patient pays 100% of the costs.
• $295 to $896.25 – 75% is covered by Medicare.
• $896.25 to $4,350.25 – nothing is covered by Medicare – This is known as the “doughnut hole“.
• $4,325.26 and up – 95% covered by Medicare.

Medicare Part D is a program to help subsidize the prescription costs of Americans and has been in place since January 1, 2006.  It was introduced as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

Is this $250 rebate permanent?

No, but the drug companies will be lowering the prices on their brand-name drugs by 50% starting in 2011 and 75% by 2020 which will completely close the doughnut hole so this rebate won’t be needed anymore.

How do I claim my $250 prescription payment?

If you are eligible for the tax free $250 rebate, then Medicare will automatically send it to you.  You don’t need to do anything.  No forms, no phone calls – nothing!

When will I get the $250 rebate check?

The $250 checks will begin to get mailed starting in mid-June of 2010.  You only get a check if you are in the “doughnut hole” coverage gap.  The checks will be mailed throughout the year, but only to new people who have reached the coverage gap.  You can only get a maximum of $250 and no more.

$250 Drug Rebate Scams

Please be aware that there are people who are trying to scam seniors into handing over their personal information by telling them it’s necessary to get the rebate.  This is not true.  Nobody should call you about the rebate – if they do, then don’t give them any information at all.

On March 3rd, President Obama signed the Temporary Extension Act of 2010 HR4691 after it was passed by Senate with a resounding 78-19 vote.  This bill only creates extensions for one month – until the end of March but it will provide much needed relief for many unemployed Americans.

There were two main sections of this bill which affect many Americans

COBRA extension 2010

COBRA is a medical health care plan for unemployed people which had been 65% subsidized by the government as part of the Stimulus effort of last year.  The unemployed person pays 35% of the COBRA premium and the government pays the other 65% for up to 15 months.

This subsidy had been scheduled to run out for people getting laid off after February 28.  Given the very high national unemployment rate (10.6%) it only makes sense that this program extension is quite necessary.

To qualify for this extension you must have been laid off between September of 2008 and March 31, 2010.

Unemployment Benefits Extension 2010

There have been numerous unemployment benefit extensions as a result of the stimulus package from last year and subsequent extensions as well.  Further extensions would be provided as part of this bill.

Passing of this Bill was delayed by Republican senator Jim Bunning of Kentucky who single-handedly held up the bill because of deficit concerns.

New info

$250 Prescription Drug Rebate Payment For Doughnut Hole Medicaid Gap

It looks like the proposed $250 Social Security stimulus check which was announced by President Obama late last year is unfortunately not going to be sent out.

On March 3, the Senate voted down the proposal for a $250 bonus check by a score of 50-47.

The reason that the plan was voted down was because of the cost. It was estimated that sending out the $250 checks to Social Security recipients as well as SSI recipients would have cost about $14 billion dollars.  Considering the current deficit is at record levels, the Senate decided that some cuts had to be made.  The other reason is that the Social Security payments are indexed to inflation which is why they were increase 5.8% last year, so to give a bonus when inflation is low, defeats the purpose of the indexing.

Just last week Senator Bunning held up another important vote on extending long term unemployment benefits in a rather bizarre one-man show of fiscal restraint.

The government is on pace to run up a record $1.6 trillion deficit this year because of various stimulus spending including $66 billion dollars on various unemployment extension benefits.

The $250 Social Security payment was being considered to make up for the fact that the Social Security payout did not have a cost-of-living increase this year because of low inflation.

The $250 check was paid out last year to Social Security recipients, SSI recipients and a few other groups as well.

Is there any chance of another $250 stimulus check this year?

This Bill is dead in the water but that doesn’t mean a similar Bill couldn’t be created.  I personally doubt that there will be another check this year but if the cost-of-living increase for 2011 is zero or close to zero percent then I think the odds would be quite good that another $250 bonus check would be approved.

How many senior citizens does this effect?

There are about 55 million senior citizens receiving Social Security who would have been eligible for this bonus payment.  Although the check amount is not huge, it will be interesting to see what effect, if any this will have on future elections.  It was widely expected that this stimulus payment would be paid out by March of 2010 and there will be an awful lot of disappointed, and possibly angry senior citizens who might be thinking that they have been short-changed $250 by this vote.

Purchasing a home is likely the biggest financial endeavor you will take on in your lifetime. It is vital that you understand the options and the consequences for owning a home upfront; otherwise, you can end up facing foreclosure or other personal financial difficulties.  Understanding your options for a zero down payment is essential if you don’t have a lot of cash reserves but still want to buy a home.

One of the chief components of buying a home involves the down payment. Lenders want to see that buyers have at least 10-20% of the home price to put down at closing. Essentially, the more you put down up front, the less you owe in the long run and the more likely you are able to be approved for financing. However, some potential home buyers are interested in moving into a home right away, without saving for an ample amount of time. Many are looking to move in immediately for a variety of reasons such as paying less than for a rental or simply because they are anxious to be homeowners. Another issue that makes a higher down payment difficult is the amount of closing costs that are involved during a home purchase.

There are financing options available for individuals with excellent credit and income levels that will not require a down payment. While 0% down may seem like a great idea at the time, it may become a problem in the future. There are lenders that will supply 0% down mortgages where the buyer can finance 100% of the purchase. Some lenders will even add in the closing costs for up to 105% in financing. The total amount is then included in the monthly installment payments.

The upside of zero down payments

When you are in need of a home and have not been able to adequately save money, a 0% down payment can be very tempting. It allows you the extra cash to pay for closing costs, new furniture, and other moving needs. Fully financing a first home may seem like the ideal situation but it can lead to payments that are too high and interest rates that are more than average.

This can also be a good idea for someone who is making a reasonable income but hasn’t had a chance to save up a down payment.  Maybe a recent medical school graduate for example.

The Downside of 0% Down Payments

Experts recommended avoiding a zero down loan at all costs. When you put 10% or more towards a home, financing is much easier to get. The proof that you are capable of saving money over time will indicate you will not have difficulties in keeping up with monthly payments. It may also allow the lender to deduce you can get financing from other resources and therefore give you better terms on your home loan. Add to that, a down payment will likely also afford you lower payment amounts on your mortgage loan. With 105% loans, there is a real possibility that monthly payments will become unmanageable especially if the home begins to need costly repairs and maintenance through the years.

Strive to Save

When you are interested in purchasing your first home, understand there typically is no ‘easy’ way. Start saving for a down payment as soon as you know you are looking to buy and be committed to reaching that goal before shopping for a new home or a home loan. In addition to saving, obtain a copy of your credit report and score to see where you stand in the eyes of lenders. Resist the temptation to get in to a new home for ‘free’. What may seem like a great deal can certainly cost you in the end. With the influx of foreclosures in recent years, the news has certainly added credibility to the need for a down payment savings plan and a suitable waiting period before taking on such a large financial burden.