When it comes to your career, perhaps one of the most important skills you’ll need to help you climb that corporate ladder is the ability to negotiate with aplomb.
Still, not everyone is born with the ability to negotiate like a pro—some of us need a little help (present company included). We tapped Keld Jensen, a negotiation advisor, author and professor, for some of his best advice on how we can negotiate our way into a higher salary this year.
Jensen recommends a three-pronged approach to get the job done. Read this before heading into your next review and you’ll be golden.
How to Prepare
You need, want and deserve that raise. Here are three things Jensen recommends having in place to make that happen:
1. Set the time and place
You don’t necessarily have to just accept your manager’s chosen time and place, says Jensen. “Have some influence on where to negotiate,” he suggested. “Try and negotiate in a ‘neutral space’ instead of the manager’s office, which would be his or her home field.” He also recommends sitting at a round table instead of across from each other at an office desk, if you can, and sharing something between the two of you, like a snack or drinks. “Make it a pleasant experience for both of you,” he said. If you can, you should also try to negotiate with just one person at a time, instead of a group. A group dynamic, as many of us know, can be much more intimidating.
2. Negotiate for more than just a salary increase
Jensen calls this “NegoEconomics”, meaning that just negotiating for a higher salary is a zero-sum game, where success for you happens at the expense of your employer, and success for the employer means failure for you (in other words, no raise). “If you ask for an additional $500 a month, that is obviously a loss for the employer,” said Jensen. “Sometimes negotiations become easier if you negotiate for more—something that would have a benefit for you that might be higher than the cost to the employer.” For example, Jensen suggests considering other variables as well, like vacation, paid phone bills, a new computer, better insurance, a pension plan or education expenses. “The more variables you involve into the negotiation, the easier it will become since there is more to negotiate about,” he said.
3. Come prepared
Jensen says the number one thing most people do wrong when it comes to negotiating is not to prepare ahead of time. You need to know your starting point and your ultimate target, and you need to know how much room you have to negotiate—it’s important to be realistic. Just because you know you deserve a raise doesn’t mean that your boss—who may be busy trying to keep a struggling company afloat—will. You should also come prepared to talk about how your role in the company is growing, the number of new clients you’ve brought on, some examples of amazing customer reviews all about you, etc. “Negotiations typically go much better when the other side is receiving something of value,” says Jensen. “Before you enter the room, have a few ideas of how you’ve already benefited your organization, and ways that you can offer more.”
Armed with this insider knowledge to help you tackle your salary negotiations head-on, there’s no reason that 2016 can’t be your most successful year yet.
A newly released New York Federal Reserve analysis sheds some insight on factors that may determine if student loan borrowers are more or less likely to default on their loans.
According to Fed data, 28% of students who left college between 2010 and 2011 defaulted on their student loans within five years. That’s significantly higher than the students who left school five years earlier, between 2005 and 2006, of which only 19% defaulted within five years.
Defaulting on a student loan is big deal. Not only will someone who defaults on a student loan need to deal with collections calls, but a default can seriously harm a borrower’s credit rating, making it difficult to qualify for a personal loan or other large credit purchases like a new home.
The New York Fed’s analysis highlights factors that could determine default rates years after students leave school. They range from things a student can’t necessarily control — family background and how selective the college they attended was — to things students may have a little more control over, like the degree and major they pursue.
The data show students in these categories are more likely to default on their student loans between ages 20-33:
Dropped out before earning a degree.
Enrolled in an associate’s degree program.
Majored in arts and humanities.
Attended a for-profit institution, community college or nonselective college.
Came from a low-income family.
A few of the factors relate to things a student has some control over, like the kind of school chosen and the degree pursued. Another big factor, family background, depends more heavily on chance.
Here’s what the Fed found about how the factors influence default rates.
For-profit, public, or nonprofit?
If a student attended a private for-profit two-year institution, their chances of default were highest of all — just above 3% were in default at age 22, shooting up to 42% by age 33. Students at private four-year for-profits weren’t far behind, with a default rate of
38.8% by age 33.
On the other hand, students were much less likely to struggle to repay their student loans at nonprofit institutions, both public and private. Private nonprofit four-year student had the lowest default rate at 17.2%. They were followed by students who attended public nonprofit four-year institutions.
Selective vs. nonselective
The Fed’s analysis found students who attended colleges that were more selective or competitive defaulted at lower rates that those who attended less-selective colleges. The analysis used Barron’s Profile of American Colleges to classify colleges into selective and nonselective based on competitiveness.
Graduate versus dropout
Whether or not a borrower graduated was the second-strongest predictor of default among borrowers, according to the Fed analysis. Overall, students who dropped out had higher rates of default versus borrowers who graduated no matter what kind of degree they attempted. The analysis notes that may be attributed to the fact graduates are more likely to find more gainful employment that would give them the ability to pay off their loans after earning a degree.
Associate versus bachelor’s degree
No matter what kind of college a graduate attended, students in a two-year degree programs had higher default rates than their peers who enrolled in a four-year college, according to the New York Fed analysis.
But the gap between default rates of two-year and four-year students was widest among students who attended public schools — 21.4% to 36.5%, respectively— a difference of more than 15 percentage points
STEM versus arts and humanities
Students who majored in arts and humanities defaulted on their loans at the highest rates — 26.3% at nonselective schools, 14.6% at selective schools— while STEM majors at selective schools (12%) and business students at selective schools (11.5%) defaulted at the lowest rates. Overall, default rates among students who majored in business or a vocational programs were closer to STEM students than to arts and humanities majors.
Arts and humanities majors defaulted at higher rates regardless of the college’s selectivity, but if students majored in STEM, business or a vocational program, selectivity may have factored in more. By age 33, the default gap between students who chose a best-performing major and a worst-performing major was three percentage points at selective colleges, while at nonselective schools the gap was eight percentage points.
Advantaged vs nonadvantaged
The Fed’s analysis took a look into defaulters’ income and family background, too. The analysis looked at the average income for the ZIP code area at a borrower’s youngest available age based on available loan data. The analysis defined students who came from households earning below the mean income based on ZIP code as nonadvantaged, and students from households earning above the mean income.
The analysis found borrowers who came from less-advantaged backgrounds based on income had higher default rates no matter what type of college they attended.
Taking both a borrower’s background and college into consideration, the widest gap in default rates observed in the analysis were among advantaged students who attended private nonprofit colleges (13% of whom defaulted by age 33) and nonadvantaged students who attended private for profit colleges (42.1% of whom defaulted by age 33).
Some 57 million Uber users’ personal information was exposed in October 2016 when the car-hailing company experienced a cyber attack, the company announced Tuesday — more than a year after the occurrence of the incident.
Bloomberg reported the company paid $100,000 to the hackers responsible for the attack to keep the breach private.
Dara Khosrowshahi, Uber’s new CEO who was appointed by the board in August, said in a statement that two people outside the company “inappropriately accessed user data stored on a third-party cloud-based service that we use.”
The attackers stole data of the 57 million people across the globe, including their names, email addresses and mobile phone numbers. About 600,000 U.S.-based drivers were among 7 million Uber drivers whose license numbers and names were exposed in the breach.
The data breach was the latest in a string of high profile cyber attacks that weren’t revealed until months or years later. Fortunately, it doesn’t appear that Uber users have to worry about any of their financial information being exposed. Khosrowshahi said no evidence indicated that trip location history, credit card numbers, bank account numbers, or dates of birth were stolen.
What was done?
After the attack happened, Uber “took immediate steps” to safeguard the data and blocked further unauthorized access to the information, according to Khosrowshahi. The company identified the hackers and made sure the exposed dada had been destroyed. Security measures were also taken to enhance control on the company’s cloud storage.
“None of this should have happened, and I will not make excuses for it,” Khosrowshahi said. “While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes. We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”
The company let go two employees who led the response to the incident on Tuesday, according to the statement. Uber is also reporting the attack to regulatory authorities.
What can you do?
Uber said no evidence shows fraud or misuse connected to the data breach.
If you are an Uber rider…
The company said you don’t need to take any action. Uber is monitoring the affected accounts and have marked them for additional fraud protection, Khosrowshahi said. But you are encouraged to regularly monitor your credit and Uber accounts for any unexpected or unusual activities.
If anything happens, notify Uber via the Help Center immediately. You can do this by tapping “Help” in your app, then “Account and Payment Options” > “I have an unknown charge” > “I think my account has been hacked.”
If you are an Uber driver…
If you are affected, you will be notified by Uber via email or mail and the company is offering free credit monitoring and identity theft protection.
You can check whether your Uber account is at risk here.
Check out our guide on credit freezes and other steps you can take to protect your identity if personal information is compromised in a data breach.
Parents spent an average of $422 per child on holiday presents in 2016, according to a survey by T. Rowe Price. An estimated 56 percent of parents with children ages 8 to 14 use credit to purchase gifts, which are bound to include gadgets that’ll be old news by New Year’s but not paid off until months after that.
Indeed, the holiday season — the most wonderful time of the year, as it’s known to some — may be far from wonderful for budgets as some parents try to fulfill every child’s every wish.
56 percent of people said they spend too much money during the holidays.
55 percent admitted that they feel stressed about their finances during the holidays.
43 percent said the extra expense makes the holidays hard to enjoy.
Some parents overload their children with “stuff” that will quite possibly be obsolete or bested in popularity by the next big thing just in time for the next holiday season. No great mystery that the U.S. has 3.1 percent of the world’s children, but consumes 40 percent of the world’s toys.
“We are a materialistic society, and often our rituals and celebrations reflect this,” says Dr. Mary Gresham, an Atlanta-based psychologist who specializes in financial and clinical psychology. “Many parents get caught up in this and start to believe that the right toy will bring happiness to their child.”
Here are five gifts to give your little ones besides presents this year. Your overflowing closets and pockets may thank you for considering other gift options.
Brendan Mullooly, an investment adviser for an asset management firm in Wall Township, N.J., suggests that novice investors interested in making a financial gift to a young person should use a service like Stockpile, an online company that simplifies the process of gifting stocks to minors. Check out our review here.
“You can purchase gift cards of individual stocks and some index ETFs to give as a gift,” says Mullooly.
And Stockpile allows you to buy fractional shares, so the gift cards can be for small amounts. Mullooly recommends setting up view-only access to these custodial accounts so your young investor can check on how the investments are doing.
“This offers a great way to give a gift that’s interesting, has monetary value, and also offers an educational aspect,” he says.
The gift of giving
For children, the holiday season can be a “gimme”time of year. But it’s also the time when we often hear that it’s better to give than receive.
Jayne Pearl, a family business and financial parenting expert and co-author of “Kids, Wealth and Consequences: Ensuring a Responsible Financial Future for the Next Generation,”says it’s not hard to nurture a child’s giving spirit. She suggests combating the “gimmes” with the “givvies.”
Put part of your holiday budget toward giving to the less fortunate, perhaps through a charitable organization. For example, you could give a gift in your child’s name to an organization such as Unicef or the American Red Cross, or to an area animal shelter or humane society.
“Giving kids the tools and the consciousness to try to help people is extremely empowering,” Pearl says.
Her recommendation is to sit down with your children and find out what bothers them about the world, help them figure out how they can help, and make this part of your holiday celebration. Use the holidays as a time to teach your kids that “we have values and our values are not just ‘stuff,’ ” Pearl says.
The gift of membership
You can’t go wrong with season passes to a favorite destination like a local museum, an amusement park or the zoo. You can use them over and over throughout the year, which could ultimately help your family spend less on entertainment.
Also, check out memberships to national organizations, like the Baseball Hall of Fame for the sports enthusiast.
Or get a pass that’s fun for the whole family, like the $80 America the Beautiful Annual Pass, which pays for itself in as few as fivevisits to national parks. The pass covers entry to over 2,000 parks for a full year, and nearly 100 percentof sale proceeds goes toward improving and enhancing federal recreation sites.
The gift of travel
Pool the money you would spend on toys and trinkets and knock a destination off your family bucket list. You could time the trip to coincide with the holiday season or breaks during the school year.
Erica Steed, 37, allowed her children to choose something they wanted to experience together in Christmas 2016.
Ellison, who was 10, wanted to see the Statue of Liberty. Elian, 7, wanted to see snow, which doesn’t often happen in Georgia. They took a family trip to New York for the holidays, and although it didn’t snow, “we had such a great time that it made up for it,” says Steed, who lives in Roswell, Ga.
When you factor in the cost of airline tickets and lodging in New York City for a family of four during the holidays, this gift option didn’t save the Steeds the money they would’ve spent on presents.
But by planning, creating a budget and sticking to it, the family spent the holidays doing something they could all enjoy and remember for a lifetime. And this, Steed says, amounted to money well spent.
The gift of learning
You know your children better than anyone. And every one of them is unique, with his/her own set of interests, so give a gift that helps a child develop existing or new skills.
Sign them up for classes that help them take their passion or hobby to the next level.
Consider coding camp for your computer whiz or cooking classes for your foodie. You can find classes offered by educational institutions, community organizations, companies or individuals.
You could also take a look at online classes like these from MasterClass, which can help your child hone a craft with a celebrity idol without leaving home.
“When people feel really good about things, they tend to spend more,” Dvorkin says.
Bruce McClary, vice president of communications at the National Foundation for Credit Counseling, says people have a tendency to overspend during the holidays, relying heavily on credit cards and not paying off the debt until later, sometimes even years later.
McClary has also noticed that credit card delinquencies have been increasing slightly over the last two quarters. The Federal Reserve Bank notes in its report that “credit card balances increased and flows into delinquency have increased over the past year.”
While most Americans are aware and ready to spend a little extra during the holiday season, you can make it a little more merry by avoiding these common debt traps.
Keeping up with the Joneses
Holiday purchasing pressure ranges from buying the hottest toys to giving (or buying for yourself) the latest tech gadget or the biggest TV on the block. People are tempted to get the latest and greatest, Dvorkin says.
It all adds up, especially if you’re out to outdo a neighbor: The tree and all the trimmings; hostess gifts for parties; food for your own holiday meals and entertaining; your Clark Griswold-style light shows. Randy Williams, president of A Debt Coach, a counseling service in Kentucky, says the desire for personal reward can contribute to holiday debt.
“You feel good when you do something for somebody,” he says.
But then consumers may have the motto “One for you, one for me,” and purchase an item for themselves, which continues the spending cycle.
Hot holiday toy crazes
Unfurling your child’s Christmas wish list can be at once fun and terrifying. Parents planned to spend, on average, $495 per child, according to 2016 holiday shopping data from the Rubicon Project.
Lists could include hot holiday toys for 2017 like the $30-$45 Fingerlings (the little plastic monkeys that attach to fingers and move in response to sounds and touch) a $300 Nintendo Switch gaming console or even the $799 Lego Ultimate Collectors Series Millennium Falcon, the company’s biggest set with 7,541 pieces.
When the toys start to run out, the prices can escalate. The Fingerlings, for example, typically retail at $14.99, but some were listed in November for twice as much on eBay. Since it can be harder for parents to say “no” to the frenzy when it’s a gift that’s going to bring a smile to a little one’s face, Williams says there’s extra incentive to plan well.
Store credit card pitches
McClary warns not to get into store credit card offers. The instant savings of 10 percent off on the day of your purchase could come with a high cost, such as 29.99 percent APR later.
“People should resist the temptation,” he says.
Williams says there’s a reason for the incentives, such as a discount on your purchase, because the company will make back whatever you initially saved.
“Most people do not pay off their cards within the intro offer time,” he says.
Instead, set aside cash for holiday spending and use it, instead of credit. If you’re sure you can “affordably borrow,” Williams suggests using an existing line of credit instead of falling for the attractive offers from retailers.
Deals seem to abound when shopping online or in stores, but if you aren’t careful, some can land you in more trouble than no deal at all.
McClary advises to avoid promotions like deferred interest cards and convenience checks. Discounts during the holidays are usually found during other times of the year, too, when the budget is less tight.
“It’s to the advantage of the consumer to be looking at sales during the year and look for opportunities to get the most out of their money,” he says.
Trying to keep family traditions alive
Wanting to continue your grandparents’ or parents’ traditions may be sentimental but also pricey in today’s economy. Maybe they held extravagant dinner parties, paid for holiday trips and gave their children a certain number of gifts every year. You want to follow suit, but can’t afford it.
“(I’m a) firm believer that what gets us in trouble in the holidays is wanting to do what Mom and Dad did,” Williams says. “Things are more expensive now.”
Shopping with family members post-Thanksgiving, on Black Friday, although a tradition, also may be a temptation because of impulse buys or if family members don’t hold you accountable to sticking to a budget.
“It’s tradition but it’s also a day people can’t afford,” Williams says.
Hosting hordes of holiday visitors
While milk and cookies are left out for Santa, entertaining guests, from neighbors and co-workers to out-of-town family and friends, can increase your food and utilities spending in December.
“You spend money in all sorts of ways,” Dvorkin says.
“Where the problem is, we don’t plan for Christmas, we just do Christmas,” says Williams. He says that means sometimes consumers plan, mentally, to go into debt.
He advises to plan ahead for the next season, adding that he knows people who start checking items off their list in February during sales, or in June or July when fewer people are buying and prices are lower.
House and Senate Republicans have rolled out separate versions of tax-reform plans, aiming to cut taxes for corporations and individuals. Although the two bills diverge in a number of ways and the fate of both remains in flux, one thing’s for certain: Homeowners would be affected under both plans.
In this article, we lay out the changes to housing-related provisions under both plans and explain what they would mean for existing homeowners and first-time homebuyers.
The Senate’s bill is to go to the full Senate for a vote the week following the Thanksgiving holiday. President Trump has called on lawmakers to pass one cohesive bill by Christmas, and Republican legislators would like to see the reforms take effect in 2018.
What are the changes?
Here’s a quick overview of housing-related changes proposed in the bills:
Both bills nearly double the standard deduction, while eliminating personal exemptions.
The House and Senate both proposed changing residency requirements for capital gains home-sale exclusions by increasing the live-in time period to five out of the last eight years. Current law allows people to write off up to $250,000 — or $500,000 for couples filing jointly — from capital gains when selling a home, as long as they have lived in it for two out of the past five years.
Under the House plan, mortgage borrowers can deduct mortgage interest on loans up to $500,000, for debt incurred after Nov. 2, 2017. Currently, the tax deduction cap is $1 million. The deduction for state and local income taxes would be gone. But the state and local property tax deduction would remain but be capped at $10,000. (There is no cap, currently.)
The Senate bill would leave the mortgage interest deduction unchanged, but eliminate all state and local tax deductions (SALT), including deductions for property taxes.
Fewer people will claim mortgage interest deductions
The National Association of Realtors (NAR), a vocal critic of the tax reform proposals, expressed through statements and press briefings that both plans would negatively affect homeownership. The association has called the tax reform legislation an “overall assault on housing.”
“Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership,” NAR President Elizabeth Mendenhall said in a statement.
Nearly doubling the standard deductions and repealing some itemized deductions would likely mean that far fewer people would itemize when they file taxes. NAR officials worry that these moves will undercut the incentives to pursue homeownership.
The standard deduction is a fixed dollar amount, based on your filing status and age, by which the IRS lets you reduce your taxable income. The itemized deduction allows you to list your various deductions, including the mortgage interest deduction. You can claim one or the other — whichever lowers your taxable income more.
The standard deduction for a married couple filing jointly is $24,400 under the House plan and $24,000 under the Senate plan. Wolters Kluwer, a global information services company, suggested in an analysis that only those taxpayers who would deduct more taxes through itemizing than taking the bigger standard deduction — the top earners — would benefit from itemizing deductions like the one for mortgage interest.
Impact under House plan
Capping the mortgage interest deduction
The good news is that the majority of existing homeowners won’t be affected by the cap on the mortgage interest deduction, because only about 21 percent of American households take the deduction under the current law, according to the Tax Policy Center.
But about 18.5 percent of new homebuyers would get hit with a bigger tax bill on their housing-related tax liabilities, according to an analysis released by Trulia, an online real estate resource for homebuyers and renters.
“Because the mortgage interest deduction skews to upper-income families, it encourages people to buy bigger homes,” Nela Richardson, chief economist at Redfin, a Seattle-based real estate and technology company, told MagnifyMoney. “It also encourages builders to also build bigger homes, so it encourages sprawl.”
Less than 10 percent of the bottom 90 percent of the income distribution receive the tax subsidy on mortgages, the Tax Policy Center said.
Richardson added that this doesn’t mean the deduction should be completely eliminated. She said she thinks putting a cap on the deduction is only to make the math work for the corporate tax cut, though it is not structured in a way to help middle-class homeowners.
“People who have the means to buy those homes” with a mortgage of more than $500,000 “would continue to buy those homes,” Richardson said. “What we’d like to see is [changes] to help buyers who wouldn’t be able to afford a house unless they got some kind of tax credit. That would be a subsidy that was progressive instead of regressive.”
A silver lining to some: Middle-class homeowners might benefit from an income tax cut, which hopefully would help them purchase a house, experts say.
“The result of that is still a little fuzzy,” Richardson said. “It’s not clear that middle-class buyers in the long run would actually receive an income tax cut.”
What does it mean to first-time homebuyers in expensive cities?
The mortgage interest deduction provides little benefit to new home buyers because many new U.S. homeowners do not itemize or are in the 15 percent tax bracket or lower, William G. Gale, chairman of federal economic policy in the Economic Studies Program at the Brookings Institution, wrote in an analysis for the Tax Policy Center.
First-time buyers are generally looking for cheaper homes. Nationally, the median sales price for existing homes is $245,100, according to the Federal Reserve Bank of St. Louis, well under the $500,000 cap, so capping the mortgage interest deduction shouldn’t affect them too much.
But for buyers in high-cost markets, where demand is high and affordability is challenging, the cap will sting, Richardson said.
“You cannot find a $500,000 home in the Bay Area,” Richardson said. “Good luck with that.”
In San Francisco, the median home sales price is around $1.2 million, according to Redfin and Trulia.
Home prices are expected to go up next year, as the Federal Reserve is expected to increase the short-term interest rate by year’s end, economists say.
“For the first-time buyer, you are dealing with this double whammy,” Richardson said. “If you add onto the fact that really expensive states’ first-time home buyers won’t be able to deduct all of the mortgage interest, then that is an additional expense. So it really is a challenging situation to put new buyers in.”
Trulia reported that across the 100 largest markets, more than half of homebuyers in coastal California, New York and Cambridge, Mass., would experience an increase in their home-related tax liabilities if they purchased a home under the House plan.
Impact on housing supply
Real estate experts expect less movement in the housing market since people who already own homes with big mortgages can continue to deduct the interest. This would make the housing supply crunch even worse in those expensive markets because people may choose to stay in the same house, knowing they couldn’t deduct the same amount of interest on their next big mortgage.
Factor in a longer live-in requirement for capital gains exclusions of homes sales, which economists believe will result in more homeowners waiting longer before moving to a different house to save on capital gains, and it would be even trickier for first-home buyers to bid for a desirable house in higher-end markets.
“It’s definitely not going to help alleviate price increases,” Cheryl Young, senior economist at Trulia, told MagnifyMoney. “But it will also contribute to competition.”
Trulia found that roughly 10 percent or more of existing homeowners in California and the Northeast would lose the incentive to sell their homes. Nationwide, the figure is 2.5 percent.
What does it mean for homeowners in high-tax states?
People living in high-tax states, such as New Jersey, New York and California, where homes are also costly, will see a rise in their property tax liability on taxes paid above the $10,000 property-deduction cap.
Trulia estimates that more than 20 percent of existing homeowners in New York and San Francisco would experience an increase in their property tax bills. Nationally, about 9.2 percent of existing homeowners will experience an increase in their property taxes.
Impact under Senate plan
Bigger property tax liability
Although the Senate plan is in some respects seen as more straightforward than the House bill, removing all SALT deductions would have a more expansive impact on homeowners across the country. That’s because they wouldn’t be able to deduct their property taxes anymore, Trulia’s chief economist, Ralph McLaughlin, explained in an analysis.
Existing homeowners in the Northeast and the Bay Area — New Jersey, New York, Connecticut and California — would be hit the hardest, according to McLaughlin.
A study commissioned by the National Association of Realtors and conducted by PricewaterhouseCoopers (PwC) found that, for many homeowners who currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction.
The study found that homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815.
Mortgage interest deduction would be worth less
Leonard Burman, a fellow at the Urban Institute and professor of public administration and international affairs at Syracuse University, wrote in an analysis that if homeowners cannot deduct state and local income, sales and property taxes, only the very wealthy and the very generous would benefit from itemizing. As a result, he estimated that only 4.5 percent of households would itemize under the plan, compared with the current 26.6 percent.
“Even for those who continue to itemize, the mortgage interest deduction may be worth much less than many homeowners believe,” Burman wrote. “This is because net tax savings depend not only on whether mortgage interest plus other deductions exceed the standard deduction, but by how much.”
For lots of people, holiday shopping consists of frantically running through the crowded aisles at Target, Walmart, T.J.Maxx, Macy’s and Best Buy — or typing things like “gifts for Mom” into the Amazon search field. And while they spend a good deal of time and effort shopping (and stressing), the outcome is all too often a load of generic products from big-box stores and a generous helping of conspicuous consumers’ guilt.
If you’re looking to break that pattern, there are lots of places where you can find holiday gifts that will stand out among all the other “stuff.” Here, we rounded up some noteworthy retailers and brand websites you could explore for interesting, unusual gifts, based on the personality of the person you’re shopping for.
A plus: You can feel good about spending money in these places because someone else will benefit from your dime.
For the sassy and quirky
BlueQ is the place to buy a gift for someone with a good sense of humor. The Pittsfield, Mass.-based novelty gift manufacturer was founded in 1988, and its self-described mission is simple: “We just want you to be happy.”
From colorful stocks to quirky reusable handbags, and tin boxes to oven mitts, almost every item sold at BlueQ features a sassy phrase combined with edgy, vintage imagery. Want a taste?
Fun stuff doesn’t need to be costly. The price range for the goods is from $1.80 to $15.
The joy-bringing gift shop donates 1 percent of the sales of its socks to Doctors Without Borders and 1 percent of oven mitt and dish towel sales to hunger relief programs throughout the world. Another 1 percent, this from profit selling recycled purses and bags — made from 95 percent post-consumer goods — goes to support international environmental initiatives. BlueQ also employs people with disabilities to assemble its products.
Where to shop
You can order from BlueQ’s website, and many bookstores and gift shops carry BlueQ’s items. Find a store near you here.
For the creative and ethically conscious
Uncommongoods is a marketplace for artists and crafters from across the world to sell independently designed, often fair-traded and hand-crafted products. To name a few:
The company values sustainability as a business and a product distributor. Many the items sold on its website are made of recycled materials. Customers can choose a nonprofit organization that partners with Uncommongoods to give $1 with every order.
A team of buyers not only evaluates goods based on materials and function, but also cares where each design comes from, how it’s made and who made it, according to the shop’s website.
During the peak winter months, when Uncommongoods hires hundreds of seasonal workers, the company says it pays its lowest paid hourly worker 100 percent more than minimum wage.
To make your shopping experience easier, Uncommongoods has a search engine for gift suggestions for your loved ones, letting you filter different personalities and hobbies.
Mouth is a paradise for your foodie friends and family. The company prides itself on producing interesting, indie, small-batch foods. You can buy your friends specialty eats from 40 states, and learn about the people who made the food you purchase here.
Why we like it
You won’t find convenience-store staples like Doritos or Hershey’s on Mouth. Most of the foods that Mouth sources are either handmade at local stores or workshops across the country, or come from brands started as homemade concoctions, according to its website. You would be supporting small, local businesses by purchasing treats that match your friends’ tastes. For ingredients that cannot be sourced domestically, such as coffee and chocolate, the company makes sure they are fair-traded and organic.
While Mouth is dedicated to selling treats that are made in an environmentally friendly, relatively healthier way, it by no means claims that everything on its website is good for you. But Mouth promises that its foods are not full of chemicals, preservatives or unhealthy fats.
Independent stores tend to have a rich history and offer diverse specialty books depending on the theme of the store and its location. Chicago’s Women and Children First, for instance, opened in a modest storefront in 1979 and is one of the country’s biggest feminist bookstores — it would be a great place to shop for someone passionate about supporting women. Sales from Indy Reads Books in Indianapolis support a nonprofit dedicated to improving adult literacy, and a book from there could be a meaningful gift for a philanthropic friend.
Why we like them
Apart from offering personalized services, specialized book selections and a platform for literary gatherings, many local bookshops are increasingly carrying gift items — pins, mugs, T-shirts, cards — consistent with the history or theme of the store.
If you have bookworms on your shopping list, pick a book from their favorite author or a souvenir from the shop they loyally frequent. This is a great way to support small businesses.
Where to find independent bookstores
You can use this guide to find a local independent bookstore near you.
For the artsy and modern
Museum gift shops are stocked with fine-art-inspired collectibles — not just totes or posters. Gift shop items often embody the very best design principles in a form of functionality or art.
Depending on where you are and what types of art you like, you can find prints, office stationery, books, dining sets, home furniture, apparel and more from the country’s art museums or through their websites
Why we like them
The gift shop is usually a critical revenue generator for a nonprofit museum, according to the State Department Bureau of International Information Programs. So when you buy a Monet umbrella or an American Gothic magnet while visiting a museum, you’re showing your support. If you are a member of a particular museum, you can often get a discount. And the purchase is likely to be appreciated by your art-loving friends.
The Art Institute of Chicago: The Art Institute is America’s second-largest art museum after the Met in New York. It is best known for Impressionist and Post-Impressionist art collections. The collectibles at the gift shop well represent the museum’s masterpieces.
Museum of Modern Art: The MoMA in New York has an outstanding history with design. In 1932, the museum established the world’s first curatorial department devoted to architecture and design. The MoMA Design Store features a vast range of modern and innovative design objects. It is currently offering 20 percent off on 100 gift items.
San Francisco Museum of Modern Art: The SFMOMA gift store offers an impressive selection of modern and contemporary art books. Apart from that, you can order gallery-quality reproductions of artworks that are often exclusive to the museum, through its website.
The Senate’s bill will go to the full Senate for a vote the week following the Thanksgiving holiday. At least 52 senators must vote in favor of the bill’s passing to move it forward. If no Democrats vote for the bill, Republicans can only stand to lose two votes.
The vote was made only hours after the House version of the tax bill passed by a 227-205 chamber vote, just before the chamber’s Thanksgiving holiday. No Democrats backed the bill.
From the looks of it, the Senate isn’t exactly on the same page with their colleagues in the House of Representatives. The plan bears the same name as the House’s bill, but the Senate’s version of the Tax Cut and Jobs Act diverges from the House’s plan on a number of individual and business tax reforms.
Most notably, the proposed Senate Republican plan would delay cutting the corporate tax rate by one year, include more tax brackets than the House plan and retain the mortgage interest deduction, among a few other popular tax breaks.
The bills do share some things in common. For example, neither version calls for any changes in workers’ 401(k) tax contribution limits. And both tax plans would repeal the alternative minimum tax and maintain the charitable contribution deduction. Both plans also repeal personal exemptions, but double the standard income tax deduction for individuals, married couples and single parents.
Complying with a Senate rule known as the Byrd rule is an issue. Under that rule, during the legislative reconciliation process, senators can move to block legislation if, among other reasons, it would possibly mean a significant increase in the federal deficit beyond a 10-year term.
If the Senate is able to pass its tax bill, the differences between the two plans may lead to clashes over tax policy as a pressured Congress tries to get a single tax reform bill to President Donald Trump’s desk by Christmas.
Here is a quick breakdown of the major differences between the two plans. Read beyond the table for further detail.
Under the Senate plan, classroom
teachers can still deduct expenses
up to $250.
The House plan would cut the deduction.
Neither the Senate nor the House
plan would reduce contribution
limits for most 401(k) savers.
However, the senate plan would
not allow employees earning
over $500,000 to make
Income tax brackets
The Senate’s plan maintains the tax system’s seven tax brackets—10%, 12%, 22.5%, 25%, 32.5%, 35% and 38.5% — as opposed to the House’s four. The senate plan notably maintains the lowest tax rate at 10 percent and modifies all but one other. The proposal also adjusts qualifying income levels.
The Senate plan would reduce the income tax on the nation’s highest earners to 38.5% from the current 39.6%. Individuals and heads of households earning more than $500,000, and married couples earning more than $1 million would pay the highest rate. The proposed income thresholds for the Senate’s plan are pictured below.
Alternatively, the House bill proposes four income brackets of 12%, 25%, 35%, and 39.6%.
The state and local tax deduction
The Senate plan fully eliminates the State and Local Tax, or SALT, deduction. Nearly one third of Americans took the deduction in 2015, according to the Tax Policy Center, so the repeal is likely to ruffle some feathers. While the House tax plan reduced deductions for state and local taxes, it still allowed Americans to deduct up to $10,000 in property taxes. The senate plan would completely get rid of the SALT deduction, including the deduction for property taxes.
Some critics fear eliminating the SALT deduction would disproportionately affect earners in states with high taxes, like New York and California. Across the nation, just six states— California, New York, New Jersey, Illinois, Texas, and Pennsylvania— comprised more than half of the value of all state and local tax deduction claims in 2014.
The mortgage interest deduction
Nothing would change under the Senate’s plan. Americans would still be able to deduct the amount of interest paid on up to the first $1 million of mortgage debt under the Senate tax plan. The House tax plan, on the other hand, had proposed to lower the threshold for the mortgage interest deduction to $500,000.
Only about six percent of new homes are valued at more than $500,000, according to an August 2017 report by the United for Homes campaign. The group argues lowering the cap would have “virtually no effect on homeownership rates.”
Corporate tax rate
The Senate plan still reduces the corporate tax rate from 35% to 20%, but corporations won’t get a break until 2019, when the Senate plan phases in the reduction. On the other hand, the House Plan would have initiated the reduced rate in 2018.
The decision to phase in the cut was likely made because a delayed corporate tax cut would make it easier for the Senate to reach its goal of passing a tax bill that does not increase the deficit by more than $1.5 trillion over the next decade.
The estate tax
The estate tax exemption is doubled from $5.49 million in assets ($10.98 million for married couples) onto heirs under both the Senate and House bills.
The House plan doesn’t get rid of the estate tax immediately. The House’s proposal also doubles the exclusion amount to $10 million, but eliminates the estate tax after 2023. The estate tax affects only the estates of the wealthiest 0.2 percent of Americans, according to the Center of Budget and Policy Priorities.
Adoption and child tax credits
Unlike the initial House tax plan, the Senate plan proposes keep some popular tax breaks. The plan proposes to retain the Adoption Tax Credit, which allows families to receive a tax credit for all qualifying adoption expenses up to $13,570. The Senate plan also slightly bumps up a proposed child tax credit compared to the House plan. While the House plan increased the credit from $1000 to $1600, the Senate plan proposes raising the credit slightly more, to $1650.
Student loan interest and medical expenses deduction
Under Senate plan, students will still be able to deduct interest paid on student loans up to $2500. Furthermore, taxpayers would still be able to claim medical expenses as a deduction if they account for over 7.5 or 10% of their income. This is a departure from the House plan, which would have eliminated both.
Pass through business
The Senate tax plan establishes a 17.4 percent deduction for pass through businesses like sole proprietorships, S corporations, and partnerships.The HIll reports the deduction would lower the effective tax rate on the highest earning small businesses to just over 30 percent, according to a Senate Finance aide. The deduction would only apply to service businesses based in the U.S
The House plan establishes a 25 percent tax rate for pass-through companies. But only 30 percent of the business’s revenue is subject to that rate. The remaining 70 percent would be taxed at the individual tax rate. The House amended the bill Thursday to create a new 9 percent tax rate for the first $75,000 of income of a married active owner with less than $150,000 of pass-through income.
What’s next for GOP tax reform?
The future is unclear for either proposed tax plan. The two chambers will likely need to compromise over differences in the coming weeks to get a bill passed and to the President’s desk by year’s end.
Thursday’s news came just as the House Ways and Means Committee finalized its own bill after announcing two amendments, with a vote expected next week.
By now, many consumers know to automatically delete suspicious emails or social media messages requesting wire transfers from Nigerian princes or scammers posing as long-lost relatives.
Even so, people have lost millions of dollars to fraudsters via wire transfer scams. If you’ve fallen victim to a wire transfer scam involving Western Union, you might want to pay attention to this news.
Consumers now can file claims to recoup money lost when scammers told them to pay via Western Union’s money transfer system, as part of a $586 million federal settlement with the company that was announced this week.
The deadline to file claims with the U.S. Department of Justice is Feb. 12, 2018. The settlement applies to scams executed through Western Union between Jan. 1, 2004, and Jan. 19, 2017.
“American consumers lost money while Western Union looked the other way,” Federal Trade Commission (FTC) Acting Chairman Maureen K. Ohlhausen said this week in a press release. “We’re pleased to start the process that will get that money back into consumers’ rightful hands.”
The settlement stemmed from a January 2017 complaint against the company by the FTC, which said that lax security policies have made the popular money transfer service a way for scammers to defraud consumers.
The case was investigated with the assistance of the Department of Justice, the Postal Inspection Service, the FBI and several local law enforcement agencies.
“Returning forfeited funds to these victims and other victims of crime is one of the department’s highest priorities,” Acting Assistant Attorney General Kenneth A. Blanco, of the Justice Department’s Criminal Division, said in a Nov. 13 statement.
Western Union also has agreed to implement an antifraud program and enhance its policies on federal compliance obligations.
Internet purchase scams: You paid for, but never received, things you bought online.
Prize promotion scams: You were told you won a sweepstakes and would receive your winnings in exchange for payment, but you never received any prize.
Family member scams: You sent money to someone who was pretending to be a relative in urgent need of money.
Loan scams: You paid upfront fees for a loan, but did not get the promised funds.
Online dating scams: You sent money to someone who created a fake profile on a dating or social networking site.
How do I submit a claim?
If you’ve already reported your losses to Western Union, the FTC or a government agency, you may receive a form in the mail from Gilardi & Co., the claims administrator hired by Justice to handle refunds. This form will include a claim ID and a PIN that you’ll need when filing your claim online at www.ftc.gov/wu.
You also can file a claim if you did not receive a form in the mail. Visit www.ftc.gov/wu and click on the link indicating that you did not receive a claim form and follow the instructions to complete your filing.
If you sent money to a scammer via Western Union, file a claim even if you don’t have any paperwork, according to the Justice Department. You may still be eligible for a refund.
You can file more than one claim, if you were a scam victim more than once.
Will I definitely get my money back?
Hard to say. Each claim will be verified by the Justice Department. If your claim is verified, the amount you get will depend on how much you lost and the total number of consumers who submit valid claims.
If verified, you’re only entitled to a refund of the actual amount you transferred through Western Union, according to the Justice Department. Other expenses, like fees or transfers sent through other companies, will not be included in your refund.
Congress is working around the clock to get a new tax bill to President Trump’s desk before the year is out. In addition to a host of tax cuts, both the Senate and House GOP tax plans include several proposals that could make saving and paying for higher education more costly for families. Considering Americans hold a collective $1.36 trillion in student loan debt and 11.2 percent of that balance is either delinquent or in default that’s not-so-good news for millions of Americans.
Both plans include proposed ideas that could impact how students and families finance higher education. The House plan, for instance, includes proposed provisions that would affect the benefits parents, students and school employees like graduate students receive, which could ultimately impact the price students pay.
In a Nov. 6 letter to the House Ways and Means Committee opposing the provisions, the American Council on Education and 50 other higher education associations states that “the committee’s summary of the bill showed that its provisions would increase the cost to students attending college by more than $65 billion between 2018 and 2027.” They reaffirmed their opposition in a Nov.15 letter.
The council and other higher education associations weren’t satisfied with the Senate’s version of the Tax Cuts and Jobs Act, either. In a Nov. 14 letter, the council says it’s pleased the Senate bill retains some student benefits eliminated in the House version, but remains concerned about other positions that it says would ultimately make attaining a college education more expensive and “erode the financial stability of public and private, two-year and four-year colleges and universities.”
Where are the bills now?
The House version of the Tax Cuts and Jobs Act passed by a 227-205 vote on Nov. 16, just before the chamber’s Thanksgiving holiday. No Democrats backed the bill.
The Senate Committee on Finance approved The Senate’s version of the bill late November 16 with a 14-12 vote along party lines. The bill will go to full Senate for a vote the week following the Thanksgiving holiday. At least 52 senators must vote in favor of the bill’s passing to move it forward. If no Democrats vote for the bill, Republicans can only stand to lose two votes.
If the Senate is able to pass its tax bill, the two chambers would need to hash out many differences between the proposed tax plans before sending legislation to the president’s desk.
In its plan, the Senate committee says the goal of tax reform in relation to education is to simplify education tax benefits. MagnifyMoney took a look at a few of the major proposed changes to the tax code that would impact college affordability most.
Streamline tax credits
The House tax bill proposes to repeal the Hope Scholarship Credit and Lifetime Learning Credit while slightly expanding the American Opportunity Tax Credit. The new American Opportunity Tax Credit (AOTC) would credit the first $2,000 of higher education expenses (like tuition, fees and course materials) and offer a 25 percent tax credit for the next $2,000 of higher education expenses. That’s the same as it is now, with one addition: The new AOTC also offers a maximum $500 credit for fifth-year students.
The bigger change is the elimination of the other credits. Currently, if students don’t elect the American Opportunity Tax Credit, they can instead claim the Hope Scholarship Credit for expenses up to $1,500 credit applied to tuition and fees during the first two years of education; or, they may choose the Lifetime Learning Credit that awards up to 20 percent of the first $10,000 of qualified education expenses for an unlimited number of years.
Basically, in creating the new American Opportunity Tax Credit, the House bill eliminates the tax benefit for nontraditional, part-time, or graduate students who may spend longer than five years in the pursuit of a higher-ed degree. According to the Joint Committee on Taxation, consolidating the AOTC would increase tax revenue by $17.5 billion from 2018 to 2027, and increase spending by $0.2 billion over the same period.
The Senate bill does not change any of these credits.
Make tuition reductions taxable
The House bill proposes eliminating a tax exclusion for qualified tuition reductions, which allows college and university employees who receive discounted tuition to omit the reduction from their taxable income.
A repeal would generally increase the taxable income for many campus employees. Most notably, eliminating the exclusion would negatively impact graduate students students who, under the House’s proposed tax bill, would have any waived tuition added to their taxable income.
Many graduate students receive a stipend in exchange for work done for the university, like teaching courses or working on research projects. The stipend offsets student’s overall cost of attendance and may be worth tens of thousands of dollars. As part of the package, many students see all or part of their tuition waived.
Students already pay taxes on the stipend. Under the House tax plan, students would have to report the waived tuition as income, too, although they never actually see the funds. Since a year’s worth of a graduate education can cost tens of thousands of dollars, the addition could move the student up into higher tax brackets and significantly increase the amount of income tax they have to pay.
The Senate bill doesn’t alter the exclusion.
Eliminate the student loan interest deduction
Under the House tax bill, students who made payments on their federal or private student loans during the tax year would no longer be able to deduct interest they paid on the loans.
Current tax code allows those repaying student loans to deduct up to $2,500 of student loan interest paid each year. To claim the deduction, a taxpayer cannot earn more than $80,000 ($160,00 for married couples filing jointly). The deduction is reduced based on income for earners above $65,000, up to an $80,000 limit. (The phaseout is between $130,000 and $160,000 who are married and filing joint returns.)
Nearly 12 million Americans were spared paying an average $1,068 when they were credited with the deduction in 2014, according to the Center for American Progress, an independent nonpartisan policy institute. If a student turns to student loans or other expensive borrowing options to make up for the deduction, he or she could experience more financial strain after graduation.
The Senate tax bill retains the student loan interest deduction.
Repeal the tax exclusion for employer-provided educational assistance
Some employers provide workers educational assistance to help deflect the cost of earning a degree or completing continuing education courses at the undergraduate or graduate level. Currently, Americans receiving such assistance are able to exclude up to $5,250 of it from their taxable income.
Under the House tax plan, the education-related funds employees receive would be taxed as income, increasing the amount some would pay in taxes if they enroll in such a program.
A spokesperson for American Student Assistance says if the final tax bill includes the repeal, it may point to a bleak future for the spread of student loan repayment assistance benefits, currently offered by only 4 percent of American companies.
Take care not to confuse education assistance with another, growing employer benefit: student loan repayment assistance. The student loan repayment benefit is new and structured differently from company to company, but generally, it grants some employees money to help repay their student loans.
The Senate plan does not repeal the employer-provided educational assistance exclusion.