Living Green

Property asking prices perk up in October

2010-10-18T00:31:00.000-07:00

Property website Rightmove, which says it captures 90 percent of all homes for sale, said asking prices jumped 3.1 percent this month, following drops of 1.1 percent in September and 1.7 percent in August.

The annual rate of growth in prices rose 2.9 percent from 2.6 percent in September.

Rightmove's findings counter the plunge in September house prices reported by mortgage lender Halifax, and appear "illogical" given the oversupply of homes on the market and buyers' difficulty in getting mortgages, the survey said.

Though market conditions should be a drag on the market, higher prices follow the autumn trend, with October prices rising every year since the inception of Rightmove's House Price Index in 2001, the survey said.

"Vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in a new home before Christmas," said Miles Shipside, director of Rightmove.

"Between 2007 and 2009, October sellers tried higher prices in spite of the 'credit crunched' housing market, and it's a habit that is proving hard to kick in the 'spending review' market of October 2010."

The comprehensive spending review, which Wednesday will outline details of how Britain plans to slash its record budget deficit, is likely to dampen confidence in the housing market, Rightmove said.

Some sellers may not be able to afford lower prices, while estate agents may encourage a speculative opening price that can be lowered later, it said, adding that with sellers staying put on prices, and buyers unable to pay more, the housing market was in danger of stagnating.

"Buyers and sellers are staring each other out, and it's a question of who will blink first," Shipside said. "Even if they wanted to, buyers cannot blink unless lenders release more funds for mortgages.

"As that's not going to happen, there are likely to be some blinking sellers this winter."

Rightmove based its data on a survey of 105,769 asking prices on its website between September 12 and October 9.

The ending of the renminbi peg with the US dollar; China tries to stall rise in currency

2010-06-22T22:58:00.000-07:00

The ending of the renminbi peg with the US dollar; China tries to stall rise in currency

Following Saturday's surprise announcement by the People's Bank of China (PBoC) of an ending of the renminbi peg with the US dollar that had been in effect since July 2008, and the return the managed float system, which resulted in a rise in the value of the Chinese currency by 17.5% since mid-2005, China on Tuesday left the renminbi drop slightly in value against the dollar in a move that was seen as deterring speculators benefiting from a stronger currency.

The PBoC had initially set the reference point for the day's trading 0.43% above Monday's level, to the highest level in five years, which appeared to be a signal it was comfortable to see a slight appreciation in the currency. However, while the renminbi initially rose against the dollar, by the end of trading Tuesday it had fallen 0.23% to CNY6.8136 compared with the peg rate of 6.828. Traders are reported to have said state-owned banks had been in the market buying dollars, which they saw as a sign the authorities were trying to control tightly the value of the renminbi and limit expectations of future gains. On Monday the currency rose 0.42% against the dollar.

In the markets, the optimism that greeted China's decision, in advance of the G-20 summit in Toronto this weekend, was replaced Tuesday with continuing concerns about the Eurozone banking sector and the US housing market.

Morgan Stanley economist, Qing Wang, based in Hong Kong, summarised the impact of China's move.

1) A renminbi exit from the USD peg would lower the risk premium of the equity market stemming from fear of a Sino-US trade war.

2) It helps contain ‘imported' inflation pressures and therefore reduces the probability of an aggressive monetary tightening in China through stringent credit controls and/or consecutive interest rate hikes.

3) A modest initial revaluation to be followed by gradual appreciation would fuel expectations of further appreciation over time.

Impact on our economic and policy calls:

MS said it maintains its forecasts for the USD/CNY spot rate to reach 6.60 by end-2010 and 6.20 by end-2011.

It changed its interest call from "no more than one rate hike in 2H10" to "no rate hikes through 2010".

It attaches a high probability that the target of new bank lending of Rmb7.5trn for 2010 could be revised upward by 4Q10.

In view of this desirable policy change, MS maintains its call for a Goldilocks scenario (not too hot or too cold) in 2010, featuring 11% GDP growth and 3.2% average CPI inflation, while noting that the balance of risks on both fronts is tilted slightly to the downside.

Three great ways to save for your kids

2010-06-07T00:21:00.000-07:00

Now that Child Trust Funds are a thing of the past, many people will be looking for new ways to save for their children and grandchildren.

The good news is there are several options open to you. Here, I’m going to highlight some of the best savings options for those wanting to build a nest egg for the next generation.

The current economic climate means it’s almost impossible to predict what savings rates will do in the next couple of years. If you choose an account that locks your money away for the long-term, it’s quite possible savings rates will rise and your rate will be left far behind.

Because of this, I’ve focused on accounts that lock your cash away for a year or less.

Cash ISAs
Children can't open their own cash ISA until they reach 16. But if you haven't already used up your ISA allowance, you could open one to start saving for their future now. The main plus point about ISAs is, of course, their tax-free status. Current cash ISA rates may not seem that impressive; but when you compare them to (taxed) savings accounts paying higher rates, you'll find they’re pretty hard to beat. This article explains why cash ISAs offer such good value for money.

If you already have a Nationwide current account, the building society’s e-ISA might be a good choice. It offers a decent variable rate of 2.75% AER (including a 1% bonus until 30th June 2011) and you can open it with just £1.

The Nationwide e-ISA also allows transfers in from previous years’ ISAs; and it won’t penalise you for transferring money out.

Related goal

Save for your child's future
The sooner you start saving for your child's future the better. Starting early will give you the best chance of giving them a great financial head start in life.

Do this goalIf you’re not a Nationwide current account holder and you still want transfer flexibility, another good option is the ISA Extra from Birmingham Midshires. This account offers a variable rate of 2.7% AER (including a 1% bonus for 15 months), allows transfers in from previous years’ ISAs, and won’t penalise you for transferring money out.

Just be aware that you’ll need at least £500 to open the account.

If you’re not looking to transfer ISA money in - and you’re willing to leave the cash alone for a full year - you’ll get a higher, fixed rate elsewhere. The 1 Year Fixed Rate ISA (3) from Coventry Building Society pays 3.25% AER until 30th May 2011.

However, you’ll be sacrificing flexibility to get this rate. You can make just one deposit (which has to be the full £5,100 allowance); you can’t transfer money in from previous ISAs; and you’ll lose 120 days’ interest if you make any withdrawals during the year.

Fixed rate bonds
If you’ve already used up your ISA allowance - and you still have a lump sum to stash away - a fixed rate bond may be the account for you. At the moment, accounts from two little-known banks top the one year bond category.

The first is the Fixed Deposit account from United National bank. This pays a very healthy fixed rate of 3.25% AER for the year-long term. On the downside, you’ll need a fairly substantial sum to get you started: The minimum deposit is £2,500.

My second choice is the Fixed Deposit Account from Punjab National Bank (International). This account also pays 3.25% AER for the year, and can be started with just £1.

These banks may not be household names, but both accounts are protected by the Financial Services Compensation Scheme.

In today's video, I'm going to highlight five things you should consider when choosing a savings account.
Regular savings
Many people won’t have a lump sum to stash away, but will be saving for their kids from scratch. If you want to start small, a regular account could be an excellent choice for you.

Regular savings accounts usually last for a year, and require you to save a certain amount (within certain parameters) every month. In return for this commitment, you’ll receive a very good rate of interest.

Just bear in mind that most regular savings accounts don’t offer much flexibility. If you think you may need to get your hands on the cash at short notice, you may want to go for an instant access savings account instead.

One of the highest-paying regular savings accounts currently on the market is the Norwich & Peterborough Building Society Family Regular Saver. It offers a rate of 5% AER (fixed for a year) and allows you to save £1 to £250 per month.

It’s exclusive to families with dependent children up to 16 years of age (or 18 if they are in full-time education). And be aware that 3% of that juicy rate comes in the form of a bonus, which you’ll only get if you save every month for 12 months, and make no more than one withdrawal a year.

Recent question on this topic
toyraman asks:
As govt stopping ctf, what happens to my existing child trust fund account?

SoftwareBear answered "your child can use it when they are 18 to pay off some of the national debt ... or some lollipops..."

MikeGG1 answered "We have still to get the details but they have also said that they will be saving on the cost of..."
Read more answers There’s also a good account aimed specifically at saving for children: The Children’s Regular Saver from Halifax pays a whopping 6% AER (fixed for a year) and any adult can open one of these accounts on behalf of any child.

On the downside, the amount you can save is relatively small - £10 to £100 per month - and this isn’t a flexible account: Any missed payments or withdrawals will result in the money being moved to a Save4It account, which pays a variable rate of just 1.05% AER.

However, several adults can each open one of these accounts for the same child; so if a few of you get together, the savings can really build up.

And this account offers a positive tax angle, too. An account opened in a child’s name is tax-free, providing the child doesn’t earn enough to pay tax!

Assets in 'dog' funds double over past year

2010-05-24T02:29:00.000-07:00

The independent investment manager and financial adviser's biannual Spot the Dog report shows retail investor money in underperforming funds has jumped from £7.2bn in January last year and £13.72bn from the last report in October. The actual number of dog funds has also risen from 77 to 90.

Invesco Perpetual has £1.77bn of poorly performing assets across three funds and is the only group to have a ‘dog' product in the US sector. While the group sits atop the list, Bestinvest says it is confident Invesco Perpetual's "strong investment culture" will enable it to rebound.

Schroders sits in second place on £1.64bn, the same position it held in October 2009.

Andy Brough's Schroder Mid 250 makes another appearance in the Spot the Dog report. Bestinvest says it downgraded the Mid 250 fund in 2008 and believes the size of the vehicle has been a concern for some time. It says the fall in assets under management in the fund indicates many investors are also losing patience.

Rounding out the top five is Henderson on £1.21bn, Scottish Widows/SWIP £980m and F&C £852m.

Bestinvest senior investment adviser Adrian Lowcock says the rise in the number of dog funds is of greatest concern.

"It seems that more fund managers than ever before are underperforming their benchmarks and many investors are experiencing rank underperformance," he says.

"The upswing in the value of assets under management in dog funds highlights the huge number of assets being held in underperforming vehicles and the rise in the actual number of dog funds illustrates just how this is spreading across asset classes.

"It is vital that investors review their portfolios regularly to ensure they are getting the best possible returns."

Employment can be solved by backing mid-sized firms

2010-05-09T23:17:00.001-07:00

MID-SIZED companies hold the key to plugging the UK unemployment gap as public sector cuts loom, according to a leading economic forecasting group.

The Ernst & Young Item Club says that mid-sized companies are even more important than start-ups in creating employment, adding that it is vital that they receive backing from the government as employment in the public sector is set to shrink.

Bob Forsyth, head of strategic growth markets at Ernst & Young said: “Small start-ups have a vital role to play in creating new industries, but the most dynamic enterprises with the highest impact on our economy tend to be medium-sized firms that have spent several years laying the foundations for fast growth.”

Item Club has called on the government to provide a stable tax policy so that mid-sized companies can flourish.

Scott Halliday, managing partner added: “Stable tax policy that is pro-entrepreneur is important to economic growth and development. government can also encourage innovation by maintaining tax incentives for research and development.

The group also wants to see regulation simplified. “Complex regulation can, quite unintentionally, kill off innovation,” Halliday said.

Customers 'happy with their bank'

2010-04-26T02:15:00.000-07:00

The vast majority of consumers are happy with their bank despite the bad publicity the sector has endured in recent years, a survey showed.

Around 92% of people have not changed banks during the past two years, with 93% of these claiming they are happy with the service they receive, according to the BBC.

Only 8% of the 1,001 people questioned had switched accounts, with reasons for doing so ranging from getting better rates and wanting to take advantage of introductory offers, to problems with customer service and a lack of local branches.

Only 36% of those who had changed their provider cited the stability of banks during the recession as the reason they switched accounts.

But despite those who have stayed with their bank saying they were happy with the service they received, the survey also uncovered signs of apathy among consumers.

Half of those who had not changed banks said they thought all current accounts were the same, despite the fact that the interest available on them ranges from 0.01% to 5%.

A further 48% said they thought switching accounts would create too many problems, while 38% thought there were not any better or more appealing accounts available and 30% said they did not have time to compare products.

Banks have endured a raft of bad publicity recently due to complaints about the fairness of unauthorised overdraft charges, the mis-selling of controversial payment protection insurance and the problems the sector has faced during the credit crunch.

The Financial Ombudsman Service recently said complaints about the top five high street banks accounted for more than half of all of the complaints it received during the second half of 2009.

However, the British Bankers' Association (BBA) was quick to point out that the high level of complaints received about banks reflected the high level of transactions the sector carried out each day.

Read more: http://www.belfasttelegraph.co.uk/breaking-news/uk-ireland/customers-happy-with-their-bank-14753491.html#ixzz0mCDv4h1S

greener on the other side

2010-03-30T00:06:00.000-07:00

new site

Unemployment claims fall

2010-03-19T01:01:00.000-07:00

The number of Americans filing for initial unemployment insurance fell last week, the government said Thursday.
There were 457,000 initial jobless claims filed in the week ended March 13, down 5,000 from a revised 462,000 the previous week, the Labor Department said in a weekly report.

A consensus estimate of economists surveyed by Briefing.com expected new claims to drop to 455,000.
The 4-week moving average of initial claims was 471,250, down 4,250 from the previous week's unrevised average of 475,500.
Resources and news for workers seeking employment
"This is a step in the right direction," said John Canally, an investment strategist at LPL Financial. "The 471,250 number is roughly 200,000 below the peak of last March, so this suggests that layoffs are ceasing and now we're just waiting for companies to start to hire."
Canally said that while he was "a little disappointed that [jobless claims] didn't fall even further," it was encouraging to get a clean reading after bad weather and administrative issues had "plagued" the data over the past couple months.
Heavy snowstorms in the Northeast shut down government offices in February. As a result, the Labor Department had a backlog of claims that it wasn't able to process on time, which inflated the numbers in the following weeks. Economists said that the storms and cold weather also led to an increase in job losses within industries such as construction.
Continuing claims: The government said 4,579,000 people filed continuing claims in the week ended March 6, the most recent data available. That's up 12,000 from the preceding week's revised 4,567,000 claims.
The 4-week moving average for ongoing claims fell by 8,000 to 4,575,250 from the previous week's revised 4,583,250.
But the decline may just mean that more filers are dropping off those rolls into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those people who have moved to state or federal extensions, or people whose benefits have expired.
On Wednesday, the House passed a bill to extend the deadline to file for unemployment insurance by one month, through May 5.
However, the deadline to apply for extended benefits is set to expire in coming weeks. Last week, the Senate approved a bill that would push back the deadline until the end of the year, and the bill is now awaiting approval from the House.
State-by-state: Unemployment claims in four states dropped more than 1,000 for the week ended March 6, the most recent data available. Claims in New York fell the most, by 10,929, which the state said was due to fewer layoffs in the transportation and service industries.
A total of 5 states said that claims rose by more than 1,000. Claims in North Carolina jumped the most, by 5,100, which the state attributed to layoffs in the construction, service, industrial machinery, apparel and transportation equipment industries.
Outlook: Canally said he expects a steady drop in unemployment claims over the year as businesses increase their hiring.
"The layoffs have largely stopped," he said. "A year ago, companies were worried about having another Great Depression and thought they needed to cut their workforce and lay off employees, but now they're thinking the opposite, that they need to increase their market share and look to hire."
By the end of 2010, Canally said he predicts jobless claims to reach a healthier level of about 400,000.

3 people the homebuyer tax credit helped

2010-03-10T23:57:00.000-08:00

The road to homeownership was hard for Valatisha Jacinto.

The Waco, Texas, schoolteacher had wrecked her credit struggling to pay for college, and later trying to support herself and her daughter on a teacher's salary. She knew she wanted to buy a home, and that meant she needed to clean up her credit.

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Robert Logan outside his new house in Ypsilanti, Mich.

Chris Saliture had a lot of work to do on his new house in St. Paul, Minn.
So she started attending credit-counseling classes run by NeighborWorks, a network of community-development and affordable-housing organizations. For several years she steadily worked on her debt.

That meant she was ready to act last February when President Obama signed the stimulus bill, which, among other things, authorized a refundable $8,000 tax credit for first-time homebuyers.

"My first question was, 'Do I have to pay this money back?'" she said. "When I found out I didn't, I said, 'Let me work even harder on my credit.'"

In March she bought a three-bedroom, two-bath home for $105,000. She took out a 4.9% FHA-insured 30-year loan, putting her monthly expenses, including property taxes and insurance, at just $830.

"I never thought anything that good would happen to me," she said.

She's not alone.

More than 1.4 million Americans have filed for the tax credit, according to the IRS. In fact, the program became so popular that Congress voted in November to extend and expand it. Now, the credit expires on June 30, for contracts signed by April 30, and there is a $6,500 refund available to some current homeowners looking to buy.

Congress created the incentive as part of the stimulus bill as a way to restart home sales. Because the real estate bust helped usher in the recession in the first place, legislators argued that healing the industry's ills would lead to recovery.

"I wouldn't have been able to afford my house without it," said Rob Logan, who bought his Ypsilanti, Mich., house for $71,000 in October. "It was one of the main reasons I started looking."

Logan has already spent most of his refund rehabbing his home, a foreclosure that was in far from perfect shape. There wasn't a single appliance left and the kitchen cabinets had vanished; the wiring was old and the floors cruddy.

The 28 year old, who works for a digital entertainment licensing company, corralled friends and family into helping, but he still had to pay out for parts and for a new kitchen. ("I never want to go back to Loews again," he said.) He figures he's spent about $7,000.

"The credit helped me pay for all my appliances and some plumbing and other maintenance," Logan said. "I was able to spend more of my saved money on a 20% down payment and that has made my mortgage more affordable."

Like Logan, many homebuyers shop til they drop during their first months of ownership. They make repairs, upgrade baths and kitchens, redecorate, and buy furniture, appliances and electronics. And that helps to stimulate the economy by keeping the Wal-Marts, Home Depots, Best Buys and Ikeas humming and contractors working.

The credit has also boosted home sales, according to the National Association of Realtors. Sales soared in October and November as first-time buyers rushed to take advantage of the tax credit before the original expiration date. More than half of all transactions were from these buyers during those two months, according to NAR, compared to the usual market share of about 40%.

For Chris Saliture, a Minnesotan, the credit was vital. "That's what got me started," he said. "I knew the incentive program was going on. I may still have looked, but this had an impact on what I could afford."

The 23 year old, who curates wine Web sites, is devoting the refund to a single purpose: a spiral staircase to connect the upper and lower floors. "It's a very interesting house," said Saliture, who bought the foreclosure for just over $100,000. "It's on three levels, but there's no interior staircase."

The house started life as a circa-1885 train depot, and it was later moved from its location alongside the railroad tracks onto a nearby lot in the St. Anthony section of St. Paul. As a result, the only way to get to the top floor is a metal exterior staircase that is 12-feet wide.

There is some hope that this good thing could live on after June 30. If the housing market and the economy is not in full recovery mode by late spring, there is already discussion about Congress extending the tax credit again, according to Jaret Seiberg of Concept Capital, a Washington-based research group.

"We believe this option is likely because housing is a key issue for many Democrats and Republicans facing re-election," he wrote in a research note. "And the $10 billion cost is relatively modest given the importance of the housing sector to the economy."

Top things to know

2010-01-13T00:30:00.000-08:00

1. Budgets are a necessary evil.

They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.

2. Creating a budget generally requires three steps.

- Identify how you're spending money now.

- Evaluate your current spending and set goals that take into account your long-term financial objectives.

- Track your spending to make sure it stays within those guidelines.

3. Use software to save grief.

If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.

4. Don't drive yourself nuts.

One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Watch out for cash leakage.

If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.

6. Spending beyond your limits is dangerous.

But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries dressed up as necessities.

If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.

8. Tithe yourself.

Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.

9. Don't count on windfalls.

When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.

10. Beware of spending creep.

As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.

Everyday Savings Opportunities You're Missing

2009-11-30T22:41:00.000-08:00

Time to Review Your Taxes — Before It's Too Late

Year-end tax planning always makes sense, but this year it's especially vital.

Convulsions in the markets and the economy have shifted the ground beneath many taxpayers, and next year may bring major tax changes as lawmakers confront the record deficit.

Bottom line: review your taxes before it's too late. "Too often, I can't do anything for people who come to me in February," says Douglas Stives, an accountant with Curchin Group in Red Bank, N.J.

First-Time Home-Buyer Tax Credit

Congress has just extended and altered this benefit, making it more generous for many. The new rules took effect on Nov. 6. The provision is a true dollar-for-dollar tax credit of up to $8,000 for 10% of the cost of a home. The credit is also refundable, meaning that even if a buyer doesn't owe $8,000 of tax, she can claim the full benefit and receive a refund check.

The new law has more generous phase-outs. The credit now begins to disappear for single taxpayers with modified adjusted gross incomes of $125,000 and married couples with incomes of $225,000. It is available for purchases through July 1, 2010 if the buyer has a contract in place before May 1, 2010. Unlike the prior law, however, this credit is capped: those buying homes for more than $800,000 get no credit at all, as of Nov. 6.

The new law also authorizes a similar $6,500 credit for buyers who already own a home. It too is a refundable credit for 10% of the purchase price of a house costing no more than $800,000.To qualify the buyer has to have owned and lived in the same home for five of the eight years preceding the new home purchase, and the new home must become the buyer's principal residence.

There are interesting twists. Two or more unmarried people buying a house together may be able to allocate the credit as they wish, say to the lowest earner. Taxpayers who buy this year may also claim the credit on either a 2008 or 2009 return, and those who buy in 2010 can claim the credit either in 2009 or 2010. Some people claim the credit in one year rather than another to avoid phase-outs.

Unemployment Benefits

Alas, these are subject to income tax. But this year there is an exemption of $2,400 per individual. Still, many unemployed taxpayers receiving benefits may need to estimate and pay quarterly taxes or risk penalties when they can least afford them. IRS spokesman Eric Smith points out that all recipients can choose to have 10% of benefits withheld by the payer. "That should protect many," he says.

American Opportunity Credit

In the roster of fiendishly complex and highly limited education incentives, this one is more useful than most. It is a tax credit for as much as $2,500, generated by spending on tuition and other education expenses (books, possibly a computer) up to $4,000. Currently this credit is available for 2009 and 2010 to single taxpayers with less than $80,000 of modified adjusted gross income and married couples earning less than $160,000. Amounts paid in 2009 for the spring of 2010 are eligible for a 2009 credit.

New Car Purchases

Taxpayers who buy new car before Jan. 1, 2010, may deduct sales and excise taxes and other fees on as much as $49,500 of the purchase price. This provision has generous phase-outs: It disappears between $250,000 and $260,000 of modified adjust gross income for married couples and $125,000 and $135,000 for singles.

Retirement Savings

Have you just started a job? Remember that you can still put in an entire year's 401(k) contribution, which is $16,500 ($22,000 if you're over 50). "Some workers who begin a job in the last quarter arrange to have an entire paycheck or two go into the plan," says Melissa Labant, an attorney with the American Institute of CPAs.

Charitable Gifts

Unless Congress acts, this will also be the last year for taxpayers over 70 1/2 to make a charitable contribution directly from an IRA. This provision is useful: without it, the donation would have to be withdrawn from the IRA, claimed as income and then deducted as a donation. That, in turn, can trigger deduction limits or jack up Medicare premiums in the future.

Investments

Take losses! Even after the run-up following the lows of last March, many investors still have long-term capital losses on investments held longer than one year. Taxpayers may deduct up to $3,000 of these losses per year against ordinary income, with the excess carried forward for use in future years. The assets must be held in cash accounts, as opposed to IRAs and other tax-sheltered retirement plans.

Capital losses also may be matched dollar-for-dollar against long-term capital gains—so if you have $20,000 of long-term losses on some investments and $15,000 of gains on others, after the $3,000 deduction, you'd only have a net loss of $2,000 to carry forward. What's more, if you are bullish on an investment with gains and you sell it to soak up losses, you may buy the winner back right away. The tax code's "wash sale" rules only apply to losers, which can't be purchased for 30 days either before or after a sale. Note: The IRS also prohibits selling a loser from a regular account and then repurchasing it within an IRA inside of 30 days.

The current top capital-gains tax rate of 15% is the lowest in decades, and it is almost certain to rise at some point as the government scrambles to pay down the deficit. "If you have a buyer and a decent price, think about selling," suggests Mr. Stives of the Curchin Group.

Medical Expenses

This has long been one of the least useful deductions in the tax code, unless a taxpayer is seriously ill or in a nursing home, because the taxpayer must spend more than 7.5% of adjusted gross income to claim any deduction. But rising insurance costs and diminishing coverage plus this year's economic tumult may qualify more people for this deduction.

In general, taxpayers may deduct all un-reimbursed medical expenses recognized by the IRS. This category includes after-tax dollars spent on insurance premiums, Medicare Part B and D premiums, and co-payments for drugs and treatments. It also extends to costs that insurance almost never covers—such as weight-loss plans (if prescribed for a medical condition), lead abatement, bandages, wigs after chemotherapy, acupuncture, and medical travel (19 cents per mile for the first six months of 2009, 27 cents for the rest of the year). But it typically does not cover expenses for over-the-counter drugs such as aspirin or antihistamines, which some Flexible Spending Plans reimburse.

Business Highlights

2009-11-25T01:46:00.000-08:00

The economy is growing modestly, with consumers too wary about spending to invigorate the recovery.

That's the picture that emerged from reports Tuesday on the economy and the confidence of consumers, who power 70 percent of it. Unemployment and tight credit have sapped shoppers' willingness and ability to spend freely as retailers enter their crucial holiday season. And Americans are expected to grow more cautious about spending next year. That would make for a plodding recovery.

Doing your part,are you?

2009-11-23T01:51:00.000-08:00

What can you do to help?