Archive for December, 2010

Bank Failures total 157 for 2010

More banks have failed in 2010 (157) than in any other year since 1992 during the savings and loans crisis according to the Federal Deposit Insurance Corporation. The number of bank closures was 0 in 2006 and 147 in 2009. Although many experts believe the economy is on the rise more financial institutions are predicted to close in 2011. The number of banks on the FDIC’s troubled list was 860 in September 2010 and typically about 20% of these banks end up closing. The troubled financial institutions on this list consist mainly of community banks that would not be considered “too big to fail.” The bad loans that plagued these banks were mostly commercial real estate loans, which are much different that the home mortgage loans that bankrupted many banking giants.

The FDIC insurance fund is currently operating in the red and has a bank deposit balance of negative $8 billion; however FDIC feels that it will be financially sound through 2014 because the negative $8 billion does not include reserves and pre-paid premiums from the banking industry.
As the year ends, 2010 should be the high mark for bank closures and in 2011 FDIC feels there will be fewer total closures and banking consultant Bert Ely says “I think we’re over the hump of the problem but far from the end.”

Depending on your experience, the feeling you have on the current banking situation may or may not be positive. Some people believe we are headed for another bubble burst but only time will tell if we are completely out of the woods but at least for now the news looks positive.


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Tax Time is coming!

Are you getting ready for the new year?  Do you have your New Year resolutions written down. How about taxes, are you organized? Got your receipts, your mileage logs, expense records ready to go?  Let me ask you this, have you reviewed the tax bill of 2010? Well there are some interesting segments that will affect just about everyone.  Here is a quick overview for you:

Most attention has been on the bill’s provision that will keep the current six income tax rates that start at 10 percent and top out at 35 percent in place for two more years. If Congress had not acted, all taxpayers would pay higher taxes in 2011.
But that year is still more than a week away. There are still tax moves to make by Dec. 31 that could lower this year’s tax bill, and some of them are part of the new tax bill. These are tax provisions that expired on Dec. 31, 2009, but which now are retroactively in effect for the 2010 tax year.
Here are answers to some questions about what the new tax bill means to those tax breaks.
Am I going to have to pay the alternative minimum tax?
Chances are that fewer taxpayers will face the alternative minimum tax, or AMT, when they file their 2010 tax returns. The tax bill includes a patch that increases the income level at which this costly parallel tax kicks in.
Can I deduct my state sales taxes?
Yes. If you live in a state that doesn’t have a state income tax, you still can claim your state and local sales tax amounts as a deduction instead. Even if your state does assess an income tax, if the rate is low and your sales tax level is high, this deduction might be preferable. Remember, you have to itemize to claim this deduction.
Is the tuition and fees tax break still available?
This is one of the above-the-line deductions. You don’t have to itemize to claim this tax break, which could be as much as $4,000. You take the deduction directly on your Form 1040 or Form 1040A.
I have a student loan. Can I still deduct the interest on the loan?
Yes. The tax bill continues the $2,500 annual interest deduction on qualified student loans. Older loans, interest paid beyond the first 60 months of the loan, also are still OK and the income levels at which this tax break is reduced will remain at the higher levels, adjusted for inflation, set by the previous and now-extended tax law. This, too, is done directly on 1040 and 1040A tax returns.
I’m a teacher. Will I still be able to deduct some of my expenses?
Educators are OK under the new tax bill. The ability to deduct some out-of-pocket expenses for classroom supplies will remain as an above-the-line deduction.

Are private mortgage insurance payments still deductible?
Private mortgage insurance, or PMI, generally is required if a homebuyer can’t make at least a 20 percent down payment on a residence. Since 2006, some PMI payers have been able to deduct their policy premiums as itemized expenses on Schedule A. That option will remain in effect for a while, thanks to the just-passed tax bill. The existing limits (those that say if you make more than $110,000 you can’t claim this deduction, and if you make between $100,000 and $110,000 the deduction is reduced) will stay on the tax books, too.

Can I still deduct my home’s property taxes if I take the standard deduction?
Sorry. This home-related tax break wasn’t part of the new tax package. In previous tax years, the last one being 2009, homeowners could add up to $500 (or $1,000 if married filing jointly) in residential real estate taxes to their standard deduction amount. That tax break ended on Dec. 31, 2009, and was not extended.
I’d like to donate some of my IRA money to a charity. Can I do that?

Older, generous owners of traditional IRAs are in luck. The ability for folks age 70½ or older to directly donate up to $100,000 per year from their IRA to a qualified charity is back on the tax books. This is a particularly appealing tax move for individuals facing a required minimum distribution, or RMD. This is a specific amount, based on the retirement account owner’s age, that must be taken out of tax-deferred retirement accounts each year.
Now an RMD, and more as long as it doesn’t exceed $100,000, can go directly to a charity so that the IRA owner follows the distribution rule but doesn’t have to count the donated money as taxable income.
And because of the lateness in getting this law back in the tax code, the new bill provides a grace period. Eligible IRA owners will be able to make their retirement account charitable donations in January 2011 and have the distributions count as if they were made for the 2010 tax year.
There’s even better news for all these reinstated tax breaks. Taxpayers won’t have to worry about their status next year. In addition to putting the deductions back in place for 2010, the new tax bill extends them through the 2011 tax year.

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Holiday Gift Idea #4

So now that you have spent money on everyone else in your life, it is time to do something for you. A SAFE DEPOSIT BOX is a great gift for you!

Most people believe they do not have anything of importance to store. In fact, the biggest myth of safe deposit box contents is that people store gold, silver, and jewels. In reality, safe deposit boxes are a convenient place to store important items that would be difficult or impossible to replace. A safe deposit box also offers privacy (only you know what is inside) and security. Although many people like to keep valuables close by in a closet, safe or file cabinet at home or in the office, these places probably are not as resistant to fire, water or theft. Also, some insurance companies charge lower insurance premiums on valuables kept in a bank’s safe deposit box instead of at home. Plus it is cool to have, sort of like Jason Bourne!

For other reasons check out this link –

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Co-Founder Frank Robinson

Frank Robinson graduated from Boise State University with a degree in Business Administration, emphasis in Human Resources. He also has a Master of Arts in Organization Management from the University of Phoenix. Frank played professional football for the Denver Broncos and Jacksonville Jaguars for 3 years. Learn More...

Co-Founder Stewart Gallagher

Stewart Gallagher graduated from Colorado State University with a Major in Political Science and minors in both Economics and Philosophy.  Over the past 12 years Stewart has worked for 3 major financial intuitions holding various positions from teller to Assistant Vice President-Branch Manager. Learn More...