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Tips to avoid the dreaded AMT-Alternative Minimum Tax

Boy did we come close to this one last year…I am afraid of what will happen this year. My brother is an accountant and he was scared for us last year. Hope his ideas are going to work to keep us out of it this year!

Both Smart Money and MSN MoneyCentral have some interesting articles on what exactly the AMT is and how you can possibly avoid it. If you think you might get hit with it, NOW is the time to do some advance planning!

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Save Money By Getting Your Own Health Insurance.

The last “real” job I had….you know, the one where I had to be there at 9 and had to stay till the end of the day, came with health insurance. Well, it didnt really come with it, but I had to pay for part of it. $100 per month, to be exact. Not bad, right? But the problem with their insurance choice was that the deductible was so high, I ended up paying for almost everything anyway, in addition to the $100 a month I was already spending. And don’t get me started on the dental plan…I don’t think I saw $1 in benefits. I know this was all because they had a very bad group plan through BlueCross, but for $100 per month, I thought it was the best scenario. Then, I got married.

When I got married and wanted to add my wife to my insurance, they wanted an additional $650 PER MONTH to add her because she is of “pregnancy” age and they figured they might have to pay out the expenses for that as well. My boss at the time said he would cover most of it, but I would have to pay some of it. Well, I had no choice and started paying it. And then I left my job to freelance/sit on my ass, leaving us with really only 2 choices for health insurance….COBRA or personal insurance from BC or another provider.

COBRA was going to be ridiculous…about $850 per month to cover both of us, with the same deductibles as before. No way in hell I was going to pay that for two people near 30 years old that are healthy. So we started looking into just getting regular old personal insurance. Because we are healthy and don’t go the doctor that often, and because my wife is of “pregnancy” age, we decided to take a plan that had a high deductible and covered maternity costs. Total monthly bill for the 2 of us? $216. We can still go to the doctor for a $40 co-pay, generic drugs are still just $10, and for most tests etc we pay 30% of the agreed upon fee. The only time we would run into a high bill is if one of us ended up in the hospital, but at most I would be out $5,000. Since COBRA was going to cost me an extra $600 per month X 12 months for an extra $7200 PER YEAR, I don’t mind taking the chance of paying $5000 for major surgery if it happens. I would be paying it out over the course of every year on COBRA anyway!

So, a word to the wise…if you leave your full time gig for whatever reason, before you sign up with COBRA, check in to regular old private insurance…get a high deductible…and you could save yourself a TON of money.

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Debt is piling up for Gen-X’ers

“Government no longer has our back,” explains Tamara Draut, author of the recently published book Strapped, in an email. “Young adults today, working to get into the middle class — they’re being hit by a one-two punch: The economy no longer generates widespread opportunity, and our public policies haven’t picked up any of the slack.”

While I agree that debt is piling up for younger people, I do not agree with the premise that it is somehow only the governments fault or the fault of the economy being the way that it is. Personally I think its the “Keeping up with the Joneses” problem..iPods, HDTV, big screen televisions, $30,000 Honda Accords, the need to have a home that impresses your friends, etc. Young people today think that they NEED these things in order to survive…but these are not needs, they are wants. And they all want them, and they pay for them with credit cards. And I know what I am talking about…in college and the few years after that, I bought anything I wanted to, thinking that I would pay it all off when I had a real job and was making real money. But its hard to play that catch up game, and if there were a few things I would tell college students now would be that A. you wont be able to pay off those credit cards as easily as you think you will, B. concentrate on paying for the things you need, and C. SAVE for retirement and emergencies. I know, retirement seems very far off…but the earlier you start, the easier it will be to attain enough money to actually retire. That being said, the article is an interesting read.

Article link: AlterNet: WireTap: Generation X’s Debt Headache

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Schools giving away $28,000 cars for perfect attendance…this is not right.

You know what I got if I had perfect attendance? Nothing. Thats right, nothing. I got to move on to the next grade and then graduate on time. But it seems thats not enough for teenagers today. This article over at NCTimes says:

“Sixteen-year-old Kaytie Christopherson was getting ready to do her homework on a Friday when she got a call that made a big improvement in her life: She had won a brand-new pickup truck for near-perfect school attendance.

And not just any truck, but a $28,000 Chevrolet Colorado crew cab, in red, with an MP3 player. Freedom comes standard.

“I take it everywhere. To work, school. I don’t know, anything I do, I have it out with me,” the high school junior said. “I pay attention to where I park it, though.”

Public schools commonly reward excellent attendance with movie tickets, gas vouchers and iPods. But some diligent students like Kaytie are now hitting the ultimate teenage jackpot for going to school: They have won cars or trucks.”

In high school, I was “given” my parents 1984 Pontiac Bonneville…sweet ride, right? The ladies were all over me in that car. (You dont believe me, do you? Didn’t think so.) But I had to pay for insurance, repairs, gasoline, and I had to drive my little brother anywhere he wanted to go. And now kids are getting brand new $28,000 trucks because they went to school? You are supposed to go to school! I keep thinking of that Chris Rock routine about things you are supposed to do and not be rewarded for; if you know it, then you understand.

Brand new cars for going to school…..I think its a sham and I dont think it is teaching these kids about dealing with money, like saving for what they want and then saving even more for emergencies. And no, I am not bitter. I just dont think spoiling kids with cars is a good idea, thats all. Anyone have any thoughts?

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Death and Taxes: A Visual Guide To Where Your Money Goes.

This is pretty damn cool. Are you curious about where all your tax dollars go? Curious about how THEY decide what to do with your money? Well, have I got the site for you.

Death and Taxes 2007 is a visual guide to how our tax dollars are used. For instance, did you know:

The Clean Air and Climate Change studies gets .668 Billion Dollars

AND

We spend the same amount, or .663 Billion just on bullets.

Pretty interesting, no? Check it out and see where YOUR money is going at Death and Taxes 2007

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