Changes to 1040 for the New Tax Season: FYI
The new tax season is upon us, and reporting has changed since last year. One of the major changes is that capital gains are now back on the 1040 form. Last year, the IRS had a new addendum called the Schedule One. The taxpayer would claim gains on this form, total them, and put the sum on the 1040. However, this caused some confusion, and the IRS took flak over it. For the latest tax year, capital gains and/or losses are declared on Line 6 of the 1040. A new tax return for seniors, Form 1040-SR — is available for taxpayers born before January 2, 1955. It has large, easy-to-read font and includes a standard-deduction chart. To read about the other changes for the latest tax season and revisions to the 1040, click here.
Refi Applications Soar 15% in Wake of Declining Interest Rates
Mortgage rates have sunk to the lowest mark since October 2016 — and homeowners were quick to take advantage. Applications to refinance jumped 15% in the month of January and are 183% higher than a year ago. The average rate for a loan balance of $510,400 or less dropped from 3.81 to 3.71%. Loan purchases, however, decreased 10% recently, but the annual is 11% higher. The numbers could’ve been even higher some experts say, but there are some factors which negated this: It’s a seller’s market for the most part, with inventory reaching a record low in 2019. Since the supply is much more limited, some prospective borrowers simply can’t find the right property. To read about the coronavirus’ effect on rates, go here.
Deconstructing the Tesla Stock Boom: A Victory for the Retail Trader Supporters?
Over the past six months, Tesla stock has tripled. Most bullish traders who bought shares in this automotive giant are reaping the rewards, and bearish investors who bought are biting the bullet. But the question remains: How overvalued is the stock? More than $55B of Tesla stock was traded on Tuesday, more than the next 10 put together — and that group includes Apple, Amazon, Alphabet, Microsoft, and Facebook. However, experts are baffled, to say the least, regarding this surge: Tesla is far from proving it’s on course to sustainable profits, and it also hasn’t provided a breakthrough in technology. Robert Sloane, the founder of S3 Partners, said: “This is the one stock where the average Joe says I’m smarter than the Street.” To see a bar chart that puts Tesla in perspective, read this page.
Want to Know a Surefire Way to Pay Less Tax? Inherit Money in the U.S.
Americans will inherit an estimated $764B this year — but they will only pay on average 2.1% tax on these monies. NYU law professor Lily Batchelder wants to change that. In her proposal, heirs would have to pay income tax on the money they inherit — rather than taxing estates, the latter being the status quo now. To put things in perspective, many high-income workers are paying 37% — plus payroll taxes. The Urban-Brookings Tax Policy Center said the plan could create nearly $1.4T in the next decade. “The proposal would take a large step toward leveling the playing field between inherited income and income from work,” Batchelder noted. To read further about the Democrats’ strategy regarding this issue, read this article.