TaxSlayer.com Review 2021 – Free Tax Filing & Online Return Preparation

TaxSlayer doesn’t blow competition like TurboTax and H&R Block out of the water, but it’s superior in several crucial ways. Most notably, it’s cheaper than many better-known alternatives. If cost is a critical consideration in your choice of an online tax prep program, that’s a huge selling point.

Regardless of your selected plan, TaxSlayer is quite flexible. It allows you to complete the required forms and schedules with minimal guidance — or with the help of an “I want to be guided” wizard that emulates more hands-on programs like H&R Block and TurboTax if you prefer. If you need help with some parts of your return but not others, you can use the wizard only for those trickier sections.

Importantly, TaxSlayer one-ups many competitors’ accuracy guarantees, which often apply only to federal returns. If you’re hit with a federal or state penalty or interest charge attributable to a TaxSlayer software calculation error, TaxSlayer refunds it without limit.

But there’s a lot more to know about this discount tax prep program.

TaxSlayer Plans, Pricing, and Features

TaxSlayer offers four main tax preparation plans: Simply Free, Classic, Premium, and Self-Employed. It also provides a separate Military package for active-duty filers, who must receive a W-2 from an employer identification number related to the military or Department of Defense to qualify. The Military version includes a free federal return with all federal forms and applies to all tax situations.

As a new TaxSlayer filer, you must choose your package when you begin the filing process. If you attempt to do something the plan you chose doesn’t support, the software prompts you to upgrade.

Final pricing is set when you e-file and is subject to change without notice as tax season wears on, so your initial quote might rise by the time you complete your return. Plan accordingly.

For all packages, TaxSlayer’s system offers you a choice between a guided, interview-style wizard that walks you through the preparation process step by step and a self-guided platform that lets you choose which forms and sections to complete and when. You can navigate between the wizard and the self-guided system at will, which is helpful if you’re confident enough to fill out some sections on your own but feel you need assistance with others.

Simply Free

This plan provides your federal return and your first state return for free. Each subsequent state return costs $39.95.

Simply Free is inappropriate for freelancers, small-business owners, solopreneurs, or those who earn foreign income. It does make allowances for common situations like reporting student loan interest and education expenses. But Simply Free lacks many of the support features and useful functions of higher-priced plans, so it may not be ideal for tax-filing novices or those who wish to complete their returns as quickly and smoothly as possible.

  • Prior-Year PDF Importing. This plan allows you to import prior-year tax returns from other tax prep programs as long as they’re saved in a PDF format. You can’t directly import prior-year information from another program, including TaxSlayer, with the Simply Free version, though you can keep your previous TaxSlayer return as a PDF.
  • Deduction Finder. This plan has a handy deduction guide (Deduction Finder) that follows along with your return and prompts you to enter all applicable deductions — a nice way to ensure you don’t miss any opportunities to save.
  • Free Phone and Email Support. TaxSlayer provides complimentary phone and email support to all customers during tax season. Email support is definitely the preferred contact method. TaxSlayer has grown increasingly protective of its limited phone support resources in recent years. Expect a phone response during weekday business hours, with extended hours subject to change as tax season wears on. Emailed inquiries can take up to 72 hours to produce a response.
  • Maximum Refund Guarantee. All TaxSlayer plans come with a maximum refund guarantee. If you find that another tax prep company offers you a bigger refund (or smaller tax obligation) than TaxSlayer for an identical return, TaxSlayer agrees to refund all your tax prep fees. You don’t have to file with the other company to get a refund. You just need to show the refund or obligation amount it offers.

Classic

This plan costs $24.95 for your federal tax return and $39.95 for each state tax return. It includes support for all major IRS tax forms, meaning it’s appropriate for tax situations of all complexities — including investors, rental property owners, and small-business owners.

TaxSlayer Classic also includes some features and functions unavailable with the free options, making it ideal for filers in search of a fast, smooth tax preparation option.

Classic comes with all the features of the free option, plus:

  • Prior-Year Importing and Comparisons. If you filed last year’s return with TaxSlayer, you can import data from it. As you fill out your return, the program shows you relevant entries, such as income, deductions, and credits, from the previous year, allowing you to judge the accuracy of your current-year entries.
  • W-2 Importing. You can import electronic W-2s in PDF format with this plan.

Premium

This plan costs $44.95 for your federal return and $39.95 for each state return. Its support features are significantly more robust than lower-priced plans, so it’s definitely a solid choice for novice filers or those who lack the confidence or knowledge to navigate a complicated situation on their own.

Premium includes all the features of lower-priced plans, plus:

  • Live Chat Support. Premium customers have access to a Web-based live chat feature that’s operational at the height of tax season (early January through Tax Day). You can access live chat during TaxSlayer’s posted phone support hours: 9am to 9pm Monday through Friday, 9am to 5pm Saturday, and 12pm to 5pm Sunday (all times Eastern). These hours are subject to change as tax season advances.
  • Priority Phone and Email Support. Premium customers also get priority support for emailed and called-in queries. All communication from Premium customers gets pushed to the front of the line, ahead of communication from Simply Free and Classic customers. That substantially reduces hold and wait times, though TaxSlayer doesn’t say by exactly how much.
  • Ask a Tax Pro. You can ask unlimited questions of TaxSlayer’s in-house tax professionals over the phone or by email. Since some questions may require research, phone responses may not be instantaneous (once you call in and ask your question, it can take one business day for a TaxSlayer employee to get back to you). Ask a Tax Pro is useful if you encounter an issue TaxSlayer’s wizards or onsite help functions can’t resolve. However, TaxSlayer stresses that all information provided by its tax professionals is general in nature and should not be construed as tax advice.
  • Federal Audit Assistance for Free. TaxSlayer’s federal audit assistance package, which it claims is worth $29, is available to Premium customers at no extra charge for three years from your filing date. But it doesn’t include support for audits or other issues relating to Schedule C or K filings.

Self-Employed

This plan costs $54.95 for your federal tax return and $39.95 for each state tax return. Its support features are even more impressive than the Premium plan’s, with extra support and hand-holding for self-employed filers and solopreneurs.

Self-Employed includes everything in the Premium plan, plus:

  • Access to Self-Employment Tax Professionals. TaxSlayer’s self-employment tax professionals are distinct from its primary tax support team. If you have a question about your Schedule C filing or any uncertainty about the business tax deductions for which you might be eligible, they can help.
  • Self-Employment Tax Tips and Reminders. This plan’s interface includes reminders and tips for self-employed filers. There’s no need to hunt for answers in the help database.

Additional Features

TaxSlayer has some other features and functions available to all filers, regardless of plan level.

Pay Prep Fees With Your Refund

TaxSlayer allows all customers to deduct TaxSlayer’s prep fees, including those for state returns, from their federal income tax refunds. There’s an additional processing fee associated with this option. Check with TaxSlayer for details.

Refund Calculator

TaxSlayer has a pretty elaborate Web-based tax refund calculator that allows you to enter much of the information you’d include on your return — filing status, personal income, profit or loss from a business, standard or itemized deductions, and credits — and receive an estimate of your federal refund or the amount you owe. You can enter as much or as little as you like, but a complete accounting ensures a more accurate number.

You don’t have to be a member to use this calculator, so it’s a convenient way to estimate your refund or tax obligation before you begin your return in earnest.

Mobile Apps and Functionality

TaxSlayer offers Android and iOS apps for download. These are functionally identical to the regular website and include value-added features, such as the on-site refund calculator. TaxSlayer’s regular website is already quite mobile-friendly, so while the app is a nice option to have, it’s not strictly necessary.

Knowledge Base

TaxSlayer has a well-maintained, searchable knowledge base with a comprehensive range of help topics.


Advantages

TaxSlayer’s most notable advantages are its affordability and convenient tools that help taxpayers customize their experience.

1. Paid Plans Are More Affordable Than Some Competitors’ Comparable Options

In addition to a comprehensive free option, TaxSlayer users enjoy moderately priced paid plans. The most expensive option, Self-Employed, charges just $54.95 for federal filing and $39.95 per state.

By contrast, TurboTax charges about $100 to well over $300 for CPA-assisted plans capable of handling more complex tax situations plus $50 or more per state return.

2. Choice Between Guided Wizard and Self-Preparation

TaxSlayer has a flexible interface that lets you choose how you complete your return. If you have a simple tax situation or can tackle a more complex return on your own, you can use TaxSlayer’s self-guided forms and schedules, which provide minimal support and guidance.

If you’re not sure whether a particular situation applies to you (for example, whether you should itemize deductions or claim the standard deduction), you can take advantage of TaxSlayer’s guided wizard, which asks interview-style questions and provides explanations along the lines of hands-on tax prep programs like TurboTax and H&R Block.

Regardless of your chosen plan level, you can move between the wizard and self-guided interface as needed and fill out different sections of your form in whatever order you choose.

3. Powerful Refund Calculator

TaxSlayer’s refund calculator is quite comprehensive, almost like a mini-return you don’t have to pay for. If you want to get a sense of how big your refund or obligation will be before completing and paying for your return, this feature is ideal.

TaxSlayer’s calculator also guides you step by step through each relevant item, making it easier to use than the less user-friendly calculators issued by TurboTax and TaxAct.

4. Strong Mobile Resources

TaxSlayer’s website and prep program are among the most mobile-friendly, rivaling TurboTax’s for ease of use and navigation. Its mobile apps are also quite powerful, with most of the features and functions of the regular website. You truly can “file from any device,” as TaxSlayer claims.

5. Accuracy Guarantee Includes Federal and State Returns

TaxSlayer’s accuracy guarantee promises to reimburse filers for federal and state penalties and interest attributable to software calculation errors. That’s a significant advantage relative to some competing services, which only offer accuracy guarantees on federal returns.


Disadvantages

While TaxSlayer provides a lot of bang for your buck, paying such low prices means living without certain perks you’d get from other tax preparation software providers.

1. No Audit Support for Lower-Priced Plans and Certain Filers

You need to upgrade past the Simply Free plan to get free audit support, which includes an over-the-phone consultation with an in-house tax professional who can answer any questions about correspondence you receive from the IRS or state revenue agencies.

2. No Refund Bonus

TaxSlayer doesn’t offer a refund bonus — you always receive the exact value of your federal refund, no more. By contrast, H&R Block offers a refund bonus of up to 5% of the total refund when you agree to receive at least $100 of it as an Amazon gift card.

3. Customer Support Isn’t as Robust as Some Other Programs

TaxSlayer has free phone and email support for everyone, but its customer support system has several disadvantages: restricted operating hours, lack of a user-curated help center (such as TurboTax’s AnswerXchange), and a two-tiered priority support system that pushes Simply Free and Classic customers to the back of the line when Premium customers need help. Also, online live chat is only available to Premium customers.

By contrast, H&R Block’s phone, email, and live chat support — including 24-hour support during tax season — is available to all customers, regardless of package. And H&R Block has a network of more than 10,000 physical offices that offer in-person support, something TaxSlayer can’t provide.

4. Website Has Some Lingering Functionality Issues

No website is perfect, but in the past, TaxSlayer’s has had enough errors and functionality issues to impact the user experience. Though the return preparation process is generally smooth, I’ve encountered page-not-found errors in TaxSlayer’s help database before.

A couple of years back, I was directed to a particularly egregious missing page from the site’s main navigation bar, though the issue appears to be fixed now. And I’ve experienced several timeouts when navigating to TaxSlayer pages from search engine results pages.

I expect TaxSlayer to address these lingering issues as time goes on, and they’re fewer and farther between these days. Still, their existence is befuddling. By contrast, I’ve had nothing but good experiences with H&R Block’s tax prep interface.


Final Word

Few people enjoy preparing and filing their taxes, but not everyone has the same relationship with the IRS, state revenue authorities, and their tax preparer.

If your tax situation is simple and straightforward, your highest priorities are likely to be filling out your return as quickly and cheaply as possible and maximizing your refund. If your situation is more complicated, avoiding an audit is likely to be a major concern.

Though TaxSlayer isn’t perfect, it offers opportunities for taxpayers at both ends of the spectrum, often at a lower cost than the competition. If you’ve been filing with a better-known program like H&R Block or TurboTax, it may be time to give TaxSlayer a closer look.

Source: moneycrashers.com

What Is the Price to Earnings (P/E) Ratio – Definition, Formula & Limitations

Before you start investing, you should know a few things about the stock market. One of the most widely known concepts is that you should buy low and sell high, making a profit in the middle. This is a widely-used strategy known as value investing.

But how exactly do you know what a “low” price or a “high” price is?

Successful value investors use a wide range of valuation metrics to determine whether a stock is undervalued, priced at par with its market value, or overvalued.

One of the most commonly used valuation metrics is known as the price-to-earnings ratio, or P/E ratio. The P/E ratio compares the current stock price for shares of a company to the amount of net profits, or earnings, the company generates per year.

The idea is that by comparing how many years’ worth of the company’s earnings it would take to buy the company outright, you can get a good idea of whether the price of the company — and therefore shares of the company — are trading at, below, or above its true market value, also called the intrinsic value.

What Is the Price-to-Earnings Ratio?

In simple terms, the P/E ratio is a valuation metric that helps investors make educated investment decisions. But how does it work?

Price-to-Earnings Ratio Formula and Calculation

The P/E ratio formula is a relatively simple one:

Share Price / Earnings Per Share (EPS) = P/E Ratio

For example, a company’s stock currently trades at $100 per share. The company’s earnings during the past year came in at $20 per share. In this case, you would divide the $100 stock price by the EPS of $20, and you would come to a P/E ratio of 5.

In this example, if the company’s earnings per share remain consistent and you purchase the stock right now, it would take five years for the company to generate enough profits to cover the initial cost of purchasing the share.

In general, stocks that trade at a discount trade with low P/E ratios, while stocks trading at a premium trade at high P/E ratios. Nonetheless, as you will learn below, there are some exceptions to that rule.

Pro tip: You can earn a free share of stock (up to $200 value) when you open a new trading account from Robinhood. With Robinhood, you can customize your portfolio with stocks, ETFs, or cryptocurrencies, plus you can invest in fractional shares.


Different Types of P/E Ratios

When talking about price-to-earnings ratios, investors generally default to the current, or trailing, P/E ratio.

However, there are actually three different P/E ratios that some of the most successful value investors follow, along with a related measurement known as the PEG ratio that takes valuation analysis to the next level.

1. Current or Trailing P/E Ratio

The current, or trailing, P/E ratio is the traditional calculation described above. This P/E ratio compares the current price to the 12-month trailing EPS.

2. Projected or Forward P/E Ratio

The forward P/E ratio is more of a speculative valuation metric because it attempts to predict the future. The idea is that if a company does well, it will grow, and investors can expect more out of future earnings than current earnings.

Therefore, by comparing the current share price to projected future earnings, you get a more detailed view of the current valuation of the company, taking its growth prospects into account.

There are two ways the forward P/E ratio can be calculated:

Current Share Price / Median Guided EPS = Forward P/E Ratio

Using this formula, you would divide the current price per share of the stock by the company’s estimate for EPS in the coming year.

Companies usually provide their expectations — or guidance — for the coming quarter or year in their shareholder reports. In most cases, guidance is displayed as a range. For example, a company may say it expects to earn between $10 and $15 per share over the next year.

Find the center point in the guidance by adding the two extremes together and dividing your total by two. In this case, you would add $10 and $15 to come to $25, then divide $25 by two to come to median guided EPS of $12.50.

You can also use the following formula:

Current Share Price / Analyst Median EPS Expectations = Forward P/E Ratio

Stock market analysts provide all kinds of predictions about publicly traded companies, including where the market price is headed, revenue expectations, and earnings expectations.

Using the formula above, you would ignore the company’s own guided expectations and rely on outside analyst projections, dividing the current share price by the median EPS expectations among analysts that cover the stock.

Of course, these two approaches will generally result in different forward P/E ratios.

3. Mixed P/E Ratio

The mixed P/E ratio, also known as the relative P/E ratio, takes both past earnings and expected future earnings into account using the following formula:

Current Share Price / (Past Two Quarters’ EPS + Future Two Quarters’ EPS) = Mixed P/E Ratio

This formula mixes the two formulas above by using the trailing EPS for the past two quarters rather than the past year and using the forward EPS for the next two quarters rather than the next year.

When calculating the mixed price-to-earnings ratio, you can either use the company’s guided earnings for the next two quarters or the analyst expectations for the next two quarters.

It’s a good general rule of thumb to calculate it both ways for a full understanding of mixed P/E valuation.

4. PEG Ratio

The PEG ratio looks at the price-to-earnings ratio while factoring in growth. The formula for the PEG ratio is:

P/E Ratio / ((Earnings This Year / Earnings Last Year)-1) = PEG Ratio

By factoring in earnings growth, investors get a more accurate picture of whether the stock is overvalued, undervalued, or trading at fair market value.

A PEG ratio of 1 is considered fair market value. When the PEG ratio falls below 1, the stock is considered to be undervalued and likely represents a strong buying opportunity.

Conversely, a PEG ratio above 1 suggests that the stock is overpriced, indicating that you’ll want to look elsewhere to find strong future growth opportunities.

What Does a P/E Ratio of 0 Tell You?

Often when digging into P/E ratios, you’ll find that the ratio is shown as “0.” A P/E ratio of 0 means that the company is currently generating negative earnings, or operating at a loss. Therefore, the P/E ratio cannot be calculated.

Pro tip: Before you add any S&P 500 stocks to your portfolio, make sure you’re choosing the best possible companies. Stock screeners like Stock Rover can help you narrow down the choices to companies that meet your individual requirements. Learn more about our favorite stock screeners.


What Is a “Good” P/E Ratio?

There is no static number that acts as a good P/E ratio across the market. Companies in different sectors tend to grow at different rates.

So, to determine if the P/E ratio of the stock suggests over- or undervaluation, it’s important that you look at the average P/E ratio across the sector that particular stock lives in.

Here are the average P/E ratios by sector based on December 2020 readings:

  • Technology Stocks P/E Ratio: 59.54
  • Service Stocks P/E Ratio: 213.18
  • Consumer Staples Stocks P/E Ratio: 50.94
  • Energy Stocks P/E Ratio: 0
  • Health Care Stocks P/E Ratio: 72.68
  • Biotech Stocks P/E Ratio: 49.48

It’s best to check industry averages at the time of your investment; you can use a resource like CSI Market’s valuation by industry to do so.

Is a High P/E Ratio Always a Bad Thing?

Naturally, investors look for lower price-to-earnings ratios when looking for opportunities to buy undervalued stocks at a discount. But is a higher P/E ratio always a bad thing?

Not necessarily.

P/E ratios are based on the current price of common stock compared to reported earnings over the past year. However, reported earnings and future prospects are two completely different topics.

In the technology and biotech sectors, it’s common to find stocks with what seem to be exorbitantly high P/E ratios. However, these higher ratios are generally justified by expectations of higher earnings.

For example, a biotechnology company currently may be generating little by way of profits but trades with a P/E ratio of 250. Consider that the average P/E ratio of biotech stocks is about 50 at the moment. With a ratio of 250, the stock is obviously overvalued, right?

Not always.

If the biotechnology company has a new drug application with the FDA for a new cancer therapy that proved to be more effective in clinical trials than the current standard of care, earnings will likely climb dramatically soon when the FDA approves the drug and the treatment hits the market.

Although this type of situation is generally seen in the technology and biotechnology sectors as a result of the industries being driven by innovation, any expectations of a coming blockbuster product, accretive acquisition, or anything else that will drive earnings higher can lead to higher P/E ratios that are entirely justified.

Is a Low P/E Ratio Always a Good Thing?

With the idea being to buy stocks at a low price and sell them at high prices, a low P/E ratio is naturally a good thing — right?

That depends on various factors.

For example, let’s say a technology company is doing relatively well. However, it’s trading with a P/E ratio of 10. That stock has to be a buy, right?

In many cases, yes. However, if the company has failed to innovate and produce compelling new products over the past couple of years, it may be quickly losing market share.

In this case, earnings are expected to fall, so a P/E ratio in line with the overall tech sector simply wouldn’t be justified. The low P/E ratio is more of a warning of painful times to come rather than a red sticker with a discount printed on it.


Is the P/E Ratio the End-All in Valuation Metrics?

Valuation is an interesting topic because the valuation of any stock on the market is relative. The value of anything — whether it be stock, a car, or a slice of pizza — is what someone else is willing to pay for it.

Considering the relativity of valuation, it’s impossible to tie down exactly what the value of any share of stock should be. Nonetheless, successful investors use various valuation metrics to give them an idea of whether they’re getting a good deal when buying shares.

Some of the most common valuation metrics used on Wall Street are listed below.

Other Valuation Metrics to Consider

  • Price-to-Sales Ratio. The price-to-sales ratio compares the price of a single share of common stock to the revenue generated from sales by the company over the past year. It’s a strong metric to use with more established companies that are generating consistent revenues.
  • Price-to-Book-Value Ratio. Price-to-book-value compares the current price of the stock to the value of assets the company has on its balance sheet. This is an important valuation metric because it gives the investor an idea of what the company would be worth if it was forced to liquidate its assets due to financial instability.
  • Price-to-Free-Cash-Flow Ratio. Finally, the price-to-free-cash-flow ratio compares the current price of the stock to the free cash flow generated by the company on an annual basis, providing a comparison of the stock price to the liquid cash the company generates.

Final Word

As you dive deeper into the stock market, you’ll quickly find that taking the time to understand current valuations of the stocks you’re interested in buying is a fruitful endeavor. At the end of the day, if you are blind to valuation, it’s easy to make the mistake of buying a stock that’s overvalued and doesn’t have much room for growth.

Although the P/E ratio is one of the most widely used valuation metrics, it’s far from the only one. Moreover, considering that valuation is a relative metric, it’s important to use as many tools as possible to get an understanding of the current value of any stock before making a purchase.

In conclusion, valuation is important, but it is only one part of the due diligence process investors should take part in before risking their hard-earned money.

Before buying any stock, make sure to research the company’s financial stability, market penetration, and continued innovation with the goal of cornering the market in the future.

Source: moneycrashers.com

Capital Gains vs. Income Tax — Why Investors Pay Less Than Employees

In 2011, American businessman and investor Warren Buffett wrote an op-ed for the New York Times in which he famously claimed he pays a lower tax rate than any of the other 20 people in his office — including his secretary.

He said his prior year’s federal tax bill was only 17.4% of his taxable income that year, compared to tax burdens ranging from 33% to 41% for the rest of his team.

With Buffett’s estimated net worth topping more than $80 billion, how is that possible? The answer lies in the difference between how capital gains and income from employment are taxed.

Capital Gains vs. Ordinary Income

Few people take the time to analyze their tax returns. However, if you did, you might notice that different income types get taxed at different rates.

Ordinary Income

The IRS taxes most income at the ordinary income tax rates — these are the familiar tax brackets that determine the tax rate you pay on income from wages and salaries, income from a business or rental property, most interest income, and some dividends.

For the 2020 tax year, the ordinary income tax brackets are:

Rate Single Married Filing Jointly Head of Household Married Filing Separately
10% Up to $9,875 Up to $19,750 Up to $14,100 Up to $9,875
12% $9,876 – $40,125 $19,751 – $80,250 $14,101 – $53,700 $9,876 to $40,125
22% $40,126 – $85,525 $80,251 – $171,050 $53,701 – $85,500 $40,126 – $85,525
24% $85,526 – $163,300 $171,051 – $326,600 $85,501 – $163,300 $85,526 – $163,300
32% $163,301 – $207,350 $326,601 – $414,700 $163,301 – $207,350 $163,301 – $207,350
35% $207,351 – $518,400 $414,701 – $622,050 $207,351 – $518,400 $207,351 – $311,025
37% Over $518,400 Over $622,050 Over $518,400 Over $311,025

Capital Gains

Capital gains income results from selling a “capital asset” for a price that is greater than its “basis.”

The IRS considers almost everything you own, including your home, personal effects, and investments to be capital assets.

Each capital asset has a basis. Basis is the price you paid for the asset, plus any money you put into improvements.

For example, say you own a vacation home. You paid $250,000 for the property, and after you purchased it, you spent $10,000 renovating the kitchen. Your basis in the vacation home would be $260,000. If you later sold the house for $300,000, you would have a capital gain of $40,000.

We calculate capital gains on investments like stocks and mutual funds in much the same way.

If you purchase 100 shares of Apple stock (AAPL) at $100 per share, your basis in the shares is $10,000. If you later sell the stock when the price per share is $120, your capital gain would be $2,000 — that’s the $12,000 selling price minus your $10,000 basis in the investment.

On the other hand, if you decided to sell your shares after the price falls to $80 per share, you would have a $2,000 capital loss.

Short-Term vs. Long-Term Capital Gains

Capital gains and losses are categorized as either short-term or long-term, depending on how long you owned the asset.

Generally, if you owned the asset for more than one year, it’s a long-term capital gain or loss. If you held it for one year or less, it’s a short-term gain or loss.

The IRS taxes short-term gains at the same rate as ordinary income. But long-term capital gains have their own lower tax brackets. Here they are for 2020:

Rate Single Married Filing Jointly Head of Household Married Filing Separately
0% Up to $40,000 Up to $80,000 Up to $53,600 Up to $40,000
15% $40,001 – $441,450 $80,001 – $496,600 $53,601 – $469,050 $40,001 – $248,300
20% Over $441,450 Over $496,600 Over $469,050 Over $248,300

You can use capital losses to offset capital gains.

For example, say you had that $2,000 gain on Apple stock mentioned above, but you also sold 100 shares of Facebook (FB) at a $1,000 loss. You would net the two together and pay taxes on a net capital gain of $1,000.


Capital Gains vs. Ordinary Income: An Example

Now that we’ve explained the different tax brackets that apply to ordinary income and capital gains, let’s return to the question of why an investor like Warren Buffet pays a lower tax rate than his secretary. We’ll do this with a hypothetical example.

Let’s say Iris is a single taxpayer who has $70,000 in wages from her full-time job. Iris is in the 22% tax bracket, but that doesn’t mean she pays 22% on all $70,000 of income.

Instead, the first $9,875 of her income is taxed at 10%, the next $30,250 at 12%, and the final $29,875 at 22%. That works out to a total federal income tax bill of $11,190 ($987.50 + $3,630 + $6,572.50).

Iris is in the 22% tax bracket, but her effective tax rate is 16% — she pays $11,190 out of her $70,000 income.

But wait. If you’ve ever looked at a pay stub, you know that federal income taxes aren’t the only taxes deducted from your paycheck.

In addition to Iris’ federal income tax bill, she also pays Social Security tax at a rate of 6.2% and Medicare tax of 1.45% on her earnings. That’s another $5,355 out of her pocket.

Between federal income taxes and payroll tax, Iris is giving 24% of her income to the federal government.

Now let’s compare Iris’ tax rate to Keith’s. Keith is also a single taxpayer with $70,000 of income. But thanks to Keith’s grandparents, who left him a pile of money, Keith doesn’t work.

Instead, all of his income comes from long-term capital gains. The first $40,000 of Keith’s income isn’t taxed at all, because it falls into the 0% capital gains tax bracket. He pays just 15% on the next $30,000, for a total tax bill of $4,500.

Keith’s effective tax rate is just 6%. Plus, Keith doesn’t have any Social Security or Medicare taxes deducted from his capital gains. As a result, Investor Keith pays a much lower effective tax rate than Worker Iris.

Note: Iris’ and Keith’s tax bills might actually be lower due to deductions and credits that would reduce their taxable income and offset their tax liability. To keep this illustration simple, we’ve ignored the potential impact of tax deductions and credits.


Why Capital Gains Tax Rates Are Lower

In looking at the example above or reading Buffett’s op-ed, you might wonder why there’s such a big difference in how the U.S. Tax Code treats ordinary income and capital gains. Well, it depends on who you ask.

According to the Tax Foundation, a low capital gains tax rate encourages people to save and invest in the U.S. economy, and low capital gains tax rates have historically raised more in tax revenues than higher capital gains rates.

The Tax Policy Center, on the other hand, argues that tax rates on capital gains aren’t a major factor in economic growth, and the benefits of lower capital gains rates disproportionately benefit the wealthy.

That’s why some lawmakers have proposed higher taxes on investment income over the past several years. One example, the so-called “Buffett Rule,” would apply a minimum tax rate of 30 percent on all taxpayers with income greater than $1 million, no matter where their money came from.

Although that initiative didn’t pass, the Health Care and Education Reconciliation Act of 2010 created the Net Investment Income Tax (NIIT). The NIIT applies a 3.8% surtax on investment income, including interest, dividends, capital gains, and rent and royalty income for high-income taxpayers.

For these purposes, “high income” means single taxpayers with income greater than $200,000 or married couples filing a joint tax return who make more than $250,000.


Final Word

Capital gains tax rates are a highly debated topic. Advocates for lowering capital gains tax rates argue that it would increase economic growth and promote entrepreneurship. Their opponents believe raising the tax rates on capital gains would raise additional revenues and promote a more equitable tax system.

Whatever happens to capital gains tax rates in the future, it helps to understand how our tax laws treat different types of income. You can use that knowledge in your own tax planning, or simply have a better understanding of what it means when politicians and lawmakers debate the issue.

Source: moneycrashers.com

Get Married for Less by Eloping

Don’t feel you need to stay at a 5-star hotel to make memories. “Hotels can be expensive, so opt for a cute Airbnb near your venue. I’ve even seen some couples rent a sweet conversion van and camp,” says Coleman.
Erika Hernandez, owner of The Greatest Adventure Weddings and Elopements serving the Pacific Northwest, began planning weddings in 2012 after noticing the growing popularity of adventure weddings and elopements. Laura Coleman, is the production manager for Simply Eloped, which plans ceremonies all over the country.
Use public land. If you were to have the ceremony and reception at a private venue, the cost would still be similar to that of a much larger wedding party because of the rental fee. Instead, use a picturesque spot in a park or government-owned land. There are 423 beautiful national park sites in America, so you can be rest assured there is one within driving distance to you. Permits are usually only around 0. For decorations, see the next tip.
Get thrifty with your bouquet. DIY your own bundle of beautiful blooms or purchase a premade bouquet from a local market.
You don’t need a traditional cake. “Especially if you’re not cake people — Go with pie, doughnuts, cookies! All much less expensive options,” says Hernandez.

15 Ways to Save Money by Eloping

Save money on booze. Instead of having a full bar, consider creating a signature cocktail named after an inside joke you share with your friends, or nickname you have as a couple.
Before getting into more of the fun stuff, Hernandez let me in on the reality check she gives clients when planning elopements: Like everything else, you get what you pay for. In other words, you can’t expect a Kardashian-level celebration on a standard budget, much less a cost-saving one. Still, there are many ways to save money without sacrificing quality.
Olivia Smith is a writer based in Washington, D.C., who has experience in public and political advocacy work. She is a contributor to The Penny Hoarder.
A recent survey by Helzberg Diamonds found that 91 percent of unmarried millennials would consider eloping. It also found that three out of five young married couples would choose to elope instead of having a traditional wedding again.
Don’t pay extra for an officiant you don’t know. “If you’re having a small group of guests at your elopement, have a friend or family member officiate. In some locations, like Colorado, you can actually self-officiate, which means you don’t need an officiant at all,” says Hernandez.
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But what if there was a way to even split the cost of your elopement? This gives you a chance to be creative, choose what elements you feel are most important, and be able to splurge even more for your honeymoon.
Take advantage of family heirlooms or vintage clothes. “Chances are your mother or future mother-in-law have a dress in a box in their closet that is probably back in style,” says Coleman.

1. The Clothes

Without further ado, here are Coleman’s and Hernandez’s top 15 ways for saving money by eloping:

2. The Heirlooms

Use your own technology. Instead of renting an expensive professional speaker, a bluetooth speaker connected to your phone, is light to pack and works well for the ceremony and first dance.

3. The Flowers

Just a few generations ago, elopements had a whiff of scandal. They were associated more with Romeo and Juliet types and shotgun weddings than with prudent couples trying to save money.

4. The Sound System

Elope on a weekday. Vendors have more availability and more flexibility in the number of hours they are willing to book. For instance, if they can book a 10-hour package on a Saturday, during peak season, they may choose to book that wedding over a four-hour elopement.

5. The Adult Beverages

“We don’t recommend skimping on vendors, especially photographers and videographers. Not only will you keep your photos/videos to look back on for the rest of your lives, they’re the best way to share your day with those that couldn’t be there with you,” says Hernandez.

A woman does her makeup on her wedding day.
Getty Images

6. The Styling

One of the best things about elopements is that you don’t need to adhere to the expectations of a traditional wedding.

7. The Food

One thing you shouldn’t go halfway on?

8. The Venue

Privacy Policy

9. The Decor

Source: thepennyhoarder.com

10. The Location

One of the most appealing aspects of eloping is the money-saving factor. People who elope spend far less than half of what a traditional ceremony would cost. The average American wedding cost ,000 in 2020 (that relatively low figure was due in part to severe downsizing and social distancing regulations due to the pandemic; in 2019 it was ,000). Brides magazine reports that elopements usually cost between and ,000.

11. The Cake

Coleman remembers some of the ways her clients put their own spin on their elopements.

12. The Date

Ready to stop worrying about money?

13. The Officiant

You can rent attire, purchase ready-to-wear items vs made-to-order, or buy slightly used. (There are some amazing second-hand shops that even have new designer dresses and gowns from previous seasons. Some good online stores selling gently used gowns and accessories are Still White, Pre Owned Wedding Dresses, Nearly Newlywed, and even Facebook Marketplace is worth a look.

A man walks out of a room he's getting ready in for his wedding.
Getty Images

14. The Accommodations

Elope where you are. Travel can often be the biggest cost. An elopement doesn’t have to be in the most epic location, it can be just as beautiful if you elope somewhere closer to home that is meaningful for you both.

15. The Transportation

Even the definition of “elope” has changed. It traditionally meant that the only people in attendance were the couple, officiant and required witnesses, and the wedding was carried out in secret, maybe on the courthouse steps. Today, it is generally agreed that a wedding with a guest list under 10 can be called an elopement. It is even smaller than what is often called a “micro” or tiny wedding where the guest list can run to a whopping 30 people.

Don’t Skimp on Memories

“Want your dad to walk you down the aisle? Sure! Want to skip the traditional vows and do them in Klingon? Heck yeah! Do it! And guess what? You don’t have to wear white. There have been some amazing elopements in which the dress is green, purple, or the best — black,” she says.
Two wedding planners who specialize in dream elopements offered their ideas on how to watch pennies without sacrificing a memorial experience.
If you want to choose a spot farther away, keep your eye out for flight deals. There are tons of websites that will notify you if a flight is discounted for any reason.
There is a way to obtain your decor for free; go outside! “The beautiful thing about outdoor elopements is nature is your decor. Let Mother Nature do all the work for you. The trees are your decor,” says Coleman.



Choose quality over quantity of food. Do a beautiful picnic with a charcuterie board or simply, drinks and dessert. This is more intimate than going out to dinner, and less expensive than hiring a caterer/personal chef.

How to Budget for Vacation, Holidays & Sick Time Off as a Freelancer

Choosing your own hours, working from home, and choosing the projects and clients you take on sounds like a dream, doesn’t it? While freelancing comes with all of these benefits and more, it isn’t always everything it’s cracked up to be.

Freelance work can give you more day-to-day freedom than traditional full-time employment, but it does come with its own challenges. Not least of which is budgeting for personal time off like sick days and vacations. And although taking time away from the office can be difficult as a freelancer, it is possible with a little forethought and planning.

Here are some of the ways you can budget for vacation time and sick leave when you’re self-employed so that you can have a healthier work-life balance.

Ways Freelancers Can Save For Vacation and Sick Time

There are two main factors that make booking time off as a freelancer particularly difficult: client obligations and budgetary restrictions. It can be difficult to balance both, but it’s essential to take time off to care for your physical and mental health.

Scheduling time off outside of your priorities and notifying clients is up to you, but when it comes to budgeting for leave, you have a number of different options.

1. Include Vacation and Sick Pay in Your Rate

Ideally, you factored in all your costs when calculating your freelance rate, including taxes, retirement savings, and expenses like professional subscriptions and tools. If you’ve already accounted for personal time off in your hourly rate, you’re ahead of the game.

But, if you’re like many freelancers, covering time off for yourself may have slipped your mind when setting your rate. Luckily, that can be easily remedied by adjusting your rate for future projects and new clients.

To start, figure out how many weeks you want to take off each year and throw in a few extra days to account for illnesses, appointments, and emergencies. Remember to consider whether you plan to work or relax on bank holidays as well because that will cut down on your total working days per year.

Depending on how much time you want to take off and how many hours you work each month, you can calculate the additional amount you need to add to your rate.

In a full-time position with an allotted two weeks of vacation a year, about 4% of an employee’s salary is set aside for time off.

As a freelancer, you may have fewer billable hours overall but charge a higher rate than a typical worker, so the amount you set aside will vary greatly depending on how you charge, how much you work, and how much vacation you want to take each year.

2. Set Aside a Portion of Every Invoice

If you don’t have straightforward billing, or your income and hours vary significantly from month to month, including a calculation for time off in your rate may not work for you. Instead, consider setting aside a portion of each invoice in a separate account.

For example, after your living expenses and bills have been covered, you could set aside 50% of any leftover cash to go toward vacation days and sick time. This is an ideal option for freelancers who can’t always predict how much they’ll have coming in or who bill differently based on the project or client.

If saving for a vacation is a priority and you’re not putting away money for other expenses or to pay off debt, you can also set aside the entire amount you have leftover each month.

First, figure out the entire cost of the vacation you want to take, including time off, flights, accommodations, meals, and activities. Once you have a number to work toward, you’ll know how much you need to aim for with your vacation fund.

3. Take on Additional Clients and Projects

If your current monthly income just covers your bills and living expenses, you probably won’t be able to shave a portion off each invoice for time off. But that doesn’t necessarily mean you have to suffer through burnout and give up on a chance to get away from your desk.

If you have a specific vacation in mind, or you just want to save up some extra cash for sick days, take on some additional clients and projects to build up a personal time off fund.

While every freelancer likes to have long-term, committed clients, taking on short-term projects every so often can help you to increase your income and top off your savings to cover vacation days and sick leave.

Set aside the income you receive from these clients in a separate savings account and let it build up over time. Use it as a rainy day fund for personal emergencies or plan a getaway to relax and unwind.

4. Take a Working Vacation

If you’re a new freelancer and your bank account just can’t handle supporting a vacation or sick day, you might have to compromise by taking a working vacation. Fortunately, you don’t necessarily have to spend the entire time working. If possible, consider committing to consistent but cut-down work hours while you’re away.

For example, some freelancers continue to work two to four hours per day while on vacation, waking up early or carving time out of their evenings to meet deadlines and keep their workload balanced.

If you still need to put in a full workday, getting away from your routine and home office might be enough to make a working vacation worth it. After all, as a freelancer, you can probably do your job from just about anywhere as long as you have a solid Wi-Fi connection and your laptop.

The same goes for a sick day. If you can’t afford to take a full day off, try working on what you can from the couch or bed and allowing yourself to have a few additional hours of rest when you feel the worst.

5. Work Overtime

Another option you have is to work overtime prior to taking time off. While that might mean pulling a few all-nighters and working longer hours, it will allow you to get any pressing client work taken care of before you leave the office. Then, you can enjoy your time out of the office without having to worry about deadlines, poor Internet connections, or responding to emails.

Plus, unlike some of the other options you have, it won’t negatively affect your personal finances because you’ll be doing the same amount of work you normally would.

6. Book Time Off During Holidays and Slow Periods

Many businesses have annual slow periods caused by seasonality. Booking your time off around holidays and slow periods when you wouldn’t have a lot of work anyway can give you a chance to take a break without it significantly impacting your annual income.

Plus, it’s unlikely to make much difference to your clients because they’ll either be taking time off themselves or experiencing an expected lull in typical operations too.

For example, many businesses slow down over the winter holidays and around bank holidays depending on their industry, so those can be ideal times for you to take a breather as well. If you expect your freelance business to be slow for a brief period — and you’re financially prepared for it — use it as an opportunity to take some time off.

7. Start a Personal Time Off Fund

If you’re a new freelance business owner, time off may not even be on your radar. But eventually, you’re going to need a day off to take a mental health break or to recover from a particularly nasty cold. When that time comes, you don’t want to have to worry about whether you’ve missed out on income.

That’s where having a time off fund can come in handy. Contribute to it in whichever way works for you — monthly, per invoice, or even sporadically — and let it build up until you need to use it. This way, when you do eventually have a vacation in mind, you’ll already have a headstart on making up for any potentially missed wages.

8. Start a Side Gig

If freelancing is your full-time job, you might balk at the thought of starting a side gig. But part-time endeavors can help you to earn additional income, which you can then put toward personal time off.

For example, you could set up an account on a freelance website like Fiverr or Upwork, or you could do something completely outside of the services you offer as an independent contractor, like drive for Uber, walk dogs in your neighborhood, or rent part of your living space on Airbnb.

Any money you generate from your side gig can be used to cover time off while still supporting the flexibility and autonomy of your self-employment.

9. Subcontract Work Out

If you have an emergency that requires you to take time off, it can be challenging to ensure that your deadlines are met and responsibilities fulfilled. And completely missing out on the income you were planning for can throw a wrench in your budget.

In these circumstances, subcontracting your work out to another trusted professional can ensure your clients still receive the deliverables they expect and you still get a paycheck, even if you have to turn a portion of it over to the subcontractor.

Although most freelancers don’t have a full-time employee on call to take on projects when you need to take time off, growing your network will help you to find professionals with similar skill sets to step in and handle a project when you aren’t able to.

For example, you could hire someone to handle a few social media posts on LinkedIn for a client while you’re away or to finish up the last graphic for a small business’s advertising project.

As an added bonus, subcontracting between complementary professionals can become a two-way street. By growing a reliable subcontracting network, you may be given referrals or opportunities to take on additional work or clients in the future, potentially adding to your income and client roster.


Final Word

When you own a freelance business, a lot of responsibility falls on your shoulders, from health insurance and contributing to a retirement account to budgeting for vacation time and sick leave. However, most freelancers will tell you that the perks outweigh the pitfalls, as long as you plan ahead and set yourself up for success.

Paid time off isn’t out of reach if you’re self-employed — it just requires careful budgeting, preplanning, and some creative thinking to make it a reality. Consider how you’d like to handle personal time off before you need it so you aren’t left scrambling to cover your expenses and stressing out over whether you can afford to take a sick day.

Source: moneycrashers.com

Motley Fool Stock Advisor Review 2021 – Is the Subscription Worth It?

Motley Fool Stock Advisor is Motley Fool’s flagship premium stock-picking service. At its core are two monthly stock recommendations, one each from Motley Fool co-founders David and Tom Gardner, also known as the Gardner brothers, delivered in detailed email newsletters making a case for — and outlining the potential risks of — each security.

Since 2002, Motley Fool Stock Advisor picks have dramatically outperformed broader market indexes. Cumulatively, Stock Advisor picks returned 343% through March 2018, compared with 79% on the S&P 500 index.

Put another way, a $10,000 investment in Stock Advisor picks at the service’s inception was worth north of $170,000 by March 2018; $10,000 invested in the S&P 500 over the same period was worth less than $40,000 by March 2018.

What Is Motley Fool Stock Advisor?

Motley Fool Stock Advisor, developed by the stock market gurus at Fool.com comes with a slew of additional features and recommendations, including:

  • Best Buys Now (Best Stocks to Buy), a rotating selection of top stock picks culled from more than 300 candidates
  • Starter Stocks, a group of blue-chip and growth stocks for novice investors
  • Premium Reports and Articles available only to paying subscribers
  • Premium Community Boards where subscribers can exchange tips and strategies

See the “Key Features” section below for more details on these and other Stock Advisor features.

Stock Advisor’s Suitability

Motley Fool Stock Advisor is not for everyone. Motley Fool advises Stock Advisor subscribers to build diversified portfolios consisting of at least a dozen recommended stocks, and to buy and hold all recommended stocks for at least three to five years.

Motley Fool makes no representations that their Stock Advisor is a key to quick riches, nor does it guarantee returns on any of its recommendations.

Motley Fool Stock Advisor also isn’t designed for investors looking to match, not beat, the performance of broader stock market indexes.

None of this is to say that Stock Advisor isn’t worth its sticker price, just that prospective subscribers should determine whether picking individual stocks — and, specifically, Stock Advisor’s recommendations — is a good fit for their investing strategy, objectives, and risk tolerance.

Here’s what you need to know about Motley Fool Stock Advisor’s pricing, features, and overall suitability for individual investors.


Pricing

Motley Fool Stock Advisor subscriptions are available monthly or annually. Pricing is as follows:

  • Monthly Subscription: $39 per month. Each month, the subscription renews on the numerical date of initiation; for example, if you began your subscription on June 10, it will renew on or about the 10th of each month moving forward.
  • Annual Subscription: $199 per month at full price. Each year, the subscription renews on the date of initiation; for example, subscriptions that begin on June 10 renew on June 10 each year.
  • Discounted Annual Subscription: $99 per month. This is a limited-time (though there’s no set end date) offer available to new customers and select current monthly customers.

All subscriptions renew at then-current rates. For instance, should the full-price annual subscription increase from $199 to $219 while your subscription is active, you’ll be charged $219 at your next renewal date.

Motley Fool doesn’t refund or prorate canceled subscriptions, except for a 30-day money-back guarantee on annual subscriptions. However, subscribers may apply balances remaining on canceled subscriptions to other Motley Fool premium service subscriptions.


Key Features

Here is what you get with your Motley Fool Stock Advisor subscription:

1. New Recommendations

Each month, Stock Advisor subscribers receive two “new recommendations,” one each from Motley Fool co-founders David and Tom Gardner.

Each recommendation comes in a dedicated email newsletter outlining:

  • What the company does
  • Key data about the company and its stock (e.g., market capitalization and price as of the recommendation date)
  • Who its clients or customers are
  • Who’s in charge (key executives and board members)
  • Why Stock Advisor subscribers should buy
  • Notable risks to the recommendation, including potential “sell” triggers

Each recommendation is simultaneously visible — or nearly so — in Stock Advisor subscribers’ accounts.

2. Best Stocks to Buy

When you log into your Stock Advisor account, the Best Stocks to Buy dashboard is the first thing you’ll see on the home screen. This 12-stock dashboard updates every Thursday and completely refreshes every month.

It includes:

  • Five “timely” picks from David Gardner
  • Five “timely” picks from Tom Gardner
  • David Gardner’s most recent new recommendation
  • Tom Gardner’s most recent new recommendation

Individual picks frequently repeat on the Best Stocks to Buy list. For instance, Amazon has appeared more than 30 times since David Gardner first picked it back in September 2002.

Each pick includes an abbreviated version of the detailed dossier that accompanies newsletter recommendations, updated to account for recent industry or company changes, such as Amazon’s 2017 acquisition of Whole Foods, which further improved David Gardner’s opinion of the company.

3. Starter Stocks

This is another elite group of stocks culled from the Gardners’ past recommendations.

According to Motley Fool, Starter Stocks are ideal for novice investors looking to build strong stock portfolios from the ground up. The list’s components are updated at least once per year. Stock Advisor recommends adding them to portfolios consisting of at least 15 different stocks.

4. Stock Advisor Email Subscription

When you sign up for Stock Advisor, you’re automatically enrolled in its email newsletter. You can expect to receive four to eight emails per month, consisting of some or all of the following:

  • New recommendations
  • Trade alerts (e.g., when the team “closes” or cancels its recommendation on a stock and advises selling part or all of your stake)
  • Expert analysis and commentary on individual stocks, industries, or economic conditions
  • Updates to the Gardners’ Best Buys recommendations
  • Multimedia content

Enrollment is mandatory; you can’t unsubscribe from the newsletter without canceling your subscription.

5. Stock Watchlist

Stock Advisor’s Watchlist feature isn’t revolutionary — it will look familiar to anyone who’s spent time on Yahoo! Finance or the back end of an online brokerage platform — but it’s useful nevertheless.

Simply search and add tickers to set up a real-time flow of news and analysis for your favorite stocks. It’s a great way to narrow down the universe of Stock Advisor recommendations to those that call your name.

6. Favorites

Stock Advisor’s Favorites feature is another place to collect and check up on the stocks you’re watching or have already taken positions in.

If you wish, you can securely link your brokerage account to your Motley Fool account to bulk-import your holdings and brokerage watchlist stocks. Once imported, you’ll automatically receive “buy” and “sell” recommendations on your holdings.

7. Scorecard

Scorecard is yet another visualization for stocks you’re holding. It’s a data-rich ticker collection that updates every minute during trading hours and features:

  • Ticker symbol
  • Current price
  • Purchase price
  • Purchase date
  • Day change
  • Return since purchase
  • Return versus the S&P 500 index

You can link your brokerage account to trade Scorecard stocks with minimal friction.

8. Optional Email Subscriptions

Stock Advisor subscribers can enroll in these optional email newsletters:

  • Scorecard Updates: Daily or weekly premium content updates about the tickers you’ve added to your Watchlist or Scorecard.
  • Special Offers: Money-saving, no-obligation offers from Motley Fool partners.
  • Stock Up: A roundup of the best of Motley Fool’s recent free content, including articles, social media content, multimedia, news, and podcasts.

If you don’t mind inbox clutter, you might find some value here. If not, you’re under no obligation to enroll.

9. Performance Tables & Charts

The Performance section is the most data-rich portion of your Stock Advisor account. Recommendations appear in a long table that displays:

  • The company name and ticker symbol
  • The recommendation date
  • The recommending team (David or Tom)
  • Market capitalization and adjusted price as of the most recent market close
  • Returns since recommendation (benchmarked against the S&P 500)
  • Risk score (with risk increasing from 1 to 25)

You can drill down on some of these data points.

For instance, each linked ticker symbol leads to a stock information page with details about the stock’s fundamentals, price history, and recent news, plus an interactive performance chart and dividend calculator, when applicable.

10. Premium Research Reports

Stock Advisor subscribers have access to premium research reports produced by Motley Fool staffers.

These reports usually cover industry and macro trends likely to affect Stock Advisor’s new and existing recommendations; typical titles include “Inside the Car of Tomorrow,” “The Ultimate Virtual Reality Investing Playbook,” and “AI Disruption Playbook.”

Some reports simply summarize recent Stock Advisor picks. One particular report highlights a legal cannabis investing opportunity that Motley Fool believes has incredible upside in one of the decade’s hottest market sectors.

11. Premium Articles

Stock Advisor subscribers also have access to premium articles not visible to run-of-the-mill Motley Fool users. These articles tend to be shorter and newsier than premium reports, but length, format, and topics vary widely.

To peruse premium articles, click over to your Watchlist.

12. Stock Screener

This is another decidedly non-revolutionary tool that’s nevertheless convenient for market watchers. Use it to sort for:

  • Market sector (e.g., energy or consumer)
  • Stock price volatility
  • Asset class
  • Advisor recommendation conviction strength (e.g., “high” or “neutral”)
  • Dividend yield

13. Premium Discussion Boards

Motley Fool Stock Advisor has more than two dozen members-only discussion boards covering topics like:

  • Investing Basics
  • Investing Strategies
  • Personal Finance
  • Best of Stock Advisor

Before you can post to any of these boards, you’ll need to create a user name. You’re under no obligation to participate; many Stock Advisor subscribers silently hang out on their favorite boards, passively absorbing fellow subscribers’ insights without contributing their own.


Advantages

These are Motley Fool Stock Advisor’s biggest selling points:

  1. No Need to Trade Aggressively or Time the Market. Although Stock Advisor isn’t designed for index investors looking to match broader equity markets’ performance, or those primarily or wholly seeking passive income, it’s not meant for overly aggressive investors, either — and certainly not for day traders whose strategies hinge on exploiting short-term market movements.
  2. No Obligation Beyond Your Subscription Term. Stock Advisor subscribers aren’t obligated to continue their subscriptions beyond their scheduled end dates. Though subscriptions auto-renew by default, it’s easy to cancel at any time and pay nothing more.
  3. New Subscribers Can See Active Recommendations Since Inception. No matter when you subscribe to Stock Advisor, you’ll have full access to every active recommendation dating back to 2002 – more than 15 years of stock-picking history. That’s more than enough to build a diversified equity portfolio.
  4. Includes Access to Closed Recommendations. Your Stock Advisor subscription also includes access to closed recommendations — picks the Gardners have withdrawn for one reason or another since inception. This is invaluable; after all, stock picks are only as good as the fundamentals supporting them.
  5. Lots of Opportunities to Learn From Veteran Investors. Stock Advisor’s premium community boards offer ample opportunity for less-experienced subscribers to learn from veteran investors. If you’re not ready to start buying stocks, or you’re looking to hone your personal investing strategy, this is a good place to start – and it’s far less noisy than public message boards or social media platforms.
  6. Tons of Premium Content. Depending on how you value it, Stock Advisor’s premium reports and articles alone – like its proprietary report on a top cannabis investment opportunity – justify the cost of a subscription. At a minimum, Stock Advisor is another resource for serious investors looking to cut through the noise and peer around the curve.

Disadvantages

Keep these disadvantages in mind as you weigh the benefits of Motley Fool Stock Advisor:

  1. It’s Just One of Several Premium Services From Motley Fool. Motley Fool has a host of premium subscription services; Stock Advisor might be the flagship, but it’s not the whole package. If you’re looking for advice specifically about investing for (and in) retirement, you’ll need to sign up for Rule Your Retirement, a $149-per-year subscription tailored to folks prepping for their golden years.
  2. Subscription Isn’t Necessary for All Premium Content. Motley Fool undercuts its extensive lineup of subscription services by offering some premium content outside its pay walls. For instance, the Rule Breakers podcast – part of the $299-per-year Rule Breakers service – is available for free at multiple podcast providers.
  3. Can’t Opt Out of Stock Advisor Email Newsletter. Subscribers can’t opt out of the Stock Advisor email newsletter; it’s one of the few non-negotiable things about a subscription. If you don’t want to receive four to eight new emails per month, think twice before subscribing.
  4. No Guarantee the Annual Subscription Discount Will Remain in Effect. The discounted annual subscription rate – $99 per year – is a great deal for first-time Stock Advisor subscribers, but there’s no guarantee it’ll remain in effect. If you do take advantage of it, be aware that your subscription may auto-renew at a higher rate, and plan accordingly.
  5. No Prorating for Canceled Subscriptions. Though Stock Advisor subscribers are free to cancel at any time, Motley Fool doesn’t prorate subscriptions canceled well before their scheduled renewal dates. If you cancel an annual subscription with six months left in the term, for instance, you’re still on the hook for half the fee. The one exception: You’re entitled to a full refund when you cancel an annual subscription in the first 30 days.
  6. Long-Term Subscribers Must Heed “Sell” Recommendations as Well. Stock Advisor subscribers aren’t obligated to act on any of the team’s recommendations, but their portfolios’ performance may deviate significantly from the Stock Advisor portfolio’s unless they faithfully act on “buy” and “sell” recommendations in a timely fashion. In effect, Stock Advisor subscribers looking to mirror the recommended equity basket’s performance must outsource their investing strategies to David and Tom Gardner – even if they’d be better served doing otherwise.

Stock Pick Performance

Investing is all about making money in the market. When paying for a service designed to give you an upper hand as you invest, it’s important that the service has a history of generating significant returns.

Although the stock advisor service makes no promises that every alert will result in a winning investment, looking into the historic performance of its picks reveals an impressive record of profit with a few bumps along the road.

Some of the most notable recent investment alerts include:

  • CrowdStrike Holdings (CRWD). On June 4, 2020, Tom suggested subscribers should invest in CrowdStrike Holdings at $95.98 per share. Those who did enjoyed 112% gains by early April 2021. The performance of the stock was so compelling that it popped up again in July 2020 as an alert at $107.27. An investment at this level would have yielded returns of nearly 90% by April 2021.
  • ASML Holdings (ASML). On July 16, 2020, David pointed to ASML Holdings as the next big opportunity at a purchase price of $383.95. Investors who jumped on the opportunity earned more than 65% by early April 2020.
  • Fiverr International (FVRR). On September 3, 2020, Tom suggested that Fiverr International was the next big opportunity, trading with a price of $116.59 per share at the time. By early April of 2021, the stock price had climbed by more than 95%.
  • Bandwidth Inc (BAND). Given the fact that nobody can predict the future, there have been a few losing trades over the past year. One of the most notable was a recommendation to purchase Bandwidth Inc in September 2020 at $150.06. The stock was down around 14% by early April 2021.

If there’s a stock picking service that promotes its ability to be right 100% of the time, you should turn the other way and run. The fact is that when making an investment, you’re essentially making an attempt at predicting the future, and there’s no 100% proven science to doing that.

With that in mind, although the service has led to a few losing trades, it is also clearly a winner with the vast majority of alerts resulting in profitable investments, many of which far outpace the average returns of the stock market as a whole.


Final Word

Picking stocks is an inherently risky business. To its credit, Motley Fool doesn’t suggest otherwise. Motley Fool Stock Advisor’s sales literature makes it clear that some Stock Advisor picks turn out to be duds, that subscribers must be prepared to buy and hold for several years, and that portfolios composed of a dozen or more picks do better than their less-diversified counterparts.

If you’re comfortable with all this, and willing to pay anywhere between $99 and $228 per year for hand-picked stock tips, you could do worse than Motley Fool Stock Advisor — a tip sheet that, unlike many imitators, has more than a decade of above-market returns under its belt.

Just don’t lose sight of the core principles of investing along the way. You’re not obligated to act on any Stock Advisor recommendations, nor should you ever invest more than you can afford to lose in securities that aren’t FDIC-insured, no matter how sound a tip appears.

Source: moneycrashers.com

4 Roadblocks to Saving Money — And How to Get Past Them

Some personal finance types will shame you for getting a big tax refund because you’re giving Uncle Sam an interest-free loan. We say, do whatever works for you. Opt to have less money withheld from your paycheck if you’ll actually save it or apply it toward debt. But if the idea of a giant tax refund motivates you, it’s OK to make the IRS play piggy bank. Just make a plan for how to spend your tax refund that will pay off in the long run. Some of our favorite ideas:
One of the best ways to save money is to look carefully at gym memberships, streaming services, subscription boxes and anything else that you automatically pay for each month. If you haven’t used it in the past month, it probably belongs on the chopping block. Also be on the lookout for any free trials you forgot to cancel.
Whether you have health insurance or not, it often pays to do some detective work before filling your prescriptions. If you’re an Amazon Prime member, you can save up to 80% on generic medications and 40% on name-brand drugs through Amazon Pharmacy if you don’t have insurance. Even if you have insurance, a prescription drug card could help you save money. You can ask your pharmacist to run the cost using your insurance and the card to find out which option is cheaper.

How to Start Saving: Set Your Goals First

Do you ever wonder why it’s so hard to save money — even when you’ve cut the cable and the meals out, and you’ve never even had a latte habit?
That said, some types of insurance are a waste of money. For example, you probably don’t need collision insurance or comprehensive insurance on a car that’s paid off if it’s older and one fender-bender away from scrapyard heaven. You may not want to shell out for accident insurance or critical illness insurance either, because the circumstances they’ll cover you for are so limited. Even life insurance may not be worth the cost if you’re single with no dependents.
Insurance can seem like a money-sucker, because hopefully, you don’t need to use it very often. Having sufficient homeowner insurance or renters insurance, car insurance and medical insurance is one of the best ways to prevent an emergency from destroying your finances.
If you’ve cut everything you can and still can’t save, it’s time to find ways to make extra money. Switching to a higher-paying job isn’t always realistic, but you can still take on a side hustle, find a work-from-home job you can do part time or make extra cash selling stuff online.

25 Tips for How to Save Money if Your Paycheck Is Stretched Thin

Some money-saving strategies require a ridiculous amount of discipline. So here’s a super easy trick that could give you a quick savings boost in just three minutes. Find out if someone owes you money by searching your state’s unclaimed property website.

1. Time your purchases like a pro.

Think about the short-term goals you’re hoping to accomplish within the next year or two. Building an emergency fund for your family, making a down payment on a home or saving for a vacation may fit in here. Also consider your long-term goals, like putting more money in a 529 plan for your child or saving for retirement.

A woman smiles as she holds up a drink and a sub she got for free from Jersey Mike's Subs.
Robin Hartill scored a free birthday sub she got from Jersey Mike’s Subs in St. Petersburg, Fla. Tina Russell/ The Penny Hoarder

2. Master the art of getting stuff for free.

We don’t have a magic money-saving trick that will send your bank account balance soaring, but there are plenty of small ways you can scale back. And the little things do add up. Read on if you’re ready to start saving.

  • Use Facebook and Nextdoor. Before you shell out for things like furniture or baby gear, check out buy nothing groups on platforms like Facebook and Nextdoor to see if one of your neighbors is looking to get rid of something similar.
  • Score free food by downloading an app. Plenty of restaurant chains offer freebies or BOGO deals for downloading their apps. You can always delete them after you take advantage if you don’t want temptation at your fingertips.
  • Get free stuff just for being born. You can score tons of birthday freebies if your big day is coming up — often not just on your actual birthday, but any time during your birth month.
  • Check out your local library for free entertainment. Your library card isn’t just a pass to check out books made from dead trees. Plenty of free library apps allow you to access ebooks, movies, music and more without paying a cent.
  • Swap goods or services with someone else. Learning how to barter can help you get what you need without spending money.

3. Smash your credit card debt once and for all.

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  • The debt snowball method, where you attack the smallest balance first.
  • The debt avalanche method, where you focus on the card with the highest interest rate.
  • A debt consolidation loan, where you merge your debts into a single payment. This is only a good option if you’re lowering your interest rates.
  • A balance-transfer credit card, where you transfer your balances to a card with a 0% promotional interest rate. That zero-interest period typically only lasts 12 to 18 months, though, so this approach is best if you don’t have tons of debt.

4. Flex low interest rates to your advantage.

But don’t get too ambitious here. If you’re an UberEats addict whose pantry consists of three spices, you’re setting yourself up for failure if you plan to cook 21 meals a week. Start with a more reasonable goal, like making your own breakfast and lunch each day, plus dinner three nights a week.

5. Lower your student loan payments.

Any successful savings plan has a little built-in flexibility so you can treat yourself from time to time. Rather than downing drinks at happy hour, buy yourself a good but cheap bottle of wine to enjoy at home. Have a DIY spa day using simple ingredients you probably have on hand. If you’ve been stuck at home for too long, you can refresh your home’s look without spending a dime.

A person meal preps at home.
To save time and money on eating out, Shane and Melissa Courtney prepare their lunches and dinners in their Tampa home. They shop at a local farmers market and use cheaper vegetables like cabbage. They also buy bulk items like rice noodles from Amazon. Chris Zuppa/The Penny Hoarder

6. Do meal prep. Don’t go overboard.

Grocery stores play all kinds of sneaky mind games with you, and you’re most vulnerable if you shop while you’re harried and hangry. A great way to combat their money-snatching tactics is to make a shopping list and devote a few hours to meal prep every week.
Ready to stop worrying about money?

Pro Tip
Another way to get a quick cash infusion: Switch bank accounts. Some of the best bank promotions will give you 0 or more just for opening a new account. Just be sure to read the fine print, since a bank account with ridiculous fees or minimum balance requirements could cost you big.

7. Squeeze every cent you can out of your employer.

No, we aren’t going to tell you to invest thousands of dollars on solar panels for your home as a way to save money on your electric bill. But there are a few inexpensive tricks that can help you save money on utilities. Simple things like regularly changing air filters and switching to more efficient light bulbs can make a big difference on energy costs.

8. Got a raise? Congrats, but don’t spend it.

Or you could try a modified version. Do a pantry challenge, where you avoid the grocery store and use the ingredients you have on hand to feed your family. Or build a capsule wardrobe, where you select a certain number of clothing items and make those your only wardrobe for the time frame of your choosing.

9. Be skeptical when something seems like a deal.

One reason it’s so hard to save is that your fixed expenses — the ones that stay the same each month, like your rent or mortgage, car payments, property taxes and insurance premiums — tend to be your biggest bills. These aren’t exactly easy to reduce. Sure, you could lower your rent by moving to a smaller place, but moving itself is also expensive.
Free shipping if you spend just another ? Step away from the digital shopping cart. If you’re being coaxed into shelling out another few bucks for something that’s “free”… well, it really isn’t free.

A woman smiles as she looks at her laptop. She's sitting on a blue couch and she has pink in her hair.
Getty Images

10. Cancel automated purchases for non-necessities.

And when you reach your savings goals, no matter how big or small? Pay it forward. Talk about it. Let others know exactly how you managed to save money — and that they can do it, too.
We aren’t just talking about negotiating your salary and asking for a raise when you’ve earned it — though both are essential, albeit awkward. To build your long-term savings, make sure you’re not leaving free money on the table. Contribute enough to get your employer’s full retirement match if they offer a 401(k) plan. If you have a health savings account, take advantage of any matching contributions to that as well. You can use the money you save for your own expenses, your spouse’s or a dependent family member’s.

Pro Tip
If a medication is expensive because you have to pay for it out of pocket or your insurance company puts it in a pricy tier, talk to your doctor or pharmacist. A lower-cost alternative may be available. For over-the-counter meds, always buy generic. The FDA requires generic drugs to be chemically identical to their more expensive name-brand counterparts.

11. Find energy suckers that are driving up your electric bill.

If you’re looking for ways to save money on expensive services, sometimes it pays to let a student practice on you. You can get services like beauty treatments, sonograms and massage therapy at steep discounts from local vocational schools. If you live near a university and you’re truly brave, you could even get low-cost dental work from a student dentist.

12. Repair what’s broken instead of buying a new one.

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Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. Send your tricky money questions to [email protected].

13. Save money on prescription drugs.

Duh. It sounds so easy: To save money, just don’t spend it. But doing a no-spend challenge, where you commit to not spending any money over a certain period — be it a month, a week or even a single day — can help you reign in your spending.
Interest rates are historically low, which means the high-yield savings account that once upon a time — ahem, back in 2019 — spoiled you with 2% or 3% APY is probably paying well below 1%. The flip side is you can use those ridiculously low interest rates to save money by refinancing your mortgage. One good rule of thumb: Refinance when you can lower your interest rate by 1 percentage point or more, since you’ll have to pay closing costs.

14. Ditch your cell phone plan if you have a major carrier.

If you’re struggling to pay off student loans, talk to your servicers about whether an income-driven repayment plan is an option for your federal loans. These plans will stretch out your repayment over the standard 10-to-20 years — and if you still have a balance after 20 years, it will be forgiven, though you’ll still owe income taxes. If you have private student loans, check with your servicers about whether there’s a way to lower your debt payments.

15. Find the money you’ve long forgotten about.

One of the best ways to save money is to tell other people that you’re trying to save money. Doing so can help you prepare your friends and family for when they hear you say no to joining them when they suggest expensive plans.
Do your tastes get fancier every time you get a raise? This phenomenon is called lifestyle inflation, and it’s a notorious savings killer. You don’t have to live like you’re on an entry-level salary forever, but make a plan for your future raises so your living expenses increase at a slower rate than your salary. For example, plan to save half of your next pay increase and sock the rest in savings.

16. Get cash for switching banks.

But for major repairs, know when to call a pro. It’s worth the cost when you’re repairing a big-ticket item or doing anything that could jeopardize your safety.

17. Be strategic about your tax refund.

Even if it’s not feasible to ditch your car, bike commuting a couple days a week can help you save money on obvious expenses, like gas and parking. But there’s a bonus here: When you’re on your bike, you can fit a lot less in your basket or backpack than you can in your car trunk. So if you have a habit of making extra trips to the grocery store or stopping for takeout on your way home, traveling by bike reduces the temptation.

  • Put it in your savings account for an emergency or upcoming expense.
  • Pay down your highest-interest credit card.
  • Make an extra mortgage or car payment.
  • Give your Roth IRA a boost.
  • Put it in your child’s college fund.
A person rides a bicycle in the park as the sun sets.
Aileen Perilla/The Penny Hoarder

18. Travel by two wheels whenever possible.

The average APR for people who carry credit card debt is well over 16%. Your bank jumps for joy when you don’t pay off your balance because it’s getting rich off all that interest. Quit padding your bank’s coffers and break up with your credit card debt forever. Some tactics to try:

19. Cancel the insurance you don’t need.

Avoid storing your credit and debit card information on websites you frequently shop on. You’ll make it harder for yourself to spend mindlessly.
Becoming a hermit isn’t the only way to save money. There are plenty of ways to get free stuff or have fun on the cheap. Some of our favorite ideas:

Pro Tip
You don’t have to worry about spotty service when you switch to a discount cell phone plan. Most discount plans run on the network of one of the four major carriers, so the only thing you have to lose is your out-of-hand bill. Depending on the plan, you may have data restrictions. Some also require an unlocked device.

20. Do a no-spend challenge

We get that making a budget ranks right up there with a dentist appointment or trip to the DMV in terms of things you’d rather do. But it’s your essential first step when you want to start saving money.
You can often get discounts on insurance by bundling your coverage. For example, you may save money by getting your car and renters insurance from the same company.

Dental Hygienist students work on people's teeth at a clinic.
Students work on patients at the Dental Hygiene Clinic at St. Petersburg College in Pinellas Park, Fla. Chris Zuppa/The Penny Hoarder

21. Find discounted services at vocational schools

At least 1 in 10 Americans has missing money waiting to be claimed. You could find money from old security deposits or bank accounts, or even a life insurance policy you didn’t realize a loved one left you. The key to making a one-time windfall work for you is to use it purposefully. That can mean saving or investing your money, or putting it toward debt.

22. Get free or low-cost financial help

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23. Find ways to earn extra money.

Here are 25 ideas for saving more money. The good news is that there’s no one thing you have to cut out. If it really matters to you, go ahead and keep spending on it. You can find other things to eliminate that won’t cause too much pain.
Just because something’s broken doesn’t mean it’s destroyed. By learning some basic DIY techniques, you can make your lightly damaged goods like new again without shelling out for repairs. For instance, learning a few basic sewing stitches will help you repair your clothing for you and your family, even if you don’t have a sewing machine. There are plenty of ways to learn home repair skills for free online.

24. Find cheap ways to treat yourself.

Fortunately, the best budgeting apps make it easy to keep track of your spending and identify areas where you can cut back. Just be sure to comb through several months’ worth of expenses to get a true sense of where your money is going. Don’t forget about the expenses you don’t encounter every month, like holiday gifts and car registration.

25. Talk about your struggles and your successes.

Playing the credit card rewards game is another good example. Yes, you can score free airfare and cash back. But it’s only free if you don’t spend more to get those rewards, and if you pay your balance in full every month. Otherwise, you’ll shell out way more in interest than you’re getting in rewards.
There’s no way around this one: Even when you have a bare bones budget, sometimes saving money just isn’t possible. One reason is that your fixed costs, like your rent or mortgage, medical insurance and car payments are often your biggest expenses — and those are the hardest to lower.
You may not be able to time a car repair or vet bill, but with discretionary purchases, knowing when to get the best deals can mean big savings. Need a TV? Wait until January, when last year’s models are discounted to make room for the new ones. Looking for new furniture? Retailers often clear out their stock around Independence Day, making July prime time for scoring cheap furniture.
If you’re struggling to stick to your budget or keep your spending in check, it’s OK to ask for help. You don’t need to spend big bucks to work with a financial pro. Unlike financial planners and advisers, who often cater to people with a higher net worth, a financial counselor is trained to help regular people manage their money from day to day. Many offer their services at little to no cost through a bank, school or nonprofit, or they practice on their own and use a sliding scale based on your income.

Only buy in bulk if you’re purchasing products that have a long shelf life or ingredients that you have enough freezer space to store for future recipes.

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But that’s not the only advantage. It’s easy to feel like you’re the only one who’s struggling to save money, especially when you scroll through Instagram. But you’re far from alone. Find other people who are trying to save money, either within your social circle or by connecting with a like-minded online community. You can swap tips for saving money and find encouragement when times are rough.

Buying Silver vs. Gold as an Investment – What’s Better?

When most people think about investing, they likely think of buying pieces of companies on the stock market. Indeed, stock market investing has helped countless people build wealth over the years.

However, the most savvy investors know that the stock market is a battle between the bears and the bulls — one in which prices fluctuate significantly, resulting in risk. To balance that risk, most successful investors look to safe-haven investments as a reliable store of value.

One of the most common ways to hedge against stock market risk is investing in precious metals, the most popular investments of this type being silver and gold. But what’s the difference between gold and silver, and which represents the better addition to your investment portfolio?

The Gold-Silver Ratio

Investors often use ratios when predicting where the values of assets are likely headed. For example, equity investors look at the price-to-earnings, price-to-book, and price-to-sales ratios when determining whether a stock is undervalued, overvalued, or trading at a fair market valuation.

But silver and gold aren’t companies. They don’t generate profits and have no earnings, book, or sales to value.

Instead gold and silver investors have looked at the gold-silver ratio to help value these precious metals. This ratio compares the price of gold to the price of silver based on the idea that their historical valuations follow predictable patterns.

For example, if the gold-silver ratio is 10-to-1, it means that gold is currently trading at 10 times the value of silver. Before the 1900s, this ratio stayed generally flat at 16-to-1 through history, meaning that if an ounce of silver was worth $5, the price of gold would be $80 per ounce, according to Provident Metals.

Today this ratio suggests significant potential for growth in the price of silver. Over the past five years, the ratio has been as high as 120-to-1 and as low as 64-to-1, with the current ratio sitting closer to 68-to-1, according to BullionByPost. Many believe the incredibly high ratio suggests the price of silver has room to climb substantially to eventually return closer to the 16-to-1 level it held for more than a century.

Although the past performance of an asset isn’t always indicative of what you can expect to see in the future, there is a strong argument that silver is significantly undervalued compared to gold.


How to Invest In Silver and Gold

Regardless of whether you choose to invest in silver, gold, or a mix of the two, you’ll need to know how to go about making those investments. There are several ways you can gain exposure to these assets, with the most common being:

Buy Bullion (Physical Metals)

Bullion is, by definition, physical gold and silver bought and sold based on its value by weight rather than as a coin or collectible. These physical precious metals, often referred to as gold and silver bullion, often come in the form of bars and one-ounce bullion coins.

For example, if you want gold bullion, you can purchase gold bars or gold coins on an exchange that sells bullion, based on the current spot price of the metal plus a service fee. If you wanted physical silver, or silver bullion, you can purchase silver bars and silver coins on an exchange at the current spot price of silver. Some of the most popular exchanges include:

  • Vaulted
  • Money Metals
  • American Precious Metals Exchange (APMEX)
  • JM Bullion
  • Gold Eagle Coins

There are benefits and drawbacks to purchasing physical precious metals. First and foremost, physical valuables can be stolen or lost. You’ll need a safe place to store the metals, and a standard safe in your home or a safety deposit box may not be enough space. Many investors enlist services that safely store the metal for them — at an additional cost of course. And unless they are specifically insured through a private insurer, most standard homeowner’s or renters insurance policies don’t cover theft of gold and silver bars or coins.

On the other hand, when you purchase physical metals, you’re able to touch your investment and hold it in your possession, unlike when you buy paper or digital forms of these assets, which can give investors peace of mind.

Buy Gold and Silver ETFs

Exchange-traded funds, or ETFs, are a popular investment option for those looking to invest in a diversified group of stocks, but many don’t even think about them when investing in assets like silver and gold. The firms that manage these funds pool money from large groups of investors and buy large amounts of the assets they target, often giving them an edge in the market.

Although most ETFs are focused on assets like stocks and bonds, there are plenty of funds that make investments in precious metals. By investing in these funds, you’ll gain exposure to these safe-haven assets without having to handle the buying, selling, or storage of physical bullion.

However, there are cons to consider here. Investment-grade funds are managed by experts, which comes at a cost in the form of the fund’s expense ratio. Moreover, when investing in ETFs, you won’t have any physical metals in your possession, which is a factor many precious metal investors enjoy.

Many precious metal ETFs trade on major stock exchanges like the Nasdaq and New York Stock Exchange. Some of the most popular precious metals ETFs include SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and iShares Silver Trust (SLV).

Buy Mining Stocks

If you’re interested in gaining exposure to the safe-haven features of silver and gold investments but you also want exposure to the growth the equities market provides, you’ll be able to find a nice blend by investing in mining companies.

Some mining companies are focused on gold, others on silver, and some focus on a mix of the two. Whether you want exposure to one or the other, a good mix of both, or to any of the many other valuable metals out there, you’ll be able to find quality mining stocks to invest in.

Investing in these stocks not only gives you exposure to the metals they mine, but access to the capital appreciation that equities have the potential to achieve. On the other hand, equities come with increased volatility risk compared to physical bullion or investments in highly-diversified ETFs focused on investing in these assets.

Pro tip: Earn a $30 bonus when you open and fund a new trading account from M1 Finance. With M1 Finance, you can customize your portfolio with stocks and ETFs, plus you can invest in fractional shares.


Key Features

Whether you plan to invest in silver or gold, there are a few factors you should give serious consideration. Although both investments are considered safe and relatively liquid, there are key differences between the two that will make one more appealing than the other to different investors.

Safety

As mentioned above, silver and gold are both generally good investments for safe-haven investors looking for a relatively liquid store of value. However, even among assets considered to be havens, levels of risk differ. Here’s how gold and silver stack up in terms of safety:

Silver Experiences More Volatility

Investors who look to the gold-silver ratio generally do so to get an idea of the relative valuation of silver, with gold recognized as the more stable asset. That means the silver market tends to experience higher levels of volatility.

This is a benefit to many who believe silver is highly undervalued and will make a comeback in relation to gold, but it does increase the risk associated with an investment in silver. After all, volatility is a measure of the pace at which growth or losses take place, meaning assets with higher levels of volatility generally experience losses or gains at a faster rate than more stable assets.

Gold Is the More Stable Asset

Investing in gold is a far more stable option and acts as a solid store of value. Gold prices tend to move at a slower rate. The stability in gold’s spot price adds a level of safety for investors.

When the price of gold falls, it tends to fall at a slower rate than silver. If you’re looking for the safer of the two options, gold is definitely the way to go.


Growth

If your ultimate goal in investing is to allow your money to work for you, you want growth. Granted, when investing in safer assets, growth is relatively slow compared to equities and other riskier assets, but the rate of movement in the upward direction is important nonetheless.

Silver Has More Potential For Growth Than Gold

If you’re looking for growth, silver may be the better way to go. As explained above, the gold-silver ratio suggests silver may be significantly undervalued at present. As any value investor will tell you, investing in undervalued assets provides the potential for significant returns as the price of the asset climbs back to a fair market valuation.

Although there’s no telling when the ratio between the two metals will fall back to 16-to-1, with it sitting above 60-to-1 at the moment, it’s clear that there’s plenty more room for growth in silver’s price relative to gold, at least from a historical value perspective.

With that being said, historical data is not always indicative of future performance. Although the potential for silver’s price to climb at a higher rate than gold’s, the market moves in mysterious ways, and growth isn’t ever guaranteed.

According to Statista, in 2020, silver gained around 20% while gold was up 25%, showing that gold can still grow faster than silver in some cases — especially when the industrial utility of silver experiences slowing demand.

Gold Experiences Slower Growth

On the other side of the coin, gold is a more stable investment, but that stability comes with a trade-off. The commodity is a slow-growth asset. Sure, there are times when gains in gold will outpace those in silver, but for the most part, the low-volatility, slow-moving nature of gold prices results in lower profitability.


Cost

Affordability is important. After all, a well-diversified portfolio will only have a relatively small portion of its assets tied up in either gold or silver. If you’re building a portfolio with $5,000, allocating 10% of your assets to these investments would only allow for $500 to invest in the precious metal of your choice. And there’s a huge difference between gold and silver prices and thus how much of each you can buy for that amount.

Lower Prices Make Silver More Accessible

The price of a troy ounce of silver was around $26 in late April 2021. That relatively low price makes the commodity far more accessible than other, more expensive investment options. At that price, 10-ounce silver bars cost about $260 each.

As a result, silver investments tend to be the choice among younger investors that are just starting out and don’t have thousands of dollars to invest in safe havens.

Gold Is Far More Expensive

If you want to get involved in buying gold, you need to have a meaningful amount of money to make your initial investment. In late April 2021, one ounce of gold was worth about $1,780.

Given the example above, with $500 to invest in precious metals, you wouldn’t have enough money to buy even a single ounce of gold, let alone 10-ounce bars. Sure, you can buy gold by the gram, or even by pennyweight, but buying smaller quantities increases your overall cost, making these investments less advantageous.


Causes of Price Fluctuations

Before making any investment, it’s important to get a detailed understanding of what makes the price of the asset you’re investing in move. This will help you make your decision as to when to buy what assets, and what to expect as a potential result of your investment.

Silver Catalysts

There are several catalysts that have the potential to move the price of silver either up or down. Some of the most significant fundamental signals to look for include:

  • Market Conditions. While silver is more volatile than gold, it is still a safe investment when compared to equities. As a result, when market conditions are poor, investors tend to sell their shares of stock and flock to these types of assets, tipping the scales of supply and demand and sending the price of silver upward. Conversely, when market conditions are positive, investors tend to ditch silver and other safer bets to free up funds for investments in the stock market. This leads the price of the commodity down as demand shrinks.
  • Economic Conditions. Silver is a great store of value, and it becomes a hot commodity when economic conditions are negative, often sending silver prices up. When investing in silver, it’s important to pay attention to economic reports like jobs and GDP reports, as well as statements from the United States Federal Reserve surrounding the state of the economy.
  • Industrial Demand. When you think of silver’s uses, you may instantly think of jewelry or silverware, but the versatile metal is used for far more than that. A significant portion of the demand for silver comes from industrial uses. Due to its lack of electrical resistance, silver is a key component of many solar panels. It’s also commonly found in contact lenses, fuses, switches, and other electrical devices. When demand is high for these types of products, demand for silver naturally increases, leading to gains in the price of the commodity.

Gold Catalysts

Gold has many significant catalysts that fall in line perfectly with those of silver. However, there are some unique differences. Here are the factors that tend to lead to movement in the price of gold:

  • Market and Economic Conditions. Like silver, gold is considered a safe-haven investment. As a result, when economic and market conditions are poor, investors tend to flock to gold, leading to an increased price.
  • Cultural Events. Gold is a significant metal in various cultures around the world, used in everything from architecture to art, and even in weddings. During the Indian wedding season in India, spanning from January through March, demand for gold for use in weddings often leads to a noticeable increase in global demand, which can drive up prices.
  • Inflation. The inflation rate also plays a role in the growth of gold’s price. When inflation is high or threatening to rise, investors often look to gold as a way to hedge against inflation. Gold investors hope to maintain the value of their investments by owning a commodity that’s known for holding its value while cash loses buying power to inflation.
  • Geopolitical Conditions. Sure, major currencies like the U.S. dollar and the euro can be traded for fair market value just about anywhere around the world. However, many developing countries’ currencies don’t enjoy the same flexibility. As a result, gold is increasingly important in the global economy and as a measure of any country’s wealth. When geopolitical conditions are unsettling, government demand for gold will generally increase, leading to gains in the price of the commodity.

The Verdict: Should You Invest In Silver or Gold?

As you can see, there are clear benefits and drawbacks to investing in both silver and gold. So, how do you make the decision? Which is better?

Consider your investment objectives, the amount of money you have to invest, and the amount of risk you’re willing to take on the safer side of your asset allocation.

You Should Invest In Silver If…

You might prefer silver if you’re the kind of investor who wants exposure to safe assets in your portfolio, but you also want the ability to realize larger gains on these assets and are willing to accept a slightly higher level of risk. The best candidates for silver investments:

  • Have a Total Portfolio Value of Under $35,000. Silver comes with a much lower price per once and is therefore more accessible than gold. Those just starting out with relatively small investment portfolios will likely be better served choosing silver over gold.
  • Want Larger Gains. Although there are times when gold will increase in value faster than silver, there’s a strong historical argument that silver’s value has room to run in the future. If you’re looking for stronger growth in your safer assets, silver is likely the way to go.
  • Are Risk Tolerant. Silver is a safer asset than equities, but there are risks involved. Silver is more volatile than other safe assets like gold, Treasury bills, and many bonds. This volatility increases risk.
  • Are Willing to Put Time In. Because price swings happen in silver faster than they do in gold, it’s important that you pay close attention to market movement, economic reports, Federal Reserve statements, and industrial demand for clues as to when to buy and sell.

You Should Invest In Gold If…

Gold may be right for you if you’re an investor with tens of thousands of dollars or more to invest in the asset class and you want to add stability to your portfolio or are looking for a store of value during tough economic times. Gold investments are better for investors who:

  • Have a Few Thousand Dollars to Invest. Gold is a highly valuable asset. Because commodities are cheaper in higher quantities and tend to make up less than 10% of a well-diversified investment portfolio, it’s important to have enough money in your portfolio to purchase a couple of ounces or more at a time. At today’s prices, a pair of one-ounce gold bars requires about $3,500.
  • Want to Hedge Against Inflation. Gold has historically grown in value at a rate faster than the U.S. dollar has lost value to inflation. As a result, the yellow metal makes a great hedge against inflation-related risks.
  • Want Stability in Your Portfolio. As an asset known for generating stable growth, gold is a great option for those looking to add stability to their portfolio in order to balance out the risks associated with other investments.

Both Are Great If…

Why choose one or the other when you can invest in both silver and gold? Exposure to both metals may be best if you’re an investor who has a reasonably sized investment portfolio and wants to diversify your safer holdings. This gives you the growth opportunity represented by silver and the higher level of stability that gold can provide. The perfect candidates for gold and silver investments:

  • Have a Portfolio Value of $40,000 or More. Because gold is relatively expensive and best purchased in quantities of multiple ounces or more, it’s important to have a sizable investment portfolio if you’re going to invest in physical gold. To mix silver in, your portfolio will need to be even larger in order to maintain the ratio of no more than 10% of your assets allocated to precious metals.
  • Want Both Growth and Stability. If you want access to the potential growth of silver but aren’t willing to give up the stability gold provides, a mix of the two investment options is likely your best bet.
  • Are in Tune With Movements in Commodities Markets. The best investments are made by investors who have taken the time to educate themselves about the assets they own. Keeping tabs on what’s going on with either gold or silver takes time and research. To invest in both, you’ll have to be willing to commit additional time and research to your investing process.

Final Word

Both gold and silver are great investment options for just about any diversified portfolio. These assets are known to be great stores of value, often experiencing price growth even in times of poor market conditions and economic uncertainty.

Whether you invest in gold, silver, or a mix of the two, it’s important to use safer assets to maintain balance in your investment portfolio and protect yourself from risk. Moreover, regardless of which direction you go, it’s important to do your research and get an understanding of the assets you’re investing in. After all, it’s never a good idea to blindly invest your money in any asset, even one that’s thought of as “safe.”

Source: moneycrashers.com

How to identify credit repair scams

family learning more about credit

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

If you have poor or damaged credit and want to repair it, you may have considered using a credit repair service to help. Unfortunately, there are many companies and individuals that want to take advantage of unsuspecting consumers needing help with their credit. 

While there are legitimate companies that can help you repair your credit, there are also credit repair scams that are only after your money and your information for identity theft purposes. To keep both safe, we created this guide to help you tell the difference between legitimate credit repair companies and credit repair scams.

Five signs of a credit repair scam

There are many things credit repair companies are not allowed to do or promise customers. If it sounds like it’s too good to be true, it probably is, and you should steer clear of that company. We’ve put together a list of signs you should watch out for when working with credit repair companies.

1. Guaranteed results

Under the Credit Repair Organizations Act (CROA), credit repair companies cannot guarantee results. Here are a few common examples of false promises unethical credit repair companies might make:

  • Improvement to your credit score
  • Results in a fixed time period
  • Removal of all of negative items, even if they are accurate

2. Up-front payment is requested

The CROA prohibits credit repair companies from asking for any payment before they render services. Many scammers know that most consumers don’t know this and, as a result, promise a quick turnaround on credit repair for a large upfront payment.

Some illegitimate credit repair companies may not allow you to cancel unless you pay a fee. All credit repair companies are required by law to give you at least three days to cancel services with them and there is no penalty for canceling.

3. Claims a new identity is needed 

A credit repair company can’t promise or offer you a new identity. Anyone offering you a new identity is a fraud. Besides guaranteeing results, scammers may try to promise you a clean slate with a new Employer Identification Number (EIN) or a Credit Privacy Number (CPN).

They tell you to use these numbers on your future credit applications instead of your Social Security Number. We explain more about common credit repair scams below.

4. Don’t explain your legal rights

Credit repair companies should explain your legal rights to you from the beginning. These are a few common things an unethical credit repair company might do.

  • Tells you not to contact the credit bureaus directly
  • Doesn’t give you a copy of the contract to review before signing
  • Fails to inform you that you can repair your credit yourself without the help of a credit repair company
  • Leaves out important information from the contract, like the date services will be executed or the amount you will pay

If you feel like the company isn’t telling you everything or refusing to answer your questions, you should seek services elsewhere.

5. Asks you to misrepresent information

Finally, an unlawful credit repair company might ask you to misrepresent your information. This can range from unlawfully using an EIN or CPN number in place of your social security number to claim you are a victim of identity theft when you’re not.

five signs of a credit repair scam

Common credit repair scams 

You’ll most likely see credit repair companies illegally promising results. However, it’s important to familiarize yourself with other scams so you understand what is and is not legal. We highlighted a few common ones below.

File segregation schemes 

A file segregation scheme is when a company or individual offers to give you an Employee Identification Number (EIN) to use in place of your Social Security Number when you apply for credit. It’s illegal for companies to do this, and it’s illegal for consumers to obtain one to use in place of their Social Security Number. 

Credit privacy numbers 

Like an EIN, a Credit Privacy Number (CPN) is created by scammers to use in place of your Social Security Number when applying for credit. Simply put, a CPN is a fake Social Security Number. Usually, these are created using somebody else’s identity, and using one can be considered identity theft. 

Tradeline renting 

Tradeline renting is when you pay for authorized user status so that the tradeline shows up on your credit reports to improve your score. This doesn’t repair any negative information on your credit, but adding a positive tradeline to your credit report can boost your score.

While this isn’t necessarily illegal, it can get you into trouble. There is nothing wrong with a loved one adding you as an authorized user. However, if you pay to “rent” a tradeline from a stranger, you don’t know how it will impact your credit and it may be a scam to get your money. 

credit repair scams to watch out for

What to do if you are scammed

There are a few things you can do if you realize you’ve fallen victim to a credit repair scam. Take a look at your options below.

who to report a credit repair scam to

Can credit repair companies fix your credit?

Yes, a legitimate credit repair company can help you work to remove inaccurate negative items from your record that may be damaging your credit score. Here are ways to recognize a legitimate, expert credit repair company. Although you can work to repair your credit yourself without a credit repair company, ideally a credit repair company would make the process much easier. Here are some signs of a legitimate, expert credit repair company:

  1. They create a repair strategy custom to your unique situation. A good credit repair company will customize their course of action only after evaluating your credit reports and credit history. Everyone’s credit history is different, and their approach to repairing your credit should reflect that. 
  2. Maintain communication with you during the process. A credit repair company that maintains scheduled calls, emails or any other form of communication with you will help you stay up-to-date with their progress. They shouldn’t keep you in the dark as they’re conducting their services. 
  3. Informs you of your rights from the beginning. At the time of signing, a credit repair company should provide two documents: a disclosure of your right to repair your credit yourself and a detailed contract of services.
  4. Make realistic claims about their services. Like we said above, credit repair companies cannot guarantee results. A legitimate credit repair company will not guarantee timeframes or point changes, but they can guarantee the delivery of services—access to credit monitoring tools, or letters delivered on your behalf. 

How to safely repair your credit

Making payments on time and disputing inaccurate information on your credit reports can help you repair your credit. While you can do this on your own, a professional credit repair firm like Lexington Law Firm will make the process easier and more efficient.

Lexington Law Firm proudly adheres to CROA to make sure we give our clients the best experience possible. For over a decade, we’ve helped clients challenge information that is unfair, inaccurate and unsubstantiated. Give us a call today for a free, personalized credit report consultation.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

Taxhub Review 2021 – Online Tax Prep by a CPA

Taxhub is a relatively new online tax filing service that blends the user-friendly interface of online DIY services like TurboTax with the expertise of professional (often in-person) preparation services. It clearly aims to disrupt the tax prep industry.

This mobile-friendly cloud software platform offers CPA-prepared tax returns for individuals and businesses. Taxhub requires a fraction of the time commitment of DIY online options and may be cheaper than some full-service independent CPAs.

Taxhub isn’t the only online, hands-off, CPA-run tax prep platform out there. Imitators come and go, and big-name providers like H&R Block now offer hands-off or hybrid filing options of their own. But it does have a lot going for it.

Taxhub Plans, Pricing, and Features

Taxhub is more expensive than most DIY-friendly online tax software and at or above the cost of many independent CPAs. Whether its in-house expertise and hands-on service justify the high price is open to interpretation.

But the company’s approach to tax preparation is easy and convenient. No matter how simple or complicated your tax situation, a licensed CPA prepares your return, and the preparation experience is uniform for all filers. It consists of three steps:

  1. Upload Your Documents. After finalizing your plan, you upload your tax documents, including any relevant income and expense statements. You can upload files directly to Taxhub’s secure server or take a picture of each document and text (SMS) it to a particular phone number.
  2. Conduct a Phone Interview. The next step is a brief phone interview with a licensed CPA (usually the person who prepares your taxes) to go over the particulars of your tax situation. You can schedule the consultation from your account dashboard. There’s no questionnaire.
  3. Approve Your Return and Pay. After the interview, Taxhub prepares your return. After they finish — typically within 48 hours — you must review and approve your return. If you approve, you pay. The price may be higher than the estimate if your situation is complicated and requires a plan upgrade. In rare instances involving a very complicated return, your final price may be higher than the highest advertised price.

Tax preparation fees vary based on your needs. Individual Taxhub clients have access to a fully customizable prep and filing plan. Small-business clients have a fully customizable business prep and filing plan as well. Both businesses and individuals can schedule one-on-one CPA consultations for $29 per 15-minute interval, with fees credited back to the client if they later prepare and file with Taxhub.

Taxhub also offers a range of business services, such as S-corporation conversions and business incorporation, for independent professionals and small-business owners.

Individual Plan

Taxhub has one off-the-shelf plan for individual income tax filers. Starting at $159 per federal return, it includes:

  • One free state return
  • Wage income
  • Single or married filing
  • Common credits for filers with dependents
  • Common scenarios related to homeownership
  • Itemized deductions
  • Interest and dividend income

If Taxhub’s individual plan isn’t adequate for your needs, you can customize it by adding services on an a la carte basis, including rental property income, stock and crypto sales, and business income. Your estimated price updates automatically as you go, and at no point do you have to walk through a lengthy online questionnaire.

But adding a la carte services increases your return’s cost quickly. For example, you can expect to pay $100 to add business income or self-employment income and $100 to add equities sales, though pricing is subject to change. The first state return is included, but additional state returns cost $75 each.

Business Plan

Taxhub’s customizable business plan is appropriate for C-corporations, S-corporations, partnerships, and trusts. Pricing starts at $459 per business but can quickly rise for larger enterprises. As part of the customization process, you must answer basic questions about your business, including:

  • Number of fixed assets
  • Number of partners or shareholders
  • Annual revenues

For an additional fee, Taxhub can provide basic ongoing bookkeeping services as well.


Additional Features

Overall, Taxhub’s hands-off filing process is its most significant draw. But it has some additional features worth noting.

Maximum Refund Guarantee

Like most competitors, Taxhub has a maximum refund guarantee for state and federal returns. If you find another tax prep service that earns you a larger tax refund or lower tax liability, Taxhub promises to refund your preparation fees.

Pay With Your Refund

Taxhub allows you to pay your preparation fees with your IRS tax refund. Taxhub doesn’t directly charge for this option, but you do have to accept a bank charge the company can’t control.

Prior Year Returns

You can use Taxhub to file a previous year’s return, even if you didn’t previously prepare with Taxhub.

Tax Return Copies

You can obtain copies of your current year and prior-year tax returns by contacting Taxhub directly.

Audit Defense

All Taxhub customers are automatically enrolled in the company’s Audit Defense service at no additional charge. Under this plan, Taxhub corresponds and negotiates with the IRS on your behalf during the audit process while providing clear explanations and interpretations along the way.

Free LifeLock Trial Membership

Every Taxhub user gets a free trial membership with LifeLock, an identity theft protection provider. The trial runs for 30 days after you create your account, after which you can opt into a paid membership of your choice.

Messaging System

If you have any questions before or during the tax preparation process, you can use Taxhub’s internal messaging system (accessible through your account) to ask them. This system functions like email and usually takes a few hours to a business day to produce a response. Whenever possible, you’re connected with the CPA tasked with preparing your return.


Advantages

Taxhub has many filer-friendly features that justify paying CPA prices.

1. Incredibly Simple Process

Taxhub’s tax preparation process is incredibly simple: You provide some basic information about your life situation, sign up for the plan that suits your needs, upload your tax documents, conduct a brief consultation with a Taxhub CPA, and approve your completed return.

You don’t have to pore over your documents, interpret IRS jargon, or sit through tedious questionnaires. That’s a massive advantage over DIY tax prep services, which either hold your hand through every step of the process or require you to take ownership of the involved risks.

2. May Be Cheaper Than Some Other Full-Service Options

Although Taxhub is unquestionably more expensive than cut-rate DIY options like FreeTaxUSA and TaxAct, it might be a better deal than full-service, in-office tax prep options like Jackson Hewitt and Liberty Tax Service.

For example, depending on the complexity of your tax situation, it can cost you anywhere from $300 to $500 to file with Liberty Tax Service. Compare that with $200 to $400 for similar returns prepared by Taxhub.

Taxhub also has no hidden fees, a significant advantage over some office-based preparers. And it may be cheaper than independent CPAs and smaller firms that specialize in complex situations, though the gap has all but disappeared in recent years.

3. Can Upload Documents by Text Message

Taxhub lets you upload your tax documents via text message (SMS) rather than email attachment or fax. That’s a handy little perk that’s virtually unique among American tax prep companies — and one that’s hugely advantageous to customers who dislike breaking out their laptop or desktop computers.

4. Low Time Investment Relative to DIY Options

With no questionnaires or self-filled forms, Taxhub is a breeze compared to DIY competitors. Though the amount of time filers need to devote to the initial consultation and document upload processes lengthens as their situations grow more complex, the same applies to DIY returns. The more information your return contains, the longer it takes to answer all those interview questions and fill in all those form fields.

Once you finish your initial consultation with your Taxhub preparer, you’re pretty much done with your end of the bargain. Unless there’s an unexpected snag, Taxhub will file your return within 48 hours, and you’ll get your tax refund (if eligible) within a couple of weeks.

Accordingly, the amount of time required to complete a Taxhub return is almost always less than the amount of time needed to complete a comparable DIY return with TurboTax, TaxAct, or H&R Block.

5. Mobile-First Website

Unlike competitors like TurboTax and H&R Block that began as desktop software programs, the much newer Taxhub started as a mobile-friendly, cloud-based service. Every part of its website is a pleasure to use on small-screened devices. There aren’t any sections that feel like they haven’t been updated since the first iPhone’s release, as is the case with Jackson Hewitt Online and some other online tax prep services.

6. Audit Defense Included at No Extra Charge

All Taxhub customers get Taxhub’s Audit Defense product, which provides guidance and representation throughout IRS audits, at no extra charge. Many competing tax prep services charge for such services. TurboTax and TaxAct both charge up to $50 for comparable products, for instance.

7. Personalized Service

As a boutique shop, Taxhub offers a degree of personalized service larger competitors can’t match. Don’t let the all-online filing process fool you: When you do your taxes with Taxhub, you’re keenly aware of your value as a customer.

This differentiator is crucial now that H&R Block and TurboTax offer CPA-assisted packages clearly designed with competitors like Taxhub in mind.


Disadvantages

As convenient and easy as Taxhub is, it’s not without its drawbacks.

1. Not a Good Value for Simple Tax Situations

Taxhub’s off-the-shelf plan costs more than $150 per return but accommodates only relatively simple situations. By contrast, the lowest-priced plans offered by competitors like TurboTax and H&R Block also have limited functionality.

But they cost far less. Many offer federal returns for free, and some (including TurboTax) provide state returns for free as well, for a total cost of $0. If you have a straightforward tax situation one of those discount plans can accommodate, there’s absolutely no reason to spend so much money with Taxhub.

2. Limited Staff

Taxhub is a young company that has grown considerably since its founding but remains very much in startup mode. In the past, I’ve interacted professionally with Taxhub’s founder, something that would never happen at major incumbents like TaxSlayer or H&R Block (and probably wouldn’t happen at Taxhub these days, given the company’s growth).

Lean staffing cuts both ways. Compared with clock-punchers at major tax prep companies, Taxhub’s staff is more likely to be fully invested in making the product the best it can be and providing top-notch customer service.

That said, its small team is likely unable to provide the same breadth of service or overall responsiveness its larger competitors can, particularly during crunch times. It’s easy to imagine a scenario in which Taxhub’s small team becomes overwhelmed with customer questions or problems in the week or two before the filing deadline.

3. No Military Discount

Taxhub doesn’t advertise any discounts or deals for military filers. That’s a significant disadvantage relative to other options, which may offer deals for active-duty military.

4. Questionable Security Practices

Taxhub is a secure website with a lengthy privacy and security policy. I never felt like my information was at risk here, nor do I have any reason to believe that Taxhub is any more likely to experience a hack or breach than any of its better-known competitors.

That said, Taxhub has a laid-back approach to front-door security that could give some users pause. For instance, it doesn’t require you to set up any security questions, and its password requirements are pretty lax — they just need to be eight characters.

Taxhub’s timeout fuse is pretty long too. The website takes longer to time out than TaxAct and TurboTax. Though you should never do your taxes on a public Wi-Fi network, this long fuse can be a problem even in semiprivate situations, such as an apartment with nosy roommates or a shared Wi-Fi network.

At a minimum, use a virtual private network (VPN) and make sure your computer’s anti-malware software is operational and up to date.

5. Higher Prices Than DIY Competitors and Many Human CPAs

Taxhub was once cheaper than most mom-and-pop CPAs. That’s no longer the case for individual filers and businesses with complex situations. It’s now possible to spend well over $400 at Taxhub for a return that would cost $250 with an independent mom-and-pop CPA or less than $200 with TurboTax or H&R Block.


Final Word

For a scrappy tax prep startup, Taxhub is pretty impressive. It’s among the most hands-off tax services I’ve encountered, requiring far less time from its customers than DIY competitors.

It’s cheaper than most in-person tax prep services and other CPA-run online services, though recent price increases have blunted this advantage somewhat. And it offers some inclusions, such as text message document uploading and no-charge audit defense, that aren’t common elsewhere.

On the other hand, Taxhub doesn’t have instant name recognition or an established reputation. It’s not at all clear Taxhub has what it takes to grow into a company that could challenge the tax prep industry’s status quo. But disruption doesn’t happen without early adopters who buy into the cause.

For more options, check out our full list of top-rated free online tax preparation services.

Source: moneycrashers.com