Blog move

This post is slightly belated, but the Many Things Finance blog has moved to http://www.FoothillsPlanning.com/ffpblog. Please check it out, and thanks for following here.

Quick Update: Deductibility for Arizona 529 plans

A key provision of the Arizona 529 deductibility is that it applies to investment in ANY 529 plan, not strictly plans sponsored by Arizona. This element allows Arizona residents to select the best plan they can find nationwide and still enjoy a tax deduction. Of course, the relatively new Arizona option managed by Fidelity is a pretty good option for savers who are looking for a new 529 plan.

529 state tax deductibility in Arizona

Better late than never. Several months ago, Arizona passed legislation that allows for a state income tax deduction for contributions to Arizona-sponsored 529 plans, starting in 2008. The downside is that it is capped at $750 for individual taxpayers, and $1500 for couples filing jointly. Generally, the amount that is deductible pretty much runs the gamut from no deduction to a maximum equal to the taxpayer's adjusted gross income for the year. Arizona's max falls at the low end of the spectrum, but it's better than zero.

Important note: the deduction is subject to recapture in the event of a non-qualified distribution, which essentially means that the funds are not ultimately used for approved educational purposes.

PMI deductibility

At the start of 2006, I talked about some important new limits for tax deductions and retirement planning purposes. That was useful information for planning purposes, but may once again be helpful, now that we're in the middle of the tax prep season for the 2006 tax year.

I wanted to hit on one additional item: there has been a fair bit of media discussion regarding the deductibility of Private Mortgage Insurance (PMI) premiums, but there is very little "official" documentation of this development. The deduction stems from the Tax Relief and Health Care Act of 2006, which was passed by Congress and signed by the President late last year. For key provisions of that act, see the White House fact sheet. In any case, the reality for PMI deductibility seems to be that a) right now it is only in effect for 2007, and b) it only applies to loans originating in 2007. In other words, existing mortgages that are subject to PMI do not qualify. The fact that it it is set to expire for 2008 is probably less of a concern, as these laws are often renewed. For the sake of PMI payers, let's hope that this does get renewed, and in the process that renewal includes existing PMI policies.

Nervous about the game

Kickoff is in a couple of hours, and I'm getting nervous about the Super Bowl. It's been a long time. I can't believe the Bears are in it. I really hope the secondary came to play, and I hope the Bears protect the ball and run aggressively.

[Chicago Bears]

Real Estate capital gains tax break

My parents recently sold their home, and the tax implications of that sale came up as I was preparing their taxes, so I thought I'd issue a reminder of the current tax law with regard to the sale of your primary residence. It is pretty straightforward: taxpayers filing singly are entitled to $250,000 in profit without paying any tax, and married filers are entitled to $500,000 in profits tax-free. There is no longer any requirement to roll gains into a more expensive home, either. Again, this only pertains to the sale of a primary residence...rental homes don't apply. That generally means that one would have had to live in the home for two of the previous five years to qualify, even if those two years were not consecutive.

Dell revisited

I posted about Dell back in August. At the time, it was trading between 21 and 22, and I thought its negative press was a reason to do some further analysis. So many companies are getting bombed by the media these days that bad PR is a new trigger for me to look at a company.

For better or worse, I did not buy Dell at that time, mostly because I prefer smaller, lesser known companies who don't have an army of analysts covering them. Dell closed over 27.60 last month, though, which would have been close to a 30% gain since that post. In fairness, a lot of stocks had good runs in the latter part of last year.

Dell is headed back down now. Keep an eye on earnings and look for buying opportunities.

Go Bears

I guess it's a good time to verbalize the obvious:

GO BEARS!!!!!!!!!!!!!!!!!!