172 investing classes at Morningstar

I am frequently asked for good resources to learn more about investing.  Morningstar.com is one of my favorite resources to learn more about investing. 

The Morningstar Classroom offers over 172 courses on investing.  Topics cover stocks, bonds, mutual funds and portfolio management. 

The classes are free and start from a basic learning level and progress up to an advanced level, so investors of all levels can improve their investing knowledge.  Visit the Morningstar Classroom to review the course catalog and to sign up. 

In addition to these free courses, Morningstar also offers investing workshops for a nominal fee.  The workshops are more in depth than the free courses, and include exercises to help sharpen your investing skills. 

Finally, Morningstar has some great articles on their website.  My favorite columnist is Sue Stevens.  Click on the Personal Finance tab to read Sue’s articles.

Tags: investing

Can you deduct your home office?

Do you have a home office?  Do you know if it qualifies for the home office deduction?

The IRS has actually relaxed it’s position on home office in the last few years, so you may qualify, even if you didn’t previously.

To qualify for the home office deduction, your home office must:

1. Be your principal place of business, or
2. Be used to meet clients, customers or patients, or
3. Be a separate structure not attached to your home.

Most solo professionals have their home office in their home, so we’ll focus on the first two requirements:

Meeting clients, customers and patients is pretty self explanatory.  If you use your home office to meet with clients, you qualify.

Place of business is a little harder to define.  Basically, you have to use your home office regularly and exclusively for management and administrative duties of your business, and you must not have another location where these activities can be conducted.

Still not sure if your home office qualifies?  Check out IRS Publication 587 - Business Use of Your Home, or the article The Home Office Tax Deduction.

Tags: taxes, home office deduction, self employed

Where to keep your emergency fund

In the last few weeks, I’ve talked about why you should have an emergency fund, and how much you should have. 

Today I want to talk about where to keep your emergency fund.

If you’ve followed the guidelines (3 to 6 months of living expenses, or $1,000 if you’re working on a ‘baby’ emergency fund), then you may have a substantial amount of cash lying around.

You don’t want this money sitting in a checking account earning no interest, or a savings account that earns less than 1% interest.

On the other hand, you don’t want to put your emergency fund at risk.  So where to put that cash?  Here are some suggestions:

1.  Look for a money market account at a bank or credit union in your area.  A great place to start your research is Bankrate.com, where you can search by your location.  Your local paper might also list money market accounts in the money or finance section.

2.  If you’re comfortable with online banking, check out internet banks such as ING, HSBC, or Emigrant.  Online banks may offer a higher interest rate than local banks because they have lower overhead.

3.  CDs - although a good portion of your emergency fund should be in liquid accounts that are easy to access, you might want to keep part of your emergency fund in CDs to earn a higher interest rate.  Shop Bankrate.com or your local banks for the best rates.

4.  Money market mutual funds - if you already have investments with a mutual fund company or brokerage company, you might consider using a money market mutual fund for your emergency fund.  Rates are competitive and this option may be more convenient for you if you already have a brokerage account. 

5.  Short-term and ultra short-term bond funds - these are bond funds which fluctuate based on what the bond market is doing, so the value of your bond fund can go down.  However, there is potential for a greater return than a money market or CD, if you don’t mind the additional risk.

Tags: saving money, budgeting, emergency fund

The AMT to be repealed?

A bill has been introduced into the Senate to repeal the AMT tax this week.

If you’re not familiar with AMT, it is the Alternative Minimum Tax, created to keep higher income taxpayers from paying too little income tax.  Unfortunately, the AMT has never been adjusted, so many middle income taxpayers have fallen victim to the AMT in recent years.

The Tax Increase Prevention and Reconciliation Act of 2005 provided some AMT relief by increasing the AMT exemption amount, but this is just a one-year fix.

Without permanent changes to the AMT tax, more and more middle income taxpayers will be subject to this tax each year.

The legislation that was introduced into the Senate calls for the death of the AMT tax.  Click here to read more.

Tags: income tax, AMT, alternative minimum tax