What about the fees that crypto traders sometimes incur when they buy or sell digital assets on exchanges or other platforms? Can that reduce your taxable gains?

So let’s say I’m buying Bitcoin on Coinbase. Coinbase charges me, let’s say, a 3 percent fee. That fee can be added to my basis of the asset that I purchased. If I purchased $100 worth of Bitcoin but I also pay this $3 fee, now my basis in that Bitcoin is actually $103. When I turn around and sell it, that is advantageous for me: I’m not incurring as much gain, because my basis is higher.

What are the questions that you hear about most?

A lot of people ask, “Hey, this is only taxable once I cash out to fiat, right?” And the reality is, “No.”

When you’re disposing of assets, whether or not you actually come back to U.S. dollars, you can still incur a tax bill.

So even if I use my Bitcoin to buy another cryptocurrency like Ether, I can still be taxed on any gains I’ve seen from my initial investment?

Let’s say you buy Ethereum on Coinbase for $1,000, and you hold that for a few months and it rips — it’s at $2,000 now. You sell it to buy stable coins, or Bitcoin. If it was at $1,000 at the time you bought it, you’ve realized $1,000 in capital gains

What about evading taxes? Are there already tax lawyers specializing in cryptoshelters — or whatever it would be in the blockchain world?

There are a lot of tax lawyers who have carved a niche out into the digital asset world. And a lot of those folks can definitely help from a tax planning and tax avoidance perspective. No one we work with is helping with tax evasion — that’s illegal. But there’s a lot of smart people who can help you reduce your taxes through proper planning.

Do you have any sense of the overall tax compliance rate?

In our survey, we found that over 50 percent of crypto investors were reporting their digital asset activity on their taxes. And we’ll see the number continue to drastically go up in the years to come.

Article source: https://www.nytimes.com/2022/03/26/your-money/taxes-crypto-nfts.html

The current high rate of inflation will help some Medicare enrollees avoid surcharges, since the bracket definitions are adjusted annually for inflation. “It does look like we’ll have fewer people paying the surcharges,” said Ron Mastrogiovanni, chief executive of HealthView Services, a Boston-area maker of health care cost-projection software.

The two-year lag effect can create unpleasant surprises when you first enroll in Medicare. It is possible to appeal premium surcharges if your income declined owing to any one of a number of defined “life-changing” circumstances — and one of those is stopping work. File your appeal using Form SSA-44 from the Social Security Administration.

State taxes

Many states exempt retirement income, although the specifics vary widely. Eight states have no personal income tax, but among those that do, about three-quarters fully exempt Social Security benefits from taxation, and most others have partial exemptions for lower-income retirees, according to research by the Institute on Taxation and Economic Policy, a nonpartisan nonprofit group. Many states also have partial or full exemptions for pension income, and extra personal exemptions or reductions.

“It’s very common for some part of pension income to be exempted at the state level,” said Aidan Davis, the group’s acting state policy director. “And we’re seeing a major trend this year with more states cutting taxes for retirees,” she added.

Strategies for tax efficiency

Careful planning before retirement can help minimize or even avoid some of the knock-on effects that taxes on Social Security and Medicare surcharges can create. The objective is to reduce taxable income wherever possible by diversifying your holdings outside tax-deferred accounts.

Saving for retirement in a Roth I.R.A., or a Roth 401(k) offers one path to achieve this goal, as can Roth conversions, especially in the early years of retirement before you claim Social Security.

For workers enrolled in high-deductible health insurance plans, a Health Savings Account can help. These accounts can be used to pay out-of-pocket health care costs in retirement; contributions are tax-deductible, and investment growth and interest are tax-exempt, as are withdrawals spent on qualified medical expenses. Contributions to these accounts generally must stop six months before your Medicare enrollment becomes effective.

Article source: https://www.nytimes.com/2022/03/25/business/retirement-taxes-social-security.html

There are steps you can take, however, to reduce the amount of your gain that is taxable.

First, you can subtract costs associated with the sale of the house, like real estate commissions and transfer and appraisal fees.

You can also increase your “basis” — the dollar amount on which the gain is based — by adding to your purchase price the cost of any improvements made to your home over the years. The improvements must be projects that add to the value of the house and extend its useful life. Replacing the pipes in your house would qualify, but swapping out a shower head would not, said Michael Durant, a senior accountant at Prager Metis in Manhattan.

If you added a room, remodeled your kitchen or replaced a roof, all those costs can be added to your basis, which helps to shrink your gain and the associated tax, said Isabel Barrow, director of financial planning at Edelman Financial Engines, a financial planning and wealth management firm.

Ms. Barrow suggested that homeowners maintain a spreadsheet showing the date and cost of any improvements. Homeowners should save receipts, invoices and design plans to justify an increase in their property’s basis.

Here’s how it could work, continuing with the hypothetical single seller who exceeds the $250,000 cap by $50,000. Say you paid a 6 percent real estate commission ($36,000). You would subtract that from the selling price, reducing it to $564,000. Perhaps you spent $15,000 to upgrade a bathroom; you would add that to the price you paid for your home, raising your basis to $315,000. The gain would then be $249,000 ($564,000 minus $315,000), below the exclusion for a single filer — so you’d owe no tax.

Most people who have lived in a home for a long period have made significant improvements, whether it’s building a swimming pool, installing blinds or adding a generator, said Melanie Lauridsen, senior manager of I.R.S. advocacy and relations with the American Institute of Certified Public Accountants. The improvements count, she said, “even if you paid for it a long time ago.”

If you don’t qualify for the full exclusion, there are exceptions that may make you eligible for at least part of it. Say you bought a home but have to sell it within two years because of a job relocation, an illness or disability, or another unforeseen event that forces a move. You may be able to claim a partial exclusion. The I.R.S. provides a worksheet, but it’s best to get professional advice to make sure you get the details right, Ms. Barrow said.

Article source: https://www.nytimes.com/2022/03/25/your-money/home-sale-tax.html

Other fund vehicles hold crypto directly, but they’re grappling with different structural problems and carry higher fees, which are a drag on returns.

Grayscale Bitcoin Trust, the largest Bitcoin vehicle, with $27 billion in assets, costs 2 percent and trades on the “over the counter” market. But these trusts don’t have the flexibility of regular mutual funds and E.T.F.s to balance supply and demand, so their share prices may deviate from Bitcoin’s price. Another provider, Osprey Bitcoin Trust, became available (for a fraction of Grayscale’s cost) in February, but it faces the same challenges.

Grayscale, Bitwise and other providers have said converting to an E.T.F. structure would solve these problems, but they haven’t received the green light from regulators, who worry that the underlying coins may be subject to manipulation and fraud. (E.T.F.s that hold actual coins do exist elsewhere, though — the Fidelity Advantage Bitcoin E.T.F., for example, is available in Canada.)

Investors seeking professional guidance may find that more financial advisers now have firsthand cryptocurrency experience — some of which may be driven by an effort to educate themselves and field questions with more confidence. About 47 percent of advisers reported owning crypto assets in 2021, according to the Bitwise/ETF Trends survey, which polled 619 advisers. That was nearly double the result the previous year.

One adviser, Ritholtz Wealth Management, has gone as far as introducing, with partners, a crypto-related index providing broad exposure for its clients through a separately managed account. It charges 0.50 percent annually, and has a sign-up fee of 0.70 percent.

Crypto is “hard to ignore at this point,” said Michael Batnick, Ritholtz’s director of research.

Cristina Guglielmetti, a financial adviser in Brooklyn, called the vast majority of her clients “prime crypto-curious”: “mid-40s, familiar with tech/pop culture — it’s all around them.” She tries to understand why they want crypto, while making sure they’re aware of its place in their investment mix.

“Are we putting off other goals so you can do this?” she said. “Or have we handled everything else that needs handling, and now you’re in a good place to be doing more speculative things?”

That makes cryptocurrencies just like any other boom-or-bust investment, Ms. Guglielmetti said.

“We just have to understand what role it’s playing for you,” she said. “Having some fun and exploring new things is a perfectly valid role.”

Article source: https://www.nytimes.com/2022/03/24/your-money/bitcoin-investing-cryptocurrency.html

Whitman might give you a bigger discount than what it promises upfront — once it does a more thorough review of your full application file — but not a smaller one. The College of Wooster, in Ohio, also offers a personalized estimate and a similar guarantee, as long as people submit accurate information.

To Whitman, the lack of upfront clarity on pricing was a basic market inefficiency that it could fix. “Some colleges may benefit from a lack of financial transparency,” Mr. Miller, the Whitman interim vice president, said.

Indeed, far too many schools keep things opaque, and one has actually doubled down on withholding useful information.

In a column about early decision applicants in January, I cited Northeastern as an example of a school that made it difficult for many students to figure out what the school might ask them to pay when making an offer of admission that is theoretically (but not really) binding.

Late last year, Northeastern’s site offered confusing language: “Students who are in the top 10-15% of our applicant pool are considered for competitive merit awards.”

I asked the school about this unhelpful word salad, and eventually, Northeastern changed it. But it made an error — and then removed the figure altogether. Here’s the right one, by the way: In the 2020-21 entering class, 59 percent of people who had no financial need got merit aid anyhow.

Why not just say that, then? “The university is placing much more emphasis on need-based aid these days,” Michael Armini, a university spokesman, said in an email. “That is what I want the focus of our messaging to be.”

Article source: https://www.nytimes.com/2022/03/18/your-money/financial-aid-northeastern-muhlenberg-whitman.html

In an interview, James D. Hamilton, professor of economics at the University of California, San Diego, and a leading expert on the economic effects of oil shocks, said they had “made major contributions to recessions over many decades.” At current oil price and supply levels, the effects of the Russian war “are fairly manageable for the American economy.”

But Professor Hamilton pointed out that Russia’s oil, which amounts to about 10 percent of world production, could not be easily replaced if totally cut off — an outcome that he does not believe to be likely. Nonetheless, even the loss of a substantial part of it could constitute an oil price shock rivaling those of the 1970s, he said.

Furthermore, cuts in the availability of Russian commodities like palladium, which is important for the catalytic converters in gasoline-fueled cars, and nickel, which is used in car batteries and for many other purposes, also amount to supply shocks.

How serious is the danger that these war-related issues will cause major economic problems in the United States? “We’ll have to be looking at this carefully,” Professor Hamilton said.

Omicron in China

Another variable for the Fed to consider: The global supply chain problems that have contributed to inflation in the United States could be made much worse by the worst outbreak of Covid-19 in China since early 2020. Lockdowns and restrictions in China are already slowing the supply of products like Toyota and Volkswagen cars and Apple iPhones, as well as components such as circuit boards and computer cables, as Keith Bradsher reported for The New York Times from Beijing.

“The situation in China definitely complicates things for the Fed,” said Yung-Yu Ma, chief investment strategist for BMO Wealth Management in the United States. “It adds a level of delicacy to the mix here, and one that’s very hard to predict.

“It was already a challenging environment before this,” he added. “Remember, in the markets, we began in the good old days in January just worrying about what the Fed would do about interest rates.”

Article source: https://www.nytimes.com/2022/03/17/business/federal-reserve-inflation-recession.html

Though the typical car payment has reached its highest levels since 2012, the latest increase isn’t expected to make a meaningful difference — at least not yet.

“Car loan rates will move up as the Fed hikes interest rates, but it will be a nonissue for car buyers because it has such a limited impact on monthly payments,” said Mr. McBride, adding that the difference of a quarter percentage point on a $25,000 loan is $3 a month. “Nobody will need to downsize from the S.U.V. to the compact because of rising rates,” he said.

Savings Accounts, C.D.s and More

Many people stashed extra money in their bank accounts over the past couple of years, but whether rate increases translate into a more attractive yield depends on the type of account you have and the institution you’re doing business with.

An increase in the Fed benchmark often means banks will pay more interest on deposits — but not necessarily right away. Banks tend to raise rates when they want to bring more money in, but the largest banks already have plenty of deposits. That gives them little incentive to pay depositors more.

Smaller banks and online banks tend to pay better rates more quickly than larger institutions, according to Ken Tumin, founder of DepositAccounts.com, part of LendingTree. And some of them, particularly the savings arms of credit-card banks including Capital One and American Express, have already begun increasing their rates a bit, he added.

But overall, rates remain quite low. The average online savings account was paying just 0.49 percent in March, according to DepositAccounts.com; the average was 0.48 a year ago. At brick-and-mortar banks, the average savings account paid 0.12 percent in March, down slightly from 0.15 the year prior.

Certificates of deposit, which tend to track similarly dated Treasury securities, have already begun to move a bit higher, particularly among online banks: The average one-year C.D. at online banks is 0.67 percent in March, up from 0.51 percent in January, while the average five-year C.D. is 1.08 percent, up from 0.86 percent in January.

Article source: https://www.nytimes.com/article/federal-reserve-rate-increase.html

Bank branch closings during the pandemic may have added another challenge. Some banks may offer remote online notary services, but laws vary by state. (The TreasuryDirect form required for changing banks states that “notary certification is not acceptable,” but it may be allowed if the notary is a bank employee, according to TreasuryDirect.)

The TreasuryDirect website was created in late 2002 as part of a federal shift from paper to digital bonds, replacing a system that let people buy bonds on the phone.

“The system will provide greater flexibility and convenience for the investor by eliminating the paperwork burden inherent in the current TreasuryDirect system,” according to the announcement about the website published in the Federal Register. The notice said that “the online transactions that an account owner may conduct” included “making changes to account information.”

John Rizzo, a Treasury Department spokesman, said in an emailed statement that a paper form was a security step “aimed at preventing unauthorized transactions.” Banks will typically certify the form without charge, he said. (Mr. Tumin, however, said some branches might charge you a fee, depending on your relationship with the bank.)

The department is developing an “updated, modern replacement” for the TreasuryDirect system with security protocols that allow account changes without paper forms, Mr. Rizzo said. He didn’t cite a timeline but said the upgrade was “a priority.”

“We are committed to ensuring that TreasuryDirect users have a positive customer experience in addition to keeping their financial information safe,” he said.

Here are some questions and answers about using TreasuryDirect:

If I mail the form to change my bank, how long does it take TreasuryDirect to update my account?

The customer’s TreasuryDirect account is usually updated within 10 business days after a completed form is received, Mr. Rizzo said.

Article source: https://www.nytimes.com/2022/03/11/your-money/savings-bonds-inflation.html

La política digital arriesgada entre potencias mundiales podría darte la sensación de que no hay mucho que puedas hacer para ayudar, pero una buena higiene digital en realidad equivale a una forma de defensa civil.

El hackeo de la campaña de 2016 de Hillary Clinton comenzó con algo que todos podemos entender: un correo electrónico fraudulento en el que se solicitaba un cambio de contraseña. Si en tu empleo manejas información importante y delicada, también podrías ser vulnerable, incluso a través del correo electrónico personal.

“Quieren tus contraseñas”, dijo Karen Walsh, quien dirige una compañía de mercadotecnia que ayuda a las empresas de ciberseguridad a explicar sus capacidades en un idioma sencillo, “porque la gente reutiliza las contraseñas para su vida personal y profesional”.

Eric Gosh, un veterano de la Fuerza Aérea que pasó parte de su tiempo protegiendo tecnología sensible de posibles ataques rusos, ahora opera una firma de consultoría de tecnología en Chicago. Siempre les recuerda a sus clientes que se hagan tres preguntas cuando reciban un correo electrónico extraño, y la respuesta a todas debe ser “sí”: ¿proviene de alguien que conozco? ¿Es algo que estaba esperando? ¿Está en el formato que esperaba?

“Si la respuesta es no, toma el teléfono y llama”, mencionó.

Walsh recomendó un plan 3-2-1 probado y comprobado para los respaldos: tres copias de cualquier dato esencial en dos formatos o tipos de almacenamiento y que uno de ellos sea en la nube.

Por ejemplo, si en este momento te sometes a un tratamiento médico delicado, es prudente que conserves copias múltiples de tu historial, teniendo en mente el problema que los programas de cibersecuestro causaron en los sistemas hospitalarios en 2020. Seguramente tu proveedor de atención médica podría tenerlo, pero puedes solicitarlo y tener tu propia copia en la nube, así como en una memoria USB o impreso en una carpeta.

Puedes hacer más, como actualizar el sistema operativo de tus dispositivos o, mejor aún, activar las actualizaciones automáticas. Anota, toma capturas de pantalla o fotografía las direcciones postales y los números telefónicos esenciales, por si acaso.

Article source: https://www.nytimes.com/es/2022/03/08/espanol/ciberataque-proteccion.html

The hacking of Hillary Clinton’s 2016 campaign began with something we can all understand: a phishing email requesting a password change. If you work in any kind of sensitive job, you could be vulnerable too, even on personal email.

“They want your passwords,” said Karen Walsh, who runs a marketing company that helps cybersecurity companies explain their capabilities in plain English, “because people reuse passwords between home and work.”

Eric Gosh, an Air Force veteran who spent part of his time shielding sensitive technology from Russia, now runs a Chicago technology consulting firm. He constantly reminds clients to ask themselves three questions when strange emails arrive, and the answer is supposed to be yes to all of them: Is it from someone I know? Is it what I was expecting? Is it in the format I was expecting?

“If the answer is no, pick up the phone and call,” he said.

Ms. Walsh recommends a tried-and-true 3-2-1 plan for backups: Three copies of any essential data in two different formats or types of storage media, with one of them in a cloud.

If you’re undergoing sensitive medical treatment right now, for instance, it’s wise to maintain multiple copies of your records, keeping in mind the mess that malware made of hospital systems in 2020. Your health care provider might have them, sure — but you can ask for and keep your own copy in the cloud as well as on a thumb drive or in a paper folder.

There’s more. Update the operating systems on your devices, or better yet, enable automatic updates. Write down, screenshot or photograph essential street addresses and phone numbers, just in case.

As for everything you may have personally stored via Google, Phil Venables, chief information security officer for Google Cloud, offered some reassurance this week.

Article source: https://www.nytimes.com/2022/03/05/your-money/cybersecurity-tips.html