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P. 112
t ment. Get professional help.
Myth #8: Any college degree is bet-
Deciding which one is better is complicated
but certainly requires comparing ter than none. I have seen people get a
quickie degree, planning to think about
your current tax bracket to your expected what to do with it afterwards. Remem-
tax bracket upon retirement. ber one thing: once you earn one degree,
Get professional help. you are ineligible to receive Pell grants
for any subsequent degree. Yes folks, you
36,000 miles, the calculation still does the annual maintenance fee is typically have disqualified yourself from receiving
not work. more than what you would pay to rent financial aid from Uncle Sam for the rest
the place. You are also greatly limited in of your life. This alone should make you
Here’s an alternative: Buy an al- where you can go on vacation, even if the ponder your move.
most-new car from a local used car deal- company claims dozens of locations; and
er. A quick look at some of their websites finally, your preferred location may not Perhaps you think you are ineligible
shows that I can buy a 2016 Toyota Cam- be available when you want to go. for aid due to your parents’ good finan-
ry with only 10K miles for $16,500. This cial situation. Bear in mind that if you
car is essentially new. I can drive it for Many timeshare owners have con- get married or turn 24, you no longer
nine years and assume it will be very re- cluded that they are a lesson in frustra- have to include your parents’ income
liable. After nine years, I can probably sell tion and a drain on their finances, and on your financial aid application. That
it for $6,000. The true cost is therefore often spent thousands of dollars just to might make you eligible for aid.
around $11,000. get rid of them. A quick check of eBay
shows that, in the last three months Myth #9: Tax deductions give you
Compare this to Toyota’s current on- alone, there are listings for over 1,100 100% payback. A question I get from
line leasing offer: You lease a new Cam- timeshares whose price never exceeded time to time is “If I give charity of $100
ry for $169 a month plus $2,900 due one dollar! Most of those never sold even will I save $100 on my taxes?” If this
at signing. That works out to $250 a at that price! I see people accepting these person really believes this, why are they
month. This does not include tax, title, offers of a “free” vacation in exchange only giving $100? Why not much more?
dealer fees, insurance, and disposition for sittin through a super-high pressure In fact, if it is true, all charities would be
fees, which are extra. In Maryland, the sales presentation that lasts for hours. I very well funded. Obviously, it is false.
cost is even higher, due to the fact that think one’s vacation time is too valuable When you give charity, you save an
sales tax is levied on the entire value of to be wasted on such torture. I would ab- amount corresponding to your marginal
the new car even though you are only solutely avoid this “bargain.” tax bracket. Typically, you will save 23 to
acquiring 36 months worth of it. The 35% of your charitable contribution – but
cost of leasing that car can easily exceed What to do instead? Across our great that is only if you itemize. If you do not
$30,000 over nine years. You can see country, untold thousands of hotels, itemize, your donation is worthless as a
that the lease cost is well over double the motels, and cabins of every stripe exist tax deduction!
$11,000 cost of buying, even if you factor at modest cost. Since most frum people
in possible repair bills. do not stay for Shabbos, a one-week va- Myth #10: If you need cash, take it
cation is often four or five nights. That from your retirement account. Some
Those who do not drive much might can be booked for a cost of $200 to $600, people look at their retirement accounts
consider a five-year-old car with low depending on the luxury level. No need as a savings account, which they use as
mileage. That way, you benefit greatly for anything more complex or expensive. spending money. There are consequenc-
from the depreciated value of the car. At es to such an attitude. First, if you with-
one of the frum-owned used car websites, Myth #7: Roth IRAs are the obvious draw money, it is taxable. If you are un-
I saw a 2012 Hyundai Accent with 46,000 choice. This one is a little complicated. der 59, you will also pay a 10% penalty!
miles selling for $6,900. This is a good Money put into a Roth IRA is not tax de- But more, as your income goes up, you
deal for a set of wheels with which to zip ductible when you contribute to it, but might lose various tax credits and other
around town and commute to work. it is not taxable when you take it out. A goodies. You might even lose your health
regular IRA is tax deductible, but then insurance assistance! That could be a big
Myth # 6: Buying a timeshare saves you pay taxes on the entire value when it ouch! And of course, you will have less
on vacations. Timeshares, where you is withdrawn. Deciding which one is bet- money for your retirement.
buy the right to occupy a vacation home ter is complicated but certainly requires
for a specified number of days per year, comparing your current tax bracket to We all face many financial decisions in
are worse than car leases. First of all, your expected tax bracket upon retire- life. In fact, financial acumen is a constant
their cost is outrageously high. Then part of living. That is why it is so import-
ant to get the facts straight. Doing so will
avoid much headache and regret.u
Eli Pollock CPA can be reached at elipol-
lock2@yahoo.com.
104 u www.wherewhatwhen.com u
Myth #8: Any college degree is bet-
Deciding which one is better is complicated
but certainly requires comparing ter than none. I have seen people get a
quickie degree, planning to think about
your current tax bracket to your expected what to do with it afterwards. Remem-
tax bracket upon retirement. ber one thing: once you earn one degree,
Get professional help. you are ineligible to receive Pell grants
for any subsequent degree. Yes folks, you
36,000 miles, the calculation still does the annual maintenance fee is typically have disqualified yourself from receiving
not work. more than what you would pay to rent financial aid from Uncle Sam for the rest
the place. You are also greatly limited in of your life. This alone should make you
Here’s an alternative: Buy an al- where you can go on vacation, even if the ponder your move.
most-new car from a local used car deal- company claims dozens of locations; and
er. A quick look at some of their websites finally, your preferred location may not Perhaps you think you are ineligible
shows that I can buy a 2016 Toyota Cam- be available when you want to go. for aid due to your parents’ good finan-
ry with only 10K miles for $16,500. This cial situation. Bear in mind that if you
car is essentially new. I can drive it for Many timeshare owners have con- get married or turn 24, you no longer
nine years and assume it will be very re- cluded that they are a lesson in frustra- have to include your parents’ income
liable. After nine years, I can probably sell tion and a drain on their finances, and on your financial aid application. That
it for $6,000. The true cost is therefore often spent thousands of dollars just to might make you eligible for aid.
around $11,000. get rid of them. A quick check of eBay
shows that, in the last three months Myth #9: Tax deductions give you
Compare this to Toyota’s current on- alone, there are listings for over 1,100 100% payback. A question I get from
line leasing offer: You lease a new Cam- timeshares whose price never exceeded time to time is “If I give charity of $100
ry for $169 a month plus $2,900 due one dollar! Most of those never sold even will I save $100 on my taxes?” If this
at signing. That works out to $250 a at that price! I see people accepting these person really believes this, why are they
month. This does not include tax, title, offers of a “free” vacation in exchange only giving $100? Why not much more?
dealer fees, insurance, and disposition for sittin through a super-high pressure In fact, if it is true, all charities would be
fees, which are extra. In Maryland, the sales presentation that lasts for hours. I very well funded. Obviously, it is false.
cost is even higher, due to the fact that think one’s vacation time is too valuable When you give charity, you save an
sales tax is levied on the entire value of to be wasted on such torture. I would ab- amount corresponding to your marginal
the new car even though you are only solutely avoid this “bargain.” tax bracket. Typically, you will save 23 to
acquiring 36 months worth of it. The 35% of your charitable contribution – but
cost of leasing that car can easily exceed What to do instead? Across our great that is only if you itemize. If you do not
$30,000 over nine years. You can see country, untold thousands of hotels, itemize, your donation is worthless as a
that the lease cost is well over double the motels, and cabins of every stripe exist tax deduction!
$11,000 cost of buying, even if you factor at modest cost. Since most frum people
in possible repair bills. do not stay for Shabbos, a one-week va- Myth #10: If you need cash, take it
cation is often four or five nights. That from your retirement account. Some
Those who do not drive much might can be booked for a cost of $200 to $600, people look at their retirement accounts
consider a five-year-old car with low depending on the luxury level. No need as a savings account, which they use as
mileage. That way, you benefit greatly for anything more complex or expensive. spending money. There are consequenc-
from the depreciated value of the car. At es to such an attitude. First, if you with-
one of the frum-owned used car websites, Myth #7: Roth IRAs are the obvious draw money, it is taxable. If you are un-
I saw a 2012 Hyundai Accent with 46,000 choice. This one is a little complicated. der 59, you will also pay a 10% penalty!
miles selling for $6,900. This is a good Money put into a Roth IRA is not tax de- But more, as your income goes up, you
deal for a set of wheels with which to zip ductible when you contribute to it, but might lose various tax credits and other
around town and commute to work. it is not taxable when you take it out. A goodies. You might even lose your health
regular IRA is tax deductible, but then insurance assistance! That could be a big
Myth # 6: Buying a timeshare saves you pay taxes on the entire value when it ouch! And of course, you will have less
on vacations. Timeshares, where you is withdrawn. Deciding which one is bet- money for your retirement.
buy the right to occupy a vacation home ter is complicated but certainly requires
for a specified number of days per year, comparing your current tax bracket to We all face many financial decisions in
are worse than car leases. First of all, your expected tax bracket upon retire- life. In fact, financial acumen is a constant
their cost is outrageously high. Then part of living. That is why it is so import-
ant to get the facts straight. Doing so will
avoid much headache and regret.u
Eli Pollock CPA can be reached at elipol-
lock2@yahoo.com.
104 u www.wherewhatwhen.com u
