We tend to believe that renting consumer goods is like pouring money down the drain -- and in many cases, it can be. But the idea that renting is always a bad idea is an oversimplification.
Renting furniture, for instance, often costs several times the original price of the piece in the long-run. You're better off getting a cheap sofa from the local Goodwill while you save enough to purchase a couch you love.
Renting your home, by contrast, might be a better deal, depending on the rent-vs.-buy costs in your specific region and city. In expensive areas, such as Manhattan and San Francisco, renting a home can sometimes be a better idea than buying, especially after home maintenance costs, insurance, interest and property taxes are taken into account.
There are plenty of other items you may want to rent rather than buy, as well. Here are six of them.
Paula Pant is an entrepreneur and real estate investor who has traveled to 32 countries. Her blog Afford Anything is not the same tired, stodgy, uninspired financial advice that you'll find on other websites. Afford Anything shows you how to crush limits, create wealth and maximize life.
Diane Macdonald/Getty Images
Although it's easy to understand basic tax rules like how your salary is treated as taxable income, there are some surprising provisions in the Internal Revenue Code that force you to pay taxes on unexpected items. If you're not prepared, you can easily get hit with extra tax liability that you didn't plan on.
In particular, three tax rules can force you to pay extra taxes in situations where you might already be in a difficult position financially. Let's take a closer look at them to make sure you don't get blindsided at tax time.
1. Unemployment Benefits Are Taxable
When you lose your job involuntarily, unemployment insurance usually kicks in to replace at least some of your lost income. What many people don't realize, though, is that unemployment benefits are usually subject to income tax. In some situations, you're allowed to recover amounts you paid in nondeductible contributions to a government or private unemployment fund, but beyond that, benefits are almost always taxable.
What makes this particularly surprising is that welfare and public assistance benefits from government programs typically aren't subject to income tax. One rationale for the distinction is that welfare benefits are based upon need, while unemployment insurance benefits are meant to replace specific amounts of what would be taxable wages. Regardless, it's smart to consider having taxes withheld from your unemployment benefits to make sure you don't get hit hard with extra tax liability in April.
2. If You Had Debts Forgiven, You Might Owe Tax
Often, when people get into trouble with debt, they end up having to work at getting their lenders to forgive all or part of what they owe. If you're fortunate enough to have your bank forgive some of your debt, you won't see a dime -- but the IRS often treats the forgiven debt as taxable income and charges taxes on it.
There are many exceptions in which the tax law specifically says forgiven debt is not subject to tax, including debts discharged in bankruptcy or insolvency as well as forgiveness of qualifying debt on a farm, business real property, or a principal residence -- although this last provision expired as of the end of 2014. Certain student loan forgiveness is also exempt from tax. But in other cases, such as credit card debt forgiveness, you may well get a tax form showing your taxable income, and you run the risk of an audit if you don't include it on your tax return.
3. Social Security Benefits Are Sometimes Subject to Income Tax
Most people see their Social Security benefits as money they earned through paying payroll taxes throughout their careers. Yet for some taxpayers, a portion of benefits they receive from Social Security are included in their taxable income.
For single filers making more than $25,000 and joint filers with incomes of $32,000 or more, as much as half of your benefits can be subject to tax. Above the $34,000 mark for singles and $44,000 for joint filers, the taxable portion of your benefits goes up to as much as 85 percent. Some proposed legislation has suggested raising those limits in future years, but for now, they're hardwired into the tax laws -- and they don't adjust for inflation, suggesting that a rising number of U.S. senior citizens are likely to run into the provisions over time.
Solar power is starting to shake up the energy market as we know it, yet rooftop solar panels can only disrupt the utility industry so much. However, new developments brewing in solar could bring major changes.
Currently, the utility grid takes the extra electricity produced by rooftop solar systems during the day and provides enough electricity for solar homes to keep the lights on at night, a structure known as "net metering." This works when a relatively small number of homes have solar panels but becomes more difficult as more homes go solar. As we pass a million solar homes in the U.S., a milestone we'll likely hit later this year, the grid will be stretched, particularly in sunny parts of the country like California and Arizona.
But energy storage could ease the growing strain solar energy puts on the grid and make it possible for people to cut ties with the grid altogether. Energy storage could be the catalyst to make electric utilities adapt to innovations taking place in the energy space and change the way millions of people get their energy.
How Energy Storage Works
In effect, energy storage simply shifts when the utility sees demand from a solar customer. In a typical solar household, the home will actually send electricity to the grid during the day when the sun is out (blue area below) and draw electricity the rest of the day, particularly right after the end of the workday, when demand is highest (green area below).
SunPower Analyst Day presentation
What energy storage can do is take some of that electricity that's created during the day, store it, and discharge it at night, all within your home. This smooths out the demand the grid sees (approximated by the dotted line in the image above).
This is important because it means solar homes won't create the same stress on the grid as they once did, reducing a major complaint utilities have about rooftop solar. Energy storage also gives consumers choice in when and how they use electricity, which could be a selling point for consumers looking to reduce carbon emissions.
How Traditional Utilities Are Fighting Back Against Solar
Solar power usage, however, means less revenue for the utility companies. So in response, utilities have developed a strategy to fight its adoption. Instead of only charging customers for the energy they use, utilities across the country are proposing a fixed charge for every customer to connect to the grid and then a lower rate for each kWh of electricity used.
On the surface, the concept makes some sense: Each customer should have to pay something to get access to the grid, and they should pay more if they use more energy. But it's a regressive way to charge customers, meaning the rich will in effect pay less for each kWh used.
Imagine two homes: one a small home that uses 500 kWh of electricity each month, the other a much larger home that uses 5,000 kWh of electricity each month. Then let's say that each customer is charged $20 to access the grid and $0.10 per kWh of electricity they use. The small home would have a total bill of $70 per month and the larger home would have a bill of $520. Despite using 10 times as much electricity, the larger home's bill is only 7.4 times that of the smaller home.
The intended side effect, however, is that it also quashes the economics of solar. If you could offset all of your electricity with a rooftop solar system but still got charged $20 to be connected to the grid, it would make less sense to go solar than if you were only charged for the net energy you use. But therein lies the problem that could upend utilities as we know them.
Where Energy Storage Could Go in the Future
Energy storage as a product is growing, but it's still in an early phase of its existence. Right now, companies like SolarCity (SCTY) and SunPower (SPWR) that offer energy storage aren't proposing taking homes off the grid entirely with energy storage -- but that's the logical next step. If you had a large enough energy storage system, it's perfectly reasonable to think you could generate enough electricity to power your home with solar panels, and the energy storage system would make sure the house ran reliably.
Long-term, this is exactly what utilities don't want to happen. They don't want leaving the grid entirely to be an option for consumers who go solar. The problem will be creating the right rate and incentive structure to give customers freedom to get energy from where they want -- while still making a profit -- without alienating solar customers altogether.
Utilities that get it wrong could face major hardship. Hawaii has become the first battleground to watch. Electricity costs there are over three times the national average, making going solar a no-brainer. But the state's main energy utility, Hawaiian Electric Industries, has been dragging its feet in connecting solar systems to the grid because it says it can't handle the surge in electricity during the day followed by a big rise in demand at night.
Regulators are saying that's rubbish and demanding that Hawaii's utilities figure out a way to make rooftop solar work. If they can't, it could be the first place in the U.S. where it's economical to say goodbye to the grid and build a big enough energy storage system to supply your own energy 24/7.
That could be the future of energy, and if enough consumers go off-grid, it would topple utilities in the U.S. Innovation is coming to the energy business, and even utilities are going to have to keep up to survive.
Alan Diaz/APJob seekers at a career fair in Miami. NABE is forecasting increased hiring as the U.S. economy continues its recovery.
WASHINGTON, D.C. -- A business economics group has boosted its outlook for U.S. economic improvement this year and next, particularly for job growth.
Healthier consumer spending, housing investment and government spending growth are expected to make outsized contributions to the projected acceleration in overall economic activity.
The report, released early Monday, also predicts more investment by businesses in both equipment and intellectual property, as well as modest growth in stock prices.
"Healthier consumer spending, housing investment and government spending growth are expected to make outsized contributions to the projected acceleration in overall economic activity. Accordingly, recent labor market strength is expected to continue," John Silvia, the association's president and the chief economist at Wells Fargo (WFC), said in a statement.
Other factors driving the improved forecast include an increased pace of activity in the housing sector, the strong dollar and continued low oil prices.
The report predicts the benchmark price for crude oil, which fell from $98 a barrel in December 2013 to $59 in December 2014, will average $61 a barrel at the end of the year and $69 a barrel in December 2016. Just three months ago, the group forecast that oil would spike to $85 a barrel by December 2015.
The NABE report did contain some negatives, however. Those include a widening U.S. trade deficit in 2015, a 0.1 percent drop in 2015 hourly compensation growth from December's prediction to 2.5 percent, and scaled-back forecasts for 2015 corporate profit growth, down 2 percentage points to 4.7 percent from December's forecast.
Meanwhile, 88 percent of the panel of 50 professional forecasters predicted the Federal Reserve will start increasing interest rates in the second or third quarter of this year.
Highlights of the association's forecast include:
On average, the economy should add 251,000 jobs a month in 2015 and then 216,000 a month in 2016.
The U.S. unemployment rate -- now 5.5 percent, the lowest in seven years -- is expected to fall to 5.4 percent in December and then decline to 5.1 percent in 2016.
Gross domestic product is expected to grow 3.1 percent in 2015, unchanged from the December forecast.
The federal deficit is expected to total $460 billion in fiscal 2015 and $453 billion in the 2016 fiscal year.
The group's forecast for Standard & Poor's 500 index (^GSPC), on average, is to end 2015 at 2,150 and end 2016 at 2,262.
Inflation, as measured by the consumer price index, is expected to decline 0.6 percent in 2015, a big improvement over December's forecast that it would increase by 1.7 percent.
Consumer spending is forecast to increase by 3.3 percent in 2015 and to increase by 3 percent the following year.
"The improved consumer spending outlook may be attributable to the psychological impact of lower gasoline prices, as well as improving employment and income growth," the report noted.
WASHINGTON -- U.S. consumer spending barely rose in February as households used the windfall from lower gasoline prices to boost savings to the highest level in more than two years, the latest sign that the economy hit a soft patch in the first quarter.
Economic growth has been undercut by bad winter weather, a strong dollar, a now-settled labor dispute at busy West Coast ports and softer demand in Europe and Asia. While the slowdown in activity is likely temporary, it could prompt the Federal Reserve to delay raising interest rates until later this year.
We expect spending activity to rebound meaningfully in the coming months as the weather setback dissipates...
"We expect spending activity to rebound meaningfully in the coming months as the weather setback dissipates, but the very weak tone in the data will likely continue to temper the impulse at the Fed to tightening policy in the near-term," said Millan Mulraine, deputy chief economist at TD Securities in New York.
The Commerce Department said Monday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1 percent last month after dropping 0.2 percent in January.
Households cut back on purchases of big-ticket items like automobiles, but a cold snap lifted spending on utilities.
Economists had forecast spending gaining 0.2 percent.
When adjusted for inflation, spending fell 0.1 percent, the weakest reading since April of last year, after rising 0.2 percent in January.
Investors on Wall Street largely ignored the data, focusing attention on a raft of biotechnology merger deals. U.S. stocks were trading higher.
The dollar gained against a basket of currencies and prices for U.S. government debt also rose.
Slowing Consumption
Consumer spending, which grew at its quickest pace in more than eight years in the fourth quarter, has lost momentum in part because of bad weather and a greater propensity by households to save money and reduce debt.
February's soft report prompted economists to further cut their first-quarter GDP growth estimates.
Forecasting firm Macroeconomic Advisers lowered its estimate by two-tenths of a percentage point to a 0.9 percent annual pace. Barclays (BCS) cut its forecast to a 1 percent rate from 1.2 percent, while Morgan Stanley (MS) now sees a 0.8 percent growth pace instead of 0.9 percent.
While households appear to have pocketed the bulk of their savings from lower gasoline prices or used the money to pay down debt, economists expect improved household balance sheets and a tightening labor market to boost consumer spending this year.
Income rose 0.4 percent last month after a similar gain in January. Savings jumped to $768.6 billion, the highest level since December 2012, from $728.7 billion in January.
The saving rate rose to 5.8 percent, also the highest since December 2012, from 5.5 percent in January.
"Consumers have a lot of pent-up spending power once the economy gets past the winter doldrums," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
There already are signs that a thaw is underway.
In a separate report, the National Association of Realtors said its pending home sales index, based on signed contracts, rose 3.1 percent in February to its highest level since June 2013. That indicated a pick-up in home sales.
Harsh winter weather has hurt parts of the housing sector.
There was a slight uptick in prices last month, suggesting a recent disinflationary trend had run its course, but inflation remains well below the Fed's 2 percent target.
Fed Chair Janet Yellen signaled Friday that the U.S. central bank would likely start raising interest rates later this year, even amid low-running inflation. The Fed has held its key short-term interest rate near zero since December 2008.
A price index for consumer spending increased 0.2 percent in February after falling 0.4 percent in January. In the 12 months through February, the personal consumption expenditures, or PCE, price index rose 0.3 percent.
Excluding food and energy, prices edged up 0.1 percent after a similar gain in January. The so-called core PCE price index increased 1.4 percent in the 12 months through February.
"This should reassure the Fed that recent low headline inflation readings are the result of transitory energy price declines and that inflation is likely to rise toward the Fed's target over time," said John Ryding, chief economist at RDQ Economics in New York.
Michael Neelon(misc)/Alamy
Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.
Let's go over some of last week's best and worst performers.
Even blue chips can get bought out. Shares of food giant Kraft soared after the company came to terms on a deal that will combine it with ketchup giant Heinz. Billionaire Warren Buffett and Brazilian private equity firm 3G Capital teamed up to buy Heinz two years ago, and now they are joining forces to bring Kraft into the fold. The merger will create America's third-largest food company.
Shares of Stamps.com moved higher after it announced that it would acquire Newell Rubbermaid's Endicia subsidiary in a $215 million deal. Endicia helps companies run their shipping operations with solutions that work seamlessly with the U.S. Postal Service.
Endicia earned just $59 million in revenue last year. However, investors see the potential in the combination with Stamps.com.
The fast-growing discounter selling wares for $5 or less moved up after a strong quarterly report. Net sales climbed 24 percent, as brisk expansion and positive comparable-store sales pushed Five Below's top line higher. Earnings grew even faster.
Five Below has made discounting cool, wooing young shoppers by stocking clothing, stationery items and even consumer electronics accessories priced at no more than five bucks. There's plenty of room to grow for the 366-store chain, and Five Below expects to open another 70 locations this new fiscal year.
Sonus Networks (SONS) -- Down 44 percent last week
Nasdaq's biggest loser was Sonus Networks, taking a big hit after a shocking financial update. The provider of enterprise communications solutions warned that it will post just $47 million to $50 million in revenue for the quarter that ended on Friday. Its previous guidance was for $74 million. It will also post a large quarterly deficit, reversing its outlook for a small profit during the period.
Apollo Education Group (APOL) -- Down 31 percent last week
Students continue to migrate away from the University of Phoenix. Apollo Education Group -- the parent company of the well-known but struggling for-profit university -- surrendered nearly a third of its value after another rough quarter.
New student enrollments have slipped 13 percent over the past year. Online hiccups have hurt its operations, but Web-based post-secondary educators in general have been struggling to draw students despite the advantages of Internet-based learning.
Weight Watchers (WTW) -- Down 14 percent last week
The weight loss continues at Weight Watchers. The stock has posted double-digit percentage declines in four of the past five weeks, shedding 61 percent of its value in that time.
Things started going downhill at Weight Watchers after it posted a steep plunge in subscribers during last month's quarterly report. Analysts have turned their backs on the diet management specialist, and the market has naturally followed suit.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Five Below and Stamps.com. The Motley Fool is short Five Below. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
WASHINGTON -- Former Federal Reserve Chairman Ben Bernanke is getting a new title -- blogger.
The man who spent eight years as the head of the nation's central bank carefully watching his every comment is writing "Ben Bernanke's Blog," where he'll be free to air his opinions on matters of economics and finance.
Bernanke is now a senior fellow at The Brookings Institution, which made the announcement Monday, coinciding with the publishing of the former fed chief's first blog. Brookings said that Bernanke will use the blog to share his observations and opinions about current economic events, while welcoming questions and comments from readers.
"Now that I'm a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers," Bernanke said in a statement.
The first blog post was devoted to examining the question of why interest rates are so low not only in the United States, but also around the world.
Brookings said Bernanke's blog would also occasionally touch on baseball. Bernanke, who served as Fed chairman from February 2006 until January 2014, is a big baseball fan.
He has spent the past year writing a book about the causes and government responses to the 2007 to 2009 financial crisis. The book is scheduled to be published this fall by W.W. Norton.
David Goldman/APA microbiologist extracts listeria bacteria for genome sequencing at the federal Centers for Disease Control and Prevention in Atlanta.By Emily Stephenson
WASHINGTON -- A U.S. District Court imposed a permanent injunction on a Los Angeles-based seafood company after food inspectors found contamination by the listeria bacteria, the U.S. Department of Justice said Monday.
U.S. Food and Drug Administration inspections of L.A. Star Seafood Inc. in 2013 and 2014 found unsanitary conditions that resulted from insufficiently cleaning surfaces and utensils used on fish, the department said.
The most recent inspection found that the company hadn't followed best practices to prevent other types of contamination. L.A. Star Seafood imports, prepares, processes, packs and distributes smoked and salt-cured seafood, the Justice Department said.
The agency said it filed a complaint in January in U.S. District Court for the Central District of California. The seafood company agreed to be bound by a consent decree that requires it to cease operations until the FDA determines its manufacturing practices are safe.
Ever since its video appeared on vimeo.com about a year ago, individual investors have been hearing about a new stock trading service called "Robinhood" that promises fee-free investing. And now it's here.
Introducing Robinhood
Aimed at on-the-go investors, Robinhood promises to permit commission-free trading to individual investors using their iPhones, iPads and iPod Touches. (The company says versions of its software for Android devices and for Web use are in the works.)
Now, fee-free stock trading isn't exactly a new idea on the Internet. Back during the dot-com heyday, sites like Freetrade.com and Zecco.com that promised free or nearly free stock trading were a dime a dozen. But the realities of the market -- such as that if you want your company to remain solvent and independent, it has to get money from somewhere -- led to these ventures either disappearing or getting bought out by savvier businessmen.
More recently, we've seen limited forays into free trading by the likes of Loyal3, which offers free online trading and adds the twist of allowing you to buy fractional shares. But Loyal3 only lets you buy 64 available stocks -- Intel (INTC) but not AMD (AMD), Kellogg (K) but not General Mills (GIS), Dunkin' Brands (DNKN) but not Domino's Pizza (DPZ).
Robinhood is different, promising to enable purchases of more than 5,000 different "U.S. equities and exchange trade[d] funds (ETFs) listed on major U.S. exchanges" such as the NYSE and Nasdaq. What's more, the service, which is currently in version 3.0.3, is still being upgraded, and Robinhood says it is "working on" adding "foreign domiciled securities, OTC securities, options, warrants, or mutual funds" to its offerings.
Three Taps, Zero Dollars
So how does it work? Well, first, you need to either receive an invitation from someone who's already using Robinhood, or apply for a spot on the waiting list for your own invitation. (It took me about three months to go from waiting list to invite, if that's any help.) But once that invitation arrives, the process is pretty straightforward: Fill out a few forms online, link a bank account to Robinhood and transfer some money to fund your account, download the mobile app to use the service, then log into it and set up a PIN.
At that point, you're ready to trade. Robinhood initially presents you with a short list of its "most popular stocks... based on the trading activity of Robinhood customers." (In case you're interested, Robinhood investors have a particular affinity for Apple (AAPL) and Starbucks (SBUX) -- of course -- but also for Disney (DIS), and ... Kroger (KR), of all companies!
But by tapping the search icon, you can search through the service's vaunted 5,000 offerings for anything else that appeals to you. Once you find one, Robinhood says it "couldn't be easier" to make a trade: "Three taps... I just bought some stock. Zero commission."
At present, the system is pretty bare-bones -- which isn't necessarily a bad thing for new investors, who should probably keep things simple to start. Press the "buy" button and you won't accidentally buy a stock that you were just hoping to window-shop. Rather, this button opens an order form where you can see the current price of the stock. If you like the price, you can enter a "market order" to buy it. If you don't like the price, you can switch to a "limit order," and enter the price you would prefer to pay.
If the stock reaches your desired price before the trading day ends, Robinhood will buy it for you. If not, the order will be canceled -- with no fee charged to you in either case.
How Do They Do That?
Robinhood says they can offer fee-free stock trading by:
First, earning interest on any money you have in your account with Robinhood that's not presently invested in stocks (i.e., they take the interest. They don't pay you the interest).
And second: "cutting out the fat -- hundreds of storefront locations, manual account management, expensive Super Bowl ads, etc." that more traditional online brokers pay for.
Robinhood is also looking into other ways to fund its operations, such as by offering margin accounts to enable its customers to short-sell stocks, and collecting interest on those. Whether this will be enough to enable Robinhood to survive and thrive where so many "free stock trading" services have failed remains to be seen.
But so far, so good.
A dedicated PC guy, Motley Fool contributor Rich Smith had to borrow his daughter's iPad to try out Robinhood. He's looking forward to the day they roll out software for running Robinhood off a "real" computer.
The Motley Fool recommends Apple, Intel, Starbucks and Walt Disney. The Motley Fool owns shares of Apple, Starbucks and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Want more free things? Check out our free report on one great stock to buy for 2015 and beyond.
Mark Lennihan/AP
After bruising allegations that top retailers were cheating consumers by selling herbal supplements that didn't contain what they claimed, the nutritional supplement and vitamin retail giant GNC (GNC) reached an agreement Monday with New York's attorney general announced that puts in place rigorous testing.
The company has resumed sales of all its supplements.
Experts said GNC is far exceeding the industry standard and what is required by the U.S. Food and Drug Administration, which frequently flags supplements that are mislabeled or dangerous. The company said it wanted to eliminate any doubt that its products are safe and as advertised and agreed to post displays in all 6,000 of its stores documenting what's in the supplements.
When it comes to consumer health, we expect companies to reach a high safety bar.
"When consumers take an herbal supplement, they should be able to do so with full knowledge of what is in that product and confidence that every precaution was taken to ensure its authenticity and purity," New York Attorney General Eric Schneiderman said in a statement. "When it comes to consumer health, we expect companies to reach a high safety bar."
In addition to the steps the company is going to take, GNC provided the attorney general with independent testing that showed its supplements exceed federal requirements.
"As our testing demonstrated, and this agreement affirms beyond any doubt, our products are not only safe and pure but are in full compliance with all regulatory requirements," said GNC Chief Executive Officer Michael G. Archbold said in a statement. "As an industry leader we have always gone above and beyond the minimum requirements in pursuing quality for our consumers, and we will continue to lead the efforts for higher standards. This is good for consumers, good for the industry, and good for GNC."
GNC -- along with Walmart (WMT), Target (TGT) and Walgreens (WBA) -- were accused last month of selling consumers herbal supplements often without a trace of the herbs that were supposed to be inside. Instead, many of the supplements were made up of cheap filler or other ingredients not listed on the label.
That not only deceived consumers, but also potentially put people at risk of consuming products that could be allergic to without knowing that's what they were swallowing. Schneiderman's office issued cease and desist letters to the retailers to halt sales of the questionable supplements.
GNC's response to the New York investigation, which shook up the supplement industry nationwide, was seen as a significant response and one that will benefit those who consume such products.
Meanwhile, GNC said it will use the testing to help it defend itself against a spate of lawsuits filed after the Attorney General's Office announced its findings last month.
Mark Lennihan/AP
NEW YORK -- A McMuffin for dinner? It might happen, as McDonald's plans to test an all-day breakfast at some locations in the San Diego area starting next month.
The company said in a statement that the test is in response to customers who have said they'd like to eat breakfast foods outside the typical morning hours that they are served.
The world's largest restaurant chain said the test will include a partial menu and feature some of McDonald's breakfast sandwiches and hash browns. The company didn't say which sandwiches would make the cut.
Fans of McDonald's breakfast menu have long wanted the option to get breakfast at McDonald's after 10:30 a.m. But offering both the breakfast and lunch menu had been considered logistically impossible, given the tight kitchen spaces of the restaurants.
McDonald's had even tweeted about the topic in February, saying it doesn't serve breakfast all day because its grills "just aren't big enough for breakfast and lunch."
Still, Jeff Stratton, head of McDonald's USA, said in an interview with The Associated Press that same month that the company was taking a look at how it could make breakfast available later in the day.
The push to make breakfast outside normal hours partly reflects how McDonald's is working to keep pace with shifting habits. In particular, executives have noted that customers increasingly want foods personalized to their tastes and schedules.
McDonald's said Monday that it was too early to speculate on any outcomes from the test.
Janney Capital Markets had released an analyst note earlier Monday saying that their industry sources had told them that McDonald's planned to test all-day breakfast in the U.S. The analyst note was released before McDonald's confirmed the report.
"Having those breakfast items available to sell all day would also serve as a reminder to customers ... that McDonald's does indeed have craveable food to sell," Janney analyst Mark Kalinowski wrote.
Shares of McDonald's (MCD), based in Oak Brook, Illinois, added 90 cents to $97.86 in afternoon trading.
J. David Ake/APBy KRISTIN J. BENDER and PAUL ELIAS
SAN FRANCISCO -- Two former federal agents were charged with fraud in the theft of digital currency during an investigation into an online black market known as Silk Road that let users buy and sell drugs and other illegal items, authorities said Monday.
Former U.S. Secret Service special agent Shaun W. Bridges, 32, of Laurel, Maryland, appeared in federal court in San Francisco but didn't enter a plea.
He has been charged with wire fraud and money laundering. He was later released on $500,000 unsecured bond. His attorney, Steven Levin, declined to comment.
Bridges is accused of diverting more than $800,000 in digital currency to his personal account after gaining control of the funds during the investigation.
The complaint alleges that Bridges placed the assets into a now-defunct digital currency exchange in Japan then wired funds into one of his personal investment accounts in the U.S.
The criminal complaint was filed in the U.S. District Court in San Francisco on Wednesday and unsealed Monday.
Carl M. Force, 46, of Baltimore, a former special agent with the Drug Enforcement Administration, also has been charged in the case. He was expected to appear Monday in court in Maryland.
Force worked undercover and was tasked with establishing communications with a target of the investigation, Ross William Ulbricht, who was convicted of seven drug and conspiracy charges in February.
Ulbricht was accused of creating the multimillion-dollar marketplace for illegal drugs and other contraband and adopting the alias Dread Pirate Roberts, a character from the movie "Princess Bride."
The website promised its buyers and sellers anonymity by using encryption and bitcoins.
Force is charged with wire fraud, theft of government property, money laundering and conflict of interest.
The complaint alleges that Force used fake online personas and engaged in complex bitcoin transactions to steal from the government and Ulbricht.
Investigators say Force solicited and received digital currency as part of the investigation but failed to report the funds and instead transferred the currency to his personal account. In one such transaction, Force sold information about the government's investigation to Ulbricht, authorities say.
The complaint also alleges that Force invested in and worked for a digital currency exchange company while still employed by the DEA. He directed the company to freeze a customer's account and then transferred the account funds to his personal account, it says.
Andrew Burton/Getty ImagesBy Caroline Valetkevitch
NEW YORK -- U.S. stocks climbed more than 1 percent Monday, rebounding from a sharp decline last week, helped by deal activity in health care and a bounce in energy shares.
Also boosting investors' risk appetite, Chinese stocks surged to seven-year highs, helped by hopes for more infrastructure spending and monetary policy easing.
The Dow registered its biggest daily percentage gain since Feb. 3 and all 10 primary S&P 500 sectors rose on the day, led by energy, which jumped 2.1 percent despite a slight decline in Brent and U.S. oil prices.
"[The rally] sort of seems to be global growth based right now: the Chinese economy is falling but they're going to stimulate," said Uri Landesman, president of Platinum Partners in New York.
M&A activity has helped boost equities, especially shares of smaller companies, Landesman said. "That's been a theme of this market on and off for a very long time."
On the deal front, OptumRx, a unit of UnitedHealth Group, agreed to buy pharmacy benefit manager Catamaran in a deal worth $12.78 billion. Shares of UnitedHealth (UNH), a Dow component, rose 2.5 percent to $121 while U.S. shares of Catamaran (CTRX) added 23.8 percent to $59.83.
The Dow Jones industrial average (^DJI) rose 263.65 points, or 1.49 percent, to 17,976.31, the Standard & Poor's 500 index (^GSPC) gained 25.22 points, or 1.22 percent, to 2,086.24 and the Nasdaq composite (^IXIC) added 56.22 points, or 1.15 percent, to 4,947.44.
Major indexes each lost more than 2 percent last week.
Uncertainty about Friday's jobs report and upcoming earnings, which start in earnest in mid-April, could create volatility this week, with the stock market closed for Good Friday.
The Nasdaq Biotech index rose 1.1 percent but remains roughly 5 percent below a record high from earlier this month. The group has recently been under pressure, with the index down 5.2 percent last week in its biggest weekly decline in a year.
Making Deals
Teva Pharmaceutical said it would buy Auspex Pharmaceuticals for $3.5 billion. Ireland's Horizon Pharma said it would acquire Hyperion Therapeutics in an all-cash deal worth about $1.1 billion.
U.S. shares of Teva (TEVA) were up 0.9 percent at $62.52 while Auspex (ASPX) added 41.5 percent to $100.36. Horizon (HZNP) rose 18.2 percent to $25.78 on the Nasdaq while Hyperion (HPTX) rose 7.6 percent to $45.98.
Separately, Fujifilm Holdings agreed to acquire U.S. biotechnology firm Cellular Dynamics International for $307 million. Cellular (ICEL) shares more than doubled in heavy trading.
About 5.8 billion shares changed hands on U.S. exchanges, below the 6.7 billion daily average this month, according to BATS Global Markets.
Advancing issues outnumbered declining ones on the NYSE by 2,271 to 806, for a 2.82-to-1 ratio; on the Nasdaq, 1,856 issues rose and 881 fell, for a 2.11-to-1 ratio.
The S&P 500 posted 26 new 52-week highs and 1 new low; the Nasdaq composite recorded 110 new highs and 44 new lows.
What to watch Tuesday:
Standard & Poor's releases S&P/Case-Shiller index of home prices for January at 9 a.m. Eastern time.
The Institute For Supply Management - Chicago releases its survey of business conditions for March at 9:45 a.m.
Conference Board releases the Consumer Confidence Index for March at 10 a.m.
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YouTube is hoping to stack its deck with YouTube Cards, a new tool for video creators that will help provide a more interactive experience for users. The new feature for enhanced video publishing should also provide enterprising content creators with some more dynamic ways to either get noticed or make some money.
Google's (GOOG)(GOOGL) video-sharing site counts more than a billion users worldwide. Billions of views are generated daily with folks checking out hundreds of millions of hours of content.
YouTube is a perfect example of what Wall Street calls the network effect. Viewers go where the content is, and content creators flock to the site where the viewers are. A whopping average of 300 hours of video is uploaded to the site every minute.
House of Cards
Opportunistic content creators will want to take advantage of YouTube Cards, a feature that lets viewers connect directly to the uploader's content. Linking directly to product pages, related websites and even fundraising sites, the new feature that became available to all content creators in good standing this month is a welcome upgrade to YouTube Annotations.
YouTube Annotations rolled out years ago as a way for users uploading videos to post notes on their clips. Creators can add written updates or corrections without having to upload new content. It's also a way for them to link back to earlier videos and playlists.
YouTube Annotations also allows publishers to post videos with text-free highlighted areas that can be clicked on so viewers can check out earlier uploads. This is a feature that inspired some interactive fun, and production-savvy users eventually embraced text-free annotations to turn highlights of earlier clips into clickable options at the end of videos.
However, a big limitation of YouTube Annotations is that they don't render on the small screens of smartphone and tablet gadgetry. Mobile is a big deal for YouTube these days. Half of its views originate from smartphone and tablet devices, and mobile revenue has more than doubled over the past year.
The new YouTube Cards changes that, replacing text-based blocks with icons that can be clicked on across any device. Viewers can then navigate to merchandise links from approved storefronts, fundraising hubs, associated websites, and other YouTube videos or playlists.
Cards Sharks
YouTube Cards can be lucrative if your videos dovetail seamlessly into a product. If you're a musician, you can link your original compositions to your iTunes page. If you provide arts and crafts tutorials, you can direct viewers to your Etsy selling page. If you have a custom channel logo that you're proud of and you want to sell it as a T-shirt or any other product, you now have an easy way to link viewers to CafePress or Spreadshirt. There are dozens of participating merchants.
If you're raising awareness for a cause, there are plenty of approved fundraising sites that YouTube Cards can point to, and that also includes financing your own productions through YouTube's tip jar-like Fan Funding platform.
If you have a video that's gaining in traction but it's not easily marketable, you can use YouTube Cards to link to earlier videos on your channel that have more potent monetization opportunities.
This isn't just scholarly lip service. My Moonpies channel has let me pocket thousands of dollars over the years through YouTube's ad-sharing program, where I recently topped 15,000 subscribers and hit nearly 4.5 million views. That's been welcome passive income, and now YouTube Cards opens the door for new ways to make money beyond getting a cut of the ads that the site can place on your videos.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Cleaning out your closet may be a cathartic experience, until you look down at the piles of clothing and see dollar signs. Consignment stores and secondhand clothing shops willing to buy gently used clothing solved this issue for a couple of decades. But going into a Buffalo Exchange or Plato's Closet to have your clothing appraised by a snarky, hipster who shoots judgmental looks and over-the-top eye rolls about your questionable fashion sense makes it easier to just save face and donate your clothing. That was, until Threadflip and Tradesy came along in 2012.
Both sites offer women an opportunity to sell gently used clothing, accessories, shoes and handbags without leaving the comfort of their homes. Goods can range from Gap to Chanel, and the sites differ in how much control you -- the seller -- has over what's being sold and for how much.
How Threadflip Works
Threadflip is the ideal site for taking the hands-off, but potentially less lucrative, approach. Sign up for the site and then request a free shipping kit. Threadflip will send you a kit with everything you need to ship your clothes, shoes and accessories back to it or just provide you with an instant label if you've already boxed it all up. Your items are insured for $300 -- more if you're selling high-priced items and contact customer service.
ThreadFlip does not accept clothing from Sears, JCPenney, Walmart, Costco, Kmart, Old Navy, Target and dozens of other lines. Ship your clothing off, and Threadflip takes care of the rest. Employees will inspect, photograph, price and ship your clothes to the buyer. Any clothing deemed unsellable will be donated to Goodwill or returned to you for a $10 fee per kit shipped back.
In exchange for all the work, Threadflip takes a 20 percent commission on sold items. Money earned on Threadflip can either be cashed out via PayPal or used as a credit to shop on the site.
How Tradesy Works
Tradesy offers a more hands-on approach for sellers and only takes a 9 percent commission. Unlike consignment stores, your items remain available to you until they sell or you take them down.
You're responsible for taking pictures of your items, describing them and setting prices. A simple interface allows you to upload your photos, answer some questions and set prices. You have the option of disclosing the original retail price, and Tradesy makes pricing suggestions based on the market, but you can set your price higher or lower.
Within 24 hours of uploading a cover photo, a Tradesy employee will freshen it up and cut out any background and hangers to just feature the clothing.
Once an item sells, Tradesy will send you a shipping kit or mailing label based on your preference. You simple pack your items up and send them off to your buyer.
The cost of shipping the item is put on the buyer, so if you price an item at $22, Tradesy will display it as $29.50 to include $7.50 for shipping. You'd make $20.02 after the 9 percent commission. Tradesy also handles returns.
Men, Millenials and Money
Currently, neither site sells men's clothing, but this will change soon for Tradesy.
Tradesy and Threadflip both feature popular bridesmaids dresses. If you're trying to be a frugal bridesmaid, see if you can get your dress deeply discounted. Most have only been worn once. Or consider selling your old bridesmaids dresses to fund future ones.
Tradesy and Threadflip both use PayPal to send money to customers. You pay PayPal's processing fee: 2.9 percent of the transaction plus 30 cents. Tradesy also allows you to deposit funds directly into your bank account. If you would prefer to shop, either site will let you use your earnings toward store credit to buy products from other sellers.
Khannanova Margarita/Shutterstock
The decision to start a family is a huge one on many levels: personally, as a couple and financially. Choosing to run a business at the same time? Well many would just call that crazy! In the United States alone, women own more than 7.8 million businesses, which means that chances are you know a mompreneur who is managing business, babies and households.
So what's it take to handle this kind of balancing act on the financial front and what are the steps to keeping your money in tact while simultaneously focusing on your children and your brainchild? Read on:
1. Set Clear-Cut Goals
Whether it's hourly, daily, monthly or annually -- what in the world are you trying to accomplish by pursuing this business? How do you want your money to help you live a life you love? Set aside an hour to create specific, measurable, attainable, relevant and timely goals -- which together spell out SMART. For example: "I want to pay off $10,000 of credit card debt in the next 12 months with income from product or service sales."
Once you have your list of goals, prioritize them with the most important listed to tackle first and keep the list is a place where you can see it daily to help hold yourself accountable.
2. Learn to Manage Finances on a Variable Income
Entrepreneurs typically don't have the luxury of pulling in the same amount of money in each paycheck. Having a volatile, variable income underlines the importance of tracking all your cash flow. Maintaining a budget is an important step toward personal finance success for anyone, but it's especially crucial for entrepreneurs.
Make your budget as flexible as your income can be each month. Separate your wants and your needs so it's easy for you to see what can be cut if funds are short one month. Break down everything into categories that make sense to you; you can have a "meals out" category and an "entertainment" category as part of your discretionary spending. If your income is lower than expected one month, you know you can easily and painlessly eliminate these two areas.
3. Be Prepared
Entrepreneurs on a budget need to be proactive about unexpected expenses and savings. Although everyone should have money set aside for emergencies, those who own their own businesses should consider building multiple fallback funds (or having an emergency fund that is much larger than the average recommended amount).
Aim to set aside three to six months' worth of household expenses that can help you get by if you experience a period of low earnings. Once you have this fund established, work to build a separate fund that will help cover emergency situations of an additional three to six months.
4. Tackle Debt
When it comes to any debt you have, make a list of each creditor, the balance, the term, the interest rate and the minimum payment due. Instead of throwing a little extra at each balance every month, follow either the snowball approach (pay off debts in order of smallest balance to largest) or the avalanche (put any extra funds toward the highest interest rate balance).
5. Automate Your Savings and Stay on Track
It's not enough to know that you need to save -- you need to make those contributions to your accounts. Look at your past earnings and calculate an average. Based off this number, you should be able to determine a safe guess for what you'd be comfortable contributing to your savings monthly. Try to set up an automated payment to your accounts (it's easy to forget or let it slide if you have to do it manually every time).
Because your income will change, follow up this action by making time to sit down on a biweekly or monthly basis to review all your finances. This will allow you to adjust spending and saving as necessary -- but still have that automated foundation to work from.
Solo 401(k). A Solo 401(k) is a traditional 401(k) that covers a business owner with no employees or that person and his or her spouse.
Simplified Employee Pension IRA. A SEP IRA is a retirement account that allows for a contribution up to 25 percent of each employee's pay (and 25 percent of your net self-employment income).
Savings Incentive Match Plan for Employees IRA. A SIMPLE IRA is a retirement plan designed for and available to any small business with 100 or fewer employees.
7. Consider College Funding
As much as you want to pay for your children's college education, if you're not taking care of yourself first by putting away for (and maxing out) your retirement accounts, you're doing your children a disservice. While they'll have the option for scholarships and student loans to assist with college, you can't finance your retirement lifestyle. What good is it if you pay for your kids to get through college and in turn they need to support you financially through your retirement years?
8. Manage Risk
If you have any dependents, you must have the appropriate insurance to protect both yourself and those that rely on you. You'll want to consider:
Life insurance. If anything were to happen to you or your spouse, life insurance provides for your surviving family members. Remember, this isn't about you: it's about protecting your family and ensuring they're provided for, no matter what.
Disability insurance. Situations don't have to be catastrophic to deal a harsh blow to your finances. Disability insurance provides you and your new family with a portion of your income if you are temporarily unable to work and earn money.
Umbrella insurance. Ensure you have coverage at least equal to your net worth in order to protect your assets in case of a lawsuit.
9. Take Care of Your Estate
No one likes thinking about the worst-case scenario -- but remember, this type of planning and protection is for your family and your children. Part of having a family is setting up legal protections for both them and the assets they may inherit from you. Estate planning is especially important when you have children, because your estate plan will:
Establish guardianship.
Ensure your assets are distributed in a way that aligns with your wishes.
Create a trust (if you decide to do so).
Without an estate plan, these issues go through probate court. Probate court is public, proceedings can take long amounts of time after your passing, and a judge makes all the decisions -- including who receives guardianship over your children.
10. Leverage Resources
As a Mompreneur, there are a ton of valuable resources that are out there to help you manage life and business successfully. Look at contests -- like the Mom Entrepreneur Giveaway -- that provides a ton of valuable content on branding, time management, organization, marketing and more for free. Check out blog posts and articles addressing the life of mompreneurs and communities built for women by women such as Marie Forleo's training videos and b-school. Consider creating or joining a mastermind group of other women in the same situation where you can learn together, grow together, and tackle the problems you're facing by getting feedback from others.
11. Take Baby Steps
Remember, getting your finances organized and under control won't happen in a week or likely even a month. Break down goals into smaller ones and set check-ins and steps for yourself along the way. Target one area at a time to address -- first by getting clear on what your goals are. Once your goals are down, focus on your cash flow and how you can make it work to meet your goals. Then move on to debt pay down and other items from there. Remember to celebrate your wins along the way and don't get discouraged if you get off track. Your financial journey is unique to you and one that will likely come with bumps, curves, twists, and turns along the way.
AudiAudi's new R8 sports car will have an all-electric version with about 280 miles of range. More electric Audis with a similar range will follow over the next couple of years.
Upstart Silicon Valley automaker Tesla Motors (TSLA) hasn't disrupted the global auto business -- at least, not yet -- but it has gotten the attention of the German luxury-car giants in a big way.
With an average transaction price close to $100,000, Tesla's Model S sedan competes squarely with big gas-powered sedans from Audi and the other German luxury brands. And with over 30,000 Teslas sold in 2014, it's stealing quite a few sales that might have otherwise gone to the Germans. But recently, it has become clear that Audi plans to fight back -- in a big way.
Audi's Electric R8 Will Lead to Much Bigger Things
Rival BMW (BAMXF) has already made moves in Tesla's direction. Its i8 sports car, which features a plug-in hybrid drivetrain in a lightweight carbon-fiber chassis, has already sold far beyond expectations -- despite a price tag of almost $140,000. And Mercedes-Benz has launched a range of plug-in hybrids, along with a limited self-driving system that beat Tesla's vaunted "autopilot" to market.
But more than the others, it's Audi and its parent company Volkswagen Group (VLKAY) that are gearing up to take on Tesla Motors at its own game.
The latest version of Audi's R8 sports car will be offered in a fully electric "e-tron" version. It'll have a Tesla-like range of about 280 miles, Audi says, and Tesla-like acceleration, too: 0-62 mph in just 3.9 seconds. And Audi says that its Combined Charging System, which uses both direct and alternating current, can fully recharge the R8 e-tron in "significantly less than two hours."
While some R8 e-trons will be sold to customers (likely at a very steep price), Audi says that it's mainly meant for testing: The company has much bigger plans for its electric-drive system.
An Audi SUV to Take on Tesla's Model X
The details aren't yet clear, but this much is: Audi plans to release an all-electric model for 2017 that will have similar range to the R8 e-tron -- designed as a mass-market product.
As Audi said in its news release announcing the R8 e-tron, "Audi uses the electrical high-performance sports car primarily as a mobile high-tech laboratory. Accordingly, the findings from the R8 e-tron help in creating a vehicle with a sedan character."
So what is a "vehicle with a sedan character"? At various times over the last few years, Audi has hinted at both a sedan and a crossover SUV powered by this system. Back in December, Audi CEO Rupert Stadler told Bloomberg that the vehicle is "probably going to be a crossover," presumably aimed at Tesla's upcoming Model X SUV.
But it's possible that Audi will decide to build both a crossover and a sedan. It's also possible that Audi's corporate sibling Porsche will get an electric sedan: A report in Germany's "Auto Motor und Sport" suggested that a long-planned Porsche midsize sedan will arrive in electric-only form in 2018 or 2019.
A Lot of New Choices Will Arrive at Dealers Soon
These new Audis are unlikely to put Tesla out of business. But they will give Audi dealers a way to retain loyal customers tempted by the Teslas -- and they'll give Audi some breathing space as fuel-economy and pollution regulations in the U.S., Europe and China continue to tighten.
For customers, they'll also expand the range of choices. Right now, the options for a buyer wanting a battery electric car are limited. That limited choice, plus the limited number of recharging stations around the U.S., have kept electric cars from escaping "niche product" status.
But now, with more automakers jumping into the battery-electric market, that could start to change. If Audi's new electrics turn out to sell well, then more automakers will follow -- and consumers intrigued by electric-car technology will have more choices than ever.
Motley Fool contributor John Rosevear has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days.
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When most of us think of spring-cleaning, we think about dusting and sweeping and polishing. But there are other areas besides your home that could use a good annual cleanout, like your finances. Here are six things you should do this spring to make sure your money management strategy is as neat and orderly as your house will soon be.
1. Remove Unnecessary Expenses
Are you paying for more cable channels than you really need? Do you still have a gym membership when you haven't gone in months? Take a look at your annual and monthly expenses and slash anything that's no longer serving you.
The "snowball" method is a popular strategy that works for many people. It involves throwing any extra money you have (like that cash you saved by slashing expenses in the previous section) toward paying down the account with the smallest balance, regardless of interest rate. Once that one's taken care of, you move down the list to the account with the next-smallest balance, until eventually everything has been paid off.
The idea behind this method is that crossing debts off your list will give you the psychological victory of "winning," which keeps you motivated. Debt is a burden that seriously limits your ability to make the most of your money. Make this the year you finally eliminate it.
3. Review Your Insurance Coverage
Chances are you've had some changes in your life since you first signed up for your various insurance policies. Review these annually to make sure you're still getting the coverage you need.
Call up your insurance agents for your home/renter's insurance, auto insurance and life insurance to discuss your current needs and find out if any plans or features have been added recently that you may qualify for. It may take a little time on the phone, but it's worth it when you have the peace of mind of knowing you're adequately covered in case of emergency.
4. Check Your Credit Score
Your credit report is one of the most important pieces of your financial life. The difference between applying for a loan with great credit versus applying for a loan with bad credit can yield a difference of tens of thousands of dollars over a 30-year mortgage.
You're entitled to request a free credit report each year from each of the three major credit reporting agencies: Experian, Equifax and TransUnion. Head to annualcreditreport.com to get yours.
Scan your report carefully to make sure nothing looks off. If you see a late payment you don't recognize, a balance that doesn't match your records or any other discrepancies, contact the reporting agency immediately to open up a dispute.
5. Shop Around for Better Rates
We often shop around for the best deal when we sign up for a new service, but once it's become a monthly line in our budget, we tend to pay it and forget about it. Take this time to re-evaluate your regular expenses and see where you can save some money.
Examine things like your cellphone bill and cable bill and do some research to find out if there are any new plans or promotions you qualify for. Call up customer service and negotiate -- they're often willing to make a few concessions to keep a longstanding customer, whether it's giving you a discounted rate or some premium features for free. Don't forget to arm yourself with the prices competitors are offering; threatening to switch providers can go a long way in making a your provider willing to work with you.
6. Revisit Your Budget
Our needs change over time, so your budget should be flexible enough to change with them. Revisiting your budget at least once a year ensures that it still works for you. Your budget will only be successful if it's in line with your current life and priorities.
Review your budget's performance over the past few months to see if there are any areas you can cut, any areas you need to increase or any new categories that should be added. If you're struggling to keep up with your budget, try adopting the anti-budget: pull your savings from the top first, spend the rest without constraint.
Paula Pant is an entrepreneur and real estate investor who has traveled to 32 countries. Her blog Afford Anything is not the same tired, stodgy, uninspired financial advice that you'll find on other websites. Afford Anything shows you how to crush limits, create wealth and maximize life.
Alamy
Tax season is in the home stretch, and millions of Americans are working hard to get their tax returns in by the April 15 deadline. Yet even as you focus on getting the numbers right and looking for strategies to make the most of available tax breaks, many people never really think about the importance of one essential component of their returns: which tax filing status they claim.
At first glance, your tax filing status might seem more like a piece of personal information than a key part of your tax planning. Yet filing status can make a huge impact on how much you owe. Let's take a closer look at your tax filing status and why it matters so much.
Tax Filing Status: What the Options Are
Taxpayers have five filing statuses that can apply to their personal situation. Two of the options cover most people who aren't married, while two more apply for most married couples, and the fifth deals with those whose spouse has recently died.
Those who aren't married as of the last day of the tax year typically file either as Single or as Head of Household. The Head of Household status is available to those who pay more than half the cost of keeping up a home for a qualifying child or other eligible relative. Typically, the child must be 18 or younger and live with you for more than half the year. Full-time students who are 24 or younger can also qualify. Other relatives must have limited income and either live with you more than half the year or be eligible for you to claim as an exemption on your tax return. If you don't qualify as a Head of Household, then you'll typically need to file as a Single taxpayer.
Married taxpayers can typically choose to file jointly or separately. Married Filing Jointly status involves adding up income and deductions and treating the couple as a single economic unit, while Married Filing Separately requires you to split up income and deductions according to state law and by what each spouse actually received and paid.
Widows and widowers have special rules. If your spouse died during the tax year, then you're allowed to file a return for that year under Married Filing Jointly status. Furthermore, if you have a dependent child and your spouse died within the two preceding tax years, then you can use the Qualifying Widow(er) With Dependent Child status.
The Big Difference Tax Filing Status Makes
The reason that tax filing status is so important is that nearly everything about your tax liability depends on it. The impact of qualifying for a different status can dramatically reduce your tax bill. For instance, having Head of Household status has many advantages over Single status. Using 2014 figures as examples:
Your standard deduction of $9,100 is $2,900 higher than Single filers.
Your tax brackets extend higher, letting more of your income get taxed at lower rates. For example, Single filers have to pay a 25 percent marginal rate starting at $36,900 in taxable income. Head of Household filers pay 15 percent all the way up to $49,400, allowing you to save as much as $1,250 in taxes compared to Single filers.
Wider tax brackets also give Head of Household filers more opportunity to take advantage of lower maximum tax rates on long-term capital gains and dividend income, with the 0 percent rate extending $12,500 higher and the 15 percent maximum applying until income reaches $432,200, $25,450 higher than for Single filers.
For widows and widowers, the differences can be even more extreme. Without Qualifying Widow(er) status, Single or Head of Household status would provide much lower standard deductions than the $12,400 that applies. Essentially, Qualifying Widow(er) status is equivalent to Married Filing Jointly for couples, featuring tax brackets that in some cases are twice as wide as those that Single filers have.
Finally, some tax breaks simply aren't available to those in certain tax filing statuses. Married Filing Separately taxpayers take the biggest hit here, as they don't qualify at all for the Earned Income Tax Credit, the Child and Dependent Care Credit, and several education provisions including the American Opportunity and Lifetime Learning credits. Higher income thresholds for joint filers can allow some people who file as Married Filing Jointly to take deductions or credits that they wouldn't qualify to receive if they filed as Married Filing Separately.
solarimpulse.com
In the last few years, solar energy has become a real force in the energy industry. According to GTM Research, 29 percent of new electricity capacity installed in 2013 was from solar, and in 2014 that figure grew to 32 percent. But thus far solar energy capture has mostly been restricted to solar panels on rooftops or in deserts in the southeastern U.S.
In the future, solar energy may infiltrate many of the products we use on an everyday basis. Everything from cars to smartphones to roadways could harness electrical energy from the sun. The best sign of the progress taking place in solar energy is currently over Asia, making its maiden flight around the world.
Solar Impulse Shows the Power of Solar Energy
On March 9 the Solar Impulse airplane took off from Abu Dhabi in an attempt to fly around the world over the next five months on solar power alone. The ultralight, 5,000-pound aircraft has a wingspan longer than a 747, is covered with high-efficiency SunPower (SPWR) solar cells and crawls at a fairly pedestrian 20 to 90 miles per hour. It won't be a quick flight, but it's an incredible milestone in the advancement of solar energy.
A five-month trip around the world may not seem impressive on the surface, but with two pilots and slow speeds, a continuous trip would be nearly impossible. But that doesn't mean Solar Impulse won't be flying 24/7 at times. The trip from Nanjing in the People's Republic of China to Hawaii is expected to take five days and five nights of continuous flight, an incredible feat of endurance.
The fact that an aircraft can fly 24/7 on solar energy alone shows how far the solar industry has come and just scratches the surface of its potential in the near future.
Planet SolarPlanet Solar went around the world in 2012, and now the catamaran is a research vessel. Just the Beginning of Solar Innovation
The Solar Impulse mission only adds to the incredible feats being accomplished in solar energy. Planet Solar's solar-powered catamaran went around the world in 2012 and has now become a research vessel. When compared to flying an airplane or powering a boat on solar power, using solar in an automobile, a smartphone, or a laptop seems a simple prospect.
Mainstream companies are starting to realize the vast potential of solar energy. Ford's (F) C-Max Solar Energi concept car includes solar cells on the roof that can power the car for 21 miles every day in optimal conditions. The same energy production on a Tesla Motors (TSLA) Model S would power the car for about 2,048 miles per year, 12 percent of what the average person drives every year. Imagine how much potential there is in covering an electric vehicle with solar cells and simply leaving it outside. Free power!
NRG Energy's (NRG) recent acquisition, Goal Zero, aims to make portable solar energy easy to use. They have panels that easily strap to a backpack and charge portable power packs that can be used for most electronic devices.
Solar products are starting to become more available to regular consumers: I use a portable battery pack from IXYS Solar with a solar cell built into it. Before long, solar energy could be used to power the devices we use every day with very little disruption to our daily lives.
Solar May Someday Be Everywhere
The reason these innovations are exciting is because they're nearly invisible to the user. Adding solar cells to a car or a backpack, or even an airplane, doesn't impact the user experience -- and they could provide power by simply sitting out in the sun. What could be easier than that?
All it takes for solar energy to be added to consumer devices around the world is a cost-effective solar cell and a little engineering to include it in electronics products we use everyday. We know that solar is cost-effective, so it's a matter of time before it shows up in more and more products on store shelves. The potential is huge, and a solar-powered flight around the world is a sign of how far solar energy could take us.
Motley Fool contributor Travis Hoium owns shares of Ford and SunPower. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool owns shares of Ford, NRG Energy and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
