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Paying Off Student Loans? Don’t Forget This $2500 Deduction!

By Frugaling 1 Comment

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1098-E Tax Form Student Loan Interest Paid
Click to Enlarge – Form 1098-E

As a student and recipient of student loans, I’ve been collecting huge sums of debt. Before I started Frugaling.org, I had amassed about $37k between car, credit, and financial aid. Thankfully, that recipe for disaster was turned around when I began writing about my new, frugal life.

Student loan interest is deductible!

I saved and made more money than ever in 2013. Despite being a full-time graduate student (at around 60 hours per week), I started making enough money to pay back my student loans. By the end of 2013, I paid off $1,785.46 of interest (just interest) owed on my student loans.

The IRS and tax code stipulates that a recipient of student loans is granted up to $2,500 in deductions from the payment of student loan interest. Again, this is only the interest that has been gained on the loans – not the principal that was originally lent. Moreover, if you make over $75k ($155k if married) in adjusted gross income (AGI), you do not qualify for this deduction. You can find out whether you qualify for the deduction here.

Golden Ticket Charlie Tax Write Off Deduction 1098-E

The use and importance of Form 1098-E

Every year that you are paying student loans, you end up contributing a certain amount in interest. In return you will receive a little golden ticket (Form 1098-E) that allows you to deduct some income tax. All you have to do is enter the corresponding boxes on a program like TurboTax and you’ll magically see a sizeable refund add up.

Pair a nice deduction with Amazon’s TurboTax bonus of 10% on this year’s refund, and you’ll be flush with cash come return season!

Here’s a link to this year’s official IRS Form 1098-E.

Filed Under: Loans Tagged With: 1098-e, debt, Form, irs, Student Loans, tax, tax forms, taxation, Turbotax

Why I Bought One Share Of Google (GOOG)

By Frugaling 15 Comments

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Google Logo

The smart portfolio is a diversified portfolio

Investing is a tough business. Most people tend to float around with average gains of the stock market – influenced by the leading indicators – because they buy mutual funds and exchange traded funds (ETFs). Those that buck the greater system, choose individual stocks, and don’t diversify their portfolios run the risk of losing it all – making it a game of chance.

Previously, I wrote about how you must have a certain amount of money in an investment account before you can make smart decisions. When you only have about $1000, as I do, there’s little that can be invested well; plus, the trading fees eat up any minor gains (or increase losses). Nowhere is the trite cliche of “it takes money to make money” more vital than the stock market.

Take a risk, play it straight, or go with what I know?

Because of the financial situation I’m in, I do not really have the privilege of a well-diversified and balanced portfolio. Moreover, I wish I could take it out and pay off $1000 in student loans (that are receiving active interest at 6.8%). But the money is caught up in an IRA with painful tax and growth implications if I withdraw it now. It’s easier to put this money to good use in the market.

I was invested in a lot of tiny ETF positions in my Vanguard Roth IRA, in an abysmal attempt to diversify. Mostly, it was working. The money was slowly adding up, but I found moral complications in some of the holdings within these ETFs. I honestly didn’t agree with some of the companies business decisions, and I felt complicit in supporting these practices.

That left me sort of in the lurch. Where should I make the most of my money with a company I support? One company stood out in my mind because I agreed with their business practices and supported their vision. Also, as a tech geek, I felt like I could conceptualize the mission.

Cr-48 Chromebook Google FreeHello, Google. I own you.

The only company that made sense to me was Google. Trading around $1050 per share, this was an expensive stock (~30x EPS). Investors were suggesting that this was a growth stock that’d be going places beyond search advertising revenue. But I had recommended the GOOG monster to someone a little while back, and completely missed a rise from $800. Something told me the run wasn’t done.

On December 4th, 2013, I purchased one share at $1051.37. Now, my entire portfolio was condensed into one bet, share. I cannot recommend this investment technique from a risk perspective, but I felt like I understood the mood around this company and its leadership.

As a nerd of the highest order, I naturally paid attention to Google products, developments, and releases – no matter if I could afford them. Back in college, I was even given a free Chromebook (the Cr-48) from Google for testing purposes. More than any company before, Google made sense to me, and I used a ton of their products. So, I pulled the trigger.

What I learned from the decision

This was a risky decision; mind you, one that paid off. The Google share has risen about $100 over my original purchase price and investors continue to be optimistic about the growth. The company is on track to deliver driverless cars in 3 to 5 years, researching how to make people live longer, and investing heavily via Google Ventures (which just helped swallow up Nest).

Have you ever considered investing in Google? What stops you if you haven’t?

Filed Under: Make Money Tagged With: diversify, ETFs, GOOG, Google, money, Stock Market, stocks, Student Loans

10% Tax Refund Bonus With Amazon.com And TurboTax

By Frugaling 5 Comments

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TurboTax has been updated for 2014!

Intuit Turbotax Deluxe Federal State Refund Return Program

This year, Amazon.com is bringing an awesome promotion that could net you a serious bonus on your tax refund. The online shopping company is offering anybody that downloads TurboTax through their website the opportunity to use a portion of their refund to get an Amazon.com gift card.

Let’s say you get a $2,000 tax refund after calculating all your deductions and savings. By downloading Turbotax with this Amazon.com bonus, you can select a portion of funds for the bonus. It’s pretty simple, too. Choose $500 from your tax refund to go into an Amazon.com gift card and you’ll receive an extra $50! Not only does this pay for the price of TurboTax Deluxe, it also offers you a rapid way to use your return.

Amazon.com Gift Card Federal Refund Bonus OfferWhat I like about TurboTax

  • TurboTax is an intuit product (they own Mint.com, too)
  • It automatically calculates deductions and checks to make sure I’m getting the largest refund possible
  • The company works with collegiate expenses and student loan payments to save even more money
  • Each year’s refund and return is collected for the next year, which saves a ton of time in preparation
  • The program includes state and federal e-files for rapid returns and paperless refunds
  • By downloading from Amazon.com, it includes 5 free federal tax return files
  • Using TurboTax is a terrific preventor of getting audited, as it checks to make sure you’ve included everything
  • Instant download for Macs and PCs

Follow this link to get this year’s version: TurboTax Deluxe Fed, Efile and State 2014 with Refund Bonus Offer

Filed Under: Make Money Tagged With: 10 percent bonus, Amazon, Amazon.com, Bonus, Deluxe, end of year, fiscal, Intuit, Return, Tax prep, tax refund, taxes, Turbotax

Hunter Gatherers vs 21st Century Desk-sitters: What A Natural History Museum Taught Me About Work

By Frugaling 19 Comments

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The Field Museum of Natural History Time is an illusion Frugality
The Field Museum of Natural History

Drop down a little rabbit hole with me. There’s a philosophical question that keeps bubbling up in my mind. Essentially, many people work in jobs they don’t care for, with increasing demands and responsibilities, all for the goal of retiring and entertaining a life of leisure. This comes at a time with tragic income inequality and painfully low social mobility.

I’m puzzled by this pattern that we are corralled into: Birth, education, working years, retirement, and then death. Why do we work as hard as we do to become financially solvent when time is an illusion and our days here are undefined? Moreover, why are we pursuing these stressful work lives that cause serious medical complications and early death (e.g., stress, heart disease, cancer, etc.)? Is there a balanced alternative?

This New Year’s Eve, I visited Chicago to celebrate with someone I care deeply about. As we walked around the city, I suggested we traipse over to the Field Museum of Natural History. That’s when some of these questions came into perspective and I found some surprising answers.

The hunter gatherer versus 21st century desk-sitter workweeks

xkcd computer problems 21st century desksitter
Photo: xkcd

As we strolled through the museum, I began to see how work and life changed for people. Where once we foraged and hunted, travelled in groups and visited a variety of places, we now hunker down and settle. Questions of food scarcity, shelter, and life expectancy abound when you’re a hunter gatherer. But you’d be wrong to assume that hunter gatherers were working all the time to survive.

Anthropologists have long known that the life of a hunter gatherer included far more leisure time than our traditional, 21st century desk-sitter. In fact, the average working day was less than 5 hours. Here in the United States and much of the working world, there’s a 40 to 44 hour workweek, and far less leisure time.

Is it worth the time? xkcd productivity tips 21st century desksitter
Photo: xkcd

Popular productivity tips and organizational oracles flood major content websites. There are entire swaths of the Internet dedicated to tackling your work, life, and beyond. Admittedly, I frequent websites such as Lifehacker and the Reddit “lifehack” subreddit. I read The 4-Hour Workweek with great vigor, and promptly failed at utilizing most of the productivity skills it contained.

When I return to books and sites like these, I feel like I’ve admitted defeat and accepted that my lifestyle and workweek just go with the territory (a full-time grad student and employee with a monetary budget equal to a few packets of ramen). Each of these self-proclaimed productivity solutions seem to be getting at the same thing: less work and more play.

The 21st century desk-sitters’ kryptonite: Heart disease and early death

Despite evolving into bipeds – made for walking, running, and moving – we are more sedentary than ever before. At the museum, the curators boldly outlined a significant problem with our current lifestyle: heart and health-related early death.

21st century desksitter picture
Photo: victor1558/flickr

The shift to 21st century desk-sitters and the productivity movement caused a sudden increase in heart and health-related diseases. Increased duration and pressure in the work environment is associated with depression, obesity, cancer, sleep deficits, cardiovascular complications, stress, and eye strain. Here’s what we know about working beyond 7 hours (aka, overtime):

The research shows a 60% increase in heart-related illness such as non-fatal heart attacks and angina in those who work for three hours or more longer than a normal seven-hour day.

“Employers and patients need to be aware of all of the risk factors for coronary heart disease – and should consider overtime as one factor that may lead to a number of medical conditions.” (The Guardian)

Despite these risks and loss of enjoyment, we continue to pursue these workweeks that perpetuate and encourage the trouble. The solution and ontology are simple: move and find time to relax more.

The hunter gatherers were really good at one thing: Minimalism

While we fight mightily to carve out more time for leisure via productivity, we’re failing and the paradigm needs to shift. There are systemic, governmental factors that limit our ability to engage in more leisure time. But more interestingly, there seems to be a cultural appreciation for those that work two or three jobs, and fight to make a living. This may hold us back more than any federal legalese.

Hunter gatherer societies seemed to understand that life was held in a delicate balance. Time versus effort was carefully calculated. Needs were different, as many just needed to feed, cloth, and find shelter. These people weren’t squabbling over cloud-piercing skyscrapers, or debating between iPad and Google Nexus tablets. They carried and traveled with little more than their necessities, and the urge to consume was much less. They were minimalists to the fullest extent – out of pure necessity.

Fortunately, some countries are wisening up to these consequences and reducing the normal workweek schedule. Germany, the Netherlands, and France top the list of countries with the fewest average work hours. Germans work an average 25.6 hours per week, make $35.33 an hour, and only have a 6% unemployment rate.

My night at the museum opened my eyes to this simple change in our workweek, lifestyles, and health complications. There’s an alternative to the work, work, die lifestyle and it starts with your schedule.

Would you be able to reduce your work hours? What consequences would you see, positively or negatively?

Filed Under: Minimalism, Social Justice Tagged With: 21st century, balance, desksitter, employee, employer, heart disease, Hunter gatherer, jobs, lifehacker, Minimalism, museum, reddit, Work, work life, workweek

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