The Internet Sales Tax: What to look out for.

May 6th has come and gone, and with it the passage of the internet sales tax through the US Senate. Getting an idea of how your investments may be affected by its passage is critical, particularly if you invest in companies with a distinct online retail element. It’s not too late to take a look and make some adjustments. The bill itself is a proposal to institute an across-the-board tax on all online sales for online retailers as a means of better regulating online sales and bringing retailers such as Amazon, back in line with their physical-store competitors who have been paying taxes on all their sales, while internet retail giants haven’t been shelling out anything of the sort since their inception.


This will also affect smaller businesses as well; the cutoff having been set at $1 million in gross margin, but many of the smallest businesses affected won’t be trading publicly regardless. Rather, the most distinct players will be the online retail giants, as well as big-box stores in the short-term future.  Keep an eye out for physical retailers such as Best Buy (who have been jokingly known for quite some time now as, “Amazon’s showroom”) playing a bit harder with some of their more expensive items. While companies such as Amazon and Wal-Mart have been proponents of this proposal, they’ll also be among those hit the hardest by it, though more often than not they have the funds to spare. Where it seems like it will be damaging in the short-term, it will hardly cause too much of a stir—rather, keeping an eye out for speculators and their impacts on the stock prices will be the larger factor. The most likely effect if this bill passes through the House, is driving prices up for smaller retailers who may let go of some of their more expensive merchandise, and thereby driving more customers to the larger retailers who can take the extra hit and who may end up with a better overall outlook.


While the internet sales tax may cause a bit of a dip in the short term for publicly traded online retailers, what this effectively accomplishes in the arena of the internet marketplace is, while hardly negligible, minimal. It’s not only important to know when to buy and when to sell, it’s also utterly imperative that you have an idea of when your stocks may be taking a temporary—or prolonged—dip, and how those factors will continue to affect their business well into the future. If your portfolio or your business has been hit by this, get in touch with an advisor or financial consultant to ensure that you’ll be able to not only keep your head above water, but to keep turning a steady profit.


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Checkout fees on Credit Cards may Greet Consumers in the New Year

As of January 27th, 2013, savvy shoppers have one more variable to consider when deciding where to buy their goods. This marked the first day that retailers had the right to pass the cost of using credit cards on to their customers directly using what is called a checkout or swipe fee.


The fee, which may begin popping up at registers near you, is the result of a 2012 settlement reached between retailers and credit card networks. For years those networks have charged a swipe fee of between 1.5 and 3.5% per credit card purchase, used to cover processing fees and fraud. Merchants have long been against the fees, saying that they are a hidden cost that they are forced to pass along to the consumer in the form of higher prices. This settlement is the second victory for retailers in their struggle to come to grips with swipe fees. The first was the Durbin Amendment, which set a limit on debit card fees of 21 cents per transaction. The settlement regarding credit cards didn’t cap the fees, but it did give retailers the option of passing the cost on to their customers.


Even though it’s legal now, it is an option that many experts don’t expect big retailers to exercise. It’s tough, especially for large retailers, to get away with a two-tiered price structure. Do you advertise the lower, cash price, and then explain the higher one at the register, or do you assume your customers will put their purchase on plastic and advertise the higher price? Not to mention, the studies that say consumers spend more money when they use a credit card. So, if you try to encourage all cash transactions you may actually be teaching your customers to be more frugal.


These are questions that will have to be answered by individual retailers. Here are the facts that consumers need to know:

  • Brick and mortar stores will display their swipe fee policy at the door, or the register
  • Online retailers must declare their inclusion of a checkout fee on their homepage
  • Checkout fees are banned in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
  • Checkout fees don’t apply when using a debit card
  • Stores can charge the equivalent of what they pay for the exchange fee, 1.5 – 3.5%


Many small business owners use company credit cards for the ease of invoicing purchases, fraud protection and to accrue rewards points. The question is, if retailers do begin passing the cost of each swipe on to consumers, will those advantages be seen as big enough to pay an extra 1.5 – 3%?


Depending on the level of adoption of these new fees by the retailers important to your household or business, they could add up to a substantial amount of your budget. Speaking with your accountant, financial planner, or banker about these fees, and their impact on your bottom line, is one way to make sure that you are truly on top of your finances in the New Year.


Electronic Payments Coalition

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The Tax Season Cometh: Putting your refund to work for you.

With tax season just around the corner and the IRS having just released information that it plans to issue refunds about as quickly as it did last year (9 out of 10 refunds released in under 21 days (, now is the time to start considering what you’re going to do with your refund. While the promise of a big check from the government always comes with some temptations (a new grill for the summer, a gift you missed out on over the holiday season) you should always make sure you’re investing that money wisely. While it may seem like a gift, and an easily spent one at that, remember that it’s mostly money from your other sources of income that you were never able to collect on. Your tax return should be treated like any other money put away, safe from withdrawals for a long period of time; take your excitement at getting such a big break in the mail as incentive to be smart and save. Here are a few tips to get you thinking about putting some of your tax refund to work.

Save it! Invest it!: The importance of either putting some of your return into a savings account or investing it cannot be stressed enough. A good rule of thumb, at the bare minimum, is take ~10% of every check you get and put it into a savings account or towards your investments. Before you know it, you’ll have a tax return a few times over waiting for you whenever you need it that can be used anytime throughout the year.

It’s too much and you don’t know what to do with it!: If it seems like you’re getting too much back on your tax return, get in touch with either a tax preparation specialist or financial advisor.  In this case, you can see if there are any changes you can make to your tax documentation in order to get more of that money throughout the year instead of the one big chunk annually. Chances are if you haven’t already done so, you could be seeing a slight rise everywhere else and a reduction in your tax return check.

IRA?: Alongside the 10% rule for saving/investing, it’s also a good idea to look at doing something long-term with some of the money, namely, putting some of it towards an IRA or other form of guaranteed retirement income (annuities, etc). Nothing is more valuable to someone right now than an investment in future stability. Consider asking your advisor, while you’re trying to shrink your tax refund, about recommended retirement investment opportunities.

While it may seem like something of a killjoy at first, making sure that the first thing you do with your tax return is putting some of it in a place that will give you access to it in the future is of utmost importance in tax season. Whether you’re saving, investing, putting it into a retirement fund or contributing to a child or grandchild’s education, just remember that it’s better if your short-term desires wait until your long-term stability is taken care of.  Before you know it, they will have caught up to each-other, and you’ll have made some hefty gains in the meantime.


What will taxes look like in retirement?

When it comes to retirement, taxes can have a major impact when you begin using your retirement savings. It goes without saying that taxes will be with us till death do us part. Having the knowledge and diligence to explore all of your options when saving for retirement can make a significant impact on your life.


“What will taxes look like in retirement”?



Exposing Tax Bracket Truths

You know we have heard so many times from so many places that when you retire you will automatically be in a lower tax bracket. Well for 37 years at Barber and Associates, I have been helping people prepare for retirement.


And those who are successful, who really were diligent and saving their money to the point that having enough money is not really a concern, What they have realized when they got to retirement is, many times taxes were higher than they anticipated. Many times they weren’t in a lower tax bracket as they expected and so the taxes on the money become a real issue.


Look at the Options


If those people could do it all over again, I think they would take a look at the options that are available that you can invest your money in retirement plans that have no taxes when you retire. Many people don’t even know there is such a thing.


But, you do have a choice. You don’t have to put all of your money for retirement in IRA’s or 401K’s. You can put it in other places that give you some reduction in the tax liability you are going to have.


So if you are looking at what taxes are going to be, probably going to be surprised there not going to be as low as you would like them to be in retirement. But take a look at some of the options to make a difference in your situation.


Finding the answers


I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.


If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.


What do high-income earners do differently about retirement plans?

If you are a successful person within your career, you are going to expect the amount of your success to be reflective in what you’ve earned. When you retire, you’d like a retirement income that’s going to display the years of saving and sacrifice you’ve exhibited.


“What do people who earn a lot of money do differently about their retirement planning?”


Options for High Income Earners

You know, frequently, folks find out that they are very limited in what they can put aside into their 401Ks and their IRAs because they earn a lot of money. And so they seek out what are other options where they can invest their money?


If you’re very successful in your career and the job that you have and that’s reflected in what you earn, then you’re also going to be very successful in the amount of money that you have available to invest for your retirement. And that means when you retire, you’d like a retirement income that’s going to reflect all of the years of saving that you had and all the years of sacrifice.


Tax Free Options


For that reason, many people, when they look at what other options are available, find out there are plans available that you can deposit your money for retirement.


You can guarantee that you will never lose any money and the best yet — when you take that money back at retirement, it can be tax free to you if you do it properly.


So many people who are very affluent in their careers and what they earn have found very attractive retirement plans available to them outside of what they can do in a traditional 401K and an IRA.



Finding the answers


I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.


If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.


What happens to your retirement plan if you die?

When the most unfortunate of times are upon us, our pre planned choices are extremely important when striving to take care of the ones we love. This often avoided subject can also be one of the most important you will ever make.


“What happens to your retirement funds if you die before retirement?”


The Importance of a Beneficiary


Well, the first thing that every person who has a retirement plan should understand is all retirement plans go to a named beneficiary, whoever you put on that document when you first set that plan up.


So if you have a 401K, you should go to your HR department and make sure that your beneficiary is current. If your IRA is held at a brokerage company, you’d want to call them and make sure that that beneficiary form is suitable to you.


Restrictions on your Retirement Funds 


But more importantly in a bigger picture question, and that is if you die before retirement, what happens to the person as they receive that money?


And let’s use an example; your retirement funds go to your wife. Well, your wife would find that she has the same restrictions on that retirement money as you do, meaning those funds are not available to her until she reaches a qualifying age, generally, of fifty nine and a half.


And so if you die too early, counting on those retirement funds to provide an income for your spouse before retirement, that would be quite a disappointment for her.


Look at the Bright Side


The good news is I help people with a variety of different retirement plans, many of which transfer all of your retirement money absolutely tax free using death benefits that are unrestricted, so that your beneficiaries have immediate use and control of that money. They are not burned with the tax rules that other types of qualified plans impose upon them. So I would encourage you, take a look at all of the alternatives.


Finding the answers

I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.


If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.


Alternatives To 401ks: Life Insurance Retirement Savings

For years, the 401k plan has been the gold standard for retirement, being used by workers of all professions to save for their retirement.


But what if it isn’t the best game in town?


You’ve worked hard to achieve what you’ve accomplished in your career field. You deserve the opportunity to maximize your lifestyle in your retirement years and have the opportunity to travel or pursue the dreams you’ve had to defer in your work years.


To do that, you’re going to need money, and the best way to ensure you have the funds you need for retirement is to choose the retirement plan that has the best investment and long term tax advantages for you.


The 401k VS Life Insurance

401ks are great for a lot of people because their employers kick in money to the fund as well. Not every company does this however, particularly start-up firms. Also, if you’re self-employed, you’ve got no one else to rely upon but yourself for retirement savings.


Life insurance can be a great alternative savings vehicle for folks trying to save for retirement. Many life insurance policies have a cash value option that allows a portion of your monthly premium to be diverted into a growth fund that you can use to save for retirement.


One of the great things about saving for retirement this way is that should you die unexpectedly, your family will be taken care of. If you’re only saving for retirement, the only money your family will have access to in the event of your death are those retirement savings, which can be negligible if you’re still young. By coupling your insurance with your retirement savings, you plan for both the best and the worst – ensuring that you’ll have money to retire on, and that your family will be financially secure if you don’t live to retirement age.


If the first decades of the new millennium have taught us anything, it’s uncertainty. By using a life insurance policy to save for retirement, you hedge against two unknowns, what life will be like when you retire, and what your family would do if you die unexpectedly.


Tax And Other Advantages

Most 401k plans allow workers to make tax deductible contributions to the plan, however that money will be taxed when you withdraw it after you’ve reached retirement age. With a life insurance policy containing a retirement savings component, you pay taxes upfront, but avoid paying them when you withdraw the money – which has had decades to grow tax deferred and then withdrawn tax free. Bottom line: You end up giving Uncle Sam far less of your hard earned money.


Another key advantage using life insurance as a retirement savings vehicle has over 401k plans is the safety of your investment. Some life insurance retirement policies invest your money in guaranteed principal accounts such as equity indexed contracts, which provide customers with good growth rates and no risk of loss. On the other hand, the risk of non-guaranteed 401K options can wipe out a lifetime of savings.


Depending on your lifestyle and individual financial circumstances, using life insurance as a retirement savings vehicle can be a far more attractive alternative for entrepreneurs and other professionals than 401k plans.


The Tax Efficient Alternative to Your 401K

Many professionals sign up for their company’s 401K plan without giving it too much thought – and you may have done the same.  But being financially savvy includes considering the long-term tax consequences of the actions you take today – Or what they will cost you tomorrow.










Tax Deferment Truth


Some of the most knowledgeable people are often unaware of just how much of an effect deferring taxes has on their wallet in the long term.  Especially in light of huge government deficits and the certainity that tax rates will increase, a person’s tax situation is likely to be quite different around the time they are ready to retire.


Position is Power


Of course, properly positioning your money so that it provides you with tax efficient income is vital.  Through life insurance, you can often secure a powerful position with benefits that your 401K won’t be able to offer.


Erroneously thought of as something that’s only designed to cover your loved ones financial needs when you pass on, life insurance provides an investment alternative whose returns can come back to you on a tax free basis at retirement.  And many times it will actually exceed what you’d receive, after taxes, from your traditional 401K plan.


You Life Insurance Policy Isn’t in Kansas Anymore


Thanks to changes in the annuity industry since the mid-1990s, flexible premiums are now able to provide investors with the opportunity to increase the cash side of their policies without substantially  increasing their death benefits and policy costs.  These new policies provide the security of guaranteed cash values and interest that is linked to a stock market index. (For more information, see Life Insurance Ain’t What it Used to be.)


The key for any professional who is investing in his future is to begin thinking longer term.  Avoid the trap of thinking the traditional 401K is the only or best option.  Strongly consider not tax deferring so much of your hard-earned money. For many savers, finding the balance between tax deferral and tax free is well worth considering.


And be sure to contact an experienced professional like Barber & Associates who can help you sort through all the complexities of these issues for you.  For thirty-eight years, we’ve assisted people  in designing tax efficient retirement plans using life insurance to supplement 401Ks.


Beat The Tax Man When You Retire

Hard work. Thrift. Family. These are the values that you have built your personal and professional lives around and you hope to be able to maintain your commitment to them as you prepare for retirement.


For the millions of Americans who are working and sacrificing to ensure that their families maintain a comfortable lifestyle, even when the primary breadwinners have retired, choosing the right retirement savings plan is vital. A lot of these folks save for retirement using a 401(k) plan, choosing the safe, well-trod route that countless Americans have used to put away money – often with a tidy contribution from their employer as well – for their later-in-life needs.
While 401(k) plans are the preferred option for many, they may not always be the best way to prepare for retirement. Believe it or not, life insurance policies, when used to take advantage maximizing the cash accumulation that are part of many policies, may be the superior retirement choice. Unlike 401(k) plans, where the owner must often pay taxes on his or her retirement savings when the time comes to tap the plan for funds, the money you save though your life insurance policy may be used in retirement as tax free income…..if you understand and follow the rules.
Your Life Insurance Policy

When most people think about life insurance, they think about the death benefit it will pay their families should they die unexpectedly. What many people don’t realize is that their life insurance policy can also offer little know benefits they can take advantage of. Many universal and whole life policies have an option that allows you to additional premiums for retirement. When it’s time for you to retire, you may have access to that money without paying taxes on the earnings the policy has gained. Holders of 401(k) and IRA plans must pay taxes on the earnings their investments have obtained. The down side is you cannot tax deduct your life insurance premiums but that short term benefit may be far outweighed at retirement. In simple terms, paying your tax on the deposits, not on the earnings can often have huge benefits in retirement.
The tax-advantaged status of life insurance retirement savings options make them a superior choice for many Americans over other retirement savings options.
Maintaining Your Lifestyle

When considering how much you need to retire comfortably, the number $2 million is often repeated by investment advisors. This is a brash assumption. I have 300+ retired clients and 1 of them has that much money. Depending on your lifestyle and plans for how you intend to spend your retirement, you could need more or less. Regardless of what your number is, minimizing your tax liability is important to being able to access as much of your retirement savings as possible. Good point.
If you’re looking to travel after you’ve retired, or if your children will have ongoing educational needs, Not a real issue about educational needs keeping as much of your retirement savings out of the government’s hands is key to being able to meet your obligations while also getting to enjoy your retirement years.
You’ve Paid Enough
Hard-working professional Americans are taxed enough, and we all know it. According to recent reports, only about 53 percent of Americans pay taxes. If you’re among the responsible, industrious class of citizens who have been blessed with the opportunity to earn a good living and fulfill your civic responsibilities as a contributor to society, by the time you retire, you’ve done your part. Why give the government more? By choosing a tax-advantaged life insurance savings option, you can minimize your exposure to taxes and let your money work for you in retirement.


Break Out Of Bonds With Equity Indexed Annuities

For years, conservative investors have been using CDs and bonds as an ironclad means of saving for retirement.  While unspectacular, the returns on these investments were steady and stable and helped many folks looking for a safe way to save for their golden years.


Then the financial crisis of 2008 hit, upending financial markets and changing the rules.  As a result from ongoing fiscal upheaval, CD rates – already low – have dipped to the point where their value has become negligible to even the most risk-averse of investors. At the same time, the bond market has become volatile and cannot provide the steady, reliable fixed returns it once provided investors.

For investors seeking a better choice, equity indexed annuities and life insurance products can help provide the returns on your savings that you need. These investments provide much of the stability that CDs and bonds offered, but the slightly higher risk involved gives investors a better shot at earning a higher return. For folks looking for a safe bet that has a chance of a decent payout, equity indexed annuities and life insurance are a winner.

What Is An EIA?

Equity indexed annuities, or EIAs, are financial products that are a kind of hybrid of variable and fixed-rate annuities. Their rates have greater risk than fixed rate annuities, but are less risky than a traditional variable rate annuity. Rates are linked to various market indexes like Standard and Poor’s, the Dow Jones, Russell, or a mix of various indexes.

In most cases, the interest you earn through your EIA will be credited on a yearly basis. Should the index dip over the year, you won’t earn any interest, but you won’t lose your capital, either. If the index your EIA is linked to does well, you’ll earn a higher rate of interest than you would have with a fixed return annuity or a CD or bond.
You can purchase an equity indexed annuity from a financial company, or as a part of your life insurance policy. Many investors who use these financial products choose to do so through their life insurance company.Reducing Your TaxOne of the goals of any investor seeking to save for retirement is to keep as much of their money as they can and surrender as little to the government as possible. EIAs provide tax advantages for their investors.If you purchase an equity indexed annuity, the interest you earn on your principal is treated as tax-deferred, meaning your investment won’t be taxed until you withdraw it. When you participate in an equity indexed annuity, your interest will also accumulate tax deferred, and, if managed correctly can be withdrawn tax free.While equity indexed annuities and life insurance products aren’t right for everyone, many investors seeking a good rate of return over the long term can successfully use these investments to provide for their needs.