TedCo Software Financial Matters Blog

Dean Wright wrote, “Watching our language: Writing about the financial crisis“, for Reuters’ Full Disclosure blog. It’s the first article I’ve read that evaluates the trend of financial journalists to create cute words and phrases to describe economic phenomena. For example, Dean offers, “intaxification” — one I’d never heard.

If you like words and have a similar interest in financial matters, don’t miss, “Watching our language: Writing about the financial crisis“.

MarketWatch.com reports on the many mistakes unlicensed, paid tax preparers make in, “Some tax pros get it wrong: Limited study of paid preparers’ returns finds many mistakes“.

The article reports on a study of tax returns prepared by unlicensed preparers in which 61% were prepared incorrectly. Some tax payers owed more tax, some owed less tax. The study focused on tax preparers who were unlicensed and did not include tax preparers who were CPAs, tax attorneys or enrolled agents.

Surprisingly, only two states require tax preparers to register with a state agency and receive continuing training. In other words, the chances are good your paid, unlicensed tax preparer may not have the skill, knowledge, or training required to do a good job with your taxes.

What can you do to ensure you have a qualified tax preparer?

• Ask him or her about continuing education.
• Contact the local Better Business Bureu.
• Visit the website of the National Association of Tax Professionals (NATP). You’ll find a “Find a Tax Professional” link in the menu. Click it, fill out the search form and view a list of NATP members in your area.

There were no NATP members in my small community or in surrounding communities. However, whether or not you find an NATP member in your area, the information available on the NATP website is informative.

The last few days have been rough for the financial markets. And everyone seems to be talking about it.

Some are calling it a “Category 4 financial storm“. Talking heads on CNBC and other cable finance channels are talking as fast as they can to everyone they can find with a professional opinion. The financial headlines are moving from section C to the front page of newspapers. I can’t count the number of times I’ve heard or read, “We are in a financial crisis.”

What people want to know in a crisis is whether they are protected. If you live along the coast in an area prone to hurricanes, you plan ahead of time for higher ground. If you live in an earthquake zone, you keep in mind where you should go when your building begins to shake.

To prepare for a financial storm, you plan ahead of time to keep funds protected.

And, fortunately, much of that planning was done for you by the FDIC (Federal Deposit Insurance Corporation). If you want to learn how the FDIC protects your deposit accounts, the best place to learn more is on the FDIC: Are My Deposits Insured? web page.

While the FDIC insures deposit accounts (think traditional bank accounts; checking, savings, trust, certificates of deposit (CDs), and IRA retirement accounts), there are some accounts and investment products the FDIC does not insure.

Increasingly, institutions are also offering consumers a broad array of investment products that are not deposits, such as mutual funds, annuities, life insurance policies, stocks and bonds. Unlike the traditional checking or savings account, however, these non-deposit investment products are not insured by the FDIC.

Specifically, the FDIC does not insure: investments in mutual funds (stock, bond or money market mutual funds), whether purchased from a bank, brokerage or dealer; Annuities (underwritten by insurance companies, but sold at some banks); or stocks, bonds, Treasury securities or other investment products, whether purchased through a bank or a broker/dealer.

The general “limit” on insurance per deposit account is $100,000, but the FDIC website offers EDIE, their online Electronic Deposit Insurance Estimator. It’s an excellent tool that helps you discover exactly how protected you have.

The FDIC’s promise (on the EDIE homepage) is, “When your deposits are 100% FDIC-insured, you can’t lose a penny, no matter what.”

You Know The Banking System Is Unsound When….
Credit card rates can go up … well, just because
Debit cards for your 401k

Not a lot of good news or positive views in these three, but certainly important considerations. I’d read them in the order provided. First Mish’s take on the banking system, then the eye-opening results of a survey of credit card companies that raise rates “just because”, and finally the worst idea of all … a firm that offers debit cards for 401k accounts … absolutely dumb.