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Jewish World Review May 18, 2000 /13 Iyar, 5760

Bruce Williams

Bruce Williams
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Building a college fund


http://www.jewishworldreview.com -- DEAR BRUCE: I am a single father raising a 6-year-old whose mother passed away two years ago. She receives $430 a month from Social Security, and my income is such that I can support her without these benefits. I would like to invest this money for her college education. What would you suggest? -- B.D., via e-mail

DEAR B.D.: My advice would be to invest the money in some relatively aggressive long-term securities to be held in your name. I am not suggesting dot-com investments.

Given the numbers that you gave me, this account will be substantial in a matter of ten years. You might wish to consider some type of trust fund for your daughter for after she graduates, or you can give the money to her when the time comes, assuming she's a responsible young woman. Obviously I would want to see the money in your name so you will have total control.

I am sorry that you lost your wife, but this young lady will have a very good start in life with the money you are putting aside for her benefit.

DEAR BRUCE: My son lived and worked in Wisconsin for three months last year and then moved to California, where he remained for the rest of the year. He retained his residence in Wisconsin because he is coming back here shortly.

When we were doing his state taxes, I called the Wisconsin Department of Revenue offices. They said he had to file in Wisconsin and had to get California to release the tax money that his employer there paid him. When I called California, they said that they would not release these funds and that the California state taxes would be paid to California. -- B.T., via e-mail

DEAR B.T.: If money is earned in California, the state of California is going to get their fingers on it. What I don't understand is why you called Wisconsin and went through the explanation with them about his moving. Why not just file the three-month return showing the money that was earned in Wisconsin and let it go at that?

Now that you have muddled this up, I am not at all certain how to get it straightened out. You will have to file a tax return in California and see if those taxes are paid.

Again, I think that this seems to be a case of volunteering information that did not have to be volunteered.

DEAR BRUCE: We have a modest income of $80,000 a year, and our home is paid for. Our financial situation is good. However, since our children are all gone, we have been socked with extremely high income taxes, $3,000 to $5,000 over and above what is deducted from our paychecks.

Last year we changed our deduction status to single with zero deductions in an effort to lower our end-of-year tax obligation. Even so, we are still having to pay way too much in taxes. We both have IRAs, to which we make fairly good contributions. Would putting additional money in these help? -- N.P., Topeka, Kansas

DEAR N.P.: If you are not covered by any other pension plans, then $2,000 put into your traditional IRAs would be deductible. You are not allowed to invest additional money in your IRAs, even if it is available to you. In the case of the Roth, any fund contributions must be after-tax dollars.

According to those rascals in Washington, you and your husband are "rich," and of course the rich must pay. If you can understand the logic, please explain it to me.



Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).

Up

05/16/00: Even death brings no relief
05/15/00: House is 'worth' what's offered
05/12/00: Borrow from Mom and Dad?
05/11/00: Your heirs, your choice
05/09/00: Mutual-fund investigations
05/05/00: Credit cards vs. debit cards
05/04/00: Lawyer are good for something
05/03/00: The binding nature of contracts
05/02/00: You know you are in trouble when ...
05/01/00: Can primary residence be rented out?
04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
04/24/00: Beware of errors in your favor
04/18/00: $10,000 limit on gifts
04/17/00: Invest or repay student loans?
04/13/00: Beware of Internet auctions
04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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