Worst Companies to Work For

To be fair - I should clarify, this list if of the worst "big" companies to work for. Edugree has a hist of the five worst companies to work for. I'm not sure if there was a particularly strong methodology for picking these, but they seem to run along the lines of businesses that I hate dealing with in my personal life. If they threw Wal-Mart and AT&T Wireless into the mix they would have hit it spot on. I have an edited list of the companies below, for a full list head over to edugree.

1) The Home Depot

2) AOL

3) Best Buy

4) McDonalds

5) Verizon

Image: triplezero @ Flickr

Deducting Tax Advice Fees

I tend to prepare my own taxes, but came across a post yesterday asking if tax advisory fees can be deducted from returns. The answer is technically yes, but the average taxpayer is unlikely to qualify.

Tax preparation fees fall under "miscellaneous itemized deductions." Other items in this category include job search fees, union, dues, legal fees related to tax advice, and even safety deposit box fees (provided that they hold investment related goods).

However, miscellaneous deductions are only deductible to the extent they exceed 2% of your adjusted gross income. So, if your income was $100k and you had $3k in miscellaneous expenses, then you would only qualify for a deduction of $1,0000. It should also be noted that while investment advice qualifies under miscellaneous itemized deductions, broker commissions don't.

You can read more about the wonderful world of miscellaneous itemized deductions in Pub 529 (note this is a pdf document) over at the IRS website.

Image: Blmurch @ Flickr

FULL DISCLOSURE, I'm not a CPA and don't pretend to be. Consult a tax attorney or CPA for your specific tax questions.

Most Overlooked Tax Credits and Deductions

It's approaching that time of the year. It's a time that no one is particularly fond of, but if you have to pay taxes -- you might as well only pay your fair share. H&R Block recently posted an article on its website about the top 10 overlooked credits and deductions. The top 10 are listed below.

1) Earned Income Credit
- Available to low-income workers.

2) Child Tax Credit
- $1,000 for each child, the amount you can claim for each child decreases once your adjusted gross income hits $75,000 as a single filer or $110,000 jointly filing.

3) Saver's Credit
- Get credit for up to half you contribute to a retirement plan. Restrictions apply.

4) Education Tax Benefits
- Hope Credit: 100% credit of first $1,100 and 50% next $1,100 per student for tuition and fees with a max of $1,650. Restricted to your first two years of college.
- Lifetime Learning Credit: Credit of 20% annual tuition and fees. Max $2,000. Unlimited number of years.
- Tuition and Fees Deduction: Allows you to deduct up to $4,000 for tuition and fees.
- Student Loan Interest Deduction: Deduct up to $2,500 per return for interest paid on student loans.

5) Medical Expenses
- Deduction available if you spend more than 7.5% of your income on medical expenses (you must itemize to claim).

6) Moving Expenses
- You can claim this even if you don't itemize so long as your move was 1) job related, 2) would have increased commute by more than 50 miles, 3) were employed full time at least 39 weeks during the 12 months after you moved, 4) your moving expenses weren't reimbursed by your employer.

7) State & Local Taxes
- If you itemize, you can claim your state and local sales tax or income tax. You will need receipts if you choose to claim the sales tax deduction.

8) Charitable Donations
- If you itemize you can deduct these, but keep your receipts for money donations, items donated, or mileage while driving for charity.

9) Out of Pocket Job Expenses
- These are deductible provided you keep records and are not reimbursed by your employer.

10) Self-employment Deductions
- Half your self-employment tax, up to $112,000 of new or used business equipment purchased this year, your home or office furniture if its used solely for your business.

You can also follow the link here to read more about each credit (but whatever you do, if you have H&R Block prepare your taxes -- please don't sign a tax refund loan).

What Are The Best Personal Finance Books?

As I was walking around the local Barnes & Noble over the weekend, I found myself in kind of a rut. Nothing seemed particularly interesting, but I haven't read a good book about money for quite awhile so that's what I was browsing for. Instead of searching through the Amazon reviews for a good book, I though it might be better to open it up to everyone out there.

So, what is your favorite book about money? The last money book I read was one of Jim Cramer's (the high strung Goldman trader turned hedgie-turned CNBC talking head), and can't say that it was something I'd recommend.

Image: Lin Pernille @ Flickr

Will Subprime Bite the Financials Again?

Today I saw an INGDirect ad for adjustable rate mortgages that struck a chord. A week or two ago I read an article at the WSJ Deal Journal Blog that said many of the mega banks were looking at ARM's and subprime again as a way to increase returns. While the article didn't say that the banking giants were getting bank into the fold originating subprime loans, the banks are eyeing the acquisition of "distressed mortgage assets."

I'm not an MBA or finance wiz, but I'm wondering if there aren't practical considerations the big banks are overlooking. We all know that the subprime meltdown was caused by lenders extending too much credit to borrowers that had questionable credit qualifications and with too little equity. The big mortgage lenders have paid a price taking write downs on a good chunk of those loans. Since the number of delinquent borrowers has increased, the risk and corresponding value of the loans has decreased in the secondary market.

If we take it as a fact that home values have decreased (or at least stagnated) due to demand in many areas, the amount of equity that lenders hold has stayed about the stayed about the same (or increased slightly as a percentage). That would normally be fine for lenders because even if they had to forclose on the borrower they would have sufficient collateral. However, there will almost assuredly be a backlash and tightening of lendering standards. This will likely lead to a shrinking pool of qualified buyers and demand sticks lenders with different problems. Reports have quoted Freddie Mac as stating a foreclosure costs it $60,000. While that figure seems misstated to me, banks are undoubtedly better off if foreclosures never happen.

Banks know more about the time value of money than anybody else. The last thing they want to be is in the business of managing real estate. Even if they can find someone to buy the property quickly after a foreclosure, the lender will undoubtedly rack up some fairly significant legal fees in the process of removing the borrower. I'm not sure there is an easy solution, but think that the industry is much more complex than it was in the past. This is compounded by the fact that most big traditional lenders are restricted in the types of investments they can make . Hedge funds and other alternative investment organizations are more flexible and can play both sides of the market.

In the end banks need to shore up their lending standards and re-evalute the risks each borrower poses. Many of the ARM loans already originated have murky credit standards and were securitized into the secondary market with purchasers not exactly sure what they are buying. I hope the banks now moving on the discounted subprime loans have done their research so they won't need to be bailed out down the road after writing down more loans.