Personal Finance News Round-Up for Friday, December 21, 2012

Personal Finance News

Here’s a review of top personal finance stories, columns and studies from publications, websites and blogs across the country.

Is your charity IRS-approved for tax deduction?

Tis the season for giving, and many Americans will be making end-of-the-year contributions to charities, assuming they will be tax-deductible. The vast majority of them will be, but the IRS has de-listed a number of organizations from approved status. This happens for a variety of reasons, but be sure your charity is one of those IRS-approved if you plan on claiming donations on tax filings. Just go to ww.IRS.gov and use the “Exempt Organization Select Check” tool.

Read the full article at The Wall Street Journal MarketWatch.

Renovate your home and get huge rewards

Wealthier homeowners are making luxury improvements to their homes, and more and more are paying with plastic. Their justification is that if they are going to be shelling out $100,000 or more in renovations, why not get a fancy yacht cruise or VIP event tickets with exclusive access to artists or celebrities out of the deal? It’s just another way that credit card owners are using loyalty rewards to get more from major expenses. Though credit card reward perks can be a nice benefit, however, consumers should be wary of potential pitfalls.

Read more at CBS News.

Bank investments that can end up costing you

Investing in stocks is a risky game. Mutual funds help diversify a portfolio, but are also tied to the ebb and flow of the market. Seeking safer havens for their money, investors often turn to banking products, comforted by an FDIC guarantee. However, shiny gimmicks and incentives can put uninformed consumers out of a lot of money.

Read about which services to avoid at the New Jersey Newsroom.

Student loan relief might just be deferred pain

New rules governing the repayment of student loans do help lessen the current burden of monstrous student loan debt, as federal law now accommodates income-based payments. A huge tax bill might be waiting for borrowers down the road, however. While a portion of the loan could be forgiven after so many years, that unpaid portion is still taxable.

Read the full article at Yahoo! Finance.

Do these 12 things – if you want to be audited

How does the IRS determine their naughty and nice list? When it comes to determining who to audit, the IRS is often on the lookout for red flags on tax returns, and 12 hot spots in particular can bring a visit from the tax man. Only a little over 1% get audited, but the chance of some extra attention can be reduced by avoiding a few no-no’s. For example, be sure to report all taxable income and watch excessive home office deductions.

Learn how to avoid an audit by the IRS at Kiplinger.

Baby boomers accelerating demise of Social Security

Social Security and Medicare are on a path toward a financial crisis, driven by huge numbers of baby boomers reaching retirement age and receiving entitlements exacerbating the situation. The rate of population growth in the U.S. is expected to slow between now and 2060, according to the Census Bureau, but the size of the over-65 segment will double. As Robert Powell of MarketWatch argues, policy makers are going to have to act — but how and when are largely unclear.

Read more at The Wall Street Journal MarketWatch.

Payroll tax cut may be ending

Nearly 125 million American households have been benefiting from the payroll tax cut, a tax break introduced in 2010 to boost incomes as part of President Obama’s plan to stimulate the economy. But this stimulus may soon end. Talks in Washington continue regarding ways to avert a fiscal cliff, and at this point it looks as though the payroll tax cut may be a casualty, whether or not a deal is made.

Find out what this could mean to your income at CNN Money.

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