142

This sounds like a scam. The debt itself may be legitimate but the debt collector doesn’t sound legitimate. Legitimate businesses would never need access to your bank account. If you have the funds ready to go, get their routing numbers and do a funds transfer from your own bank account to theirs. Giving others access to your bank account (user name & ...


52

For the purposes of this answer I am assuming that this is not a scam, and that they are not the one who led you down the path of needing to use gift cards to make the payment. No legitimate business would insist on gift cards. If you want to make sure that you are not providing them with any more banking details than is necessary, you should consider the ...


44

Mutual fund investments within a 401(k) plan (or outside a 401(k) plan for that matter,) are NOT covered by the FDIC regardless of whether the plan administrator is FDIC-insured or not; they are not on the list of things covered by FDIC insurance. So, you have no FDIC coverage to keep your money "safe" when you invest in a mutual fund. Mutual funds rarely go ...


32

I'd first suggest you read another question here, Is it true that, “just ten trading days represent 63 per cent of the returns of the past 50 years”?. Then, I'd suggest you consider two questions. How would you react if the market continued up? Another 30-50% from here. Or, if you are correct, how will you know when to get back in? What you propose sounds ...


28

Nope, the IRS just deals with federal. You'll have to work with your state's department/office of revenue to settle up with them.


28

Assuming since you paid them off that these are legitimate debts (i.e. you are not disputing the fact that you incurred them in the first place) and that you have just recently paid them off, you can't remove them. The point of a credit report is to show your history of credit usage not just the current accounts you have active. Removing accounts once they ...


28

Investments are usually insured by SIPC instead of FDIC, however it is a different kind of protection. Essentially it just protects you from the broker going under, not the investment losing value. When you invest in securities there is always some risk of your investment decreasing in value, however if you diversify properly that risk is mitigated pretty ...


24

Even if they were legit, they won't file litigation (which is a lawsuit) because the overhead costs are considerable. But who cares? It's not a lawsuit until they serve you. Then it'll be a month + til the first hearing, and the suit will be extinguished once you pay them, which you're planning to do anyway. Ergo it's no threat at all. Absolutely not. ...


18

This concerns me: I should note I'm also trying to settle with them for a significantly lower sum. However, in order to do this I need to be able to pay soon with a card or bank account. Debt collectors are notorious for using any and all tactics necessary to get money from you as quickly as possible. It is very well possible that even if you pay them ...


17

Absolutely. Everyone should have an "emergency fund" of some sort. Many advisors recommend holding 3 to 6 months of expenses in cash as an emergency fund. There are many reasons for this: It reduces the amount of debt that you incur (and interest you pay) in the event of an emergency Less shock on your budget Peace of mind You can choose to use a larger ...


14

If you're really worried about the collections agency doing something bad like taking more money than agreed, then open a "burner" temporary bank account. Transfer just enough to satisfy the debt, and then -- when the transaction posts to the account -- close it. It'll take a few days for the money to be fully transferred to your new bank, though.


13

They should stop the contributions for you, but mistakes happen, so employees should still check to make sure they haven't over-contributed.


13

In general, no. Your credit report is intended to show history, not just a current status. Closed accounts will fall off of your report automatically over time. Some people successfully negotiate a "pay for delete" scenario wherein by agreeing to pay off a delinquent account the owner of the debt deletes the account from their report. That is increasingly ...


11

The biggest benefit of using a Roth 401(k) vs a non-tax-advantaged investment account is that the growth is tax free (not just deferred like a traditional 401(k)). With the managed account, you'll pay taxes on all distributions and realized gains as you get them, which adds friction to long-term growth. The downside is obviously that you can't touch the ...


11

Broadly, it means that you'll be responsible for the first $3,000 of medical expenses that you incur over the course of the year before insurance kicks in. There may be a co-pay as well where you're responsible for some fraction of the bill once you've met your deductible up to an out-of-pocket maximum. Realistically, your plan very likely covers certain ...


10

A few things come to mind: Gifts above $15,000 (raised from $14,000 in 2018) are not necessarily taxable. Gifted amounts over the $15,000 annual exclusion are applied toward the lifetime maximum of $11.4 Million. Only after that maximum has been reached do gifts become taxable. Also, the tax is applied to the giver, not the receiver. Be very careful about ...


10

"Risk" is a funny word. If you play Russian Roulette with all 6 bullets in, it stops being risk at that point. That's what you're doing by passing up that juicy employer match. The universal advice with 401Ks is contribute at least to the employer match, because that's free money! I gather the interior mechanisms of a 401K are a "black box" to you. ...


8

First off, make sure you are using your modified adjusted gross income (MAGI) as calculated by https://www.irs.gov/publications/p590a#en_US_2018_publink100025076. For example, 401(k) contributions and health insurance premiums paid through your employer are not counted. It's possible you are still eligible to make a full or partial Roth IRA contribution. ...


8

The chance they deposit more than the limit is slim to none. The issue of depositing too much is with those who had 2 jobs over the year. The warning I’d give you pertains to matching funds. With no percent limit in my deposit, I could have topped off my 401(k) by April or May. But, with no deposits, any potential matching was delayed until February of the ...


8

You're correct- the tax advice given in that scene doesn't make any sense, and it might actually make the scene even better if you know that. The advice was bad for three reasons: Even in 1949 (like today) there would be no tax at all on the inheritence. Estates may pay taxes before the money is distributed (and his brother's estate would have paid taxes), ...


8

(Answer was edited based on OP's edits and comments, see the bellow for the original answer) You said that the orthodontist billed insurance $8k, so insurance paid based off of $8k (all is good).Then you got the bill from the orthodontist and they said the total amount is $10k (uh oh). In other words the orthodontist charged you more than what they charged ...


8

It is none of those. It is defined in the US Code, but not the Internal Revenue portion of the code. The official explanation: The TSP is established under the Federal Employees' Retirement System Act of 1986 and is codified primarily under Chapter 84 of title 5, United States Code (U.S.C.). The Internal Revenue section of the code is involved only ...


7

Last time I ran the numbers on insurance in my state you were almost certainly better off taking the highest deductible available. It was almost impossible to find an amount of medical bills where this wasn't your best choice. Obviously, this means you're taking a higher risk the first year as you might get a big bill before seeing the savings. Note that ...


7

Having more liquid cash would never really be considered a bad idea, but holding to buy into a low market has its risks. While it's definitely a strategy you could employ, the thing is that it would be trying to time the market, which is based on being lucky. No one knows if a recession is going to happen soon. If it was actually imminent, the market would ...


7

Assuming you are in the US, based on some things you have said. If you were self-employed, then expensing books related to your business is a no-brainer and would not cause you any problems with the IRS. As an employee, before 2018 you could deduct "unreimbursed employee expenses" as long as they were normal and "necessary" subject to a few restrictions. I ...


6

There are many small-time landlords that are a bit overzealous in asking for information or simply don't know what information is appropriate to ask for. Some ask for pretty much everything remotely relevant to see what you'll provide, since that helps them get as detailed an understanding of your financial situation as possible. Savings/checking balances ...


6

Generally, you are correct. If you and your family are relatively healthy, a HDHP + HSA can be a great thing and will often leave you with more money in the long run. In the case of a catastrophic medical emergency, HDHPs have a "max out of pocket" amount, usually given in individual + family numbers. For example, your max out of pocket might be $7,000 ...


6

The details of your questions are confusing. In 2019 there is a $19,000 employee contribution limit for 401k plans. That amount can be split between either traditional or Roth 401k. An employer's matching contribution does not count toward that limit. Separately, there is a $6000 limit for IRAs, which can also be split between traditional and Roth. If you ...


6

From the IRS: Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. ... [T]he contribution limit is split equally between the spouses unless you agree on a different division. So for 2019, you and your wife have a combined HSA limit of $7,000. You can decide to split that however you ...


6

I can't really go into it due to NDA's, but I work in this industry and see people getting scammed all of the time for many different scenarios that rational people removed from the situation don't think they could ever fall for. Please do not let yourself be scammed. If there is any doubt at all, there is a solution. If you legitimately have a debt that ...


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