The Mortgage Forgiveness Debt Relief Act of 2007 (the Act) was passed by Congress on December 18, 2007, and was signed into law by President Bush on December 20, 2007. The primary objective of this new law is to help beleaguered homeowners avoid foreclosure by eliminating the adverse federal tax consequences associated with debt forgiveness. The Act also extends the deduction for mortgage insurance premiums through 2010, expands the time period for a surviving spouse to use the higher home sale exclusion, and excludes from income certain state and local tax breaks given to volunteer emergency responders.

Foreclosure Relief
Generally, amounts of a debtor that are discharged are included in gross income. The Act generally allows taxpayers to exclude up to $2 million ($1 million if married filing separately) of mortgage debt forgiveness on their principal residence.

• Principal residence indebtedness includes indebtedness (for first, second, and home equity loans) that is incurred in the acquisition, construction, or substantial improvement of an individual's principal residence and that is secured by the residence. It includes refinancing of debt to the extent the amount of the refinancing doesn't exceed the amount of the refinanced indebtedness.
• The basis of the taxpayer's principal residence is reduced by the excluded amount, but not below zero.
• The exclusion doesn't apply to the discharge if the discharge is on account of services performed for the lender, or any other factor not directly related to a decline in the value of the residence or to the taxpayer's financial condition. The exclusion also doesn't apply to a taxpayer in a Title 11 bankruptcy.
• This provision is effective for indebtedness discharged on or after January 1, 2007 and before January 1, 2010.

Extension of Deduction for Mortgage Insurance Premiums Paid
Premiums paid or accrued by a taxpayer during 2007 for qualified mortgage insurance in connection with acquisition indebtedness with respect to a qualified residence of the taxpayer are treated as deductible qualified residence interest (subject to a phase-out based on the taxpayer's AGI). The Act extends the rules treating qualified mortgage insurance premiums as deductible qualified residence interest for three years.

• This provision is effective for amounts that: (1) are paid or accrued after December 31, 2007 and before January 1, 2011; (2) aren't properly allocable to any period after December 31, 2010; and (3) are paid or accrued with respect to a mortgage insurance contract issued after December 31, 2006.

Modification of Exclusion of Gain on Sale of Principal Residence
A qualifying taxpayer may exclude up to $250,000 ($500,000 for joint return filers) of gain from the sale or exchange of property that the taxpayer has owned and used as his or her principal residence. Married taxpayers filing jointly for the year of sale may exclude up to $500,000 of gain if: (1) either spouse owned the home for at least 2 of the 5 years before the sale, (2) both spouses used the home as a principal residence for at least 2 of the 5 years before the sale, and (3) neither spouse is ineligible for the full exclusion because of the once-every-2-year limit on the exclusion.

• Prior to the Act, the maximum $500,000 exclusion was available only if a husband and wife filed a joint return for the year of sale. If the home was sold in a year after the year of a spouse's death, the surviving spouse could only get a maximum exclusion of $250,000.
• The Act allows surviving single spouses to qualify for the maximum $500,000 exclusion if the sale occurs not later than 2 years after their spouse's death and the requirements for the $500,000 exclusion were met immediately before the spouse's death.
• This provision is effective for sales and exchanges after December 31, 2007.

New Exclusion for Volunteer Emergency Responders
Generally, reductions or rebates of property taxes by state or local governments on account of services performed by members of qualified volunteer emergency response organizations are taxable income to the volunteers.

• The Act provides an exclusion from gross income to members of qualified volunteer emergency response organizations for:
  1. any "qualified state or local tax benefit"; and
  2. any "qualified payment"
• A "qualified state or local tax benefit" is any reduction or rebate of state or local income, real property, or personal property taxes on account of services performed by individuals as members of a qualified volunteer emergency response organization. To avoid a double tax benefit, the amount of state or local taxes taken into account by a taxpayer in determining his deduction for taxes is reduced by the amount of any qualified state or local tax benefit.
• A "qualified payment" is a payment that is provided by a state or political subdivision on account of the performance of services as a member of a "qualified volunteer emergency response organization". The amount of these payments is limited to $30 multiplied by the number of months during the year that the taxpayer performs such service (therefore, the maximum exclusion in a given year is $360 ($30 x 12 months)).
• A "qualified volunteer emergency response organization" is any volunteer organization which is: (1) organized and operated to provide firefighting or emergency medical services for persons in the state or its political subdivision; and (2) required, by written agreement, by the state or political subdivision to furnish firefighting or emergency medical services in the state or political subdivision.
• This provision is effective for tax years beginning after December 31, 2007 and before January 1, 2011.

Personal savings in America is dismal. In fact, the personal savings rate went from -0.5% in 2005 to -1% in 2006, the only negative years since the Great Depression. Some media pundits will argue that consumers don’t need to have traditional savings because their cumulative wealth is tied up in other assets (retirement plans, mutual funds, real estate, etc), which are suitable substitutes for basic savings. We strongly disagree.

In a previous discussion, we detailed How to Choose the Best Checking Account. Feedback was excellent, but many readers wanted more information about choosing the other critical bank account: Savings. As a result, we've put together some information on the second most important financial account everyone should have: an easily-accessible, high-yield cash account.

We Prefer "Cash Account"
Of course, we could have just come out and said a “High-Yield Savings Account”, but there are a few other high-yield options that also fit the bill. Having said that, for the average consumer, a high-yield savings account is the perfect solution. Here's why...

Just In Case
For most people, the main purpose of a savings account should be to serve as an Emergency “Rainy Day” Fund. Let’s face reality; you just never know when a financial crisis will occur, and it is prudent for you to set aside some liquid money that you can tap if a financial crisis ever occurs. By liquid, we mean you should be able to access the money in a matter of days without incurring any penalty, loss of asset value, or transaction fee. These criteria rule out the certificate of deposit (CD), stocks, mutual funds, 401k, IRA, and the home equity loan/line of credit as emergency fund tools. Then you naturally ask, What If an Emergency Never Happens?

A Financial Tool...and Then Some
An emergency fund is equally as much an emotional and psychological tool as it is financial. The confidence and peace of mind you will have by knowing that you have some protection “just in case” is invaluable. And if you never need to use it, then lucky you! As a general rule, we recommend that you accumulate 3 to 6 months of living expenses inside of your Emergency “Rainy Day” Fund.

Online All the Way
When selecting a checking account, we gave you the option of brick-and-mortar versus online, but the savings account is a no brainer: Go online. As with the checking accounts, online savings accounts offer superior interest rates, equal FDIC protection, no fees, and fast transfers.

Our three favorite online savings accounts (and their APYs)

1. E*Trade Bank (5.05%)
   
2. Emigrant Direct Savings (4.75%)
3. HSBC Direct Savings (4.50%)

Beyond Savings
For the savvy savers, a few other options exist:

Money Market Account (MMA) – Offered by banks and credit unions, the MMA is takes the higher-interest feature of the savings account and combines it with the check writing ability (usually up to a limit each month) and FDIC insurance of a checking account. Sort of like a TV/VCR/DVD combination unit, it does several things sufficiently…but none great (and the MMA will never eat your videotape). If minimizing the number of open financial accounts is your number one priority, then a money market account is worth a look.

Money Market Fund (MMF) – In contrast to the Money Market Account, a Money Market Fund is a product purchased through a brokerage. The same companies that sell stocks and bonds typically also offer mutual funds that invest in low-risk, highly-liquid securities. Money market funds typically invest in short-term government securities, certificates of deposits, and corporate commercial paper. Because MMFs place your money into open market financial instruments, investor losses are possible (although rare), and your money is not insured against these losses.

U.S. Treasury Bills - Issued and guaranteed by the U.S. Treasury Department, Treasury Bills (“T-Bills”) are considered one of the safest investments; additionally, they are exempt from state and local taxes. T-bills offer a quick and easy way for the U.S. government to raise money from the general public. Here’s how they work: Consumers bid on Treasury Bills at a reduced price (a “discount”) and—3 to 12 months later when the bill comes due—the government will repay the discounted price plus interest.

It's no fun to look at your mutual fund statement and realize that you've had losses for the year. It's even more painful if you discover that, in addition to suffering a paper loss, you owe taxes on the fund's distribution of capital gains. It's a question that puzzles a lot of investors...How can you owe taxes on an investment that has lost money?

The answer has to do with the difference between your profit when you sell fund shares, and the fund's profit when it sells individual securities. As a fund buys and sells securities during the year, it will typically have some gains and some losses. At the end of the year, losses are subtracted from gains to determine the fund's shareholder distribution. The fund also may use losses from previous years to help offset gains.

By law, gains and/or income must be distributed each year; typically, those distributions occur around the end of the year and are taxable (unless the fund is held in a tax-advantaged account such as an IRA). Even if a fund is down at the end of that year, it may still have capital gains from earlier sales of securities.

Example: In 2002, Cesar's stock fund bought 10,000 shares of XYZ Corporation for $33 a share. By the end of last year, the share price had reached $50, helping to push up the net asset value (NAV) the fund reported on its year-end statement to shareholders. This year, XYZ's price drops to $43. The fund's manager, concerned that XYZ might fall still further, sells the shares for a $100,000 profit. However, other shares held by the fund drop in value, and Cesar's end-of-year statement now shows a lower balance compared to the year before. Because the fund did not sell shares to realize losses, it must still pass its $100,000 XYZ profit on to shareholders as capital gains distributions.

Good News, Bad News
Owing taxes on distributions from a fund that's down is especially likely in years when a fund experiences substantial redemptions. If your fellow investors in a mutual fund have been pulling money out, the manager might have had to sell securities in order to meet those redemption demands. High market volatility also could mean a greater than usual level of capital gains distributions by funds with managers who traded actively, either to try to lock in gains or avoid further losses.

Some capital gains distributions this year may be affected by what happened in 2000-2002. Many funds that suffered during the bear market could use those losses in subsequent years to offset any capital gains and minimize that year's taxable distribution. However, many funds have now used up their losses from the down years, leaving their managers with fewer leftover losses to offset any current gains from selling individual securities.

Tax Factors to Consider in Fund Selection
One way to minimize such problems is to consider a fund's tax efficiency in advance. Taxes shouldn't be the single deciding factor in any investment decision. However, when assessing the capital gains impact of a potential purchase, consider the following points:

• Some mutual funds tend to be more susceptible to the capital-gains dilemma than others. For example, funds with a high turnover ratio buy and sell more often and may generate more capital gains distributions.
• Some actively managed funds are designed specifically to be tax efficient, taking capital gains into account when making trading decisions.
• A fund's long-term capital gains will be taxed at a more favorable rate than its short-term gains.
• Bond funds can experience capital gains and losses from the sale of individual bonds.
• Each mutual fund must report its after-tax return in its prospectus.

A (Small) Consolation
If you are squeezed by both a loss in your fund's value and a capital gains distribution this year, remind yourself that at least the maximum tax rate on long-term capital gains and qualified dividends is 15% until January 1, 2011 (less if you're in the 15% or 10% tax bracket).

You also may be able to offset capital gains from one mutual fund by taking a capital loss on another investment. A financial professional can help you assess the potential tax impact of a given mutual fund, as well as the best way to manage any capital gains liability.

As the holiday season and the close of the year quickly approach, you may be planning to make gifts to family, friends, and charities. You can be generous to yourself, too, by making those gifts in a way that maximizes your tax benefits. Here are some tips for tax-wise giving.

Giving to Family and Friends
Gifts to family and friends may be subject to federal gift tax (and perhaps state gift tax), and gifts to grandchildren may also be subject to generation-skipping transfer tax (GSTT). However:

• Gifts to spouses are gift tax free.
• Currently, you can give tax free up to $12,000 per recipient ($24,000 if the gift is from both you and your spouse) under the annual gift tax exclusion. Gifts over that amount are tax free to the extent of your $1 million lifetime gift tax exemption ($2 million lifetime GSTT exemption).
• If you fund a 529 plan for your child or grandchild, you can contribute up to five years' worth of gifts at once; that's $60,000 per child or $120,000 if you and your spouse make the gift.
• You can make unlimited tax-free gifts if you directly pay medical bills or college tuition on behalf of a recipient.

Giving to Charity
Donations to charity are completely gift tax free and are also generally deductible for income tax purposes, subject to the usual limitations. However:

• Only donations to "qualified" organizations are tax deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions, or you can ask the organization for a copy of its tax-exempt status determination letter. In addition, churches, synagogues, temples, mosques, and government agencies are eligible to receive deductible donations.
• Avoid giving cash, and keep records (receipts, canceled checks) of all your donations, regardless of the amount. Although the value of your time serving as a volunteer is not deductible, out-of-pocket expenses (including transportation costs) directly related to your volunteer service to a charity are usually deductible.
• You must obtain a "qualified appraisal" for donations of property worth over $5,000 (other than cash and publicly traded securities), and you must attach an appraisal summary (IRS Form 8283) to your tax return.
• Donated clothing and household items must be in good condition. You may claim a deduction of more than $500 for any single item, regardless of its condition, if you include a qualified appraisal with your return.
• For 2007, an IRA owner age 70½ or older can directly transfer income tax free up to $100,000 per year to an eligible charitable organization. You can take advantage of this provision regardless of whether you itemize your deductions.
• Consider donating appreciated securities that you've held for more than a year. You'll generally get a full fair market value deduction and avoid capital gains tax, too.
• Consider grouping donations and making gifts in alternate years to create a larger deduction and opportunity to itemize.

Concierge health care is a primary-care arrangement that requires you, the patient, to pay your physician an annual retainer fee (often over and above your health insurance premiums) in exchange for improved access and services.

Such retainer fees may range from a low of $1,500 to as much as $20,000 per year...the more you pay, the more services you get. In exchange, you receive same- or next-day appointments (with no reception-room waiting), extended office visits, 24/7 telephone and/or e-mail access to your doctor, and an annual intensive physical. For additional fees, higher benefits are also available; this includes house calls, home delivery of prescribed medications, and continuous personalized care. Your primary care doctor may even accompany you to appointments with specialists, and will coordinate your care even during hospital stays, rather than handing you over to the hospital's staff physicians.

In a concierge health-care plan, your doctor sees fewer patients (the average caseload is 300, compared to 2,500 for doctors in managed-care plans). While some concierge plans don't accept health insurance, most do. Whenever possible, your doctor will bill your health insurance provider (or Medicare) for payment for services provided.

However, most health insurance plans require participating doctors to accept the plan's rates as payment in full for the covered services, and Medicare generally prohibits doctors from charging Medicare recipients anything more than what Medicare pays. As a result, concierge health-care providers who participate in Medicare must be careful to charge annual retainer fees only for services health insurance or Medicare won't normally cover.

While concierge health care obviously has its perks, you should make sure you understand exactly what is covered by the annual retainer fee before you sign up for it.

Today's young professionals are in a difficult financial position. Often squeezed between supporting aging parents and young children of their own, the under-40 crowd is often referred to as The Sandwich Generation. However, we prefer to use a more descriptive, more encompassing definition which includes the issues of retirement planning, career guidance, educational goals, and issues at home. We lovingly call this unique group the Degree Rich, Money Poor™.

Who Are They?
Sandwich Generation. Debt Generation. Baby Boom Echo. Generation X/Y. The media uses many names to describe this emerging group, but until now, no label had fully described this growing population of young professionals who continue to yearn for financial direction.

Interestingly, the Degree Rich, Money Poor are a college-educated, tech-savvy, autonomous group which carries an attitude of "I could do everything for myself...but I'm willing to pay someone else to save me time, energy, and frustration." Whether living at home with mom and dad, or out in the "real world" struggling with student loan repayment, credit repair, marriage, mortgages, and children, this under-40 group wants to maintain full control while minimizing any inconveniences. Moreover, they are smart enough to realize that they don't know everything...particularly about issues of personal finance.

Generation 2.0
The Degree Rich, Money Poor are master outsourcers, willing to delegate tedious, menial activities associated with financial matters. As qualified financial professionals, we are usually brought in to serve as co-pilots: setting the course, reading the maps, and keeping the client on track. But make no mistake, the Degree Rich, Money Poor want to steer, and they keep their hands and feet firmly on the wheel and pedals at all times.

In order to accomplish this, the Degree Rich, Money Poor embrace and exploit the productivity rewards of technology. For example, young professionals in California show no hesitation when hiring our Georgia-based firm to serve as their "virtual financial planners" who will meet with them via remote desktop sharing and web conferencing tools. In fact, we have countless remote clients throughout the country with whom we "share" Word documents and PowerPoint presentations via the Internet during our advising sessions.

Just Give it to Me Straight
The under-40 professional is also starving for honest, ethical, professional financial advice. Most Degree Rich, Money Poor--like their parents--are either unaware of, or simply don't have the necessary resources to employ the basic principles of personal finance:

1. Spend less than you earn
2. Make the money you have work for you
3. Prepare for the unexpected; save a little

A great deal of our time is spent educating every client before we really get into the nuts & bolts of their financial situations. In fact, we often setup a meeting in the beginning of the engagement just to teach our clients about credit repair, insurance, and other urgent issues. Not surprisingly, the Degree Rich, Money Poor soak up honest, professional advice like an unused sponge.

How to Find a Competent Planner
Qualified, competent financial planners are plentiful and can be found through websites of industry-leading organizations such as the Financial Planning Association, the National Association of Personal Financial Advisors, and the Garrett Planning Network. We also encourage consumers to work with advisors who have invested the time and energy to seek higher credentials. In our opinion, the CERTIFIED FINANCIAL PLANNER™ professional is at the top of the heap. Also, young professionals will do well to find an advisor who operates an hourly, fee-only practice.

The most basic and essential financial account everyone should have is a checking account. Unfortunately, according to the Federal Reserve's most recent Survey of Consumer Finances, approximately 10 million U.S. households do not have a checking account at a bank or credit union. Ideally, everyone over 18-years-old should have a checking account in order to pay bills, track cash flow, and establish a track record with a reputable financial institution. We emphasize selecting an account with no monthly fees and accessible, no-fee ATM machines.

Should You Stay Local or Go Online?

Local Bank
This is the traditional national/regional "brick and mortar" banking institution with a branch on every corner of your community. As stated before, if you are going the local route, be sure to open an account with no fees (minimum balance, online bill pay, check-writing, etc.) and also ask about a sign up bonus. You can usually score a quick $25 or $50 deposit from these multi-national players since competition is so fierce for your banking business.

Online Bank
The digital scene continues to invade traditional spaces, and more of our financial advising clients are going virtual for their checking needs. Online checking accounts are more popular than ever due to their convenient, no-fee structure. Our three favorite online banks are:

1. Schwab Bank
2. Fidelity
3. E*Trade Bank

Many of you probably noticed that all three of these banks wear names traditionally associated with investment brokerage accounts. Points for you! And if you take a look at each link, then you will also note that all three of these online banks will give you free personal checks, free online bill pay, and even refund all ATM fees…even those pesky fees charged by out-of-network ATMs!

Consumers Have High Interest
A major reason why the general public is flocking online is the lofty interest rates that online banks are dolling out to customers. All three of the online banks listed above offer an annual percentage yield (APY) of at least 3.5% (Note: E*Trade bank requires at least $5,000 in deposits to earn the high interest rate; Schwab and Fidelity do not.). This is compared to the national "brick and mortar" average of about 0.35%. And rest assured, as long as the FDIC protects your online deposits, you will take on no additional risk by leaving your local branch and going online.

On the downside, online banks likely do not have a major presence in your neighborhood, so local offices could potentially be hard to come by. In this case, if you do visit your bank’s local branches often, then an online account may not be your best bet. But come on, who actually goes inside of banks anymore?

Five Checking Account Tips

1. Never pay an ATM fee again
• If you can't find a network ATM, just make a small purchase at any grocery store, pharmacy, or post office and ask for cash back
  
2. Use online bill pay whenever possible
• Most banks even allow you to use bill pay to send money to friends and family at no cost.
3. Avoid mailing personal checks to pay bills
• For personal security and identity-theft protection
  
4. Never have the following information printed onto your checks:
• Driver’s License #
• Social Security #
• Full Name (Optional)
  
• Just use your first initial and last name
  
5. Check your account often
• The best way to minimize the effects of identity theft is to catch it early
• Watch your balances and report any suspicious activity to your bank immediately
  

Life's major decisions have a lasting impact, and important financial concerns are often overlooked when your loved ones are:

• Graduating from college
• Starting a career
• Getting married
• Having a new baby
• Changing jobs
• Nearing retirement

Holiday Differently
Offer your friends and family something more meaningful. Give them peace of mind and the opportunity to secure a positive financial future.

For the recipient, there are no products to buy and no accounts to set up; just the time and expertise of a qualified financial advisor to help steer them onto the correct financial course.

A certificate for one or two hours of time is ideal, and the session can either be tightly focused or a less formal "rapid fire" style Q&A session covering multiple topics.
Our most common concerns with gift recipients often include:

• Debt and credit management and repair
• Allocating retirement plan contributions among investment choices
• Estimating college education expenses, and how to fund them
• Developing a spending and savings plan
• Obtaining a second opinion on an investment portfolio
• Making a pension lump sum decision
• Deciding how much and what type of insurance to buy

Simply Wrap It, and You're Done
We will mail you a high-quality gift certificate that you can wrap and give to your loved one during the big event. The certificate fits inside of a standard envelope and includes space for your name and a personalized message for the recipient. As a bonus, if you already know what you want to say, just tell us and we'll happily print the message on the certificate for you.

Contact us to learn more and to purchase gift certificates for your loved ones today.

If you have a credit card account, then you've no doubt seen the blank "checks" attached to your monthly statements. They are advertised to make your life easier...obtain fast cash, pay rent, and transfer higher-interest balances.

Let's Define "Convenience"
As it turns out, these checks are often more convenient for the creditor and identity thieves than they are for you.

When you use convenience checks, your creditor makes a much greater profit than when you simply swipe your card at the store. That's because:

• The interest rate on convenience check usage is often higher than the rate charged on card purchases.
• The creditor may charge a substantial convenience fee for using the check (up to 5% of the check amount, with no cap).
• There may be no grace period on purchases made with these checks, which means interest charges will be to accrue from the moment you use the check.
  
• Your creditor may apply your monthly payments first to lower-interest balances (such as card purchases) rather than to the high-interest convenience check charges.
  

Higher Risks; Less Protection
Traditionally, if you purchase defective merchandise with your credit card and you have no luck returning it to the seller, you may contact your credit card company for relief. However, if you use a convenience check to make the purchase, these protections may not apply.

Convenience checks are also a favorite target of mailbox thieves. Unlike unsolicited credit card offers, you can't "opt out" of receiving them. Since you never know when the credit card company will send checks, you can't report them missing when they don't arrive. Also, for some strange reason, most creditors don't require a call to activate the checks, and merchants often don't verify signatures on convenience checks. To make matters worse, the regulations that limit your liability to $50 for use of a lost or stolen credit card do not apply to convenience checks.

So, the bottom line (if you haven't already guessed) is we recommend that you "inconvenience" yourself by using the ol' trusty credit card instead.

In the past, employees stayed with the same company for years, working their way up the food chain. But times have changed, businesses are restructuring, and employees are often forced to look for new jobs. It's also common for younger workers to change jobs several times throughout their careers as they seek higher salaries and new professional opportunities. Whether you're forced to seek a new employment opportunity or are willingly doing so, you'll eventually be faced with an important decision: When you're offered a job, should you take it?

Make Sure the Offer is Firm Before You Evaluate It
Although it may be useful to explore an employment opportunity, don't waste time dreaming about your new position until you have gone through the interview process, gathered data on the company, and received a firm offer of employment. Only then should you take time to compare the offer you've received against the job you already have or a job offer you've received from another company. You'll have the facts, and you can make a more informed, unemotional decision.

Investigate the Company
Gather some data to help evaluate what kind of future you can look forward to with the company you're investigating. It's a good idea to do some research on the company before you have an interview so you'll know what questions to ask and be able to fairly judge the answers you receive. There are many ways to get background information on a company. Here are a few:

• Check your local public or university library--Many references are available through public or university libraries that can help you obtain information about a company or an occupation. Following are references that can give you general information about the company (including some financial data):

  1.	Dun & Bradstreet's Million Dollar Directory
  2.	Standard & Poor's Register of Corporations
  3.	Ward's Business Directory
  4.	Thomas' Register of American Manufacturers

• You should also look for information on a business in consumer or trade magazines and/or newspapers. Magazines and newspapers may contain up-to-date information about the company's future, its products and services, and its successes and failures. You may also be able to find out something about the company's key executives and philosophy. Rather than check the magazines individually, check one or more of the following indexes:

  1.	Business Periodicals Index
  2.	Readers' Guide to Periodical Literature
  3.	Wall Street Journal Index

• Look for information via the Internet--If you have Internet access, you can use it to find information on a company without leaving your home or office. Many excellent resources exist, including the following:

  1.	American City Business Journals -- This site will search the archives of many weekly U.S. business journals, looking for the name of the company or organization you are researching. As a result, you may be able to access articles, press releases, and snippets of information about the company.
  2.	Dun & Bradstreet -- At the Dun & Bradstreet site, you can find information (including financial) about millions of companies. If you want a detailed report, however, you'll have to pay. You may want to do this once you are seriously considering a job offer.

Tip: Whatever research method you choose, it's often easier to find information about public rather than private companies and well-established companies rather than new ones. To get hard-to-find information, you may want to contact the public relations liaison in the company and ask for general information and/or an annual report. You may also be able to get information by asking individuals who do business with the company or who have worked there in the past or by asking about the company at your local chamber of commerce.

What To Look For
As you research a company or organization, try to find answers to some or all of the following questions:

• How strong is the company financially?
• Will the company be taken over by another in the near future?
• Is the company planning to expand?
• How many employees does the company have?
• How long has the company been in business?
• Is the company privately or publicly held and by whom?
• What successes and failures has the company experienced?
• What is the company's philosophy?
• Is the company a part of a growing industry?

Answering these questions can enable you to determine whether the company or organization is a good match for you and help you decide whether the company has a strong track record and an exciting future. Supplement the information you get via your own research by asking questions during your interview to fill in the gaps or to expand your understanding of the company. If possible, try to talk to one or more employees who currently work there to get a handle on the company environment and future.

Assessing the Job Offer
You probably have some idea of what you want to earn, and the salary offered by the company you are evaluating may or may not match your expectations. Obviously, if the company offers you more than you expect, you have no problem. But what if the company offers you less? First, find out how frequently you can expect a pay review and/or a raise, and try to determine how much the pay increase is likely to be and on what is it based (e.g., merit, cost of living). In general, you should expect the company to increase your salary at least annually.

Next, ask about bonuses, commissions, and profit sharing that can add a lot to your income. To fully evaluate the salary you're being offered, try to find out about the average pay for that job in your area. You can do this by talking to others who hold similar jobs, by calling a recruiter (i.e., headhunter), or by doing library or Internet research. The following resources can help you:

• Bureau of Labor Statistics, Office of Compensation and Working Conditions Phone: (202) 606-6225
• Bureau of Labor Statistics, Office of Employment and Unemployment Statistics Phone: (202) 606-6400

Many salary surveys are available on the Internet that you can use to research salaries in your profession.

Benefits
Never overlook the value of good employee benefits. Benefits can add thousands of dollars to your base pay, and some benefits (including group health insurance and disability insurance) can be difficult to obtain privately at a reasonable price. Although many companies offer them, the type and quality of benefits vary widely from company to company. Find out what benefits the company offers and how much of the cost the employee must bear.

Future Opportunities with the Company
You'll want to find out what opportunities exist for you to move up in the company. This includes determining what the company's goals are and the type of employee the company values. Will you get to use skills you already have? Will you need more training and education? Is your philosophy regarding work in line with the company's? (If not, you may have trouble getting promoted or may end up leaving the company.) In addition, make sure the company has a future at all. If it's a new company, it may be at risk for folding in the near or distant future, so take time to evaluate the company's structure and plans and, if possible, to find out some information about the financial soundness of the organization. If the company is well established, determine if it is in a growth industry and try to find out (possibly by checking annual reports or articles about the company) what plans it has for the future.

Working Environment
You may be getting paid well and the company may offer great benefits, but you still may not be happy working there if the working environment does not suit you. To evaluate the working environment, pay attention if you get a chance to tour the company's offices. Do employees seem extremely busy? Do they look happy? Bored? Is the office space cold or inviting? Do people seem relaxed and friendly? Tense? In addition, try to meet the individuals you will be working with closely. Do they seem like people you would be comfortable working with? Do you sense any hostility? Do they say they like their jobs? Finally, consider how much time you must spend at your job. Are the hours suitable? Will you work a lot of overtime? Will you have to punch a clock, or is the scheduling somewhat flexible?
Consider the financial and emotional impact of taking the job

Professional and Personal Consequences
To evaluate the professional and personal consequences of taking the job, consider the following questions:

• How will taking this job positively or negatively affect your finances? Consider increases or decreases in salary, cost and availability of benefits, and related costs of taking this job, including relocation, spouse potentially losing his or her job, and the cost of transportation.
• How will this job indirectly affect your finances? For instance, will taking this job lead to better opportunities in the future? Does taking this job mean taking on additional financial risk (e.g., if the job doesn't work out or the company downsizes or goes out of business)?
• Will taking this job make you happier? Aside from the financial implications of accepting the job, consider the emotional consequences, both personal and professional. Will you be happier than you are now? Will your family be happy with your choice? Will you work longer hours or have more time to relax? Will you be better respected or be able to expand your professional horizons?

Should You Accept the Offer?
Despite the time and energy you spend researching and evaluating, the hardest part is yet to come: deciding whether to accept the offer. Begin by assembling the facts, data, and information you have gathered. Think back to the interview, paying close attention to your feelings and intuition about the company and/or the position. Consider not only the salary offered to you but also what future you can expect with the company, and think about whether you believe you would be happy and excited working there. If you're having trouble making a decision, try writing down the pros and cons of accepting the job; it may then become clear whether the positives outweigh the negatives. Sometimes, you may really want the job, but you're unhappy with the salary or the benefits offered to you. If so, it's time for negotiation.

Make the Offer Acceptable by Negotiating
Most young professionals are afraid to negotiate a job offer because they really want the job and are afraid that the company will rescind the offer or respond badly if they attempt to negotiate. However, if you truly want the job but find the salary, benefits, or hours unacceptable, it's better to face rejection than turn down what otherwise would be a great opportunity. The first step in negotiating is to tell your potential employer what it is that you want. Make it clear that you are immediately willing and able to accept the offer if this aspect of the offer could be changed. Be specific. Name the amount of money it would take or the exact hours you would like to work. However, don't threaten the company, and if you really want the job, don't imply that you'll walk if the offer remains unacceptable. Stay neutral.

What will happen? The company may refuse your request, either because company policy does not allow negotiation or because the company is not willing to move from its original offer. Or, the company may make you a second offer, perhaps offering you more money but not as much as you requested or offering to make up to you in benefits what they can't give you in salary.

In either case, the ball is back in your court. If the offer is still unacceptable, you may have to turn the job down. However, if the offer is better but not exactly what you want, ask for a day or two to think about it.

It's also possible that the company will accept your counteroffer outright, especially if you have unique talents or experience. At this point, there isn't much else to say except, "Thank you, I look forward to working here."

A 401(k) plan is an employer-sponsored retirement savings plan that offers you significant tax benefits. Here's how it works...

You contribute to the plan via pretax payroll deductions. Pretax means that your contributions are deducted from your pay, and transferred to the 401(k) plan, before federal (and most state) income taxes are calculated. This reduces your current taxable income because you don't pay income taxes on the dollars you contribute--or any investment gains on your contributions--until you start making withdrawals ("distributions") from the account during retirement.

For example, let's say Riley earns $30,000 annually. She contributes $4,000 of her pay to her employer’s 401(k) plan on a pretax basis. As a result, Riley's taxable income is now only $26,000. She isn’t taxed on her contributions ($4,000), or any investment earnings, until she receives a distribution from the plan.

What's the Deal on the Roth 401k?
Due to recent tax law changes, a new option is appearing on the benefits sheet for many employees: The Roth 401k. The difference is that Roth 401(k) contributions are made on an after-tax basis, just like Roth IRA contributions. As a result, unlike pretax contributions to a traditional 401(k) plan, there is no up-front tax benefit--your contributions are deducted from your pay and transferred to the plan after taxes are calculated. However, distributions from your Roth 401(k) account are entirely federal-tax free if the distribution is qualified, as discussed below.

Many 401(k) plans let you direct the investment of your 401(k) plan account. Your employer will provide a menu of investment options (for example, a family of mutual funds). But it's your responsibility to choose the investments most suitable for your retirement objectives.

When Can I Contribute?
You can contribute to your employer's 401(k) plan as soon as you're eligible to participate under the terms of the plan. In general, a 401(k) plan can make you wait up to a year before you're eligible to contribute. But many plans don't have a waiting period at all, allowing you to contribute via payroll deduction beginning with your first paycheck.

Some 401(k) plans provide for automatic enrollment once you’ve satisfied the plan's eligibility requirements. For example, the plan might provide that you’ll be automatically enrolled at a 3 percent pretax contribution rate unless you elect a different deferral percentage, or choose not to participate in the plan. This is sometimes called a "negative enrollment" because you haven't affirmatively elected to participate--instead you must affirmatively act to change or stop contributions. If you've been automatically enrolled in your 401(k) plan, make sure to check that your assigned contribution rate and investments are appropriate for your circumstances.

How Much Can I Contribute?
There's an overall cap on your combined pretax and Roth 401(k) contributions. In 2007, you can contribute up to $15,500 ($20,500 if you're age 50 or older) to a 401(k) plan. If your plan allows Roth 401(k) contributions you can split your contribution between pretax and Roth contributions any way you wish. For example, you can make $8,000 of Roth contributions and $7,500 of pretax 401(k) contributions.

But keep in mind that if you also contribute to another employer's 401(k), 403(b), SIMPLE, or SAR-SEP plan, your total contributions to all of these plans--both pretax and Roth--can't exceed $15,500 in 2007 ($20,500 if you're age 50 or older). In order to escape IRS penalties, it's up to you to make sure you don't exceed these limits if you contribute to plans of more than one employer.

Can I Also Contribute to an IRA in the Same Year?
Yes. Your participation in a 401(k) plan has no impact on your ability to contribute to an IRA (Roth or traditional). You can contribute up to $4,000 to an IRA in 2007 ($5,000 if you're age 50 or older). But, depending on your salary level, your ability to make deductible contributions to a traditional IRA may be limited if you participate in a 401(k) plan.

What are the Income Tax Consequences of Contributing to a 401(k) Plan?
When you make pretax 401(k) contributions, you don't pay current income taxes on those dollars (which means more take-home pay compared to an after-tax Roth contribution of the same amount). But your contributions and investment earnings are fully taxable when you receive a distribution from the plan. In contrast, Roth 401(k) contributions are subject to income taxes up front, but qualified distributions of your contributions and earnings are entirely free from federal income tax. In general, a distribution from your Roth 401(k) account is qualified only if it satisfies both of the following requirements:

• It's made after the end of a five-year waiting period
• The payment is made after you turn 59½, become disabled, or die

The five-year waiting period for qualified distributions starts with the year you make your first Roth contribution to the 401(k) plan. For example, if you make your first Roth contribution to your employer's 401(k) plan in December 2006, your five-year waiting period begins January 1, 2006, and ends on December 31, 2010.

What About Employer Contributions?
Employers don't have to contribute to 401(k) plans, but many will match all or part of your contributions. Your employer can match your Roth contributions, your pretax contributions, or both. But your employer's contributions are always made on a pretax basis, even if they match your Roth contributions. That is, your employer's contributions, and investment earnings on those contributions, are always taxable to you when you receive a distribution from the plan.

Which Should I Choose: Pretax or Roth Contributions?
Assuming your 401(k) plan allows you to make Roth 401(k) contributions, which option should you choose? It depends on your personal situation. If you think you'll be in a similar or higher tax bracket when you retire, Roth 401(k) contributions may be more appealing, since you'll effectively lock in today's lower tax rates. However, if you think you'll be in a lower tax bracket when you retire, pretax 401(k) contributions may be more appropriate. Your investment horizon and projected investment results are also important factors. A qualified financial professional can help you determine which course is best for you.

Whichever you decide--Roth or pretax--make sure you contribute as much as necessary to get the maximum matching contribution from your employer. This is essentially free money that can help you reach your retirement goals that much sooner.

What Happens When My Employment Ends?
When you (or your employer) terminate employment, you generally forfeit all contributions that have not yet vested. Vesting means that you own the contributions. All of your contributions, pretax and Roth, are always 100 percent vested. But your 401(k) plan may require up to 6 years of service before you fully vest the employer's matching contributions (although some plans have a much faster vesting schedule).

When you terminate employment you can generally leave your money in your 401(k) plan until the plan's normal retirement age (typically age 65), or you can roll your dollars over tax free into an IRA or into another employer's retirement plan.

What Else Do I Need to Know?
Payroll deductions can make saving for retirement easier. The money is "out of sight, out of mind."

• You may be eligible to borrow up to one half of your vested 401(k) account (to a maximum of $50,000) if you need the money.
• You may also be able to make a hardship withdrawal if you have an immediate and heavy financial need. But this should be a last resort--hardship distributions are taxable to you (except for your Roth after-tax contributions), and you may be suspended from plan participation for 6 months or more.
• If you receive a distribution from your 401(k) plan before you turn 59½, the taxable portion may be subject to a 10 percent early distribution penalty unless an exception applies.
• Depending on your income, you may be eligible for an income tax credit of up to $1,000 for amounts contributed to the 401(k) plan.
• Your assets are fully protected in the event of your, or your employer’s, bankruptcy.