Jobs Picture gets Worse in 27 States

Although the recession may have officially come to an end, 27 states saw higher unemployment rates in August. This is almost double the number of states that saw jobless rates increase in July. According to CNN Money, the unemployment rate remained at 9.6% for the country and states such as Nevada, Michigan, and California are seeing rates above 12%.

Nevada had the worst rate for the fourth month in a row, at a record high of 14.4%, up from 14.3% in July. Michigan followed with 13.1% unemployment, unchanged from the prior rate, and California was third with a 12.4% rate, an increase from 12.3% in July.

Where does your state rank?

After Kentucky and Georgia joined the list, 13 states had unemployment rates above 10% in August, as opposed to 11 the previous month.

The jobless rates fell in 13 states, as opposed to 18 that saw decreases in July. Ten states and the District of Columbia had no rate change.

North Dakota remained the state with the lowest unemployment, posting a 3.7% rate, followed by South Dakota with 4.5% and Nebraska with 4.6%

Consumer confidence rises in August

From CNNMoney.com:

A key measure of consumer morale made a surprising turn higher in August, but Americans still feel jittery about the economy.

The Consumer Confidence Index rose to 53.5 in August, from July's upwardly revised level of 51.0, the Conference Board, a New York-based research group that compiles the index, said Tuesday.

The rise follows two months of losses and beats the drop to 50 that economists surveyed by Briefing.com were expecting. But the index is still painfully low, falling far below 90 -- a level that typically indicates a stable economy.

"Markets are broadly interpreting this as an improvement in the economy, but overall consumer confidence is still very, very bad," said Tim Quinlan, an economist with Wells Fargo. "We went from being severely depressed about the outlook, to just being depressed about the outlook."

While the uptick means consumers' short-term outlook for the economy has improved slightly, a weak job market continues to weigh on their attitudes, Lynn Franco, director of the Conference Board Consumer Research Center said in a statement.

Questions for the Tax Lady: August 23rd, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Is it true that the child tax credit would be reduced if the Bush tax cuts expire?

Yes. The Economic Growth and Tax Relief Reconciliation Act passed in 2001 doubled the child tax credit form $500 to $1,000. It is set to expire at the end of the year, and unless extended by Congress, would revert back to $500 in 2011.

Question #2: What is the difference between an Individual Taxpayer Identification Number (ITIN) and a Social Security Number (SSN)

Taxpayer identification numbers are assigned to individuals that do not qualify for a Social Security number but may need to file a tax return. ITINs are often given to resident aliens living in the United States. While a taxpayer may use his or her social security card as proof to work in the United States, an ITIN does not serve as verification of one’s ability to work in the United States.

Coming Up: Tax-Free August Shopping

The new school year is just around the corner, and for millions of parents and students that means back-to-school shopping. Luckily, several states will be offering sales tax holidays in August. This year there are 17 states with tax holidays that apply to a number of items including clothing and basic school supplies. Forbes.com put together a good summary of the states offering tax-free shopping. I have included a portion of their article below, but you can find the full text at Forbes.com.

Within the next five weeks 17 states with sales taxes will be offering "holidays" during which certain purchases can be made tax-free. Take a trip to the right mall at the right time and you can save up to 10% in tax (including local levies) and possibly more, since some retailers offer sales timed to capitalize on the attention sales tax holidays draw. (Five states--Alaska, Delaware, Montana, New Hampshire and Oregon--have no general sales taxes.)

The timing for these holidays is no accident. The average family will spend $606 on back-to-school shopping for K-12 students this year, up from $549 last year, according to the National Retail Federation. In fact, back-to-school is the second-biggest consumer spending event for retailers, behind the winter holidays.

Mississippi kicks off the tax-free shopping season on Friday, July 30, with a two-day period when clothing items costing less than $100--but not school supplies--will be free from the state's 7% sales tax. In August 15 states will hold holidays, generally covering such items as school supplies, clothing costing less than $100 per item and in some cases, computers. In high-income Connecticut, clothing and footwear priced at up to $300 will be exempt from the state's 6% state tax.

Sales tax holidays aren't all aimed at back-to-school shopping, however. In Louisiana, on Aug. 6 and Aug. 7, shoppers can buy all sorts of items, including furniture, costing up to $2,500 free of state sales tax. Then in September, at the start of dove hunting season, the state will offer a special sales tax holiday for hunting supplies. (Guns, ammunition and off-road vehicles, but not hunting dogs, are exempt.) South Carolina also will hold a "Second Amendment" holiday, exempting handguns, rifles and shotguns from sales tax on the Friday and Saturday after Thanksgiving--during deer hunting season

New Credit Card Rules Effective August 22. What you need to know

Credit card companies have done their fair share of making sure they make money at your expense. Before now, they had really come up with their own set of rules. Well, there are new consumer credit card protection rules that are set to begin August 22, 2010.

This set of rules is the latest in a series of regulations that implement the Credit Card Accountability, Responsibility, and Disclosure Act (the Credit Card Act). For other credit card rules that already went into effect February 22, although you can go the the website here. You can see some of the provision below. Here’s what you can expect from these new protections:

Reasonable penalty fees

• Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.
• Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:

1. One of your last six payments was late, in which case your fee may be up to $35; or
2. Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

What’s even better, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5.

Additional fee protections

• No inactivity fees. Your credit card company can't charge you inactivity fees, such as fees for not using your card.
• One-fee limit. Your credit card company can't charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of rate increase

• If your credit card company increases your card's Annual Percentage Rate (APR), it must tell you why.

Plus a Re-evaluation of recent rate increases

• Today: Your credit card company can increase your card's APR with no obligation to re-evaluate your rate increase.
• Under the new rules: If your credit card company increases your APR, it must re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.

Gold Prices Hit New Record

From CNN Money.com:

Gold prices climbed to a new record Tuesday as Europe's debt troubles sparked demand for perceived safe havens, such as the precious metal, and investors hedged against inflation.

What prices are doing: Gold for August delivery rose $3.60 to $1,244.40 an ounce. It climbed as high as $1,254.50 an ounce earlier in the day, a record for intraday trading.

What's moving the market: Investors remained wary about the global economic recovery amid Europe's ongoing sovereign debt problems and looked to gold and other low-risk investments, which are attractive during times of economic crisis and uncertainty.

The metal's price has jumped 13% this year.

Gold prices also got a boost from investors who believe Europe's fiscal problems will subside and are instead worried about rising prices. The Federal Reserve's loose monetary policy has some traders worried about inflation.

What analysts are saying: "One one hand you have the possibility of additional problems in Europe going forward. And if Europe implodes, gold prices will continue to rise sharply higher," said Tom Pawlicki, precious metals analyst at MF Global.

"But if the European problems go away, gold will still trade higher based on the inflation outlook," he added. "Gold is the perfect hedge against inflation.

When the dollar loses its value, gold has been seen as the alternate currency since it holds its value."