Expected Family Contribution or EFC is a number computed from information provided through the FAFSA form. The EFC, together with the cost of attending a particular college or university determines eligibility for federal student assistance, and many need-based scholarships. A lower EFC means that the student and their family are expected to contribute less towards the cost of their education.
A 529 Account is a tax favored account that allows for saving for college. The earning that result from investing the savings in the 529 account may be withdrawn tax-free to pay for college expenses of the beneficiary.
Today’s episode with Mr. Rachit Dayal concludes Season 1 of FinanceSmartz: The Entrepreneurship Series. You can check out all 9 episodes of this season here:
We will be back soon with more interviews with entrepreneurs from around the world. If you have any ideas for guests to interview or would like to see entrepreneurs from a specific field, please email director.financesmartz@gmail.com with your suggestions.
Please keep looking out for new terminology posts each Thursday.
See you in a few weeks!
Welcome back from our Holiday Break for the final episode of Season 1 of FinanceSmartz: The Entrepreneurship Series! I was delighted to speak with Mr. Rachit Dayal, the Founder and CEO of Happy Marketer, which was recently acquired by Merkle, about running a sustainable business, creating the right environment for creativity and entrepreneurship, and balancing rational and irrational fears on your entrepreneurial journey!
Watch it on YouTube, or listen on Spotify, iHeartRadio, Audible, or Buzzsprout!
The Entrepreneurship Series: Schedule
- 10/18 – Director of Student Entrepreneurship at the George Washington University – Lex McCusker
- 11/1 – Founder and President of Thale Blanc – Deborah Sawaf
- 11/7 – Founder of Chantel’s Bakery – Dennis Stanley
- 11/9 – General Manager of Dole Packaged Foods, India – Mudit Mathur
- 11/12 – CEO of YouScript – Kristine Ashcraft
- 11/16 – Founder of Chi’lantro and Shark Tank Winner – Jae Kim
- 11/24 – President of Weinberg Medical Physics – Irving Weinberg
- 12/13 – Owner and Chief “Schmooze” Officer of Schmear It – Brian Goren
- 1/19 – Founder and CEO of Happy Marketer – Rachit Dayal
This episode concludes Season 1 of the Entrepreneurship Series! We’ll see you again in a few weeks!
As college decision season approaches for many, it is critical that students and their families understand the complexities of saving for college and financial aid. Over the next several weeks, FinanceSmartz will be releasing weekly posts focused on college, from Coverdell ESAs to Pell Grants, in our new College Special Series! Whether you are a student eagerly awaiting to hear back from colleges or a parent planning early for your young child, these posts will help prepare you for financial success in both the short- and long-term. Stay tuned for the first post of the series this Thursday!
Form 1040 is the main form used to file personal income tax returns with the Internal Revenue Service. Tax returns are normally due on April 15th. Tax returns must be filed by anyone who might owe income taxes – for a single person, the threshold for 2020 is income of more than $12,400. Dependents with unearned income may also have to file a tax return, and other special circumstances exist. While Form 1040 is the main form used to file personal income tax returns, there is a version of the form, 1040-SR, designed for taxpayers over the age of 65.
A W-2 is a form given by an employer to every employee who earned at least $600 in a year, or who had tax withheld. It lists wages paid to the employee, along with taxes withheld, and related information for an entire calendar year. The W-2 form is used to file an Income Tax return, and is normally provided by January 31st for the previous year. A copy is also provided by the employer to the Internal Revenue Service.
An IRA is an Individual Retirement Account, a tax favored account that allows savings for retirement. In return for the tax benefits, account owners are prohibited in most cases from using the funds prior to retirement.
A Savings Bond is a bond issued by the government which can be purchased by individuals. Savings Bonds are a safe investment with no risk of loss, but earn interest rates which are generally lower than available through other investments.
Savings Bonds have been a popular gift and investment for many years.
Their characteristics have changed over the years. In 2020 there are two types of Savings Bonds available:
The first type is the Series EE savings bond which is held in an account at the Treasury Department. Series EE savings bonds earn a fixed rate of interest based on purchase date. However, the value of the bond will double in 20 years, even if the interest rate is low. This means that If you hold the savings bond for exactly 20 years, your effective interest rate is approximately 3.5%.
The second type is the Series I savings bond, which can either be held in an account at the Treasury Department or issued as a paper bond. Series I savings bonds earn a fixed rate of interest based on purchase date and an amount tied to inflation which changes twice a year.
More information on these savings bonds can be found at: www.savingsbonds.gov
Stock Gifting has a long history, but has come into focus in 2020, due in part to COVID-19. The idea is that most gifts lose value and eventually end up as trash. Gifts of stock represent an investment who value has the potential to grow over time. Other benefits include motivating the recipient to learn about investing, and providing a platform to accumulate the value of future cash gifts.
Stock Gifting has become much easier due to the availability of fractional shares, which allow purchases to be made in dollar amounts rather than buying a whole number of stock at a fluctuating price. Stock gifting is supported by several companies and teaches the value of buy-and-hold investing. It is possible to obtain stock certificates which can be visually attractive, but doing so adds cost that could better be applied to the investment value.
Ventures in-vesting! 