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Problems with the new Free Application for Federal Student Aid have resulted in fewer students applying for college financial aid, which could cause enrollment to fall.
Given the current status of FAFSA submissions, the Department of Education is on track to see 2.8 million fewer FAFSAs submitted this year, a nearly 20% decline, according to higher education expert Mark Kantrowitz.
Studies show students are more likely to enroll in college when they have the financial resources to help them pay for it.

Fewer students are filling out the FAFSA

As of March 8, only 31% of the high school class of 2024 had completed the FAFSA, according to the National College Attainment Network, a 33% decline compared to a year ago.

“We are getting to a point where kids are just giving up on it,” said Anne Zinn, a school counselor at Norwich Free Academy in Norwich, Connecticut. “They are so extremely frustrated; they just don’t know what to do.”
“There’s also a psychological aspect of this,” Kantrowitz added. “Students have no confidence that they are going to get the financial aid they need to make college affordable and they are opting out.”
The FAFSA serves as the gateway to all federal aid money, including loans, work study and grants, the latter of which are the most desirable kinds of assistance because they typically do not need to be repaid.

Under the new aid formula, an additional 2.1 million students should be eligible for the maximum Pell Grant, according to the Department of Education.
However, given the slower pace of FAFSA applications being submitted, “the number of Pell Grant recipients will be about the same as last year, despite the new Pell Grant formula making it easier for students to qualify,” Kantrowitz said.
“The goal of FAFSA simplification was to increase the number of lower-income students applying. If we have fewer because of a bad rollout, it’s extremely problematic,” he added.

FAFSA completion paves the way to college

Submitting a FAFSA is one of the best predictors of whether a high school senior will go on to college, the National College Attainment Network found. Seniors who complete the FAFSA are 84% more likely to immediately enroll in college. 
However, in the past, many families mistakenly assumed they wouldn’t qualify for financial aid and didn’t even bother to apply. Others said a lengthy and overly complicated application was a major hurdle. Some said they just didn’t have enough information about it.
“I never planned to attend college because I knew my mother couldn’t afford it,” said Tikai Harvey, 19, a sophomore at Hunter College in New York. Harvey only learned about the FAFSA her senior year of high school, she said. Before then, “I didn’t know federal grants existed.”
In ordinary years, high school graduates missed out on billions in federal grants because they didn’t fill out the FAFSA. The plan to simplify the 2024-25 form was meant to improve college access.
This year’s rollout has not achieved that, Kantrowitz said. “This is a complete mess.”
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The Federal Reserve is not expected to announce a rate cut at the end of its two-day meeting this week.
For consumers, that means it won’t get any less expensive to carry credit card debt, or to borrow to buy a house, purchase a car or tap into home equity.

Chris Wattie | Reuters

Economists expect the Federal Reserve to leave interest rates unchanged at the end of its two-day meeting this week, even though many experts anticipate the central bank is preparing to start cutting rates in the months ahead.
In prepared remarks earlier this month, Federal Reserve Chair Jerome Powell said policymakers don’t want to ease up too quickly.

Powell noted that lowering rates rapidly risks losing the battle against inflation and likely having to raise rates further, while waiting too long poses danger to economic growth.
But in the meantime, consumers won’t see much relief from sky-high borrowing costs.
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In 2022 and the first half of 2023, the Fed raised rates 11 times, causing consumer borrowing rates to skyrocket while inflation remained elevated, and putting households under pressure.
With the combination of sustained inflation and higher interest rates, “many consumers are experiencing higher levels of economic stress compared to one year ago,” said Silvio Tavares, CEO of credit scoring company VantageScore.

The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

Even once the central bank does cut rates — which some now expect could happen in June — the pace that they trim is going to be much slower than the pace at which they hiked, according to Greg McBride, chief financial analyst at Bankrate.
“Interest rates took the elevator going up; they are going to take the stairs coming down,” he said.
Here’s a breakdown of where consumer rates stand now and where they may be headed:

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. Because of the central bank’s rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to nearly 21% today — an all-time high.
With most people feeling strained by higher prices, balances are higher and more cardholders are carrying debt from month to month compared with last year.
Annual percentage rates will start to come down when the Fed cuts rates, but even then they will only ease off extremely high levels. With only a few potential quarter-point cuts on deck, APRs would still be around 20% by the end of 2024, McBride said.
“If the Fed cuts rates twice by a quarter point, your credit card rate will fall by half a percent,” he said.

Mortgage rates

Fifteen- and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy. But anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
Rates are already significantly lower since hitting 8% in October. Now, the average rate for a 30-year, fixed-rate mortgage is around 7%, up from 4.4% when the Fed started raising rates in March 2022 and 3.27% at the end of 2021, according to Bankrate.
“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” said Sam Khater, Freddie Mac’s chief economist. “In this environment, there is a good possibility that rates will stay higher for a longer period of time.”

Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate, and those rates remain high.
“The reality of it is, a lot of borrowers are paying double-digit interest rates on those right now,” McBride said. “That is not a low cost of borrowing and that’s not going to change.”

Auto loans

Even though auto loans are fixed, payments are getting bigger because car prices have been rising along with the interest rates on new loans, resulting in less affordable monthly payments. 
The average rate on a five-year new car loan is now more than 7%, up from 4% when the Fed started raising rates, according to Edmunds. However, competition between lenders and more incentives in the market have started to take some of the edge off the cost of buying a car lately, said Ivan Drury, Edmunds’ director of insights.
Once the Fed cuts rates, “that gives people a little more breathing room,” Drury said. “Last year was ugly all around. At least there’s an upside this year.”

Federal student loans

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by the Fed’s moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are already paying more in interest. How much more, however, varies with the benchmark.
For those struggling with existing debt, there are ways federal borrowers can reduce their burden, including income-based plans with $0 monthly payments and economic hardship and unemployment deferments. 
Private loan borrowers have fewer options for relief — although some could consider refinancing once rates start to come down, and those with better credit may already qualify for a lower rate.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
As a result, top-yielding online savings account rates have made significant moves and are now paying more than 5% — above the rate of inflation, which is a rare win for anyone building up an emergency savings account, McBride said.
Since those rates have likely maxed out, this is the time to lock in certificates of deposit, especially maturities longer than one year, he advised. “There’s no incentive to hold out for something better because that’s not the way the wind is blowing.”
Currently, one-year CDs are averaging 1.73%, but top-yielding CD rates pay over 5%, as good as or better than a high-yield savings account.

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The American Rescue Plan Act of 2021 made student loan forgiveness tax-free until Dec. 31, 2025.
President Joe Biden wants to make that provision permanent.
Student loan forgiveness first became tax-free at the federal level in March 2021 due to a provision included in the $1.9 trillion federal Covid-19 stimulus package that Biden signed into law.

U.S. President Joe Biden speaks at the Pieper-Hillside Boys & Girls Club in Milwaukee, Wisconsin, on March 13, 2024.
Sara Stathas | Bloomberg | Getty Images

How student loan forgiveness used to be taxed

Before that Covid-era change, any student loan debt canceled by the government was considered taxable and levied at the borrower’s normal income tax rate.
The federal tax bill could be hefty.
According to a rough estimate by higher education expert Mark Kantrowitz, under previous tax rules, a borrower with a remaining balance of $10,000 after 20 or 25 years of payments could have to write the IRS a check for $1,200, assuming they’re single and have an income less than $35,000. Yet, depending on a borrowers’ circumstances, their federal tax bill could be as high as $15,400, Kantrowitz said.
Borrowers can also owe state taxes on the forgiven debt.

‘Replacing education debt with tax debt’

Many student loan borrowers who get forgiveness aren’t able to afford a tax bill, Kantrowitz said.
“These borrowers have had low income for decades and are unlikely to have any assets,” he said. “The tax liability might be as much as half of their annual income, or more, on top of their current tax liability.”
If borrowers sign up for a payment plan with the IRS, they’re merely “replacing education debt with tax debt,” Kantrowitz said.
The millions of borrowers enrolled in income-driven repayment plans would be most affected by ending taxation of forgivable education debt. These plans, which cap a borrowers’ monthly bill at a share of their discretionary income, lead to debt erasure after 10 to 25 years of payments. There are currently four different plans, each with different rules.
Other student debt forgiveness plans, including a popular one for public servants and another that cancels the debt for those with serious disabilities, are already nontaxable.

The tax rules around forgivable student debt could become especially important in the coming months as the Biden administration rolls out its revised student loan forgiveness plan, which has become known as Biden’s “Plan B.”
The Supreme Court struck down the administration’s first attempt to forgive student debt in June.
Regardless of the federal policy, it’s possible a borrower could still face state taxes on their forgiven education loans.

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While spring is known to be the season that kicks off the housing market, events from recent years have changed the trends, experts say.
While housing supply is already beginning to recover, a seller may want to wait for June.
In 2023, homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home, according to a new Zillow analysis.

Sturti | E+ | Getty Images

Spring, the season when home buying and selling activity kicks off, is around the corner. 
Available housing supply is already rebounding: The number of new listings jumped 14.8% from a year ago, the largest annual gain since May 2021, according to new data from Redfin, a real estate site.

Buyers are typically looking to land a new home before their children’s new school year while a seller’s house benefits from the fresh flowers and renewed greenery post-winter. 
“It’s sort of an ideal time for both buyers and for sellers, and that’s why we just see a lot more activity that time of year,” said Amanda Pendleton, a home trends expert at Zillow Group.
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However, sellers might benefit from waiting until June to put up their property for sale.
In 2023, homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home, according to a new Zillow analysis.

“We’ve learned that real estate cycles don’t always happen [at this] time of year,” said Melissa Cohn, regional vice president at William Raveis Mortgage.

Spring market was ‘flipped on its head’

The typical spring home shopping season has been “flipped on its head” due to an unusual market over the past four years, Pendleton said.
Trends started shifting when the country locked down in March 2020 at the start of the Covid-19 pandemic: “There was no market that year,” Cohn said.
Throughout 2021, buyers were purchasing homes no matter the month or season, given ultra-low mortgage rates and flexible remote-work policies that led many consumers to relocate. Then when March 2022 came around, the market stalled as mortgage rates began to rapidly increase, Pendleton explained.
While buyers were still holding back last year, there was a slight return to seasonal behaviors, she said.
While some experts may see a continued trend toward normalization, “the good old-fashioned spring selling season” hasn’t been seen in several years, Cohn said.
“I think people have become sort of more year-round in terms of their attitude towards real estate,” she added.

Rate cuts could ‘ignite a summer selling season’

In fact, while there may be more buyers and sellers in the coming weeks, a second surge is anticipated in the summer — an “extended home shopping season,” Pendleton said.
With the Federal Reserve expected to begin cutting rates as soon as the summer, there could be a renewed surge in buyer demand, experts say.
“People are hoping the first rate cut will be at the beginning of June. That hopefully will ignite a summer selling season,” Cohn said. “The direction of mortgage rates over the course of the next two years is probably a downward one.”

However, when mortgage rates begin to come down, buyer demand will rise, Pendleton said.
“We could see a bit of a bump in terms of home prices with that added competition,” she added.
Meanwhile, home prices are still elevated.
The median U.S. home sale price is $412,778, up 6.6% from a year ago, according to Redfin data, which is not seasonally adjusted. The recent boost in supply isn’t enough to meet the pent-up demand in the market, according to Redfin.
Yet if you can afford to buy a property now, it may be smart to do so and refinance later. That allows you get in and out of the real estate market, Cohn said, “before the mad rush happens and rates really start to come down.” More

Women and Wealth Events
Your Money

After a spouse dies, the survivor may face higher future taxes when switching to single filer for federal taxes.
But you can minimize the possible tax hit with advanced planning, such as Roth individual retirement account conversions, account ownership and beneficiaries.

Jessie Casson | Digitalvision | Getty Images

It’s hard to lose a spouse, and a costly surprise makes it even more difficult, especially for older women — higher taxes. But financial experts say there are several ways to prepare.
In 2022, there was a 5.4-year life expectancy gap between U.S. sexes, according to data from the Centers for Disease Control and Prevention. Life expectancy at birth was 74.8 years for males and 80.2 years for females. 

The gap often leads to a “survivor’s penalty” for older married women, which can trigger higher future taxes, certified financial planner Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts, previously told CNBC.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

‘The biggest shock’ for widows

The year a spouse dies, the survivor can file taxes jointly with their deceased spouse, known as “married filing jointly,” unless they remarry before the end of the tax year.
After that, many older survivors file taxes alone with the “single” filing status, which may include higher marginal tax rates, due to a smaller standard deduction and tax brackets, depending on their situation.

For 2024, the standard deduction for married couples is $29,200, whereas single filers can only claim $14,600. (Rates use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.)
Higher taxes can be “the biggest shock” for widows — and it may be even worse once individual tax provisions sunset from former President Donald Trump’s signature legislation, George Gagliardi, a CFP and founder of Coromandel Wealth Management in Lexington, Massachusetts, previously told CNBC.

Before 2018, the individual brackets were 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. But through 2025, five of these brackets are lower, at 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Typically, the surviving spouse inherits the deceased spouse’s individual retirement accounts, and so-called required minimum distributions are about the same. But the surviving spouse now faces higher tax brackets, Gagliardi said.
“The larger the IRAs, the bigger the tax problem,” he said.

When to use partial Roth conversions

Some surviving spouses may face higher future taxes, but it’s important to run tax projections before making changes to the financial plan, experts say.
Spouses may consider partial Roth IRA conversions, which transfers part of pretax or nondeductible IRA funds to a Roth IRA for future tax-free growth, Jastrem said.

This is often best done over a number of years to minimize the overall taxes paid for the Roth conversions.

George Gagliardi
Founder of Coromandel Wealth Management

The couple will owe upfront taxes on the converted amount but may save money with more favorable tax rates. “This is often best done over a number of years to minimize the overall taxes paid for the Roth conversions,” Gagliardi said.

Check investment accounts

It’s always important to keep account ownership and beneficiaries updated, and failing to plan could be costly for the surviving spouse, Jastrem said.
Typically, investors incur capital gains based on the difference between an asset’s sales price and “basis,” or original cost. But when a spouse inherits assets, they receive what’s known as a “step-up in basis,” meaning the asset’s value on the date of death becomes the new basis.

A missed step-up opportunity could mean higher capital gains taxes for the survivor.

Edward Jastrem
Chief planning officer at Heritage Financial Services

That’s why it’s important to know which spouse owns each asset, especially investments that may be “highly appreciated,” Jastrem said. “A missed step-up opportunity could mean higher capital gains taxes for the survivor.”

Reduce taxes on IRA distributions

If the surviving spouse expects to have enough savings and income for the remainder of their life, the couple may also consider beneficiaries other than the spouse, such as children or grandchildren, for tax-deferred IRAs, Gagliardi said.
“If planned correctly, it can reduce the overall taxes paid on the IRA distributions,” he said. But nonspouse beneficiaries need to know the withdrawal rules for inherited IRAs.
Before the Secure Act of 2019, heirs could “stretch” IRA withdrawals over their lifetime, which reduced year-to-year tax liability. But certain heirs now have a shortened timeline due to changes in required minimum distribution rules. More

Everyone from President Joe Biden to Cookie Monster is taking a stand against shrinkflation.
One legislative proposal aims to curb the practice of downsizing consumer products.
In the meantime, there are steps consumers can take to spot the phenomenon and reduce their grocery bills.

Pixelseffect | E+ | Getty Images

Some grocery store products are providing less for your money. And everyone from President Joe Biden to Cookie Monster has noticed.
Blame shrinkflation. The term — which is increasingly used in conversation — refers to products becoming smaller in size, weight or quantity as their prices stay the same or even increase.

Biden took companies to task for shrinking sports drinks and ice cream cartons and providing fewer chips in snack bags, in a pre-Super Bowl video posted on social media.
At the State of the Union, he again took a stand against shrinkflation, complaining that Snickers bars have become smaller.
Mars, the company that makes Snickers, denies the allegation. “The size of Snickers singles and share bars in the U.S. hasn’t been reduced,” a spokesperson for the company said in a statement.

In a more lighthearted exchange, when Cookie Monster posted “Me hate shrinkflation!” on X earlier this month, the White House responded, “C is for consumers getting ripped off.”
“President Biden is calling on companies to put a stop to shrinkflation,” the White House said.

The president has called for a bill to be passed that would give the Federal Trade Commission the authority to put regulations into effect to curb shrinkflation. The proposal would also make it possible for the FTC and state attorneys general to engage in civil actions against companies that engage in the practice.

Where consumers may see shrinkflation

For now, it’s up to consumers to spot the changes companies may make to their products.
Certain products tend to be more susceptible to charges of shrinkflation, according to Bureau of Labor Statistics data cited in a recent Senate report.
Household paper products had the largest measured price increase change due to shrinkflation from January 2019 to October 2023, with a 10.3% increase.
Other categories that saw notable changes in that time frame include snacks, which increased by 9.8%; household-cleaning products, up 7.3%; coffee, 7.2%; candy and chewing gum and ice cream and related products, 7%.
Noticing the changes requires having a keen eye and diligently paying attention, according to Mara Weinraub, senior lifestyle editor of groceries at food website The Kitchn.
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It can be easier to track those changes if you typically buy your groceries online or if you belong to a grocery store’s loyalty program. Some families even track their grocery store shopping by hand, Weinraub said.
If you’re watching for changes, you’re more likely to spot when a bag of popcorn shrinks from 5 ounces to 4.5 ounces, she said.
Shrinkflation isn’t necessarily new. But there are reasons why consumers are paying more attention to it now, Weinraub said. Social media makes it easier to share experiences with downsized products. Meanwhile, companies are generally posting profits while engaging in this practice, she said.
“There’s a layer of deception that they feel like, ‘Oh, this is something that companies are trying to do under the radar without us noticing,'” Weinraub said.

Why critics say shrinkflation is the wrong focus

While shrinkflation is now under the political spotlight, not all experts agree the emphasis is correctly placed.
Inflation peaked at 40-year highs in 2022. While the rate of inflation has come down, it is still higher than the Federal Reserve’s target.
The Bureau of Labor Statistics tracks changes in the sizes of consumer products in order to accurately capture the changes in prices for goods and services in the consumer price index.
While consumers may notice shrinkflation at the grocery store, it has a very small impact on the overall inflation picture they face, the Bureau of Labor Statistics said in 2023 article.

Shrinkflation is rarer than politicians are depicting and not as influential on consumers’ lives, argues economist Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University.
“Ultimately, consumers’ lives are harder because of inflation,” de Rugy said.
Notably, the categories most affected, such as snack products, are areas where consumers may refrain from purchases or substitute other goods, she said.
Most economists are not paying close attention to shrinkflation, contending its effects are eventually absorbed in inflation data.
But “I understand how with the average person it would frustrate and annoy them,” said David Doyle, head of economics at Macquarie.

How to be a smarter shopper at the grocery store

Customers shop at a Costco store on August 31, 2023 in Novato, California.
Justin Sullivan | Getty Images News | Getty Images

While consumers cannot control the changes companies make to grocery store products, they can take steps to be more mindful of how much they are spending.
Switching to a different brand may be one way to save, according to The Kitchn’s Weinraub, particularly by opting for store brands. Many stores are expanding their private label lines, which are generally cheaper than brand names, she said.
Taking the time to do some comparison shopping can also help, Weinraub said.
One staff writer at The Kitchn experimented by shopping in person at the grocery store for one month and then buying exclusively online for another month. She was shocked when she compared her receipts, discovering she spent over twice as much in person, Weinraub said.
Avoiding those in-person impulse purchases may help you save more than you think, she said.
Other shoppers have switched retailers and found that change “literally saved them hundreds of dollars,” Weinraub said.
“These strategies become increasingly important, as the prices continue to either maintain or creep up, or you seem to be getting less for the same amount of money,” she said.
“You do need to get more creative to stretch your dollar further.” More

In this photo illustration, the CrowdStrike Holdings, Inc. logo is displayed on a smartphone screen. 
Rafael Henrique | SOPA Images | Lightrocket | Getty Images

Investors’ worries about the prospect of higher-for-longer interest rates have made a comeback, pulling the major averages lower this past week.
Even as markets seem turbulent for now, it’s key for investors to keep a long-term focus and to find stocks that can offer attractive returns for years to come.

With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

CrowdStrike

This week’s first stock pick is cybersecurity provider CrowdStrike (CRWD). The company recently impressed investors with strong quarterly results and upbeat guidance. It also announced that it would acquire Flow Security, which provides cloud data runtime security solutions.  
Mizuho analyst Gregg Moskowitz highlighted that CrowdStrike is experiencing solid traction for its Falcon Cloud Security, Identity and next-gen LogScale SIEM (security information and event management) offerings, with management disclosing that these products collectively contributed more than $850 million to annual recurring revenue.
The analyst also noted that the company closed several large transactions in the fourth quarter, including more than 250 deals with a value of greater than $1 million. Additionally, deal volume surged 30% year over year across all customer cohorts.
Explaining his bullish stance, Moskowitz said, “CRWD’s cloud platform remains very differentiated, its GTM [go-to-market] is unrivaled,” and the company is witnessing more success beyond the traditional endpoint security markets.

The analyst views CrowdStrike as a generative artificial intelligence beneficiary. Moskowitz reiterated a buy rating on CRWD stock and raised the price target to $390 from $360.
Moskowitz ranks No. 132 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, with each delivering an average return of 16.5%. (See CrowdStrike Ownership Structure on TipRanks) 

Nike

We move to athletic footwear and apparel maker Nike (NKE). Earlier this month, Guggenheim analyst Robert Drbul reiterated a buy rating on Nike stock with a price target of $130, adding it as a “best idea.” The analyst thinks that the pullback in the stock — which is down more than 8% in 2024 — offers an attractive entry point with a favorable risk/reward profile.
“We believe Nike is laying the groundwork for impactful launches of new product (led by basketball, but also running) to deliver an acceleration in top line growth in 2H24 and into 2025,” said Drbul.
The analyst noted the company has been increasing its focus on the highly competitive running category after losing ground over the past few years. He anticipates that the category’s growth will be supported by an array of new launches, including the Pegasus 41.
Drbul also expects the Nike brand to be highly visible at the upcoming 2024 Summer Olympics. Further, he thinks that the Jordan brand continues to be strong and that it presents a large opportunity for the company in the international, women’s and kids’ segments. He highlighted that the Jordan brand is on the path to emerge as the second-largest brand in North America.
Additionally, the analyst sees the possibility of gross margin expansion, with higher prices, favorable ocean freight rates and supply chain improvements more than offsetting the impact of increased product costs.
Drbul holds the 565th position among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, with each delivering an average return of 7.9%. (See Nike Stock Buybacks on TipRanks) 

BJ’s Wholesale Club

Warehouse chain BJ’s Wholesale Club (BJ) recently reported mixed results for the fourth quarter. The company’s earnings surpassed analysts’ consensus estimate, but revenue, which grew 8.7% year over year, fell short of expectations.
Nonetheless, Baird analyst Peter Benedict was impressed with the company’s performance. He reiterated a buy rating on BJ stock and increased the price target to $90 from $80. The analyst noted that the company delivered encouraging top-line key performance indicators, including traffic and units, even as disinflation continued to weigh on the average basket size.
The analyst thinks that BJ’s is making good progress in transforming its general merchandise business through various efforts, including enhancing its assortment and product presentation and ramping up its marketing efforts. Interestingly, general merchandise comps are expected to outpace grocery comps in FY24.
Benedict also highlighted BJ’s solid real estate pipeline and its plan to open 12 clubs this year. Further, he noticed the retailer’s healthy membership trends, with membership fee income increasing 6.5% in the quarter and the tenured renewal rate remaining strong at 90%.  
“With a healthy balance sheet and still-reasonable valuation, we continue to highlight BJ as an attractive long-duration mid-cap staple GARP [growth at a reasonable price] idea,” the analyst said.    
Benedict ranks No. 74 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 69% of the time, with each delivering an average return of 15.2%. (See BJ’s Wholesale Technical Analysis on TipRanks)  More

Smart Tax Planning

Some tax professionals are bracing for more crypto scrutiny as the IRS beefs up digital asset service, reporting, compliance and enforcement programs.
Experts cover how to answer the “digital assets” question on your return, calculate crypto taxes and handle reporting.
When you trade digital currency or sell it at a profit, it may be subject to capital gains or regular income taxes, depending on the “holding period” or how long you owned the asset.

Chesnot | Getty Images

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Whether you’re a longtime crypto investor or recently purchased digital assets, here are some key things to know from crypto tax experts. 

How to answer Form 1040 ‘digital assets’ question

Cryptocurrency has become a priority area for the IRS, and the agency shared guidance in January about reporting digital currency this tax season.
Since tax year 2019, the IRS has collected crypto data on tax returns with different versions of a yes-or-no question. For 2023, there’s a “digital assets” question on the front page of Form 1040, along with returns for estates and trusts, partnerships, corporations and S corporations.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

However, many crypto investors don’t realize the term “digital assets,” which includes cryptocurrency, stablecoins, nonfungible tokens and more, applies to them, said enrolled agent Matt Metras, owner of MDM Financial Services. 

For 2023, you must answer “yes” if you sold crypto; traded one coin for another; or received digital currency as a payment, reward or award, according to Form 1040 instructions. You could answer “no” if you bought crypto with U.S. dollars and still hold the asset.

Yes-or-no questions are quite powerful.

Andrew Gordon
President of Gordon Law Group

“Yes-or-no questions are quite powerful,” said Andrew Gordon, tax attorney, certified public accountant and president of Gordon Law Group.
If you have crypto profits or income and select “no” for the digital assets question, the IRS could argue there’s “willfulness” in intentionally violating the law, Gordon said.
However, the 2023 digital assets question does not apply to bitcoin futures ETFs or spot bitcoin ETFs, he said.

How to calculate crypto taxes

When you trade digital currency or sell it at a profit, it may be subject to capital gains or regular income taxes, depending on the “holding period” or how long you owned the asset. 
“They’re treated the same as stocks or other property,” and the gain is the difference between your “basis” or purchase price and the value when you sell or exchange the asset, Gordon said. 
If you hold crypto for more than one year, you’ll qualify for long-term capital gains of 0%, 15% or 20%, depending on your taxable income. By contrast, short-term capital gains or regular income taxes apply to assets owned for one year or less.

Both brackets use “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
For higher earners, selling crypto after one year could “cut your rate in half,” which is why tracking your purchase date is so important, Gordon said.

How crypto tax reporting works

Many investors rely on tax forms to file returns every year. But it’s harder for crypto investors without reliable reporting, experts say. 
For 2023, you may receive Form 1099-MISC for rewards or income, Form 1099-B for transactions or no forms at all, depending on the exchange.
Plus, if you receive crypto tax forms, there can be basis reporting errors if you’ve moved currency from one exchange to another.
The U.S. Department of the Treasury and IRS released proposed regulations, including a standardized Form 1099-DA for digital asset reporting, for transactions on or after Jan. 1, 2025.
In the meantime, crypto investors should report activity based on personal record-keeping, which can be challenging with a high volume of activity, Metras said.
“Once you have more than five transactions, trying to do it yourself in an Excel spreadsheet becomes overwhelming,” he said. More