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Crypto lender BlockFi filed for Chapter 11 bankruptcy Monday, about two weeks after the collapse of FTX.
Investor protections for crypto are different from those for more traditional holdings, such as stocks and bonds.
Crypto falls in a gray area of law and regulation, according to legal experts. Investors must hope they can recover any funds in bankruptcy court.

The BlockFi website on Nov. 17, 2022.
Gabby Jones/Bloomberg via Getty Images

Crypto firm BlockFi filed for bankruptcy Monday, the latest cryptocurrency domino to fall after the collapse of FTX two weeks ago threatened to destabilize companies in the broader crypto ecosystem.
BlockFi offers a cryptocurrency trading exchange and interest-bearing custodial service for cryptocurrencies. The distressed company — which had said it had “significant exposure” to FTX — said Monday it has more than 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.

The ongoing FTX fallout — and bankruptcies earlier this year for lenders Celsius Network and Voyager Digital — is teaching crypto investors a hard lesson about their protections relative to more traditional asset classes. The fate of their money now lies in legal proceedings that will likely take years to play out.

Cryptocurrencies such as bitcoin, ethereum and others in the digital-asset realm exist in a gray area of federal regulation, according to legal experts.
That means they largely escape the same oversight as holdings such as stocks and bonds. Further, federal money isn’t available to backstop customers in the same way it would be for those with holdings at a failed brokerage firm or bank.

How orange groves impact crypto protections

Aldo Pavan | The Image Bank | Getty Images

The reason largely hinges on a 1946 Supreme Court case about investors in Florida orange groves.
The justices who heard that case, SEC v. W.J. Howey Co., established the so-called Howey test to determine what constitutes a security, or “investment contract.” More on how the Howey test works can be found below.

Stocks are considered securities, which are regulated by the U.S. Securities and Exchange Commission.
Courts have used the Howey test to lasso some nontraditional investments — animal-breeding programs, railroads, mobile phones and internet-only enterprises, for example — under the “investment contracts” umbrella, thereby giving them the same protections and oversight as stock investors.
Here’s why this is important for crypto: It’s unclear in many cases if digital assets are an “investment contract” under the 76-year-old Howey test.
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Regulatory oversight is therefore somewhat ambiguous, said Richard Painter, a securities law professor at the University of Minnesota.
Experts have questioned whether it may be more appropriate to consider crypto a currency or a commodity, for example, governed by different federal regulators.
“It doesn’t make any sense to have all this turn on the Howey test in the 1940s-era case,” said Painter, a former chief White House ethics lawyer under President George W. Bush.
“It’s an invitation to disaster,” he said. “Somebody’s got to cover this.”
“We know what happens with unregulated markets — ever since the 1637 tulip bulbs [mania] in Holland,” added Painter, referring to an event widely regarded as the first documented case of a major financial bubble that bankrupted many investors.

Why the ‘security’ distinction matters

U.S. Supreme Court
Rudy Sulgan | The Image Bank | Getty Images

The Howey test has four parts to determine if something like bitcoin is an “investment contract.” A contract exists if each is true:

There’s an investment of money
in a common enterprise
in which the investor expects a profit, and
the profit is derived solely from the efforts of others.

Think of an investor who holds publicly traded stock, for example. The investor doesn’t do the work to generate the company’s profit, rather it is done by company employees and managers. For their part, the investor might reap profit in the form of dividends and/or a higher stock share price.
But crypto is different. It’s decentralized in many cases, meaning it may not be considered a “common enterprise,” said Daniel Gwen, business restructuring counsel at law firm Ropes & Gray. It’s also unclear if its intent is always to generate a profit, since some use it to transfer funds across borders or as a “store of value,” for example, Gwen said.
The 1946 Supreme Court case centered on the Howey Company, which cultivated orange groves and solicited investment from tourists staying at an adjoining hotel. An affiliate managed the grove on the tourists’ behalf. After the orange harvest, Howey allocated a share of net profits to each buyer. The transactions “clearly involve” investment contracts, the court ruled.  

It’s an invitation to disaster.

Richard Painter
securities law professor at the University of Minnesota

If crypto were also a clearly defined security, the SEC would be able to police companies not complying with securities laws, said Micah Hauptman, director of investor protection at the Consumer Federation of America, an advocacy group. Those enforcements may also have a deterrent effect on would-be bad actors, he said. There would be additional disclosures required for investors, among other protections.
“It shouldn’t make a difference to investors how these assets are regulated, but it does in reality,” Hauptman said of crypto.
The SEC has tried to assert its regulatory oversight in some cases. For example, the agency sued Ripple Labs and its officers in 2020 for failing to register the cryptocurrency XRP as a security offering. That case is ongoing.
“I don’t think you can fault regulators” for what happened at FTX, Sheila Bair, former chair of the Federal Deposit Insurance Corporation, told CNBC. “They’ve been wanting Congress to act because there’s not a lot of clarity, complete clarity, about what’s a security, what’s a commodity, what should be with the banking regulators.”

‘The law is all over the place’

Customers holding their crypto assets at FTX also don’t appear to get the financial protection afforded to defunct brokerage firms that sell stocks, bonds and other securities.
The Securities Investor Protection Corporation insures investors for up to $500,000 in the event a brokerage firm liquidates and their holdings are tied up in the insolvent firm. Let’s say a Lehman Brothers customer had owned shares of a publicly traded corporate stock when the firm went bankrupt. It would be SIPC’s aim to get shares back in investors’ hands as quickly as possible, Gwen said.
There’s a similar mechanism for bank customers, who are insured for up to $250,000 by the FDIC if a bank fails.
However, FTX customers likely don’t have SIPC protection, Gwen said.

For one, that protection applies to securities, meaning crypto’s ambiguity as a security or non-security may be a hindrance. FTX itself may not be classified as a brokerage, which deals with securities products. What’s more, the company is based outside the U.S., in the Bahamas, which SIPC doesn’t cover, Painter said.
“It does things similar to a broker-dealer,” Gwen said of FTX. “But the law is all over the place when it comes to [crypto].”
FTX, once valued at $32 billion, filed for Chapter 11 bankruptcy protection on Nov. 11. Customers with crypto holdings must hope they can recover some — if any — money in bankruptcy court.
That may be a difficult and lengthy process.
“Chapter 11 is not really designed to protect this circumstance, where you have an unclear digital asset being administered almost security-like, without the same framework,” Gwen said. “It doesn’t mean investors don’t have protections; they have different protections.”

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Medicare’s open enrollment period ends Dec. 7, with changes you make to your coverage taking effect Jan. 1.
Advantage Plans and Part D prescription drug plans make changes from year to year, which means it’s important to see if your current plan is still the most appropriate.
Roughly 1 in 3 Medicare beneficiaries do not check whether another plan would be a better fit than their current one.

Jose Luis Pelaez Inc | Digitalvision | Getty Images

In between eating leftover turkey and hunting for bargains amid holiday sales, be sure to review your Medicare coverage, if you haven’t already.
The program’s annual open enrollment period, which began Oct. 15 and ends Dec. 7, is when you can make changes, which will take effect Jan. 1. Although you aren’t required to take action — your current plan generally would renew automatically — experts recommend determining whether it still is the best fit.

“It’s important for people to make sure their providers are still participating in their plan for 2023 [and] their medications will be covered at the most cost-effective price possible,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans. 
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“There’s nothing worse than finding out on Jan. 1 that your medications will now be costing you $1,000 more per year,” Gavino said.
Despite how prevalent changes are to plans each year, most beneficiaries do not compare their current coverage with other available plans. Just 29% did in 2020, according to a recent study from the Kaiser Family Foundation.
“Even without a change made by their plan or a change in health status, beneficiaries may be able to find a plan that better meets their individual needs or lowers their out-of-pocket costs,” the study said.

For Medicare’s 64.5 million beneficiaries — 56.6 million of whom are age 65 or older — this current enrollment period is for making changes related to prescription drug plans (Part D) and Advantage Plans (Part C). Advantage Plans deliver Part A (hospital coverage) and Part B (outpatient care) and usually include Part D.
If you already are enrolled in an Advantage Plan or drug plan, you should have received a packet explaining changes to your coverage for 2023. This could include adjustments to monthly premiums, copays, deductibles, coinsurance or maximum out-of-pocket limit, or changes to drug coverage. Additionally, doctors and other health-care providers move on and off plans from year to year, as do pharmacies.
Be aware that while you can change your Advantage Plan between Jan. 1 and March 31 if you discover it’s not a good fit, that’s not the case for standalone Part D plans.

Advantage Plans are offering more benefits

If you shop for Advantage Plans, you may find they generally are offering more in the way of extra benefits, said Danielle Roberts, co-founder of insurance firm Boomer Benefits. Many plans also have no premium, although you would still be responsible for your Part B premium.
In addition to dental, vision and hearing or gym membership, extras could include things such as a credit — say, $200 or $400 per year — for over-the-counter medicines and other health-care supplies; a Part B premium “buyback,” meaning your plan refunds you a portion or all of your Part B premium, which is $164.90 for 2023; and transportation to and from doctor’s appointments or other providers.
However, while the added benefits can be appealing, it’s important to know that those extras can change from year to year, Roberts said. And, she said, you should make sure the plan meets your medical needs before considering additional benefits.

Here’s what’s new with Part D coverage

The Inflation Reduction Act, which became law in August, ushered in some changes to Part D coverage.
Starting Jan. 1, there will be a monthly $35 cap on cost-sharing for insulin under Part D; some plans may already offer a $35 cap. Part D deductibles also won’t apply to the covered insulin product. For beneficiaries who take insulin through a traditional pump, which falls under Part B, the benefit starts July 1.
Additionally, there will no longer be any cost-sharing for recommended inoculations under Part D beginning Jan. 1, including the shingles vaccine.

Other provisions from the new law that are intended to reduce Part D spending take effect in later years.
This includes eliminating an existing 5% coinsurance in the so-called catastrophic phase of coverage, in 2024, and capping beneficiaries’ annual out-of-pocket Part D spending at $2,000, in 2025. Currently, there is no out-of-pocket limit, regardless of whether you get your coverage as a standalone Part D option or through an Advantage Plan.
Medicare also will be able to start negotiating the price of some drugs beginning in 2026.

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Jensen Huang, CEO of Nvidia, shows the NVIDIA Volta GPU computing platform at his keynote address at CES in Las Vegas, January 7, 2018.
Rick Wilking | Reuters

Even though the holiday week ended on a positive note for stocks, more volatility is likely in the cards.
All eyes are on November’s upcoming payrolls report, due out Dec. 2. Further, the Federal Reserve’s Dec. 13-14 meeting looms ahead, and investors await the central bank’s next steps on its monetary policy campaign. There is still plenty of time for stocks to churn before the year ends.

This means investors need to shift their focus toward longer-term prospects instead of fixating on near-term gyrations in the market. See below for five stocks picked by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their previous performance.

Nvidia

Nvidia (NVDA) has been hurting from weakening demand for its chips from the gaming and data center end markets due to the macroeconomic headwinds and supply-chain issues.
However, after the company posted its quarterly results, Susquehanna analyst Christopher Rolland noticed that Nvidia is “getting back on track.” This prompted him to reiterate a buy rating on the stock and raise the price target to $185 from $180. (See Nvidia Dividend Date & History on TipRanks)
While elevated channel inventories are still a problem, Nvidia foresees them falling back to normal levels from the next quarter onward. Other than that, Rolland was fairly satisfied with the quarterly performance and trends. Nvidia’s gross margin guidance amid lower revenue run rate impressed the analyst, who said that this “may be indicative of significantly higher ASPs (average selling price) for both new gaming and data center products.”
The analyst said that of the four major end markets (auto, datacenter, professional visualization, and gaming), at least three are expected to grow at three times the rate of the overall semiconductor market.

Rolland is ranked 26th among more than 8,000 analysts tracked on TipRanks. His track record over the past year shows a success rate of 69% and average returns of 21.8% per rating.

Marvell Technology

Another of Rolland’s stock picks is semiconductor company Marvell Technology (MRVL), which is slated to post its third-quarter fiscal 2023 results on Dec. 1. Ahead of the print, the analyst identified several dampening factors that are expected to be a near-term sore point. Keeping that in mind, Rolland trimmed the price target to $75 from $90.
The company’s nearline HDD business is expected to have remained weak in the quarter, due to a large inventory build. Overall, the analyst expects Marvell to have had a slightly disappointing quarter, despite some tailwinds from the North American rollouts of 5G infrastructure. (See Marvell Stock Chart on TipRanks)
Looking beyond the quarter, Rolland sees several upsides to Marvell. “We believe the start of India’s 5G deployments could be a positive for the narrative (with revenue to come later in 2023). Marvell’s 5G products continue to ramp at both Samsung and Nokia (two large customers), as the networking businesses at both companies beat expectations,” the analyst said.
Rolland reiterated his buy rating on the company.

Costco

Costco (COST) operates an international chain of warehouse clubs that offer branded and private items from various product categories. Recently, in light of food inflation, slowdown, and other economic forces, Bank of America analyst Robert Ohmes analyzed the company’s prospects and emerged bullish.
“We expect high food inflation to drive continued share gains for the warehouse club channel (including Costco) given the strong value proposition and price positioning on overlapping SKUs vs. mass and traditional grocery,” said Ohmes. (See Costco Website Traffic on TipRanks)
The analyst pointed out that Costco churns out more than 20 new clubs a year. Further, he expects solid trends in customer traffic and membership renewal rates to continue. Even in the international markets, continued growth in same-store sales is a positive for the company
Ohmes is ranked at No. 854 among more than 8,000 analysts on TipRanks. The analyst has delivered profitable ratings 56% of the time, and each one has generated average returns of 8.3%.

Monday.com

Earlier this month, project management tool provider Monday.com (MNDY) delivered banner quarterly results, which buoyed the confidence of investors and analysts alike. Among the Monday.com bulls was Tigress Financial Partners analyst Ivan Feinseth, who reiterated a buy rating on the stock.
Feinseth noted that the company’s performance stands to gain from consistently strong customer adoption rates. Furthermore, Monday.com’s competitive advantage lies in its low-code/no-code Work OS. He also maintains that easy integration and user-friendliness of the platform will continue to attract significant customers and boost revenue growth. (See Monday.com Financial Statements on TipRanks)
“Ongoing innovation and growth will continue to drive MNDY’s already strong brand equity together with its high-margin SaaS (Software as a Service) subscription-based revenue model will drive an ongoing acceleration in Business Performance trends which will drive an increasing Return on Capital, further gains in Economic Profit, and long-term shareholder value creation,” said Feinseth.
He is ranked 232nd among more than 8,000 analysts on TipRanks. Feinseth has issued profitable ratings 60% of the time, and each has delivered 11.3% returns on average.

Disney

Entertainment company Disney (DIS) is another stock on Feinseth’s buy list. The analyst recently reiterated a buy rating and $177 price target on the stock, mainly encouraged by the return of former CEO Bob Iger, who is expected to drive “a return to creativity dominance.”
Moreover, the solid content roster is expected to drive the company’s growth. Feinseth is also upbeat about Disney’s ongoing investments in its theme park upgrades, new technology and ongoing content development, which he thinks will continue to drive the company’s performance. (See Walt Disney Hedge Fund Trading Activity on TipRanks)
“DIS will continue to drive increasing theme park attendance with ongoing park upgrades and introductions of new attractions; the ongoing leverage of its advanced reservation system is driving capacity optimization and greater revenue yield, and its Genie and Genie+ virtual park assistant significantly increase guest experiences,” said Feinseth.
The analyst highlights Disney’s strong balance sheet, cash flow generating capabilities and practical capital-allocating strategies. These are helping the company invest in content development, new theme park attractions and other growth-driving efforts.

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It’s been almost three years since those with federal student loans have had to make a payment, and the White House has now given them more time.
Here’s what borrowers need to know.

President Joe Biden and Secretary of Education Miguel Cardona.
The Washington Post | The Washington Post | Getty Images

It’s been almost three years since people with federal student loans have had to make a payment on their debt, and the Biden administration recently announced that borrowers have even more time.
In March 2020, when the coronavirus pandemic first hit the U.S. and crippled the economy, the U.S. Department of Education suspended federal student loan payments and the accrual of any interest, providing borrowers extra breathing room during an especially hard financial period.

Resuming the bills for more than 40 million Americans has proven to be a massive and tricky task, and the holiday on the payments has now spanned two presidencies and been extended eight times.
Even before the public health crisis, when the U.S. economy was enjoying one of its healthiest periods in history, problems plagued the federal student loan system, with about 25% — or more than 10 million borrowers — in delinquency or default.
Experts say hardship rates are likely to only increase with the setbacks of the pandemic, the current sharp rise in prices on everyday goods and the fact that borrowers have gotten used to a budget sans student loans.
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White House officials had hoped to ease the transition back into life with student loan payments by first forgiving a large swath of the debt.

Yet not long after President Joe Biden announced his plan to cancel up to $20,000 in student loans for millions of Americans, a number of conservative groups and Republican-backed states attacked the policy in the courts. Two of these lawsuits have been successful in at least temporarily halting the relief, and the Education Department closed its loan cancellation application portal this month.
With so much still up in the air, the Biden administration has pushed back the due date on student loan bills again.
“It would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement.
Here’s what borrowers need to know about getting more time.

So when exactly will payments resume?

It’s a little complicated.
With previous extensions of the payment pause, the Education Department provided one date for when student loan bills would resume.
This time, it left things a little more open-ended, saying that the bills will restart only 60 days after the litigation over its student loan forgiveness plan resolves and it’s able to start wiping out the debt.

Therefore, the soonest the bills could become due again would be late January, if the legal challenges clear up by the end of November, although that’s unlikely.
If the Biden administration is still defending its policy in the courts by the end of June or if it’s unable to move forward with forgiving student debt by then, it said, the payments will pick up at the end of August.
So borrowers have at least two more months without the bills and at most nine.

What if I was behind on my student loans?

The U.S. government has extraordinary collection powers on federal debts and it can seize borrowers’ tax refunds, wages and Social Security checks if they fall behind on their student loans.
During the extended payment pause, however, the Education Department is also ceasing all collection activity, it said.
Borrowers in default on their student loans should also look into the recently announced “Fresh Start” initiative, in which they’ll have the opportunity to return to a current status.

Should I still hold off on refinancing?

Higher education expert Mark Kantrowitz had previously recommended that, despite the chance of picking up a lower interest rate, federal student loan borrowers should refrain from refinancing their debt with a private lender while the Biden administration deliberated on how to move forward with forgiveness. Refinanced student loans wouldn’t qualify for the federal relief.
Now that borrowers know how much in loan cancellation is coming — assuming the president’s policy survives in the courts — borrowers may want to consider the option now, Kantrowitz said. With the Federal Reserve expected to continue raising interest rates, he added, you’re more likely to pick up a lower rate with a lender now than later.
Still, Kantrowitz added, it’s probably a small pool of borrowers for whom refinancing is wise.

It would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests.

Miguel Cardona
Secretary of the U.S. Department of Education

He said those include borrowers who don’t qualify for Biden’s forgiveness — the plan excludes anyone who earns more than $125,000 as an individual or $250,000 as a family — and those who owe more on their student loans than the Biden administration plans to cancel. Those borrowers may want to look at refinancing the portion of their debt over the relief amounts, Kantrowitz said.
Betsy Mayotte, president of The Institute of Student Loan Advisors, warned borrowers to first understand the federal protections they’re giving up before they refinance.
For example, the Education Department allows you to postpone your bills without interest accruing if you can prove economic hardship. The government also offers loan forgiveness programs for teachers and public servants.
“Refinancing can generate a lower interest rate than federal student loan rates,” Mayotte said. “But your rate doesn’t matter if you lose your job, have sudden medical expenses, can’t afford your payments and find that defaulting is your only option.”

What should I do with the extra cash during the pause?

Boy_anupong | Moment | Getty Images

With headlines warning of a possible recession and layoffs picking up, experts recommend that you try to salt away the money you’d usually put toward your student debt each month.
Certain banks and online savings accounts have been upping their interest rates, and it’s worth looking around for the best deal available. You’ll just want to make sure any account you put your savings in is FDIC-insured, meaning up to $250,000 of your deposit is protected from loss.
And while interest rates on federal student loans are at zero, it’s also a good time to make progress paying down more expensive debt, experts say. The average interest rate on credit cards is currently more than 19%.

Could it make sense to still pay my student loans?

If you have a healthy rainy-day fund and no credit card debt, it may make sense to continue paying down your student loans even during the break.
With interest temporarily suspended, any payments will go directly toward your debt’s principal, potentially shortening your repayment timeline, said Anna Helhoski, a student loan expert at NerdWallet.com.
“You could continue making payments each month by contacting your servicer, or save the money and make a lump sum payment on your highest-interest loan before interest accrues again when repayment restarts,” Helhoski said.

There’s a big caveat here, however. If you’re enrolled in an income-driven repayment plan or pursuing public service loan forgiveness, you don’t want to continue paying your loans.
That’s because months during the government’s payment pause still count as qualifying payments for those programs, and since they both result in forgiveness after a certain amount of time, any cash you throw at your loans during this period just reduces the amount you’ll eventually get excused.
One more possibility: If you find yourself in a financially comfortable position and it doesn’t make sense for you to continue paying down your student loans, you may want to donate the extra cash.
You can make sure an organization is reputable using tools such as the Better Business Bureau’s Wise Giving Alliance or Charity Navigator, Helhoski said. If the charity is registered as a 501(c)(3), you’ll even be eligible for a tax break.

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Finding the cash to cover the cost of an emergency is a big challenge for many individuals and families.
Though experts recommend building an emergency cash cushion, surveys consistently show this is a challenge for many.
Now, Congress may be poised to consider changes that would help make it easier for workers to set aside cash.

Thomas Barwick | Digitalvision | Getty Images

Many families struggle to come up with the cash when faced with an unexpected $400 expense.
That lack of emergency savings may force them to borrow money at high interest rates to pay for the surprise expense, putting their financial security at risk.

Now Congress has a window to address that issue by paving the way for new emergency savings plans in the lame duck session.
Three emergency savings proposals may be included in a legislative package known as Secure 2.0, which is set to amplify changes to the retirement system brought by the Secure Act in 2019.
“We’re on the cusp of a significant shift in how people save for emergencies in this country, thanks to public policy and private sector innovation,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center, during a recent web panel hosted by the Washington, D.C., think tank.
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The panel discussion coincided with an open letter from the Bipartisan Policy Center Action with 40 organizations to Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky., as well as House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif.

The letter called for the inclusion of three bills that would amplify emergency savings in the pending retirement package.
“We firmly believe emergency savings policy aligns with the goals of the U.S. retirement system and will help boost financial resiliency for American households,” they wrote.

Why emergency savings falls short

Anti-eviction banners are displayed on a rent-controlled building in Washington, D.C., on Aug. 9, 2020.
Eric Baradat | AFP | Getty Images

The Covid-19 pandemic was a stress test for many Americans’ finances.
As many parts of the economy shut down, many individuals and families found their incomes were reduced or eliminated altogether.
The federal government stepped in and sent unprecedented amounts of aid through three rounds of stimulus checks, enhanced federal unemployment benefits, direct monthly child tax credit payments to parents and other policies.
Yet the pandemic still led some workers to withdraw funds from their 401(k) or other retirement savings accounts, putting their long-term financial futures at risk.

Those that had at least $1,000 in emergency savings at the height of the pandemic were half as likely to withdraw from their retirement savings accounts, according to the Aspen Institute.
“As people face that crisis, you need that liquid savings to protect your long-term investments and make sure you have a secure retirement and build wealth,” Tim Shaw, associate director of policy at the Aspen Financial Security Program, said during the Bipartisan Policy Center panel.
Covid relief measures helped push the share of families who could cover an unexpected $400 expense with cash or an equivalent method to 68% in 2021, a 4-percentage point increase from 2020. It also marks the highest level since the Federal Reserve began the survey in 2013.
Still, 1 in 3 households would need to borrow money to cover a $400 emergency, which is still “far too many,” Shaw noted.

How 3 proposals may encourage savings

Image Source | Getty Images

Advocates are hoping three proposals that could help encourage emergency savings will be included in Secure 2.0.
That includes two bills proposed by Sens. Cory Booker, D-N.J., and Todd Young, R-Ind., as well as a third created by Sens. James Lankford, R-Okla., and Michael Bennet, D-Colorado.
One proposal from Booker and Young would enable employers to provide emergency savings accounts to workers in addition to their retirement savings accounts. Employees would be able to set aside up to $2,500 automatically that they could access at any time in case of an emergency.
The second proposal from Booker and Young would allow for separate standalone plans outside of retirement accounts, which would be “really important” for employees who don’t currently have retirement plans through their employer, Akabas noted.

A third, the Lankford-Bennet plan, would allow workers to take out up to $1,000 from their retirement accounts penalty-free in case of an emergency. Those withdrawals would only be allowed once per year; additional contributions would be required before making another withdrawal.
Chantel Sheaks, executive director of retirement policy at the U.S. Chamber of Commerce, said she has “fingers crossed” that all three proposals will make it into Secure 2.0 and that the legislation will pass.
“From an employer’s viewpoint, we need choice,” Sheaks said.
What may work for one employer may not work for another, she noted. The three proposals would allow for more options, including possibly encouraging employers who do not current have retirement plans to think about adopting them, Sheaks said.
Moreover, because hardship withdrawals can reduce workers’ retirement security, these emergency savings options can help prevent those stumbling blocks to building wealth.
“People have emergency needs today, and we can’t forget about those emergency needs,” Sheaks said. “We need to find a way to balance today’s needs with tomorrow’s needs.”
 

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There’s still time to trim your tax bill or boost your refund before the end of the year.
Depending on your 2022 income, you may consider deferring a holiday bonus, “bunching” medical expenses or a partial Roth conversion, experts say.

Charles Taylor | Getty Images

1. If your income is higher in 2022, defer your bonus into 2023

If you’ve had a strong year and expect lower earnings in 2023, you may try to defer a holiday bonus until the new year, experts say.
“It’s always exciting to reap the rewards of hard work by getting a year-end bonus,” said Lisa Greene-Lewis, a CPA and tax expert with TurboTax. “But sometimes that may bump you up into another tax bracket.”

However, by receiving the money in January, you may reduce 2022 income without waiting too long for the funds, assuming your company allows it, she said.

2. Prepay future medical expenses for a deduction

It’s not easy to claim the medical expense deduction. For 2022, there’s a tax break for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. But can only claim it if you itemize deductions.
Typically, you’ll itemize if deductions — including charitable gifts, medical expenses and more — exceed the standard deduction, which is $12,950 for single filers or $25,900 for married couples filing together for 2022.
While it’s difficult to plan for medical expenses, you’re more likely to maximize the deduction by “bunching” expenses for two years into one, explained certified financial planner Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.

For example, with multiple children in orthodontic braces, you may ask to prepay the remaining balance before year-end if you can afford it, she suggested. “The provider may also provide a discount for paying off everything sooner,” said Cheng, who’s also a member of CNBC’s Financial Advisor Council. 
Of course, you’ll need to project your adjusted gross income, total itemized deductions and tally your previous 2022 medical expenses first.

3. ‘Maximize your bracket’ with a partial Roth conversion

With the S&P 500 Index down around 15% for 2022, you may be eyeing a Roth individual retirement account conversion, which transfers pre-tax funds to a Roth IRA for future tax-free growth. The trade-off is you’ll owe upfront taxes on the converted amount.
The strategy may pay off when the market dips because you can buy more shares for the same dollar amount, and there’s a chance for tax savings on the converted portion.
However, depending on your income level, you may also consider a partial conversion annually, experts say.

“The bottom line is if you are in retirement or near retirement and your income is down, then you want to consider filling up enough to maximize your bracket,” said Thomas Scanlon, a CFP and CPA at Raymond James in Manchester, Connecticut. 
For example, if you’re already in the 24% bracket, it’s possible there’s still room for more income before triggering 32% on the excess amount, he said. 
Scanlon said partial Roth conversions work well for retirees who are “income light and asset heavy,” like someone who leaves the workforce with several years before they have to start taking required minimum distributions.

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Warren Buffett
Gerard Miller | CNBC

Warren Buffett donated more than $750 million in Berkshire Hathaway stock to four foundations associated with his family on Thanksgiving eve, and the legendary investor said the timing was no coincidence as this is his way of giving thanks to his children for their charitable work.
“I’ve got a personal pride in how my kids turned out,” Buffett told CNBC’s Becky Quick. “I feel good about the fact that they know I feel good about them. This is the ultimate endorsement in my kids, and it’s the ultimate statement that my kids don’t want to be dynastically wealthy.”

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The 92-year-old investor donated 1.5 million Class B shares of his conglomerate to the Susan Thompson Buffett Foundation, named for his first wife. He also gave 300,000 Class B shares apiece to the three foundations run by his children: the Sherwood Foundation, the Howard G. Buffett Foundation and the NoVo Foundation.
The recipients this time didn’t include the Bill & Melinda Gates Foundation. The “Oracle of Omaha” has vowed to give away his fortune over time and has been making annual donations to the same five charities since 2006.
In June, he gave 11 million Class B shares to the Gates Foundation, 1.1 million B shares to the Susan Thompson Buffett Foundation and 770,218 shares apiece to his children’s three foundations.

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The IRS on Tuesday warned taxpayers about the new $600 threshold for receiving Form 1099-K for third-party payments.
The change applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods.
“It’s going to be a new form for a lot of people,” said Adam Markowitz, vice president at Howard L Markowitz PA, CPA.

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The IRS on Tuesday shared tips for the upcoming tax season — including a reminder about the new $600 threshold for receiving Form 1099-K for third-party payments.
The change applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods, according to the IRS.

Before 2022, the federal Form 1099-K reporting threshold was for taxpayers with more than 200 transactions worth an aggregate above $20,000. However, Congress slashed the limit as part of the American Rescue Plan Act of 2021, and a single transaction over $600 may now trigger the form.
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Aimed at closing the tax gap — a top priority of the Biden administration — the provision is estimated to bring in $8.4 billion from fiscal year 2021 to 2031, according to the Joint Committee on Taxation.  
“It’s going to be a new form for a lot of people,” said Adam Markowitz, an enrolled agent and vice president at Howard L Markowitz PA, CPA in Windermere, Florida. “And the worst thing they can do is ignore it.”

Who may receive Form 1099-K for 2022

Companies file Form 1099-K, known as an “information return,” annually to report credit card and third-party payments, with a copy going to taxpayers and the IRS. 

Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, said the business income on your return must include what’s reported on Form 1099-K. Otherwise, you may trigger an automatic IRS notice or even an audit, he said.

The challenge with the new lower threshold amount of $600 for Form 1099-K is that personal payments and reimbursements could be incorrectly reported as taxable transactions.

Justin Miller
national director of wealth planning at Evercore Wealth Management

It’s possible you’ll receive Form 1099-K for transactions you don’t expect, such as reselling Taylor Swift tickets at a profit, for example, warned Justin Miller, national director of wealth planning at Evercore Wealth Management in San Francisco.
But selling items at a loss, such as used furniture, may be less clear.
“Obviously, if you sell a $2,000 couch for $1,000, there’s not taxable transaction there,” Markowitz said. “You don’t get a capital loss for it, and you don’t have a gain.”  

What happens if you get a 1099-K by mistake

Although the change aims to collect taxes on income, not personal transactions, experts say it’s possible some filers may receive Form 1099-K by mistake. 
“The challenge with the new lower threshold amount of $600 for Form 1099-K is that personal payments and reimbursements could be incorrectly reported as taxable transactions,” Miller said.

A frequently asked questions page from the IRS says you shouldn’t receive Form 1099-K for personal transfers, such as reimbursements for splitting meals, gifts or allowances.
However, if you receive the form for personal transactions, the agency says to contact the issuer for a correction. If the company doesn’t fix the error, you can attach an explanation to your tax return while reporting your income correctly, the IRS says.

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