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    This is the ‘sweet spot’ for Roth individual retirement account conversions, expert says

    If you’re eyeing a Roth individual retirement account conversion, you could save on taxes by leveraging a “sweet spot,” according to experts.
    Converting early in retirement while your income is lower could lower your upfront tax bill.
    But you need to be mindful of income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums.

    Filadendron | E+ | Getty Images

    If you’re weighing a Roth individual retirement account conversion, you could save on taxes by leveraging a limited window of time, experts say.
    Roth conversions transfer pretax or nondeductible IRA money to a Roth IRA, which kickstarts future tax-free growth. The trade-off is upfront taxes due on the converted balance.

    The decision to convert a pretax balance hinges on several factors. But converting early in retirement — while your income is lower — could reduce your upfront tax bill.
    After you stop working, but before you start required withdrawals from retirement accounts, is “the sweet spot” for Roth conversions, according to JoAnn May, a Berwyn, Illinois-based certified financial planner at Forest Asset Management. She is also a certified public accountant.
    More from Personal Finance:More home sellers are paying capital gains taxes — how to reduce your billHow to avoid getting ‘hammered’ on inherited individual retirement account taxesIRS waives mandatory withdrawals from certain inherited IRAs — again
    If your income drops after retiring, “there are some nice years in there for conversions,” May said.
    Plus, many investors want to leverage lower income tax brackets through 2025 before provisions could sunset from former President Donald Trump’s signature tax overhaul, she said.

    After a Roth conversion, you’ll owe regular income taxes on the converted amount. But your bracket depends on that year’s taxable income.

    Roth conversions can reduce your taxable retirement balance subject to future required minimum distributions. Roth accounts are not subject to RMDs.
    A Roth conversion could also eliminate taxes for heirs who later inherit the account. Since 2020, most adult children must deplete inherited accounts within 10 years, known as the “10-year rule,” which can trigger tax issues during peak earning years.  

    How Roth conversions affect Medicare premiums

    Since Roth conversions can boost income, it can also affect income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums, May said.
    Your IRMAA is based on so-called “modified adjusted gross income,” or MAGI, which is your adjusted gross income plus tax-exempt interest — and there’s a two-year lookback.
    “That’s a big piece,” said Ashton Lawrence, CFP and director at Mariner Wealth Advisors in Greenville, South Carolina. “No one likes paying excess premiums.”

    The standard monthly Medicare Part B premium is $174.70 in 2024. But that could be higher with a 2022 MAGI above $103,000 for individuals or $206,000 for married couples filing jointly.  
    MAGI limits are a cliff, and income from a Roth conversion could easily bump you into the next bracket, Lawrence warned.
    “The last thing you want is to peak right over that bracket by $1,” he said. “Now your Medicare premiums have just jumped up substantially.”

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    Interest rates on federal student loans may increase by 1 percentage point: ‘A fairly big jump,’ expert says

    The U.S. Department of Education sets annual interest rates on federal student loans once a year.
    The percentage is based on the 10-year Treasury note, which has been on the rise while the Federal Reserve has kept interest rates high until inflation comes down.
    Federal student loan rates may rise by about 1 percentage point in the 2024-2025 academic year, according to one estimate.

    Morsa Images | Digitalvision | Getty Images

    As a result, federal student loan rates may increase in the 2024-2025 academic year, according to an estimate by higher education expert Mark Kantrowitz. The rate could go up by 1 percentage point.
    “This is a fairly big jump,” Kantrowitz said.
    Here’s what borrowers need to know.

    What will the new rates be?

    Who is affected? 

    All federal education loans issued on or after July 1, 2024, will be subject to the new rates.
    Sorry, families: You can’t try to evade the rate increase by borrowing ahead of that deadline. Loans for the 2024-25 academic year must be taken out after July 1.

    Don’t worry about loans you’ve taken out for previous academic years: Most federal student loan rates are fixed, meaning the rates on those existing loans won’t change.
    The rate changes apply only to federal student loans. Private loans come with their own — often higher — interest rates.

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    Writing your will is ‘not just a question about finances,’ expert says. Here’s why it’s a crucial task

    About one-third, or 34%, of people have a will, according to a study by the Center for Retirement Research at Boston College.
    About 44% of those who don’t have one say they are procrastinating.
    While cumbersome, a will can help streamline the inheritance process for your loved ones.

    Shapecharge | E+ | Getty Images

    Contemplating your death may not warrant a spot at the top of your priority list — but writing your will should.
    About one-third, or 34%, of people recently surveyed have a will, according to the results of a study from the Center for Retirement Research at Boston College.

    Of those who don’t have a will, 44% of respondents said the main reason involves procrastination, according to the results of the survey, which polled 3,047 people aged 25 and up in April 2023.
    While setting up your will can be a cumbersome task, it’s important because “it’s not just a question about finances,” said Gal Wettstein, a senior research economist at the Center for Retirement Research.
    More from Personal Finance:The 30-year fixed-rate mortgage is a uniquely American constructHow to reduce taxes on your inherited individual retirement accountThe great wealth transfer: Why millennials, Gen Z may not inherit much
    A will can streamline the inheritance process by making sure your wishes are conveyed and your assets are directed to the people and entities of your choice, especially if your state’s intestacy laws do not fit your needs, experts say.
    “This is a cornerstone of financial planning,” said Clifford Cornell, a certified financial planner and an associate financial advisor at Bone Fide Wealth in New York.

    ‘It’s already such an arduous process’

    About 79.9% of people said they intend to write a will at some point, according to the Center for Retirement Research report.
    Respondents were also asked if they would take advantage of a bank offer to write their will at the same time as signing a mortgage, keeping in mind that they would receive free legal and financial advice throughout the process. Only 71% said yes, according to the results of the study. If the bank were to throw a $500 incentive on top of that aid, 75.6% said they would do it.
    Researchers believed it would be opportunistic to draft a will while applying for a mortgage because people are already doing a lot of the work they need: filling out forms, signing documents and taking stock of their assets, Wettstein said.
    However, survey respondents saw that workload as a detriment.
    “It’s already such an arduous process that they don’t want to add any more red tape,” he said.
    The paperwork isn’t the only reason people fail to establish an estate plan.
    About 40%, of U.S. adults feel they do not have enough assets to prepare an estate plan or a will, a 21% jump compared with 2022, according to Caring.com’s 2024 Wills and Estate Planning Study.
    That’s a misconception.
    “Wills and estate planning are essential for everyone, not just the wealthy,” Patrick Hicks, general counsel of Trust & Will, a digital estate planning and probate platform, said in the Caring.com report.
    The Caring.com survey polled 2,481 U.S. adults aged 18 and older in December.

    Not having the proper estate planning documents in place can put your loved ones in a difficult situation in a catastrophic event, Cornell explained.
    Without a will in place, state intestacy laws determine who gets what. Dying intestate can also create challenges, with the court left to decide on a guardian for minor children or whether to recognize a domestic partner’s ability to inherit.
    “If something ever happens to you, it’s going to be an incredibly stressful time for your loved ones as it is,” Cornell said. “It’s great form to have these documents in place.”

    ‘A great way to get started’

    If you have yet to begin a formal estate plan, “a great way to get started” is by naming beneficiaries in certain retirement accounts, such as 401(k) plans, Cornell said.
    You can also name beneficiaries for life insurance policies, certain bank accounts and other assets.
    When you designate a beneficiary for such assets, they pass according to those instructions rather than what’s in your will. And it takes just a few minutes to add or update a beneficiary.
    Make sure to review those periodically, especially after a life change such as a marriage, divorce or family birth or death.
    For major assets, such as a house or vehicle, consider how those assets are titled. There are several forms of joint ownership, and those determine how ownership transfers. Assessing that can help smooth out the inheritance of the property when the time comes, Cornell said.
    If a house is not set aside in a will or title, it typically gets divided between heirs depending on a state’s intestacy legislation — and a house is a complicated asset to manage among multiple owners, Wettstein explained.

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    Biden’s student loan forgiveness plan gets a record number of public comments. Here’s what people are saying

    More than 34,000 people have left public comments on the Biden administration’s new student loan forgiveness proposal.
    Here’s what some of them said.

    US President Joe Biden gestures after speaking about student loan debt relief at Madison Area Technical College in Madison, Wisconsin, April 8, 2024. 
    Andrew Caballero-Reynolds | AFP | Getty Images

    ‘I plan on dying with student loan debt’

    “I think this is a great idea. I am 52 years old with a lot of student loan debt from years ago. It has quadrupled from what I actually borrowed. I think the interest is ridiculous. With the crazy inflation, how can anyone afford to pay for anything these days? I plan on dying with student loan debt. It is very depressing.”

    ‘An unjust burden on Americans’

    “I call on the Biden administration to stop imposing an unjust burden on Americans who did not go to college or have paid off their student loan debt with yet another unfair plan to carry out massive student loan debt cancellation.
    The president will take hundreds of billions of dollars in taxes from hardworking Americans, millions of whom never went to college, to pay for this new student loan cancellation plan. These taxpayers will be forced to pay for the degrees of those who did attend college, including doctors and lawyers who have every ability to pay their debts.
    If students want to attend college, then they should work for companies that provide educational assistance. That’s how I attended college and got my BA and MS. The only way people appreciate what they have is if THEY BUST THEIR BUNS EARNING IT.”

    ‘People will remember who made their lives easier’

    “Not only will forgiving all the debt make individuals’ lives easier, but they’ll be able to spend more money in their local economies, which benefits small business[es] and the community as a whole. And at election time, people will remember who made their lives easier.”

    ‘Rectifying long-standing inequities’

    “As an African American millennial from River Rouge, MI, I believe it is crucial to support and approve student loan debt relief proposals. Our community faces distinct generational disparities that necessitate such measures. Historically, African Americans have had limited access to generational wealth. This gap makes it necessary for many of us to rely on financial aid … to pursue higher education.
    Despite achieving success in our careers, the heavy yoke of student debt often means we are starting several paces behind, continuously trying to catch up. This reality hinders not only individual financial growth but also our collective ability to invest in our communities.
    Approving student loan debt relief is more than a financial reprieve; it is a step towards rectifying long-standing inequities, centuries of compounded interest and empowering a significant segment of our society to achieve true economic participation and security.”

    Biden ‘attempting to purchase votes’

    “I paid for my undergraduate degree by working throughout my high school and college career. I worked overtime and three part-time jobs when I pursued a graduate degree. College is a personal choice that comes with many adult decisions. There are trade-offs.
    It was my choice to go to college and graduate school. Nobody helped me. I earned every credit the hard way.
    It is not the federal government’s responsibility to pass those personal decisions off onto our country’s taxpayers. This feels like President Biden and the Democrats are simply attempting to ‘purchase’ votes in a presidential election year.”

    ‘The sooner the better’

    “My generation, especially those of us who came from poor factory families and blue collar workers, were told to go to college, no matter what. We were told that college was our way out, our path to the American Dream. It has become an American Nightmare as we try to navigate Byzantine repayment programs, waiting on hold for hours to try and get a person on the phone at our servicer, and do everything in our power to help our children avoid student debt, no matter the cost.Student loan debt accounts for a huge chunk of my family of 4’s total debt load. We have a mortgage, a car note, and student loans. We do not have credit card debt.
    These proposed rule changes will be a huge relief to our family, and the sooner the better.”

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    As Social Security’s funds face insolvency, experts say these are key factors to watch

    An improving economy has helped modestly improve the outlook for Social Security’s funds.
    But experts say the outlook for the program still points to the need for imminent reform.

    Phoenix Wang | Moment | Getty Images

    A new Social Security trustees report released on Monday provides a modest bright spot for the program.
    The program’s combined funds are now projected to run out in 2035 — one year later than was previously anticipated. At that time, 83% of benefits will be payable, unless Congress takes action before that date to prevent an across-the-board benefit cut.

    The later projected depletion date is due to an improved economy, according to the trustees report. That includes higher labor productivity that enables workers to contribute to the program through payroll taxes.
    But experts say that’s where the good news ends, and the revelations from the trustees’ report point to the need for congressional action.
    “Unless something changes more of the economy rapidly or dramatically, we’re going to have trust fund depletion in the next 10 years,” Jason Fichtner, chief economist at the Bipartisan Policy Center said during a Tuesday panel hosted by the Committee for a Responsible Federal Budget.

    The trust fund shortfall may be addressed through tax increases, benefit cuts or by taking funds from general revenues, he said.
    While the national debt is $34 trillion, Social Security’s unfunded liability is around $22 trillion, Fichtner said. To make the program solvent for 75 years, an upfront sum of $22 trillion would be necessary today.

    “That’s a lot of borrowing,” he said.
    The longer lawmakers wait, the larger the changes that will be necessary.
    Because it is an election year, there likely won’t be action now, said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, in an interview. But Social Security is poised to be an issue in the upcoming House, Senate and presidential campaigns, he said.
    Here are some key revelations to note from this year’s Social Security trustees report.
    1. Retirement fund depletion date is less than a decade away
    While the overall outlook for Social Security’s trust funds improved, the depletion date for the fund used to pay retirement benefits remains unchanged.
    In 2033, that fund will be depleted, at which point 79% of benefits will be payable.
    As that depletion date gets closer — with it now just nine years away — there are fewer factors that could change that forecast, Fichtner said.
    2.  Disability fund is in good shape — for now
    A separate trust fund used to pay disability benefits should be able to pay full benefits through 2098 — the last year of the report’s projection period.
    The good news is that points to fewer disability benefits being paid from that trust fund, Social Security expert Laura Haltzel, a former research manager at Congressional Research Service, noted during the webinar. Because those individuals are still in the work force, it means they are continuing to contribute to the program, she said.
    But that fund is “very, very sensitive to economic conditions,” Fichtner said.
    If there is a major recession, many workers who are at the margin may apply for disability benefits, he said. That may affect that trust fund’s solvency.
    “I don’t think we should say that [disability insurance] is fine and we’re out in the woods,” Fichtner said. “We need to keep an eye on it.”

    3. The insolvency projection has not shifted  
    Since 2012, Social Security’s trustees have predicted the insolvency date would be between 2033 and 2035.
    As the new trustees’ report projects the combined funds may last to 2035, that has not changed, Haltzel noted.
    “The actuarial deficit really has not shifted that much,” Haltzel said.
    4.  A declining birth rate may impact the program
    Social Security’s trustees have revised the total fertility rate assumption to 1.9 children per woman, down from 2.0, which is the lowest that has ever been assumed, senior Treasury officials noted.
    The birth rate is an important part of long-term projections, Linda K. Stone, senior retirement fellow at the American Academy of Actuaries, said in an interview with CNBC.
    “It’s going to take 20 years, 18 years for the children being born now to actually be workers and paying taxes into the system,” Stone said.
    5.  Immigration may help give the program a boost
    Immigration may help bring in more workers to help pay taxes into the program.
    “Immigration absolutely can and should be part of what the solution is,” Haltzel said.
    Legal immigration is preferred, she said, but the effects of illegal immigration on the program are frequently misunderstood.
    Many illegal immigrants tend to adopt a false Social Security number, she said. While they pay into the program through payroll taxes, they are ineligible to actually claim benefits.
    “We actually end up benefiting in a very unfortunate way from illegal immigration,” she said.
    Immigrants may also have a higher birth rate, Stone said.
    “That’s more future workers also entering the system,” she said.
    6.  More dramatic changes will be necessary with time
    As lawmakers procrastinate when it comes to addressing Social Security, the solutions needed to address the program get more dramatic.
    During President Barack Obama’s presidency, eliminating the maximum threshold on taxable earnings would have restored the program’s 75-year solvency, said Fichtner.
    Now, a combination of changes would be needed to get the same results. One suggestion that often comes up is raising the retirement age.
    “We’ve lost our ‘one and done’ policy options,” Fichtner said.
    On Capitol Hill, Social Security tends to become a partisan battle, Richtman said. But most Americans want to see the benefits they’ve earned preserved.
    Voters should ask candidates where they stand on the issue, Richtman said.
    “Everybody’s for Social Security in theory. But what are your positions on making sure that it continues and is improved?” Richtman said. “That’s the real question.” More

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    Op-ed: Investing lessons from a baseball card collector. Diversify to find the all-stars

    YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

    No one — not even professional investors, with all the resources behind them — knows for sure how any individual stock will perform going forward.  
    There are ways to mitigate the risk of striking out with any one individual stock: Buy many stocks or even the whole stock market.
    It’s the same idea as buying whole sets of baseball cards to get that one future All-Star.

    DETROIT, MI – APRIL 29: A fan trades a baseball card on the trade wall during the 2023 Topps Truck Tour promotion outside of Comerica Park during game one of a doubleheader between the Baltimore Orioles and the Detroit Tigers at Comerica Park on April 29, 2023 in Detroit, Michigan. The Tigers defeated the Orioles 7-4. (Photo by Mark Cunningham/MLB Photos via Getty Images)
    Mark Cunningham | Getty Images Sport | Getty Images

    When I was a kid, I collected baseball cards with the money I earned from mowing lawns. It was fun to open a pack of cards not knowing which ones you’d get. I sometimes bought a bunch of cards of a particular rookie, in hopes he would one day become an All-Star. Most of the time, however, I ended up striking out. I learned the only way to make sure that you owned a future star was to diversify by buying every card in the set.  
    There are parallels to investing.

    Many folks try to find the next Amazon or Nvidia. But let’s face it, no one — not even professional investors, with all the resources behind them — knows for sure how any individual stock will perform going forward.  

    More from Your Money:

    Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

    But there are ways to mitigate the risk of striking out with any one individual stock — buy many stocks or even the whole stock market. It’s the same idea as buying whole sets of baseball cards to get that one future All-Star. Jack Bogle, the founder of Vanguard, used a different analogy to convey the same idea: “Don’t try to find the needle, buy the haystack.”
    By haystack, he was talking about buying the entire stock market through a broad-based index fund instead of trying to find those few winning individual stocks. However, some may argue that just a handful of stocks have a disproportionate weighting in the index, so a U.S. equity index fund may not be as diversified as you may think.

    The roster of stars keeps changing

    Over the years, pundits have come up with interesting names to describe the largest or most-coveted stocks, such as the Nifty Fifty, FAANG and the Magnificent Seven. The latter, as of year-end 2023, were the most valuable U.S. companies, making up more than a quarter of the S&P 500 Index’s market capitalization. True, some of today’s winners will end up being tomorrow’s losers, but many will continue to become tomorrow’s winners as well. And some modest-size stocks will grow into behemoths.
    For example, Apple, Microsoft and Google were among the five largest U.S. stocks in March 2014 and they remain so 10 years later. Exxon Mobil and Berkshire Hathaway rounded out the top five in March 2014, but were replaced by Amazon and Nvidia. Back then, Amazon was worth roughly $150 billion, while Nvidia was valued at a relatively modest $10 billion. Both stocks were included in broadly diversified U.S. stock indexes in 2014 and grew into top-five stocks today.

    You never know which names will be the future All-Stars 10 years from now, so diversification is key. And diversification can be gained across three levels:
    Diversify within each asset class. As mentioned, the easiest means of diversification is through a broad-based index fund or ETF. However, you do not have to stick strictly with index funds. If you go with actively managed funds to complement a core holding of index funds, make sure that your collective portfolio is adequately diversified and keep your costs like expense ratios and other fees low.
    Diversify across asset classes. Diversifying across equities, bonds and cash further reduces risk. Make sure your allocation is appropriate for your time horizon, risk tolerance, and financial goals.
    Diversify across time. In most cases, investing in a lump sum leads to higher returns. On the other hand, while dollar-cost averaging — regularly investing a fixed amount over time — doesn’t guarantee a profit or protect against a market downturn, it does mitigate the risk of bad market timing. And if you set it up as automated investments, it has the added benefit of being a set-it-and-forget-it approach. As time passes, regularly revisit your plan to make sure it still matches your current circumstances. Life happens, things change and so can your target allocation.
    I’ll state the obvious: All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss; and no particular asset allocation can guarantee you will meet your goals.
    That said, if you diversify, you’ll have some share of the potential All-Stars in your investment lineup.
    — By James Martielli, head of investment and trading services at Vanguard. More

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    Student protesters facing disciplinary action may also deal with financial setbacks

    Some college students protesting Israel’s war in Gaza have faced disciplinary action in recent weeks, including being suspended or expelled.
    The consequences of these temporary or permanent bans from campus “may also involve financial setbacks,” said higher education expert Mark Kantrowitz.
    Those include the loss of scholarships, previously paid tuition, and access to meal plans and even housing.

    Pro-Palestine protesters on the Massachusetts Institute of Technology campus lock arms after several demonstrators knocked fences down and reopened an encampment. Rallies and protest camps persist at MIT as student demonstrators demand divestment from Israeli military ties. President Sally Kornbluth set a deadline for encampment removal by May 6, 2024, threatening suspension.
    Vincent Ricci | Lightrocket | Getty Images

    Some college students protesting Israel’s war in Gaza have faced disciplinary action in recent weeks, with universities handing down suspensions and expulsions.
    The consequences of these temporary or permanent bans from campus “may also involve financial setbacks,” said higher education expert Mark Kantrowitz. Depending on the college and disciplinary action taken, those can include the loss of scholarships, previously paid tuition, and access to meal plans and even on-campus housing.

    “Students who are suspended do not get tuition refunds,” Kantrowitz said.
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    More than 100 students have been suspended across the U.S. in recent weeks, according to Kantrowitz, who made a rough calculation from news reports. The real number is likely much higher, but a federal regulation curbs how much colleges can publicly disclose about student suspensions.
    The protests emerged in response to Israel’s offensive in Gaza, which it launched after a Hamas attack on Oct. 7 that Israel says killed 1,200 people. Israel’s retaliatory attacks on Gaza have killed more than 34,000 people, including more than 14,000 children, according to local officials and the United Nations.
    Here’s what to know about the financial risks for suspended and expelled student protesters.

    Students can lose housing and more

    According to an email reviewed by CNBC from Massachusetts Institute of Technology President Sally Kornbluth to the MIT community on Monday, students in encampments were notified they could face a range of punishments, from a written warning to an “immediate interim full suspension.” The email says those consequences depended on factors such as whether the students agreed to voluntarily leave the encampment on Kresge Lawn and whether they already had a pending case or sanction on their record from the campus discipline committee.
    Those who are handed the harsher penalty will not be allowed to reside in their assigned residence hall or to use MIT dining halls, although they will continue to have access to health services, the email said.
    MIT did not immediately respond to a request for comment.
    “It’s devastating for students who are denied those basic services,” said Martin Stolar, a lawyer in New York who has defended protesters for decades.
    Beyond the risk of losing their housing, suspended college students across the country may not be able to complete their courses and get credit for them, Kantrowitz said, and likely won’t receive tuition refunds.

    It’s devastating for students who are denied those basic services.

    Martin Stolar
    a lawyer in New York

    It’s uncertain whether suspended or expelled students will be refunded any leftover money on their meal plans, he said.
    “Some colleges issue a refund of leftover balances when a student is no longer at the college, whether due to graduation, expulsion or some other reason,” he said. “Some colleges roll over the credit balance to the next year. Other colleges do neither, so the student loses the balance.”

    Charges of disruption, vandalism

    In recent weeks, students have been disciplined on charges that they maintained unauthorized encampments that disrupt college life and infringe on the rights of their fellow students. Some students are facing allegations of vandalism and destruction of property.
    “There is a dire humanitarian crisis occurring in Gaza that must be addressed, and I am personally grief-stricken by the suffering and loss of innocent lives occurring on both sides of this conflict,” George Washington University President Ellen Granberg wrote in a statement on Sunday.
    “However, what is currently happening at GW is not a peaceful protest protected by the First Amendment or our university’s policies,” she said. “The demonstration, like many around the country, has grown into what can only be classified as an illegal and potentially dangerous occupation of GW property.”

    But there’s disagreement over when protesters overstep their rights.
    The American Civil Liberties Union of Indiana filed a lawsuit against Indiana University this month, accusing the college of violating the First Amendment rights of three plaintiffs facing a 1-year ban from campus for their participation in the political protests, including a tenured professor.
    A spokesperson from Indiana University said it does not comment on pending litigation.

    Federal loan bills could come earlier

    Suspended or expelled students may also get their federal student loan bills sooner than they expected, Kantrowitz said.
    “Generally, if a student drops below half-time enrollment for at least six months, their student loans will enter repayment,” he said.
    Those who can’t make their payments have the option of putting their loans into deferment or forbearance, he added. However, pausing loan payments can cause interest to accrue and borrowers’ balances to grow.
    If a suspension ends and a student returns to college before six months, their grace period should reset, Kantrowitz said.
    The U.S. Department of Education did not immediately respond to a request for comment on how it was notifying student protesters of any financial impacts, including the possibility of an early start to their loan payments.

    It’s possible that a suspension or expulsion will be marked on a student’s transcript, which could make it harder for them to transfer to other colleges, get into a graduate school and land jobs, Kantrowitz said.
    However, this particular disciplinary action might not be looked at the same way as other academic or conduct charges, Stolar said.
    “We’re talking about people involved in protest activity, which is very different than something on your permanent record saying that you cheated on an exam or assaulted another student,” he said.

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    More home sellers are paying capital gains taxes — here’s how to reduce your bill

    Married couples can shield up to $500,000 in home sale profits from capital gains, and single filers can exempt up to $250,000.
    In 2023, nearly 8% of U.S. home sales yielded profits exceeding $500,000, compared with about 3% in 2019, according to a new report.
    If your home sale profit exceeds the limit, you can reduce it by adding to the “basis” or original purchase price with capital improvements.

    The Good Brigade | Digitalvision | Getty Images

    More Americans are paying capital gains taxes on home sale profits amid soaring property values — but there are ways to reduce your bill, experts say.
    In 2023, nearly 8% of U.S. home sales yielded profits exceeding $500,000, compared with about 3% in 2019, according to an April report from real estate data firm CoreLogic.

    There’s a reason the report called out that threshold.
    It’s key for a special tax break for homeowners who make a profit when selling a primary residence. Married couples filing together can make up to $500,000 on the sale without owing capital gains taxes. The threshold for single filers is $250,000.
    More from Personal Finance:How to reduce taxes on your inherited individual retirement account, experts sayAmericans can’t stop ‘spaving’ — here’s how to avoid this financial trapWomen farmers are key decision-makers, according to USDA data
    Those capital gains exemption thresholds haven’t been indexed for inflation since 1997, said certified financial planner Jaime Quinones with Stockade Wealth Management in Marlboro, New Jersey.
    “With the recent rise in home values, more sellers have been facing a capital gains tax hit,” Quinones said.

    Home sale profits above the $250,000 or $500,000 thresholds incur capital gains taxes of 0%, 15% or 20%, depending on your income.
    Capital gains taxes on a home sale are more common in high-cost areas. In 2023, the percentage of home sales that had profits exceeding $500,000 hit double digits in Colorado, Massachusetts, New Jersey, New York and Washington, the CoreLogic report found.

    How to qualify for the capital gains exemption

    The IRS has strict rules for qualifying for the $250,000 or $500,000 capital gains exemption, according to the IRS. To that point, you must own the home for at least two of the past five years before your home sale to satisfy the “ownership test.”
    The “residence test” says the home must be your primary residence for any 24 months of the five years before the sale, with some exceptions. The 24 months don’t need to be consecutive.

    How to reduce your capital gains tax bill

    If you’ve lived in a home long enough to exceed the capital gains exemptions, there’s a “high probability” you’ve made improvements to the home, said Falls Church, Virginia-based CFP Parker Trasborg, senior financial advisor at CJM Wealth Advisers.
    You can use those improvements to increase your home’s “basis,” or original purchase price, which reduces your profit, he said.
    But routine maintenance and repairs don’t count. For example, you can increase your home’s basis by adding the cost of a new roof or addition. But fixes to leaky pipes won’t qualify.
    After selling a home, the IRS receives Form 1099-S, which shows your closing date and gross proceeds. But you’ll need paperwork to prove any changes to your home’s basis in the case of an IRS audit.

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