Gross Income – Resource KT Wed, 05 Jan 2022 18:37:48 +0000 en-US hourly 1 Gross Income – Resource KT 32 32 Analysis and analysis by the management of RITE AID CORP of the financial situation and the results of continuing operations (form 10-Q) Wed, 05 Jan 2022 18:23:03 +0000


We are a healthcare company with a retail presence, providing our customers and communities with a high level of care and service through various programs that we offer in our two reportable lines of business, our Retail pharmacy segment and our Pharmacy Services segment. We achieve our goal of providing comprehensive care to our customers through our retail pharmacies and our PBM, Elixir. We also offer fully integrated mail order and specialty pharmacy services through Elixir Pharmacy. In addition, through Elixir Insurance (“EI”), Elixir also serves seniors enrolled in Medicare Part D. When combined with our retail platform, this comprehensive suite of services enables us to deliver value and choice to customers. , patients and payers and enables us to be competitive in today’s changing healthcare. Marlet.

Retail Pharmacy Segment

Our Retail pharmacy The segment sells branded and generic prescription drugs and provides various other pharmaceutical services, as well as an assortment of commodities including health and beauty products, personal care products, seasonal merchandise and a wide range of products. range of private label products. Our Retail pharmacy The segment generates the majority of its revenue through the sale of prescription drugs and basic products through our more than 2,400 retail pharmacies in 17 states. We re-stock our retail stores through a combination of direct in-store pharmaceutical delivery facilitated by our pharmaceutical purchase and delivery agreement with McKesson, and the majority of our front-end products through our distribution center network.

Pharmacy Services Segment

Our Pharmacy Services segment provides a fully integrated suite of PBM offerings, including technology solutions, mail delivery services, specialty pharmacies, network and rebate administration, claims processing and rebate programs. pharmaceuticals. Elixir also offers prescription rebate programs and Medicare Part D insurance offerings for individuals and groups. Elixir provides services to a variety of clients across its various lines of business, including major healthcare plans, commercial employers, worker groups, and state and local governments, accounting for approximately 3.2 million lives covered, of which approximately 0.8 million lives covered through our Medicare Part D insurance offerings. Elixir continues to focus its efforts and offerings on its target market of small and medium employers, labor unions, and regional health plans, including provider-managed health plans; and government-sponsored Medicaid and Medicare plans.


Starting in fiscal 2019, we launched a series of restructuring plans aimed at reorganizing our management team, reducing management levels and consolidating roles. In march 2020, we announced the details of our RxEvolution strategy, which includes creating tools to work with regional health plans to improve patient health outcomes, streamlining SKUs in our front-end offering to unlock fund operating and updating our merchandise assortment, evaluating our pricing and promotions strategy, rebranding our retail pharmacy and pharmaceutical services business, launching our Store of the Future format and reducing overheads and costs. workforce, including the integration of certain back-office functions in the pharmacy services segment both within the segment and through Rite Help. Other strategic initiatives include expanding our digital business, replacing and updating the Company’s financial systems to improve efficiency and moving to a common customer platform at Elixir.

These and future restructuring activities are expected to yield future benefits in terms of growth and cost efficiency. There can be no assurance that our current and future restructuring charges will achieve the cost savings and remarketing benefits in the amounts or on time anticipated.


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Asset Sale to WBA

At September 18, 2017, we entered into the Amended and Restated Asset Purchase Agreement with Walgreens Boots Alliance, Inc. (“WBA”) and Walgreen Co., a
Illinois company and wholly-owned subsidiary of WBA (“Buyer”), in which Buyer has purchased from Rite Help 1,932 stores, three distribution centers, related inventory and other specified assets and liabilities for a total purchase price of $ 4,375,000, on a cashless and debt free basis.

During the first quarter of fiscal 2021, we completed the sale of the final distribution center and related assets to WBA for proceeds of $ 94,289. The impact of the sale of the distribution center and related assets resulted in a pre-tax gain of $ 12,690, which was included in operating results and cash flows from discontinued operations during the thirteen week period ended May 30, 2020. The transfer of the final distribution center and related assets constitutes the final close under the Amended and Restated Asset Purchase Agreement.

As part of the asset sale, we have agreed to provide transition services to the buyer. Pursuant to the Transition Services Agreement (“TSA”), we have provided various services on behalf of WBA, including, but not limited to, the purchase and distribution of inventory and substantially all sales activities, general and administrative. As part of these services, we purchased the related inventory and incurred cash payments for sales, general and administrative activities, which we billed on a cash neutral basis to WBA in accordance with the terms described in the TSA. Total billings for these items during the completed thirteen and thirty-nine week periods November 28, 2020 were 0 million dollars and $ 35.2 million, respectively. We have recorded a WBA TSA fee of 0 million dollars and $ 1.5 million
during the completed thirteen and thirty-nine week periods November 28, 2020, respectively, which are reflected as a reduction in selling, general and administrative expenses. At October 17, 2020, we and WBA have mutually agreed to terminate the Services under the TSA.

Given its scale and the fact that we have withdrawn from certain markets, the sale represented a significant strategic shift which had a significant effect on our operations and financial results. Accordingly, we have applied the treatment of discontinued operations as required by GAAP.

Overview of the financial results of continuing operations

Our net loss from continuing operations for the thirteen-week period ended
November 27, 2021 has been $ 36.1 million Where $ 0.67 per basic and diluted share compared to the net income of $ 4.3 million Where $ 0.08 per basic and diluted share for the thirteen-week period ended November 28, 2020. Our net loss from continuing operations for the thirty-nine week period ended November 27, 2021 has been $ 149.4 million Where $ 2.77 per basic and diluted share compared to a net loss of $ 81.6 million Where $ 1.52 per basic and diluted share for the thirty-nine week period ended November 28, 2020.

The increase in net loss for the thirteen-week period ended November 27, 2021
was mainly due to higher facility exit and depreciation charges, a LIFO charge in the current quarter compared to a LIFO credit in the third quarter of the previous year and a lower gain on asset sale . These items were partially offset by an increase in Adjusted EBITDA, lower restructuring costs and lower amortization charges.

The increase in net loss for the thirty-nine week period ended November 27, 2021
was mainly due to higher litigation settlements, an increase in asset exit and depreciation charges, a LIFO charge in the current year compared to a LIFO credit in the previous year and at a lower capital gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA, lower restructuring costs and lower amortization charges. In addition, the first quarter of the previous fiscal year included impairment charges for intangible assets associated with the rebranding of Elixir.

Our adjusted EBITDA from continuing operations for the thirteen and thirty-nine week period ended November 27, 2021 has been $ 154.8 million or 2.5% of turnover and
$ 399.8 million or 2.2% of sales, respectively, compared to $ 137.4 million i.e. 2.3% of turnover and $ 396.4 million or 2.2% of earnings, respectively, for the thirteen and thirty-nine week period ended November 28, 2020.

The increase in Adjusted EBITDA for the thirteen-week period ended November 27, 2021, was due to an increase in Retail pharmacy sector, partially offset by a decrease in the Pharmacy services sector. Adjusted



EBITDA up $ 37.4 million in the Retail pharmacy segment driven by an increase in gross margin, partially offset by an increase in selling and administrative expenses. Pharmacy Services segment adjusted EBITDA decrease $ 20.0 million driven by lower revenues, reduced rebates and an increase in the EI medical claim rate.

The increase in Adjusted EBITDA for the thirty-nine week period ended November 27, 2021 was due to an increase in Retail pharmacy sector, partially offset by a decrease in the Pharmacy services sector. Adjusted EBITDA up $ 16.3 million in the Retail pharmacy mainly due to an increase in gross margin, partially offset by an increase in selling and administrative expenses. Pharmacy Services segment adjusted EBITDA decrease $ 12.9 million driven by lower revenues, reduced rebates and increased EI medical claims rates. Please see the sections titled “Segment Analysis” and “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” below for further details.

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AMZN: Better buy for 2022: Amazon vs. Walmart Mon, 03 Jan 2022 19:53:39 +0000

According to a Mastercard Inc (MY) report, United States retail sales increased 8.5% during this year’s holiday shopping season, fueled by the surge in e-commerce sales. Even as the Omicron variant of the coronavirus continues to spread, making the outlook bleak for physical retail stores, many retail companies have stepped up their online presence to benefit from online shopping trends. However, increasing physical store sales as the economy reopens should help retailers thrive in the coming months. According to a Research and Markets report, the global retail market is expected to grow at a 7.7% CAGR by 2025. Therefore, (AMZN) and Walmart (WMT) should benefit.

E-commerce giant AMZN is dedicated to the international retailing of consumer products and subscriptions. It operates across North America; International; and Amazon Web Services. WMT engages in retail, wholesale and other units around the world. The company operates through Walmart US; Walmart International; and Sam’s club.

AMZN has gained 1.5% in the past three months, while WMT has gained 3.8%. Which of these two titles is the best buy now? Let’s find out.

Latest developments

On December 15, 2021, WMT announced plans to build a new distribution center in Salt Lake City to support the retailer’s growing e-commerce business. Steve Miller, senior vice president of supply chain operations at Walmart US, said, “This new facility is the latest example of Walmart’s commitment to providing customers with fast delivery of the items they need every day. day, and we look forward to continuing to deliver on that promise. with the development of this new state-of-the-art facility.

On December 2, 2021, Amazon Web Services, Inc., an AMZN Company, announced AWS Cloud WAN, a managed wide area network service that enables businesses to build, manage, and monitor faster and easier a unified global network that connects transparently. cloud and on-premises environments. This could lead to increased demand for its solution.

Recent financial results

WMT’s total revenue increased 4.3% year-on-year to $ 140.53 billion for the fiscal third quarter ended October 31, 2021. Company net profit increased 39.8% year-on-year to $ 5.20 billion. In addition, its adjusted EPS stood at $ 1.45, up 8.2% year-on-year.

AMZN’s net sales increased 15% year-on-year to $ 110.81 billion for the third quarter ended September 30, 2021. However, its net profit declined 50.2% year-on-year to $ 3 , $ 15 billion. In addition, its EPS stood at $ 6.12, up 50.5% year-over-year.

Past and expected financial performance

WMT’s revenue and EPS have grown at CAGRs of 3.8% and 17.5%, respectively, over the past three years. Analysts expect WMT’s revenue to grow 2.3% in the current year and 2.9% next year. The company’s EPS is expected to grow 7.9% in the current quarter and 17% in the current year. In addition, its EPS is expected to grow at a rate of 8.1% per year over the next five years.

On the other hand, AMZN’s revenue and EPS have grown at a CAGR of 27.5% and 42%, respectively, over the past three years. The company’s revenue is expected to grow 21.8% in the current year and 17.7% next year. However, its EPS is expected to decline 73.4% for the fourth quarter of 2021 and 2% for the full year. AMZN’s EPS is expected to grow at a rate of 36% per year over the next five years.


WMT’s last 12 months revenue is 1.25 times that generated by AMZN. However, AMZN is more profitable with gross profit and net profit margin of 41.31% and 5.73% compared to WMT’s 25.04% and 1.40%, respectively.

On the other hand, WMT’s ROA and ROTC of 7.45% and 12.07% are higher than 5.32% and 8.10% of AMZN, respectively.


In terms of non-GAAP futures PER, AMZN is currently trading at 81.71x, which is 262% higher than WMT’s 22.57x. Additionally, AMZN’s advanced EV / EBITDA ratio of 25.20x is 105.9% higher than WMT’s 12.24x.

So, the WMT is relatively affordable here.

POWR odds

WMT has an overall rating of A which equates to a strong buy in our property POWR odds system. On the other hand, AMZN has an overall rating of C, which translates to Neutral. POWR scores are calculated taking into account 118 different factors, each factor being weighted to an optimal degree.

WMT has a B rating for growth and sentiment, in line with analysts’ expectations that its EPS will increase in the coming months. On the flip side, AMZN has a D rating for growth and a C rating for sentiment, in line with analysts’ expectations that its EPS will decline in the near term.

Additionally, WMT has a B rating for value, consistent with its forward EV / S of 0.80x, 59.9% below the industry average of 1.99x. However, AMZN has a D rating for value, consistent with its forward EV / S of 3.72x, 161.3% above the industry average of 1.42x.

Additionally, WMT has a B rating for stability, in line with its beta of 0.52. In comparison, AMZN has a C rating for stability, in line with its beta of 1.13.

Of the 39 shares rated A Grocery Stores / Big Box Retailers industry, WMT is ranked No. 3. However, AMZN is ranked 32nd out of 77 stocks in the F ranking the Internet industry.

Beyond what I stated above, we also rated the stocks for quality and momentum. Click here to view all WMT odds. Also get all AMZN ratings here.

The winner

The retail sector is expected to experience significant growth with the rapid shift to online platforms amid rising consumer spending. While WMT and AMZN both stand to benefit, I think WMT is currently the best investment due to its strong finances, lower valuation and better growth prospects.

Our research shows that the chances of success increase when investing in stocks with an overall strong buy or buy rating. View all the other top rated stocks from the Grocery / Supermarkets sector here. Also click on here to access all of the top rated stocks in the internet industry.

AMZN stock was trading at $ 3,407.54 per share on Monday afternoon, up $ 73.20 (+ 2.20%). Year-to-date, AMZN has gained 4.62%, compared to a 29.25% increase in the benchmark S&P 500 over the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal’s a passionate interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach he takes while advising investors in his articles. Following…

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The perfect place for retirement accounts Sat, 01 Jan 2022 20:53:17 +0000

By LouAnn Schulfer, AWMA®, AIF®

If you have a retirement account, you probably know there are a lot of rules. For example, in most cases 59½ is the earliest age at which you can make withdrawals without penalty and typically at age 72 you should start collecting Minimum Required Distributions (RMDs) from your retirement accounts before. tax. The 12 and a half years in between can be an opportune time.

I have high income clients and excellent retirement savings during their working years. Their accumulated retirement savings enabled them to retire early, taking advantage of withdrawals without penalties. During their working years, their combined income had kept them from making ROTH IRA contributions and their tax bracket discouraged them from making ROTH conversions. One concern that we have identified is which tax bracket they will be in after 72 years. With their combined Social Security and minimum required distributions, their Adjusted Gross Income (AGI) level would force them to pay higher health insurance premiums than their peers who are in income tax brackets. Fortunately, they are young enough and retired from their higher earning years that we can take advantage of ROTH conversions, where we will methodically transfer money from their pre-tax IRAs to ROTH IRAs, paying tax due on conversions. at a lower tax rate. that they had not been subjected while they were working. Money in

ROTH IRAs are not subject to RMDs, which reduces their taxable income at age 72 and beyond, thereby helping to keep the AGI lower, which affects Medicare premiums.

My clients are delighted to see their ROTH accounts grow and their future RMDs decline as we take advantage of this great place for retirement accounts.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be contacted at (715) 343-9600 or
Securities and advisory services offered by LPL Financial, a registered investment adviser. FINRA / SIPC member.

Traditional IRA account owners have some considerations to take into account before making a Roth IRA conversion. These primarily include the tax consequences on the amount converted in the conversion year, the withdrawal limits from a Roth IRA, and the income limits for future contributions to a Roth IRA. Also, if you need to make a minimum required distribution (RMD) in the year of the conversion, you must do so before you convert to a Roth IRA.

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Washington State’s reimbursement request enters the no-fly zone Fri, 31 Dec 2021 08:21:20 +0000

The Washington Court of Appeals recently issued a split (2-1) decision in a case involving Washington’s “benefits received” test for the distribution of service income. The Court ruled that the “benefits” of the services of an aircraft design firm were received in Washington, where the taxpayer’s direct customer, Boeing, manufactured the planes incorporating the taxpayer’s aircraft designs, rather than in the states where Boeing ultimately delivered the planes to its customers, individual airlines such as Delta, United, and American.

The taxpayer in Walter Dorwin Teague Associates, Inc. v. Washington State Department. revenues, n ° 54959-0-II (Teague), was an industrial design firm based in Seattle, Washington (Teague). Teague specializes in the design of the interiors of passenger planes, including seating arrangement, geometry and brand placement. Boeing, one of Teague’s major customers, hired Teague in fiscal years 2011-2014 to design interiors of planes Boeing would manufacture in Washington. After manufacture, Boeing delivered the aircraft to customer airlines at their respective sites. Claiming that the revenue for his design services should have come from where the airlines are located, and not from Washington where Boeing is located, Teague filed for a refund of the Washington business and professional tax. (B&O).

Washington imposes a B&O tax on an allocated portion of a service provider’s income, determined using a single revenue factor formula, the numerator of which is the gross taxpayer income attributable to Washington and the denominator of the gross taxpayer income all over. Washing revision code § 82.04.462. Since 2010, service revenues have come from Washington (that is to say, included in the numerator of the apportionment formula) if the “customer benefited from the taxpayer’s service” in Washington. Wash. Rev. Code § 82.04.462 (3) (a).

The question before the Court of Appeal in Teague was whether the “benefit” for the taxpayer’s services was received at the location of his customer, Boeing, or at the location of individual airlines, which were Boeing’s customers. Majority and dissenting opinions turned to a ministry rule to resolve this issue. Washing. Admin. Code § 458-20-19402 (Rule 19402). This regulation provides that when the taxpayer’s service relates to tangible personal property, “the benefit is received where the tangible personal property is located or is deemed / is deemed to be located”, which the rule in turn defines as being the “main place of use of the property. “The rule further provides that in the case of” tangible personal property [that] will be created or delivered in the future, the primary place of use is the place where it is expected to be used or delivered.

Applying the rule, the majority determined that the “benefits” of Teague’s services were “received” in Washington because “the airline interiors were to be used by Boeing during the manufacturing process in Washington.” The majority rejected Teague’s argument that the place of use should instead be where the airlines “have used or received delivery of the interiors of the aircraft” because he “ignores[d] the key legal investigation, where the client benefited from the taxpayer’s service. Since Teague’s customer was Boeing, and not the individual airlines, the majority concluded that it was “wrong” to research the place of use or delivery by anyone other than Teague’s direct customer, that is to say, Boeing.

A dissenting opinion disagreed, believing the tax law to be at least ambiguous, which under Washington rules would require the case to be resolved in favor of the taxpayer. The dissent said there was another reasonable interpretation of the legal provisions (which Teague had put forward): “The majority conclude that Boeing benefited from the design services of Teague in Washington, where Boeing used the design to manufacture interiors. aircraft for its commercial aircraft. But another reasonable interpretation is that Boeing benefited from Teague’s design services when Boeing sold the completed planes to foreign airlines. It was certainly at this time that Boeing received the financial benefit from the design services of Teague. The dissent raised a particular problem with the majority’s application of the relevant regulation, Rule 19402, because that regulation does “not refer to the clients place of use or even contain the word “customer”. And it was “equally reasonable” to conclude that the “primary place of use is where the airlines purchasing the planes containing the interiors are located”.

Teague is an example of the “benefits received” test applied on the basis of the location of the taxpayer’s direct customer, rather than on a “see-through” basis that looks at the location of an end user. The search for sources of supply can be beneficial or detrimental to a taxpayer depending on the location of their customers. In Teague, the transparency would have benefited the taxpayer because its direct customer was in Washington and the end-users were outside of Washington. But in other cases – for example, where the taxpayer’s direct customer is out-of-state and end users are in-state – a go-through approach would be detrimental. Barring another appeal to the Washington Supreme Court, the case should prevent Washington from applying a transparent procurement method to the detriment of a taxpayer in similar circumstances in the future.

Walter Dorwin Teague Assocs., Inc. v. Dep’t of Revenue, 2021 Wash. App. LEXIS 2983 (Dec 14, 2021).

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Liz Weston: A Year-End Money Checklist for People 50 and Over Sat, 25 Dec 2021 18:30:16 +0000

Age brings unique opportunities and obligations, including some important year-end tasks that can help you get the most out of your money. For those 50 and over, here are a few to consider:


If you still have a job, use a retirement calculator to see if you should increase your savings rate.

Catch-up contributions could allow you to save more in tax-efficient accounts. A person 50 or older can contribute up to $ 26,000 to a 401 (k) workplace in 2021, and up to $ 7,000 to an IRA, says Mark Luscombe, senior analyst for Wolters Kluwer Tax & Accounting .

You have until December 31st to contribute to the work plans for 2021 and until April 15th to make your 2021 IRA contributions. The possibility of contributing to a Roth in 2021 gradually disappears from a modified adjusted gross income of 125 $ 000 for singles and $ 198,000 for married couples filing jointly.

Slightly different rules apply to health savings accounts, which are associated with qualifying, high-deductible health insurance plans, Luscombe explains. The contribution limits for 2021 are $ 3,600 for people with individual coverage and $ 7,200 for people with family coverage. People aged 55 and over can make an additional catch-up contribution of $ 1,000. As with IRAs, you have until the tax filing deadline of April 15 to contribute for the year.

To contribute to an HSA, the account holder must have a qualifying health insurance plan with an annual deductible of at least $ 1,400 for individual coverage and $ 2,800 for family coverage. People on Medicare cannot contribute to an HSA, but they can withdraw money tax-free from an HSA to pay for medical expenses, including Medicare premiums, deductibles, and co-payments. said Luscombe.


Money can’t sit in retirement accounts indefinitely, says Mary Kay Foss, a chartered accountant, member of the American Institute of CPA’s Personal and Self-Employed Tax Committee. Withdrawals must begin at some point, usually at age 72. If you miss a deadline or withdraw too little, you could face a tax penalty equal to 50% of the amount you should have withdrawn but failed to do. Your retirement fund or brokerage firm can help you calculate the appropriate amount, or you can use the tables in IRS publication 590-B.

The IRS specifies the minimum you must take each year based on your account balance as of December 31 of the previous year. Your minimum distribution required for 2021, for example, will be based on your balance as of December 31, 2020.

You should generally receive your distributions before the end of the year, although you can defer your first RMD until April 1 of the year after you turn 72. If you delay, you will need to take your second RMD before the end of this year. , says Foss.

You can carry over RMDs from a work plan such as a 401 (k) if you still work for the company sponsoring the plan and do not own 5% or more of the company.

Additionally, there is no RMD for Roth IRAs during the account holder’s lifetime. A spouse who inherits a Roth IRA may treat it as their own, also avoiding the required distributions, but the other heirs must start emptying the account after his inheritance.


Another way to avoid RMD is to convert an IRA or other retirement account to a Roth, but that means paying taxes on the money now rather than later.

Conversions can make sense when you expect to be in a higher tax bracket in retirement and can pay tax without plundering your retirement savings, says certified financial planner Michael Kitces, editor of the website. Nerd’s Eye View Financial Planning Strategy. Young people are often good candidates for conversions because their tax bracket will likely increase with their income. Most people nearing retirement will face the opposite situation: their tax bracket will go down once they stop working, so conversions may not be a good idea.

People who have been diligent savers, however, could find themselves pushed into a higher tax bracket once they are required to start making minimum withdrawals, Kitces says. In that case, Roth conversions before age 72 might be smart, but you’ll want to consult a tax professional. Excessive conversion could increase your tax bill and, if you are affiliated with Medicare, potentially increase your premiums.


You can also avoid the minimum required distributions through qualified charitable distributions from your IRA, which can begin after you’re 70 and a half, says Foss. The money must be transferred directly from the IRA to a qualified charity. These contributions may be excluded from your income, but count towards your required annual minimum distribution if funds leave your account before the RMD deadline, which is usually December 31st.

Qualified charitable distributions can be made from most types of IRAs: traditional, renewable and legacy, as well as inactive Simplified Employee Pensions known as SEP and SIMPLE, which are employee incentive plans. savings for employees. (Inactive means you no longer contribute to these plans.) The maximum annual amount you can contribute in this way is $ 100,000.

FILE – This undated file photo provided by NerdWallet shows Liz Weston, columnist for the personal finance website. (NerdWallet via AP, file) {Taken from column 7.12.21}

This column was provided to The Associated Press by the NerdWallet personal finance website. Contact Liz Weston, a Certified Financial Planner and Columnist at NerdWallet, at or @lizweston.

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Mortgage Interest Deduction: What You Need to Know to Deposit in 2022 | News Fri, 24 Dec 2021 03:33:00 +0000

Buying a home has never been more expensive, but if you can find one that you can afford, there’s good news after you move in: You may be able to take advantage of the mortgage interest deduction. to reduce your tax bill.

However, the IRS rules regarding mortgage interest deduction can be very complicated. As you contemplate tax season, here’s a guide to help you understand what interest is eligible for the deduction and how you can benefit from it if you qualify.

What is the mortgage interest deduction?

If you have a home loan, mortgage interest deduction can allow you to reduce your taxable income by the amount of interest paid on the loan during the year, as well as other expenses such as mortgage insurance premiums. and points.

The deduction only applies to the interest on your mortgage, not the principal, and to claim it you must itemize your deductions. You can use Bankrate’s Mortgage Interest Deduction Calculator to get an estimate of the kind of savings you can expect when filing your taxes.

Mortgage interest deduction has been around for over 100 years, but has evolved over time. Different administrations have changed the rules for this benefit, and former President Donald Trump’s tax reform has had an impact on who can benefit from it.

Mortgage interest deduction limit

If your home was purchased before December 16, 2017, you can deduct mortgage interest paid on your first million dollars in mortgage debt ($ 500,000 if you’re married and filing separately).

For mortgages taken out since that date, you can only deduct interest on the first $ 750,000 ($ 375,000 if you’re married and filing separately). Note that if you were under contract before December 15, 2017 and the mortgage loan was closed before April 1, 2018, your mortgage is considered prior to December 16, 2017.

Mortgage interest deduction for your 2021 tax return

While almost all homeowners are entitled to the mortgage interest tax deduction, you can only claim it if you itemize your deductions on your federal income tax return by completing a Schedule A with Form 1040 or equivalent.

For this reason, you will need to decide whether it is better to deduct mortgage interest by itemizing or taking the standard deduction. The standard deduction for the 2021 tax year is $ 12,550 for single tax filers and $ 25,100 for married taxpayers filing jointly. For the 2022 tax year, these amounts are $ 12,950 for single tax filers and $ 25,900 for married spouses.

Let’s say you are a single homeowner who spent $ 18,000 on mortgage interest in 2021. It would make sense in this scenario to itemize your deductions because you are reducing your taxable income by a larger amount than if you had to take the standard deduction. .

If you’re not sure what the best course of action is, consult a tax professional to help you understand the best decision for your financial situation.

What constitutes mortgage interest?

The general IRS definition of “mortgage interest” is the interest that accrues on any loan secured by your primary residence or second home. Other costs and charges may also be included in the mortgage interest deduction. Here is an overview:

– Any interest in your home: The property must include facilities for sleeping, cooking and eating and can be a home, condo, co-op, mobile home, boat, or recreational vehicle.

—Interest on a second home that you don’t rent – If you rent the property during a certain time of the year, you will need to follow certain guidelines (in particular, use it for your own use that is more than 14 days or more than 10% of the time it is rented, whichever is longer) to deduct interest. Be sure to inquire about other tax deductions for rental property.

——Most Mortgage Insurance Premiums: For tax year 2020, if your Adjusted Gross Income (AGI) is greater than $ 109,000 as a married couple or $ 54,500 if you are filing individually, you do not cannot deduct mortgage insurance costs.

– Late payment fees: If you are late on a payment, you can probably deduct the additional fees charged to you.

—Payment Penalties: If you are charged a penalty fee for prepaying your mortgage, you can deduct this amount.

—Points: If you have paid points to reduce your mortgage interest rate, you can deduct a portion that applies to the individual reporting year.

—Home equity loans and home equity lines of credit used to improve your home: If you have purchased a home equity line of credit (HELOC) or home equity loan to pay for a home improvement project, you can deduct the home equity loans. interest on the amount you used to upgrade your property.

What is not deductible?

—Interest on a mortgage for a third or fourth house

—Any interest on a reverse mortgage

-Home insurance

– Expertise fees

-Notary fees

—Closing costs or down payment

—Additional payments made to the principal

—Home equity loan funds / HELOC funds used for purposes unrelated to your property (for example, if you borrowed against your home to pay for a wedding, these funds are not deductible)

Special considerations for deducting mortgage interest

When you review the IRS’s guide to mortgage interest deduction, you will notice a lot of language that details exceptions in certain situations. Below is a partial list of these special considerations. If you have a unique circumstance, consult the most recent IRS publication 936 or seek advice from a tax professional.

—Home office complications: If you are using part of your property for a home office, you will need to calculate the specific square footage used for living versus work. The “inhabitant” space is the only part that qualifies for a mortgage interest deduction.

—House Under Construction: If you are building a house, you have a qualifying 24-month period under the mortgage interest deduction guidelines.

—House sales: If you sold your home last year, you can still deduct the interest accrued on the loan up to the date of sale, but not included.

—Pay points when refinancing: If you refinanced your mortgage in 2021 and paid points to reduce the rate, you probably won’t be able to fully deduct the cost of those points. Instead, you may be able to deduct some of those points over the life of the new loan.

How to claim mortgage interest deduction

Step 1: Watch for communications from your lender or manager in early 2022. You don’t have to track the amount of interest you pay; your lender or agent will do this and send you Form 1098. This should arrive in late January or early February, and should also include mortgage insurance premiums and prepaid interest.

Step 2: Do the math. You will need to determine whether the breakdown of your deductions (your mortgage interest charges and any other eligible deductions) will give you more than the standard deduction.

Step 3: Submit your Form 1098 to your tax professional or complete Schedule A of Form 1040 yourself. All reported mortgage interest will be entered on line 8a, any undeclared interest will appear on line 8b and insurance premiums. mortgage will appear on line 8d.

Benefits of deducting mortgage interest

The main advantage of deducting mortgage interest is that it can reduce the total taxes you pay. Let’s say you paid $ 10,000 in mortgage interest and you are in the 32% tax bracket. You reduce your tax bill by $ 3,200 after subtracting the $ 10,000 deduction from your income.

“Those in the higher tax brackets will benefit the most because they will see larger deductions,” notes Kelly Crane, president and chief investment officer of St. Helena-based Napa Valley Wealth Management, in California.

In fact, lower income taxpayers get fewer benefits overall, says Andrew Latham, certified personal finance advisor and editor at SuperMoney in Santa Ana, California.

“Taxpayers who earn less than $ 100,000 actually only receive 11% of the benefits of this deduction,” Latham said, citing a 2019 Tax Foundation report. “In contrast, taxpayers who earn $ 200,000 or more per year get a larger benefit – 60% of the total savings from deducting mortgage interest.”

Need more information on filing your taxes in 2022? Read the Bankrate guide for the next tax season. If you’re lucky enough to be eligible for a refund, also consider some of the great ways to invest that amount of money to improve your financial well-being.

(Visit Bankrate online at

© 2021 Distributed by Tribune Content Agency, LLC.

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Home weatherization project | | Wed, 22 Dec 2021 06:00:00 +0000

It is the season of violent cold fronts and surprise rainstorms; and after experiencing Texas last winter with snow and ice, no one wants to relive a cold, drafty house.

The Kerrville Public Utility Board and the Alamo Area Council of Governments have partnered with the Dietert Center to provide information on home weathering to the public.

One of these sessions was held at the Dietert Center on December 9. Representatives from KPUB and AACOG attended these events to promote energy efficiency, home energy saving tips and funding available through AACOG’s “Bloat Assistance Program”. .

The AACOG program is designed to help low-income people, especially the elderly and disabled, overcome the high cost of energy by installing measured energy savings at no cost to the applicant.

Those who can apply for this help are homeowners, tenants, single-family homes, mobile homes, and multi-family homes.

While KPUB is one of the partners in this program, Allison Bueche said the application process is starting and will be approved by the AACOG offices in San Antonio.

The steps include filling out and sending a request. The applicant receives a letter if the AACOG needs more information or when it has been approved.

An auditor contacts the applicant to set up an appointment; and complete reports to list the jobs required.

A contractor will be hired to do the work; and the work will be inspected by a certified inspector when completed.

Possible measures may include weatherstripping, energy efficient light bulbs, caulking, duct sealing, attic / wall / floor insulation, furnace cleaning and / or tune-up and pipe insulation.

AACOG’s weatherization program saves money over the life of the home, reducing energy bills; and is 100 percent free for those who qualify by income.

The program can be offered to tenants and owners.

The AACOG WAP program does not deal with major home repairs. The house must be structurally sound and have a good roof. Help cannot be provided if the house needs major repairs such as roofing, house leveling, plumbing or electrical.

This can help reduce the amount of energy used in a home with weather protection upgrades.

The less energy it takes to heat or cool the home, the more money you save on utility bills.

Examples of some of the energy efficient weatherization improvements can include insulation of the attic, walls and / or floor; installation of new gas water heaters, space heaters, air conditioning or window air conditioning units; replacement or repair of broken windows; and weatherstripping and caulking for air leakage control.

“Making small improvements to energy savings can have a big impact on lowering utility bills if a home is not energy efficient,” said Mike Wittler, Managing Director and CEO of KPUB. “Statistically, low-income households struggle with high energy costs. Weatherization programs like the one at AACOG can be done 100% free of charge for the customer if they meet the income requirements and the house is structurally sound.

If you have any questions, contact KPUB in Kerrville at (830) 792-8250.

KPUB’s energy saving tips are available online at

Bueche said KPUB has approximately 24,000 customers and that its “territory” is bordered by that of Central Texas Electric and Bandera Electric.

AACOG’s WAP program information is available online at

The AACOG office is located at 2700 NE Loop 410, Ste. 101, San Antonio, TX 78217. The office phone is (210) 362-5282. Contact them online at

Application process

There is an app that can be downloaded from the AACOG website.

Proof of gross income of the household applying for the program must include the gross income for the last 30 days from the date the applicant signs the application, including all sources of income.

This income is based on family size, annual income and monthly income; for example, a family of four must have an annual income not exceeding $ 53,000; and a monthly income of up to $ 4,416.

Proof of US citizenship and identification for each member of the household must include a US passport or birth certificates, and driver’s licenses or Texas ID for anyone 18 years of age or older; and qualified documentation on the status of foreigner.

The completion, date and signing of the Texas Housing & Community Affairs SAVE document is also required.

Copies of your electricity and / or gas bills are also required (and disconnection notes are not accepted).

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Why Investors Shouldn’t Be Worried About Adobe’s Short-Term Outlook Sat, 18 Dec 2021 18:46:51 +0000

Adobe‘s (NASDAQ: ADBE) the rate of income growth is accelerating. In the earnings report it released on Thursday, the software giant announced surprisingly strong sales gains to close its fiscal year. Management has issued a bullish outlook for fiscal 2022 while making sure to highlight some challenges ahead.

Despite these issues, Adobe predicts potentially phenomenal revenue growth over the next several years.

Image source: Getty Images.

Sales trends remain strong

Sales rose 21% to $ 4.11 billion in its fiscal fourth quarter, which ended Dec. 3. This result was enough to beat management’s expectations. It also means the business grew at a rate of 23% for the full year compared to the 15% increase in 2020.

Adobe’s privileged position in the global digital transformation trend is evident in its growth trends. Its software as a service revenue has grown to over $ 12 billion on an annual basis as more customers have subscribed to its consumer and enterprise products. Executives acknowledged that the steady stream of popular company innovations, like Creative Cloud software and Experience Cloud, have helped keep annual growth above 20%.

More wins on the profit side

The news was equally good further down the income statement. Cash flow hit a record $ 2 billion in the fourth quarter of the fiscal year, and gross margin reached $ 3.6 billion (88% of sales), from $ 3 billion a year earlier. Adobe’s gross profit margin remained stable, but profitability increased. The operating profit represents 37% of the turnover against 35% last year.

ADBE Operating Margin Graph (TTM)

ADBE operating margin data (TTM) by YCharts

Profits fell for the full year, but only because the company reaped a one-time tax benefit in 2020. Operating cash flow hit a record $ 7.23 billion in the past 12 years. last months, or 48% of income.

“Adobe’s financial performance (…) has been exceptional,” CFO Dan Durn said in a press release, “with an acceleration in revenue resulting in more than $ 7 billion in cash flow. operating cash flow “.

The New Perspective

Adobe’s first crack in the forecast for fiscal 2022 warns of a slowdown ahead. Sales will increase by about 13% to $ 17.9 billion, management said, from the 23% increase last year. These gains will be tempered by comparisons with fiscal 2021, when demand soared, but also by accounting issues, including exchange rate fluctuations and the fact that its fiscal 2021 benefited from a week of sales. extra on the schedule. Management estimates that non-GAAP earnings will reach $ 13.70 per share, compared to $ 12.48 last year and $ 10.10 per share in fiscal 2020.

These forecasts imply strong and continuing momentum for Adobe, although perhaps not as aggressive a growth rate as some investors would like to see. The stock price fell immediately after the report, but remains significantly higher until 2021.

Adobe has promised to provide shareholders with more details on its long-term goals in an upcoming conference call and in a meeting with Wall Street analysts. But the company said it believes its total addressable market will grow over the next several years. Adobe has the potential to capture a significant share of a market that will be worth more than $ 200 billion by 2024, management said.

Gaining an edge in this race will be difficult – the market for consumer and business services software is crowded. But Adobe has a head start with its massive customer base and annual recurring revenue of over $ 12 billion. These benefits should serve him well in FY2022 as he takes another big step towards his longer-term goal of $ 20 billion in annual sales.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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2020 gross crop value down 29% – Lake County Record-Bee Wed, 15 Dec 2021 07:24:55 +0000

LAKE COUNTY— For the first time in six years, the gross value of Lake County’s agricultural production fell well below $ 100 million, setting a record as the largest decline in 10 years. The county’s commodities in 2020 totaled $ 75,471,368, down 29% from 2019 due to “significant declines in the value of wine grapes, timber, nuts and field crops,” according to the report on the 2020 harvests presented to the supervisory board on Tuesday by Agriculture Commissioner Steven. Hajik.

Board chairman Bruno Sabatier has expressed concern about the downward trend, but the report has not prompted any board discussion or public comment.

With a drop of 29% in 2020, 5% in 2019 and 8% in 2018, the department has seen the gross value of its agricultural products fall by 42% in three years. The three-year decline followed three consecutive years of gains – 6% increase in 2017 to a gross value of $ 120,802,142; 12% in 2016 for a gross value of $ 113,829,790; and 9% in 2015 for a gross value of $ 101,135,648. “2017 was the best year I can remember,” Hajik said at the meeting.

The grand total of $ 75.47 million for 2020 is the sum of the following: $ 70,308,792 or 93.2% for fruits and nuts; $ 1,235,000 or 1.6% for field crops and seed crops; $ 2,553,500 or 3.4% for animal production; $ 31,522 or 0.06 of 1% for forest products; $ 170,500 or 0.22 of 1% for vegetable crops; $ 90,300 or 0.12 of 1% for livestock and poultry products; and $ 1,072,170 or 1.4% for nursery production.

The report highlights the latest data on the county’s three main products – wine grapes, pears and walnuts. The gross value of wine grapes, the county’s main crop for at least 20 years, was $ 52,509,710, down 37% from 2019. Total tonnage was 39,520 and total grape acreage was of 10,009, a loss of five acres. The price per tonne of wine grapes has fallen by 26%. Cabernet Sauvignon was consistently at the top of the wine grape list with a gross value of $ 24,258,288, followed by Sauvignon Blanc at $ 15,489,621, Petite Syrah at $ 3,310,500 and Chardonnay at $ 2,553,300. . Commenting on the decline of wine grapes, Hajik said in an interview, “There are far too many wine grapes in California now. There are also people who thought that the grapes in Lake County were damaged by smoke in recent years, whether this is true or not.

The gross value of pears was $ 16,626,482, up 13% from 2019. Total production decreased by 3,256 tonnes and the price per tonne of pears increased by 30%. Bartletts led the way with a gross value of $ 15,534,991 for fresh, canned and by-product products. The gross value of the nuts was $ 1,047,600, down 49%, and production was down 3%. The price per tonne of nuts has fallen by 43%. “Nuts peaked in 2015,” Hajik said. “Today there are more nuts than the public asks for. And for the past two years, growers have had to deal with severe frosts in late October and November.

The report also notes increases in the production of nurseries (39%), vegetables (220%), and miscellaneous livestock (10.995%). Miscellaneous livestock refers to goats, sheep, pigs, rabbits, meat chickens and other meat birds. Declines were noted in miscellaneous fruits (4%), animal and poultry production (40%), cattle (14%), field crops (28%) and timber (98%). Miscellaneous fruits include apples, peaches, strawberries, raspberries, blackberries, melons, olives, etc. For reporting purposes, the gross value of pears represents the value of pears after packaging and processing. The figures do not indicate the value of the pears at the time of harvest or the gross income of the producers. However, the gross value of all other commodities included in the report represents the value of each commodity at the time of harvest.

Commenting on the overall decline in gross value, Hajik said, “I am concerned about the continuing decline, but there is nothing the government can do about it. Can we control the market? Can we control the weather? Can we control the workforce?

Hajik predicted that the 2021 numbers probably wouldn’t be that far off the 2020 numbers. “I’m sure things will be the same for 2021,” he said.

The report lacks any mention of cannabis. Hajik said: “Cannabis is not recognized as an agricultural crop.”

Crop reports are available at

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The Roth IRA backdoor may be on the chopping block. Here is what you can do now Mon, 13 Dec 2021 17:18:00 +0000 If the Build Back Better bill, passed by the House in November and currently before the Senate, becomes law, it could limit the options for high-income savers to convert their savings to Roth IRAs and Roth 401 (k) s, that offer tax-free withdrawals in retirement.

The most immediate restriction, unless lawmakers change the date, would start in 2022, when you would no longer be allowed to convert after-tax contributions – say from a non-deductible IRA – to a Roth.

Converting to Roth would not only allow your money to grow tax-free, but also allow you to make tax-free withdrawals. Having this option makes sense if you expect to be in a higher tax bracket in retirement or want more flexibility in deciding when to use different pots of money for different purposes in retirement or at any other time. .

Since the law has not yet changed, high income savers can still take steps to maximize their Roth 2021 options.

You can contribute up to $ 6,000 (or $ 7,000 if you are at least 50 years old) into a Traditional or Roth IRA. But if your modified adjusted gross income is $ 140,000 or more ($ 208,000 if you are married and filing jointly), you cannot contribute directly to a Roth in 2021. And if you’re covered by a workplace pension plan and your income is $ 76,000 or more ($ 125,000 if you’re married), you’re also not allowed to make deductible contributions to a traditional IRA.

Either way, however, you can make after-tax contributions to a traditional IRA. And you can then immediately convert those contributions into a Roth IRA.

While technically you can make your 2021 contributions until April 15, 2022, conversions must be completed – or at least be in progress – by December 31 in order to count for that year, before any potential restrictions take effect, California said. Mary Kay Foss, Certified Public Accountant based.

But usually a conversion can be done in a day or two. “It’s very fast,” Foss said.

The tax bite

The immediate problem, however, is that you will likely owe tax on at least some of the money you convert, even if you only convert your after-tax contributions.

To determine how much tax you will have to pay on your after-tax contributions, the IRS uses a pro-rata rule, which calculates what you convert as a percentage of all your IRA balances.

How much should I save for retirement?

Here’s how it works: Say you’re 51 and earn $ 7,000 after tax contribution this year to a non-deductible IRA, but you also have a traditional pre-tax IRA savings of $ 63,000. Under the pro rata rule, the after tax portion ($ 7,000) represents 10% of your total IRA savings ($ 70,000). So when you convert this year’s contribution to Roth, only $ 700 will convert tax free; you will have to pay tax on the remaining $ 6,300. And you will have to pay this tax by April 15, 2022.

While this sounds like double taxation, technically it won’t be because the remaining portion of your after-tax contributions will eventually reduce the taxes you pay when you make taxable withdrawals in retirement. “The remaining base of your non-deductible IRA contribution is taken into account when you make subsequent IRA withdrawals. It is not lost forever,” Foss said.

And of course, if you convert your pre-tax IRA savings to Roth as well, you’ll have to pay taxes on those savings as well.

There is a way to avoid the pro rata rule. If your employer allows you to transfer your IRA savings into your 401 (k), and you can do so before December 31, you will effectively have no other IRA savings other than the after-tax contribution of $ 7,000 for 2021 to convert. So, in this case, 100% of your conversion to Roth IRA that year will be tax exempt.

Get good advice before you act

The specifics of your situation maybe more complex as the examples above. And the IRS rules governing the different types of IRAs – especially Roths – are very complex, and never more so than when you transfer money from one to the other.

This is one of the best ways to get tax-free retirement savings

This is also the case if you are considering converting your after-tax savings. in your pension plan qualified to work in a Roth 401 (k), if your employer offers the option of making voluntary after-tax contributions. The advantage of Roth 401 (ks) over Roth IRAs is that there are no income eligibility rules and you can contribute much larger amounts each year. As with the Roth IRA, the restrictions for Roth 401 (k) would go into effect as early as next year under the Build Back Better bill passed by the House, if it becomes law.

So before you do anything, consult with a knowledgeable tax and retirement advisor who can guide you through your options and help you think through the tax consequences now and in retirement.

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