Buying A Used Car

By: John L. White

You don't need to have the knowledge of a mechanic to find a good used car. The two most important qualities you need are patience and common sense. I spell out the common sense strategies in this article. Only you can supply the patience.

It is critical that you not be in a hurry when shopping for a used car. You have to be willing to do the necessary legwork required. If you feel like you can't devote the required time to this search, much as I hate to admit it, you might be better off purchasing a new car. Don't get me wrong though, purchasing a used car is still a much better financial decision than buying a new one, but only if you are willing to devote the time and effort to do it properly.

With regard to the type of car you want to buy, maintenance history is important. Edmunds.com is a good resource for this. You want to select vehicles that have the best maintenance records, so hopefully you will have to spend less money on repairs over the years. Another thing to consider is gas mileage. If you purchase a gas-guzzler, you will pay for it over the years. Also, try to steer clear of a vehicle's first year of production. There are typically more mechanical problems with first year vehicles.

Once you have narrowed your list down, you can begin your search for a specific vehicle. The classified ads and autotrader.com are where I usually start. I try to narrow the ads down to ones that mention excellent or mint condition. I have no interest in purchasing a car that was not immaculately maintained. You shouldn't either.

After you locate a few ads that look promising, prepare a short list of questions that you want to ask before you pick up the phone and call. You will eliminate unnecessary trips if you ask the correct questions over the phone. Your goal is to try and eliminate the cars that won't meet your standards so you don't waste your time and money driving out to see a car that is a hunk of junk.

Are they the original owner?

Buying a used car from the original owner helps eliminate some of the unknowns you might encounter. The exception to this is if there are full maintenance records from the previous owner. They tell a complete story. The most important piece of that story are the records that will prove the oil was changed on a regular basis. With regard to maintenance history, oil change frequency is absolutely critical.

What is the mileage?

While low mileage is always desirable, there is a tradeoff involved with low mileage vehicles. You are going to pay more than you will for one with high mileage. Conversely, you will be able to get the high mileage vehicle for less money. The reasoning being that there is less life remaining in a high mileage vehicle. While generally this is true, I think there are exceptions you should consider. If you buy a vehicle with a reputation for lasting years and years with high mileage (like a Toyota) and you know that the vehicle has been properly maintained, don't necessarily let the mileage scare you away. However, make sure that the price is adjusted accordingly for the mileage because you can expect more repairs and maintenance with a high mileage vehicle.

Has the car been in any accidents?

This is a critical question. I won't purchase a used car that has been involved in anything but the most minor fender bender. If you know or have any idea that the vehicle has been in an accident, walk away. There are too many unknowns. Is the frame bent? Does everything still seal like it should? Was it repaired properly? Is there any damage you can't see? Your best bet is to play it safe. When in doubt, don't take the chance.

Has the car been regularly maintained and does the seller have records?

If there are no maintenance records, walk away. Don't take the owner's word. You want proof. Make it clear that you will want to review the records if you make the trip to see the car.

Why are they selling the car?

This may seem like an obvious question, but the answers you get may be enlightening. The answer I like to hear is they are upgrading to a new vehicle. Some people just like to have a new vehicle every few years. There have been several times that I have asked this question and the person just started talking and kept going, eventually revealing information that told me I didn't want to investigate the car any farther, or was just so weird that my gut instinct told me to walk away.

If the vehicle does not pass any of these questions, you should be honest and thank the person for their time and end the call.

PayPal - Protect Yourself from Fraudulent Emails

A fraudulent (spoof) email pretends to be from a well-known company, such as PayPal or eBay, in an attempt to get personal information from you. People who send spoof emails hope to use your information - such as credit and debit card numbers or account passwords - to commit identity theft.

You can prevent spoof from affecting you

Spoof, or "phishing," emails - and the spoof websites often associated with them - are deceptive in appearance. However, they contain content that reveals they're fake. The most important thing to do to protect yourself is be able to spot this misleading content.

Know a spoof when you see it

Frequently, a spoof email looks something like this:
Spoof screenshot
What to watch out for

1. Generic greetings. Many spoof emails begin with a general greeting, such as: "Dear PayPal member."

2. A false sense of urgency. Most spoof emails try to deceive you with the threat that your account is in jeopardy if you don't update it ASAP.

3. Fake links. The text in a link may attempt to look valid, then send you to a spoof address. Always check where a link is going before you click. Move your mouse over it and look at the URL in your browser or email status bar. If the link looks suspicious, don't click on it. And be aware that a fake link may even have the word "PayPal" in it.

Learn more ways to spot spoof

Read PayPal's 10 ways to recognize fake (spoof) emails now.

Questions PayPal will never ask you in an email

To help you better identify fake emails, we follow strict rules. We will never ask for the following personal information in emails:

* Credit and debit card numbers
* Bank account numbers
* Driver's License numbers
* Email addresses
* Passwords
* Your full name

Ways to fight spoof

* Report it. Forward the entire email - including the header information - or the site's URL to spoof@paypal.com We investigate every spoof reported. Please note that the automatic response you get from us may not address you by name.

* Use Account Guard on the eBay toolbar. If you use Internet Explorer, download the eBay toolbar. Account Guard helps ensure you are on PayPal or eBay. Download the eBay toolbar now

* Use the SafetyBar. Email security provider Cloudmark has engineered a toolbar for Microsoft Outlook you can use to report spoof emails. Should you receive a spoof, click the SafetyBar's "Block Fraud" button to automatically report it to us. Download the Cloudmark SafetyBar now

We're dedicated to protecting you

PayPal works hard to educate you on the best ways to recognize and fight spoof. Learn more about how PayPal fights fraud for you around the clock.

Steps to take to prevent spoof from affecting you

* Keep your security software current. Update your firewalls and security patches frequently. Consider using software from companies like McAfee and Symantec.

* Monitor your account. Check your account periodically to see if there is any suspicious activity.

* Change your password often. And, if you think your security may have been breached, create a new password immediately.

* Use a unique password. Your PayPal password should be one-of-a-kind, and not used on any of your other accounts. A good password contains letters and numbers. This makes it more difficult for people to guess it.

* Take action. If your information is compromised, get a fraud alert placed on your credit report.

Get more information on how to prevent fraud
To download security tools, report fraud, and learn more about how we protect you, visit the PayPal Security Center today.

Even if you don't itemize, don't overlook above-the-line tax deductions

By: Sandra Block

Smart consumers are skeptical of offers that sound too good to be true. If those miracle weight-loss products advertised on late-night TV really worked, we'd all look like aerobics instructors, and manufacturers of elastic waistbands would go out of business.

But when it comes to your taxes, you really can reduce your tax bill without breaking a sweat. The secret: above-the-line deductions. These deductions are taken on the first page of your tax return, above the line for your adjusted gross income. Even if you take the standard deduction instead of itemizing, you may qualify for these tax breaks.

Quick guide to tax forms Your tax situation will determine the kind of tax return you must file with the IRS. A quick guide to figuring out which form to use: 1040EZ Taxable income below $50,000. Single or married filing jointly. Under age 65. No dependents. Interest income below $400. 1040A Taxable income below $50,000. Capital gains distributions from mutual funds, but no other gains or losses. Only deductions are for IRA contributions, student loan interest, educator expenses and/or tuition and fees. No itemized deductions. 1040 Taxable income of $50,000 or more. Itemized deductions. Self-employment income. Income from sale of property. Source: IRS

Itemizers shouldn't overlook these deductions, either. Above-the-line deductions reduce your AGI, which may make you eligible for other tax breaks tied to your income, says Jackie Perlman, senior tax analyst for H&R Block. For example, itemizers can't deduct unreimbursed business expenses unless they exceed 2% of AGI. Shrinking your AGI will increase the chance you'll qualify for that deduction, she says.

To get the full benefit of above-the-line deductions, you have to know what they are. A look at some deductions that could save you money:

Individual retirement accounts. The maximum contribution for an IRA is $3,000 in 2002, or $3,500 if you're age 50 or older. If you're not covered by a retirement plan at work, you can deduct your IRA contribution.

If your company offers a pension or retirement-savings plan, such as a 401(k), you can't deduct the full IRA contribution if your AGI exceeds $34,000 a year if you're single or $54,000 if you're married and file jointly. Singles with AGI up to $44,000 and married couples with AGI of up to $64,000 qualify for a partial deduction.

Don't overlook the spousal IRA. If your spouse isn't working or isn't covered by an employer plan, you can contribute up to $3,000 on your spouse's behalf or up to $3,500 if your spouse is 50 or older. You can deduct the full contribution as long as your combined AGI doesn't exceed $150,000, Perlman says. If your AGI is between $150,000 and $160,000, you may be eligible for a partial deduction.

You have until April 15 to contribute to an IRA for 2002.

Student loan interest. You can deduct up to $2,500 in interest paid on federal student loans. The deduction phases out for single taxpayers with AGI of more than $50,000 or married taxpayers with AGI of more than $100,000. The deduction is available for the full term of the loan, assuming you meet the income thresholds. A rule that limited the deduction to the first 60 months of loan payments was eliminated in 2002.

Higher education expenses. A new above-the-line deduction for 2002 allows taxpayers to deduct up to $3,000 in college tuition and related expenses. Single taxpayers with AGI of up to $65,000 and married taxpayers with income of up to $130,000 qualify. The deduction is a useful tax break for families that earn too much to qualify for the Hope Scholarship or Lifetime Learning Credits.

Classroom expenses. If you're a teacher and spent your own money on books, school supplies, computer equipment and supplementary educational materials, you can deduct up to $250 of your unreimbursed costs.

Alimony. Alimony, including back alimony, is deductible in the year in which it's paid. Property settlements and child support aren't deductible.

Early withdrawal penalties. Did you cash a certificate of deposit before it matured in 2002, triggering an early-withdrawal penalty? You can deduct the lost interest on your tax return. You don't have to itemize, but you must use the longer Form 1040 to take the deduction (see box for guide to tax forms). If you're not sure how much to deduct, check the Form 1099 from your bank, Perlman says. The amount should appear under "forfeited interest."

Taxpayers often mistakenly believe this deduction also extends to penalties triggered by an early withdrawal from an IRA, Perlman says. Unfortunately, those penalties — usually 10% of the amount withdrawn — aren't deductible, she says.

Moving expenses. The cost of a job-related move is an above-the-line deduction, as long as your new job is at least 50 miles farther from your former home as your former job.

Hybrid vehicles. If you bought a hybrid car in 2002, you can take an above-the-line deduction for up to $2,000 of the cost. The IRS says the Toyota Prius, the Honda Insight and a hybrid version of the Honda Civic are eligible for the deduction. The deduction is limited to new cars, and you can take it only for the first year you use the car.

Protecting Your Assets

Have you ever wondered what would happen to your assets if you were sued, in a car accident and it was your fault or if you became disabled or even died? Most people consider this question but do very little about taking the necessary steps to protect their assets.

The first thing to do is to have a plan in place before anything bad happens to you. Even if you are one of the luck ones and nothing ever bad happens, eventually as a fact, everyone dies.

When you die, your bank accounts are frozen, and an executor is appointed to wrap up your estate. This means finding everyone you owed money to, and settling the debts. If you have a family, and all your assets are in your own name, your spouse could be unable to access your funds for up to 2 years.

There are three major concerns when it comes to protecting your assets: estate duties, income taxes, and lawsuits.

Estate duties

When you die, the government claims a percentage of the value of your estate. This amount varies from country to country, and it could be anything from 20% to as much as 55%.

The solution to the estate duty problem is to ensure that your estate is worth as little as possible when you die. Moving your assets into a living trust could be a good solution, as the trust is not taxed upon your death.

Income tax

How do you legally reduce your tax liability? One way is to decrease your income to an absolute minimum. Anything you need could be paid for by a business. For instance, if you need a new laptop, it could be paid for by your corporation or living trust. It is a legitimate business expense, as long as you use it for generating income, and not just for playing games.

The expenses of a business are deducted from its income before taxes are calculated. For individuals working for an employer, taxes are deducted before you even get your paycheck. That means that your personal expenses are paid for with after-tax income. If a separate legal entity can pay some of these expenses, it reduces the amount of money you need to earn, and the amount of tax you need to pay.

Lawsuits

The first thing that happens when someone wants to sue you is that his or her lawyer will try to find out what you are worth.

It is not difficult to find out someone's net worth by examining public records. These days, on the internet, it is even easier. What you need to do is look like a poor target. This could mean transferring as many assets as possible into a separate legal entity, which you do not own, but do control. This could be a living trust, or a corporation.

It might also mean that you ensure that properties in your own name are mortgaged to the hilt, so that your net asset value (the difference between what you own and what you owe) is as low as possible. Ideally, you want your assets and your income to be as small as possible, so that you are not worth suing you.

In conclusion

Everyone has different financial needs. Laws are different from country to country, and from state to state. It is essential that you get professional advice from a competent financial advisor before doing anything.

If you are in financial trouble, it is already too late. If you transfer assets in order to put them out of reach of your creditors, it may be seen as fraudulent and illegal. You need to have a plan in place before you are sued, and before anyone tries to take your assets away.

You may think that you are too young to worry about asset protection, but it is not too early to get a plan in place. It is a cliché, but still true: If you fail to plan, you plan to fail.