FiLife

A hybrid car will most certainly cut your gas bill — and if you bought one last year, it could also shave down your tax bill.

New hybrid owners shouldn’t forget about the so-called alternative motor vehicle credit when filing your tax returns (you’ve only got a week left!). If you bought a new hybrid in ‘07, you may qualify for a tax credit worth as much as $3,000, according to the IRS, depending on what make and model of hybrid you purchased – and when you bought it.

Tax credits shouldn’t be confused with tax deductions. Credits are more valuable because they cut your actual tax bill, dollar for dollar, while deductions reduce your taxable income.

For the list of credit-eligible hybrids in 2007, click here. In order to qualify, you need to be the original purchaser of a new hybrid; used cars don’t apply. And if you’re leasing, you’re also out of luck. The credit is only available to the leasing company, the IRS says.

These credits won’t last forever. Once a new manufacturer sells 60,000 hybrids, the government begins phasing out the tax break. Take the Toyota Prius. If you purchased one between April and September of last year, you’re eligible for a $787.50 credit (down from $3,150 for 2006 buyers), while it disappears completely for people that bought after Oct. 1. The full credit for qualifying Honda hybrids is available for all 2007 purchases, but it’s being reduced this year.

If you’re in the market for a green set of wheels, check out this chart to see what’s tax-credit worthy in ‘08.

–Tara Siegel Bernard

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Over the past several days, we’ve witnessed the near collapse and quick rescue of Bear Stearns, one the nation’s oldest financial institutions. J.P. Morgan agreed to buy Bear for a per-share price that won’t buy you a cup of coffee at Starbucks. Meanwhile, the taxpayer Fed is kicking in $30 billion to help the deal along.

Oh, and did you hear last week’s news that we’ve already slid into a recession?

Things aren’t looking good. As such, the Fed is expected to cut rates again tomorrow. But is that the best way to handle what’s going on? Did the Fed go beyond its call of duty with the Bear bailout? Paul LaMonica of CNNMoney, along with some of his readers, raise those interesting questions in an article posted earlier today. You can read it here.

Have your own thoughts about the way the Fed has handled the credit crisis thus far? Post ‘em below.

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It figures. Just as I’m packing for Rome, the dollar hits a new all-time low against the euro.

I’ve put off traveling overseas for several years in hopes that the dollar would eventually firm up. But when you start reading stories about how some New York shopkeepers are beginning to favor the European currency, you lose hope. And you just go anyway.

Since we’re already starting at a disadvantage, I want to avoid as many of the fees banks and credit-card companies tack on every time you make a transaction in a foreign currency. So I did some research to find out the best credit-cards to use, as well as what’s the most economic way to convert my weakling dollars into euros (I need a small pile of euros to qualify for a 10% discount on my hotel). (more…)

When planning an upcoming trip to Rome, I knew we wouldn’t be staying at a hotel of the fluffy-white-robe variety.

When you factor in the impact of the weak dollar, a Holiday Inn-quality hotel suddenly carries the price tag of a room at the Hilton. So finding a comfortable place to stay in the center of the city - without spending a bundle - became our mission. Besides, that would allow us to indulge with a little less guilt on decadent dinners and other Roman treats.

We came up with a list of hotels using traditional sources: Frommers.com, Fodors.com, and recommendations from friends and family. Once we narrowed down the list, we started shooting off emails to our target hotels. And we were pleasantly surprised to learn there were ways to shave off a few euros here and there. (more…)

There have been a handful of occasions when I needed to call customer service about my husband’s credit-card account. I’m an authorized user on that account and have a card with my name on it.

But representatives always ask me to hand the phone to my husband, so that he can give them permission to speak with me. Instead of trying to deepen my voice by a couple of octaves — which I’m always tempted to do — I simply put him on the line.

It’s a minor inconvenience, but it made me think: is there a way we can get around this? If he’s traveling, or simply down the block at the gym, I should be able to call up customer service if I have a question about a random fee — and vice versa. (more…)

I’m a list maker. I keep lists in my date book, on yellow Post-Its, in my mind, everywhere. But there’s something about the start of a New Year that calls for a larger list, one that allows me to reorganize, reinvent and start with a clean slate. Here’s what’s on my financial agenda for 2008:

1. Find that apartment! My husband and I have been looking to buy a place since August, but we haven’t found anything just yet. The upside is that we’ve managed to save some more money. We need to continue to stay disciplined and look only at places within the price range we know we can realistically afford. We also need to make peace with the fact that our first place isn’t going to be our dream home. But it will be a “cozy” place (in euphemistic broker language) to start. (more…)

Stock doesn’t rank very high on my three-year-old nephew’s wish list. Buzz Lightyear, anything with a pirate insignia and the occasional Happy Meal are what make this little guy happy.

But instead of putting more money into Disney’s pockets this holiday season, his grandmother recently decided she wanted to let him and his ten-month-old brother share in some of Disney’s good fortune by buying some shares of stock.

I’ve been toying with the same idea, so I decided to investigate the best way for us to buy them stock or contribute to their college savings accounts. If you’ve also grown tired of giving the little people in your lives disposable pieces of plastic that may be covered in lead paint, we’ve listed a few options to consider below. (more…)

Many people in our grandparents’ generation continued to receive a paycheck (in the form of a pension) from employers during retirement. They could move to Florida and play golf, or whatever suited their fancy.

Those days are mostly over. We have to pay our own way in retirement. Ok, we get it. So given our situation, wouldn’t it be nice if our employers and the companies that provide our 401k plans did their best to make this formidable task a tad easier?

We’ve compiled a holiday wish list to let the 401k elves – and the employers that provide 401ks (and other similar retirement plans) — know what we’d like to see them work on for the New Year:

(more…)

Here’s my problem with the rescue plan.

The Bush administration intends to reward some borrowers who are in over their heads by cajoling mortgage companies into leaving those borrowers’ artificially low interest rates where they are. Those rates won’t jump, as they were scheduled to do soon. Read the White House’s explanation here.

But what about the folks who have saved diligently, have impeccable credit, earn a decent income and yet still are priced out of many homes because of the stratospheric real-estate prices that were propelled by easy credit? Folks like, oh, say, me for instance? (more…)

Money earning more money – it’s a wonderful thing.

As regular FiLife readers may know, my husband and I are looking to buy our first apartment. Our down payment resides in a Citibank e-Savings account, which currently yields 4.0%. We’ve saved a respectable sum, and I get a sense of satisfaction watching it grow without having to do anything at all.

But the last time I checked the balance - and I do this often - I started thinking: Can I do better?

So I came up with an idea. If I was a bank product manager for a day, I’d create something tailor-made for first-time homebuyers: an account specifically earmarked for down payment savings that offers one percentage point more in interest than the highest-yielding online savings account already in the market. (more…)