House Floats 'Flexible Giving Accounts' for Employees

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A bill introduced in the U.S. House of Representatives on July 25 would enable employees to set aside money for charity and receive a tax break.

The Everyday Philanthropist Act (H.R. 4002), sponsored by U.S. Reps. Vern Buchanan,R–Fla., and Thomas Suozzi, D–N.Y., seeks to “empower everyday, working Americans to give to charity.”

It would incentivize employees to set up a flexible giving account through their employer. This would enable them to set aside a pretax portion of their paycheck to donate to a nonprofit of their choice, resulting in an immediate reduction in their taxable income.

Employees’ annual pretax contributions would top out at $2,700; gifts beyond that amount would be included in taxable income. There would be no minimum contribution.

The proposed legislation comes at a time when overall giving in the U.S. has plateaued. Last year, Americans’ donations to charity were virtually flat.

This owed in part to the tax overhaul, which doubled the standard deduction, resulting in a drop in the number of households that itemized deductions, from more than 45 million in 2016 to between 16 million and 20 million in 2018.

In a recent report, researchers suggested several policies that could increase the number of donor households, including an enhanced deduction that provides additional incentives for low- and middle-income taxpayers.

Employers would enjoy several benefits from encouraging their workers to set up flexible giving accounts. Their corporate social responsibility profile would improve as they were seen to be doing social good. Recent research found that eight in 10 employees prefer to work for socially responsible companies.

In addition, the amount of payroll taxes employers pay would be reduced because the FGAs would lower employees’ taxable income.

Another bill, the Charitable Giving Tax Deduction Act, would allow taxpayers to write off charity donations whether or not they itemize. That bill was introduced and sent to the House Ways and Means Committee in May 2018.

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Democrats Float Bill to Help Workers in Closed Pension Plans

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Sens. Rob Portman, R-Ohio and Ben Cardin, D-Md., members of the Senate Finance Committee, introduced legislation Thursday to protect workers in closed defined benefit plans from having their benefits frozen by Jan. 1, 2020.

Portman and Cardin said that The Retirement Security Preservation Act of 2019 (RSPA) — which is included in the Setting Every Community Up for Retirement Enhancement (Secure) Act of 2019, that’s tied up in the Senate — amends and modernizes the pension nondiscrimination rules that apply to these single-employer pension plans.

The most recent estimate from the American Benefits Council finds that at least 450,000 Americans are at risk of losing future pension benefits by Jan. 1, 2020, if a solution is not reached, the senators noted.

“Some plans have already been forced to freeze due to Washington’s inaction,” they said.

The senators “are pleased that the legislation is included in the Secure Act, but we are introducing it as a standalone bill as well to send a message about its urgency,” Portman said. “Older workers in these affected closed defined plans deserve relief before it’s too late.”

Added Cardin: “While I maintain my belief that the Senate should pass the Secure Act now, we have an obligation to act immediately to prevent a further loss of benefits for workers affected by this provision. Congress must act immediately to give workers, especially those closer to retirement, the certainty they need to make decisions and plan their lives — be it passing the Secure Act or passing this standalone bill.”

The senators explained that some companies that have moved from defined benefit plans to defined contribution plans have elected to grandfather existing employees by closing their traditional DB plans (also known as “soft freezing”); other companies have “hard frozen” their traditional DB plans but assisted existing employees in other ways, such as through enhanced DC plan contributions.

“When a plan closes, existing participants or a subset of participants continue to earn benefits under the traditional DB plan,” the senators said. “When a plan is ‘hard frozen,’ employees earn no new benefits under the plan.”

Lynn Dudley, senior vice president, global retirement and compensation policy at the American Benefits Council, applauded Portman and Cardin’s bill.

“For the better part of a decade, we have been urging lawmakers to address the quirk in the nondiscrimination rules that effectively compels pension plan sponsors to stop making contributions for older, long-service workers. Now, the stakes have never been higher,” Dudley said in a Thursday statement.

She went on to explain that when employer sponsors of traditional defined benefit pensions “soft freeze” their plans (close them to newly hired employees), they typically want to allow older, long-tenured employees to continue accruing greater pension benefits for the duration of their employment.

However, as these grandfathered participants in the pension plan age and advance in the company, the plan can inadvertently be subject to regulations prohibiting discrimination in favor of “highly compensated” employees, Dudley said.

“This glitch in the nondiscrimination rules effectively penalizes employers for trying to ‘do the right thing’ for their older workers,” she argued. “It is compelling some employers to ‘hard freeze’ their plans by ceasing accruals. This is something nobody wants to see happen,” Dudley said.

Dudley also said the RSPA bill improves on existing Treasury Department guidance by updating the testing rules while providing targeted relief to the many pension plans trapped by current law.

“The RSPA is bipartisan, inexpensive and incredibly urgent,” Dudley said. “We strongly encourage Congress to address this issue as soon as possible.”

15 Ways to Lower Your Energy Bill

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Keeping the lights on isn’t cheap — never mind the air conditioning, furnace and hot water heater. In fact, the typical family spends an average of $2,200 per year on utilities, according to the Energy Department.

Tweaking your usage can lower your bill by as much as 25%. Keep reading for ways to save on your electric bill.

Heating and cooling

Home heating and cooling are 10 of the biggest culprits behind hefty utility bills — and the best places to look for cost-cutting opportunities.

1. Check seals on windows, doors and appliances: Make sure your fridge and freezer are well sealed to keep the cold air where it belongs. Same goes for your doors and windows. A bad seal allows energy to seep out, draining your wallet in the process.
2. Fix leaky ductwork: Improve the efficiency of your heating and cooling systems by repairing leaky heating, ventilation and air conditioning ducts.
3. Give your thermostat a nudge: Set your thermostat back 10 to 15 degrees when you’re asleep or away from home. Doing so for eight hours can lower your annual heating and cooling costs by around 10%. A programmable thermostat will do the work for you.
4. Adjust your fridge and freezer temperature: Set your fridge to 38 degrees and your freezer to 5 degrees. This will keep your food fresh, but your fridge and freezer won’t need to work as hard to maintain the temperature.

You could be saving up to $50 per month on your bills. See how much you could save.

NerdWallet can help you lower your bills and find you more ways to save money.

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Water

Hot water is the second-largest expense in powering most homes, according to the Energy Department. Cutting back on your hot water usage — in the shower, laundry and dishwasher — can make a sizable dent in your overall energy bill..

5. Take shorter showers: Trimming two minutes off your shower time can cut your water usage by 10 gallons.
6. Replace your showerhead: An efficient showerhead can reduce your water usage by 2,700 gallons per year. Look for one with the WaterSense label, which is certified to meet efficiency criteria set by the Environmental Protection Agency.
7. Don’t wash clothes in hot water: Cut your per-load energy usage in half by sticking to warm or cold water when you do laundry.
8. Fix leaky faucets: That drip, drip, drip isn’t just annoying, it wastes gallons of water.
9. Adjust the temperature on your water heater: The default temperature setting on water heaters is typically 140 degrees. Lowering it to 120 degrees can reduce your water heating costs by up to 10%. Leaving town for a few days? Turn your water heater to the lowest setting to conserve energy usage.
10. Purchase energy efficient appliances: If you’re in the market for a new washer, dishwasher or water heater, buy an energy efficient model to yield long-term savings. A dishwasher with the Energy Star label is required to use 5.8 gallons of water or less per cycle, compared to the more than 10 gallons used by some older models.  Prioritize appliances that run most often, like the fridge, HVAC system, water heater, dehumidifier, television, washer and dryer.
11. Ask about discounted rates: Some utility providers offer cheaper rates during certain times of the day, making laundry and other energy-intensive chores 5% to 25% less expensive during off-peak times.

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Power and lighting

Keeping the lights and electronics on accounts for roughly 12% of a home’s energy usage.

12. Swap out your light bulbs: Save $75 per year by swapping out the bulbs in your most used light fixtures with compact fluorescent or LED bulbs that bear the Energy Star label.
13. Install dimmer switches: Dimmers let you set the brightness in a room to suit your needs, setting the mood and saving electricity..
14. Use smart power strips: Some electronic gadgets never truly power off; instead, they sit in standby mode using a trickle of power that can add up over devices and time. These are usually — but not exclusively — items with a remote control, because the remote sensor needs power while waiting for your input. Plug these electronics into a smart power strip, which cuts off the current when the devices aren’t in use.
15. Do an energy audit: Utility providers will often conduct a home energy audit, sometimes for free, and can identify additional ways to reduce your energy usage.

9 Ways to Lower Your Cable Bill

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Cable bills never seem to get less expensive. Instead, they might jump $5, $10 or $20 without warning or a clear reason.

Those small increases can really hurt. But you can take control of your budget and your cable bill. Here are seven ways to lower your bill right now.

1. Cut back on premium channels

It’s hard to say goodbye to HBO, but doing so can shave as much as $20 off your monthly bill with some providers. Let go of Showtime and you could save another $5 to $15 per month.

Farewell doesn’t have to be forever, though. If you can’t live without “Game of Thrones” or “Homeland,” remove the channel when the season wraps.

You could be saving up to $50 per month on your bills. See how much you could save.

NerdWallet can help you lower your bills and find you more ways to save money.

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2. Pare down cable boxes

Premium channels aren’t the only extras you can trim. Additional cable boxes often cost $3 to $12 per month. Maybe the equipment in your bedroom isn’t necessary after all.

3. Pay attention to fees

Call your provider’s customer service line and question each fee on your bill. Some will be unavoidable, but you can sidestep others, such as those for HD technology, by tweaking your plan.

4. Nix the DVR

Miss your favorite show? There’s a good chance you can watch it on-demand the next day. Even local news segments live on via the stations’ websites. Trading in your DVR for a standard digital receiver could trim $10 or more off your monthly bill.

5. Downsize your plan

Trimming your cable package to include just your must-haves can save you as much as $40 per month with some providers — and you probably won’t even miss the extra channels.

A September 2016 report by Nielsen revealed that, on average, American adults watch only about 20 channels, though they get around 205.

6. Bundle cable and internet

Pairing your cable and internet service with some providers will save you more than $1,000 over two years.

Just don’t get talked into bundling services you don’t need, such as a premium cable package when you only want local networks or blazing-fast internet service that you only use to watch Netflix. These may indeed be great deals for some users, but that doesn’t make them great for you.

7. Negotiate a lower rate

Don’t be afraid to haggle with your cable provider. You may be able to negotiate a better deal by talking to customer service and asking for a discount.

8. Seek out cheap cable

Compare the rates at each provider in your area. As long as you won’t face a sizable cancellation fee for switching away from your current service, you could end up with a cheaper alternative.

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9. Cut the cord

Still not satisfied with your cable bill? Eliminate it altogether. You can still watch broadcast TV with the help of a digital antenna and binge on your favorite series with Netflix or Hulu. Subscriptions for Netflix start at $8.99 per month, while Hulu’s base plan is just $5.99 per month.

Those looking for a less drastic option can try SlingTV or DirecTV Now. Packages start at $25 per month with SlingTV and $40 per month with DirecTV Now. Both offer access to live and on-demand TV without all the extra fees of cable.

Whether you go bold or make small cuts, the savings on your cable bill will add up over time — giving your budget more breathing room so you can treat yourself in other areas.