TradeKing Online Broker Review


Customer-driven TradeKing is an award-winning online discount broker that charges a flat commission for any kind of equity order – be it market, limit or broker assisted. TradeKing only charges $4.95 per trade; Zecco is slightly lower at $4.50 per trade but has pricing tiers for different types of trade including $19.95 for broker-assisted orders.

Trade King charges only $0.65 for an option contract. There is no minimum to open or maintain an account, but margin accounts require $2,000 for equities and $25,000 for writing naked puts and $100,000 for writing naked calls. A naked option trade is executed by someone who does not have a position – long or short – in the underlying stock and is exposed to considerable risk.
Award-winning Customer Service

TradeKing is pretty nifty and has garnered awards from industry standard like Barrons and Smart Money in 2008 and 2009 for outstanding customer service – you are assured of speaking to a live person in minutes without having to punch a lot of buttons, expect an email reply within 2 hours on a trading day. Better yet, you can even have a live chat to get immediate feedback if you are still confused about an issue.

While every brokerage is obliged to get its customer the best price available, that does not always happen especially with a volatile stock. TradeKing promises best execution – such as speed of transaction and execution price, failing which, your trade is free. There are some exemptions to this, such as advanced orders and stop orders and it is best to be aware of what these are.

Impressive Suite of Free Tools

Another of TradeKing’s appeal lies in its easy user interface arsenal of free trading tools for stocks, options, EFTS and mutual funds. For stocks and options, it has scanners that will trawl through the market for those names that fit your criteria. You can save the criteria and not have to input them each and every time. There are useful interactive tools with views that you customize, such as easily zooming from short to long-term horizons, drawing trend lines or comparing performances against the stock indices.

It has intuitive tools for options trading. In the options scanner, there are 25 criteria to define the options you are looking for. There is a companion options strategy tool that will devise options strategies from basic puts and calls to straddles, strangles and collars. You can place an order without having to change screens.

Uses the profit and loss calculator to figure out the potential for making or losing money from possible or existing positions, and a probability calculator to work out how likely it is your stock or option will reach touch your desired price. Additionally, there is a very powerful tax manager which processes all transactions and corporate actions, works out, before you trade, short and long term gains or losses, and churns out tax reports on demand.

Special Offers and Education

TradeKing provides a whole range of educational materials in a variety of media such as videos mp3s, text and podcasts so that you can down load a seminar and listen to it on your iPod. Materials go from basic to sophisticated trading strategies. It is leveraging social media and has a trader’s community where you can follow the top trader, ask questions or chat with like-minded investors.

Currently, TradeKing is running some very attractive promotions. It will: –

  • Reimburse up to $150 in account transfer fees
  • Pay you $50 for every referral that opens an account with $1,000 and executes you a trade. The $50 bonus shows up in your non-Ira account.

Although there are slightly cheaper discount brokers around, TradeKing has a very impressive all round service. Operating since 2005, TradeKing has earned well-deserved kudos from both users and reviewers.


Roth IRA vs Traditional IRA

When making decisions about your financial future, it can be confusing and frustrating trying to understand the ins and outs of financial planning for retirement. Many people can’t afford to make a money mistake. Understanding IRA’s may be one of the more difficult aspects of planning for retirement savings goals. But gaining the knowledge of which IRA may be better for you, the Traditional IRA or the Roth IRA, can help to improve your money in the future.

Traditional IRA

First off, IRA stands for Individual Retirement Accounts. They are designed by the federal government. The Traditional IRA was first established in 1981 to help American citizens with a way to save for retirement through a means that is tax beneficial. Taxpayers are able to contribute a yearly total of $5000 or $6,000 (over 50 years old) into an account. The contributions are tax deductible and earnings on the account are then tax-deferred until the account holder reaches the age of 59 ½.

Roth IRA

The Roth IRA is a more recent venture, established in 1998 is not an option to individuals who have a gross yearly income of $110,000 for singles and $160,000 for married people. Also with the Roth IRA, the contributions are not tax-deductible in the year they were made. However, the money contributed and distributed from a Roth account is tax-free during the lifetime of the account.

Deciding which kind of IRA is the right one for you will ultimately be a personal decision. Each person may have their own opinion about which to choose so individuals are best to decide for themselves or upon the advice of a financial advisor. Many feel that the Roth IRA is the best choice because in the long run all the money in the account will be tax-free for life (provided laws remain the same), even if the contributions are not during the working years. If you meet the financial guidelines, the Roth can be viewed as having the more valuable option. Some individuals feel that they prefer the tax-deduction benefits during the working years through the Traditional IRA. Concern about the changing of laws in the future years is relevant because of the country’s growing deficits.

Making the Change

Some individuals will first choose one type of account over the other but then down the road change their minds. Regardless of which account you started first, you can make the switch. You can do what is called a ‘rollover’. While a rollover is possible, it doesn’t come without a cost. You will be required to pay taxes at ordinary rates on the amount transferred but you are not required to pay penalty fees for early distribution. Making the decision to rollover funds will require that you look at the end result and if the hit you took in taxes early will be less than what you would have spent in the long term. For instance, if an individual 35 or younger were to convert from a Traditional to a Roth account, the move would likely be smart and ultimately pay for itself but not work from those older than 35.


ShareBuilder Online Broker Review

ShareBuilder is a subsidiary of ING Bank and is consistently rated as one of the top discount online brokerages.  If you have an ING Direct account, you can connected it with your ShareBuilder account which makes the entire process of investing simple – and creates the opportunity for ShareBuilder’s most notable feature of automatic investing.

Automatic Investing with ShareBuilder

While many investors push for frequent day trading and short investments, ShareBuilder promotes the idea that wealth is created through long term investing and automatic investments.  They are also a fan of reinvesting your dividends.

There are some very attractive rates for individuals using ShareBuilder with automatic trades.  You can purchase fractional shares which means every cent of that investment is going toward the cost of buying your selected stock.

Automatic investing allows you to purchase specific dollar amounts of stocks on a weekly, bi-weekly or monthly schedule.

Real Time Trades with ShareBuilder

If you decide you don’t want to use the automatic investing feature of ShareBuilder, or that you would like to supplement it with real time trades, you can do that as well.  You can buy or sell your stocks in share amounts real-time, act immediately on your investment decisions and conduct orders in seconds during market hours.

Open a ShareBuilder Account

If you have about ten minutes, you have enough time to open an account.  You just need to have your standard personal and financial information available to open the account online – including your social security number, employer, bank account data, identification and address.  They also ask you about your trading experience.

Once you’ve opened your ShareBuilder account, you have some options for the plan you’d like to use.  There is a Basic Plan, Standard Plan and Advantage Plan available.  On the Basic Plan, you don’t pay a monthly fee but you pay $4 for each automatic investment.  The Standard Plan is $12 per month, and you get up to 6 automatic investments included at that price, with additional automatic investments at $2 each.  For individuals who want to use more frequent automatic investing schedules, the Advantage Plan is $20 per month and includes 20 automatic investments and additional automatic investments at $1 each.

Real-time trading will cost the same per trade no matter which ShareBuilder plan you select and seem a bit pricey at $9.95 per online trade.  For more info on ShareBuilder’s pricing, visit their pricing page.

How to Use ShareBuilder

If you have an ING Direct savings account or an Electric Orange checking account through ING, you can connect them to your ShareBuilder account and transfer money for free, instantly.  If you use another bank account, you can transfer money to your ShareBuilder account through ACH, checks, or wire transfer. If you’d like to place a real-time order and cover the cost of the order from your bank account immediately, ShareBuilder uses Express Funding and charges $5 per trade to do so.

You can set up automatic transfers from your bank to your ShareBuilder brokerage account to fund your automatic investing, or you can make real-time trades via the internet or phone.


$250 Prescription Drug Rebate Payment For Doughnut Hole Medicaid Gap

One of the immediate changes which will result from the historic 2010 health care bill will be a $250 payment to help with prescriptions.  There are quite a few Americans who have a drug coverage gap known as the “doughnut hole”.   This gap in Medicare D Drug benefit program means that assistance from Medicare for different levels of annual drug costs is not consistent through different levels of annual costs.

Right now the following costs (which include drug costs and Medicare payments)  are covered as shown:

  • $0 to $295 – No coverage – patient pays 100% of the costs.
  • $295 to $896.25 – 75% is covered by Medicare.
  • $896.25 to $4,350.25 – nothing is covered by Medicare – This is known as the “doughnut hole“.
  • $4,325.26 and up – 95% covered by Medicare.

Medicare Part D is a program to help subsidize the prescription costs of Americans and has been in place since January 1, 2006.  It was introduced as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

Is this $250 rebate permanent?

No, but the drug companies will be lowering the prices on their brand-name drugs by 50% starting in 2011 and 75% by 2020 which will completely close the doughnut hole so this rebate won’t be needed anymore.

How do I claim my $250 prescription payment?

If you are eligible for the tax free $250 rebate, then Medicare will automatically send it to you.  You don’t need to do anything.  No forms, no phone calls – nothing!

When will I get the $250 rebate check?

The $250 checks will begin to get mailed starting in mid-June of 2010.  You only get a check if you are in the “doughnut hole” coverage gap.  The checks will be mailed throughout the year, but only to new people who have reached the coverage gap.  You can only get a maximum of $250 and no more.

$250 Drug Rebate Scams

Please be aware that there are people who are trying to scam seniors into handing over their personal information by telling them it’s necessary to get the rebate.  This is not true.  Nobody should call you about the rebate – if they do, then don’t give them any information at all.


COBRA Extension 2010 And Unemployment Benefits Extension 2010

On March 3rd, President Obama signed the Temporary Extension Act of 2010 HR4691 after it was passed by Senate with a resounding 78-19 vote.  This bill only creates extensions for one month – until the end of March but it will provide much needed relief for many unemployed Americans.

There were two main sections of this bill which affect many Americans

COBRA extension 2010

COBRA is a medical health care plan for unemployed people which had been 65% subsidized by the government as part of the Stimulus effort of last year.  The unemployed person pays 35% of the COBRA premium and the government pays the other 65% for up to 15 months.

This subsidy had been scheduled to run out for people getting laid off after February 28.  Given the very high national unemployment rate (10.6%) it only makes sense that this program extension is quite necessary.

To qualify for this extension you must have been laid off between September of 2008 and March 31, 2010.

Unemployment Benefits Extension 2010

There have been numerous unemployment benefit extensions as a result of the stimulus package from last year and subsequent extensions as well.  Further extensions would be provided as part of this bill.

Passing of this Bill was delayed by Republican senator Jim Bunning of Kentucky who single-handedly held up the bill because of deficit concerns.

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$250 Prescription Drug Rebate Payment For Doughnut Hole Medicaid Gap


Senate Rejects $250 Stimulus Check For Social Security And SSI

It looks like the proposed $250 Social Security stimulus check which was announced by President Obama late last year is unfortunately not going to be sent out.

On March 3, the Senate voted down the proposal for a $250 bonus check by a score of 50-47.

The reason that the plan was voted down was because of the cost. It was estimated that sending out the $250 checks to Social Security recipients as well as SSI recipients would have cost about $14 billion dollars.  Considering the current deficit is at record levels, the Senate decided that some cuts had to be made.  The other reason is that the Social Security payments are indexed to inflation which is why they were increase 5.8% last year, so to give a bonus when inflation is low, defeats the purpose of the indexing.

Just last week Senator Bunning held up another important vote on extending long term unemployment benefits in a rather bizarre one-man show of fiscal restraint.

Will Social Security Payments Be Paid If United States Defaults On Debt?

The government is on pace to run up a record $1.6 trillion deficit this year because of various stimulus spending including $66 billion dollars on various unemployment extension benefits.

The $250 Social Security payment was being considered to make up for the fact that the Social Security payout did not have a cost-of-living increase this year because of low inflation.

The $250 check was paid out last year to Social Security recipients, SSI recipients and a few other groups as well.

Is there any chance of another $250 stimulus check this year?

This Bill is dead in the water but that doesn’t mean a similar Bill couldn’t be created.  I personally doubt that there will be another check this year but if the cost-of-living increase for 2011 is zero or close to zero percent then I think the odds would be quite good that another $250 bonus check would be approved.

How many senior citizens does this effect?

There are about 55 million senior citizens receiving Social Security who would have been eligible for this bonus payment.  Although the check amount is not huge, it will be interesting to see what effect, if any this will have on future elections.  It was widely expected that this stimulus payment would be paid out by March of 2010 and there will be an awful lot of disappointed, and possibly angry senior citizens who might be thinking that they have been short-changed $250 by this vote.


How To File Your Federal Taxes Online For Free

Everyone has to file their taxes and nothing is worse than having to owe money at tax time AND have to pay a fee to do it!  Well, for certain tax situations you can file your taxes for free!

Basically if you have a fairly simple tax return (only use the 1040 type forms) then you can file your federal taxes for free.  The TurboTax Online Free Edition offers free federal tax filing.

Here are some of the features of TurboTax Online Free Edition

  • Audit support center – Step by step guidance in case the IRS contacts you about your tax return.
  • Saves your work – You can finish the return in as many different sessions as you wish.  TurboTax will remember your work from previous sessions.
  • Upgradeable – If the free edition is not sufficient for your tax filing needs then you can upgrade at any time to one of the pay versions of TurboTax without losing any of your work.
  • Live tax answers – Live answers available from TurboTax experts.
  • Free tech support
  • Error checker – A feature called “Smart Check” will verify your return for possible mistakes.
  • Up to date – TurboTax is always up to date with the latest tax laws.
  • Refund real time – You can always see your tax refund adding up as you fill out the forms.

Give it a try and let me know what you think of this software!

Another option if you don’t like TurboTax is H&R Block at Home (formerly TaxCut) Free Edition.  This program is similar to TurboTax in that the software is free and you can file your federal taxes for free as well.

Check out a more comprehensive review of all the editions of TurboTax.

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Free federal online filing


Income Tax Deductions That Will Save You Money In 2011

Filing your taxes is a pretty complicated process and it seems to get more difficult each year.  Whether you are preparing your tax return using a software program like TurboTax or filling out the tax forms by hand it is important to know the rules.

When filing your taxes this year, don’t forget about the income tax deductions you can claim. Using these common tax deductions is an easy way to help you reduce your taxable income. It could also place you in a lower tax bracket.  Either way you can save some money which is always a great thing.

Each person filing taxes must either choose the standard deduction or itemize their deductions. The idea is to use the method that gives you the most deductions and the lowest amount of taxes.

The standard deduction is a common tax deduction that is a flat dollar amount which reduces the filer’s taxable income. This deduction varies by a person’s age, filing status, and certain disabilities.

Here are some income tax deductions you need to know

  • If you have children (dependents), you may qualify for the Child Tax Credit. This can be found on Form 1040, Line 51.
  • Alimony payments are a tax deduction for the person paying it and taxable income for the recipient. Alimony paid is reported on Form 1040, Line 31 and alimony received is reported on Form 1040, Line 11.
  • Tuition and fees deduction is a tax deduction for anyone who paid college tuition and other mandatory school fees during the tax year. These deductions are reported on Form 1040 and 1040A. 2009 is scheduled to be the last year for this deduction. Another deduction similar to these are the Hope or Lifetime Learning tax credits for those who paid college tuition.
  • If you paid interest on a student loan, there is a tax deduction found in the “adjustments to income” section of Form 1040 or 1040A. You can claim up to $2,500 in interest on this deduction. You are able to take this deduction even if you didn’t choose to itemize or in addition to any other itemized deductions.
  • The Retirement Savings Tax Credit is available to all those who contributed to a retirement plan. This is found on Form 1040, Line 50 and on Form 8880.
  • If you donated money or property to a qualified non-profit organization, then that is a tax deductible contribution. Ask for a receipt, or keep records on your own, especially for donations over $250. If donating property, keep records that indicate the value of the property and the condition it was in when given to the charitable organization.
  • Car and truck expenses are tax deductible if your car or truck is driven for business, medical or charitable uses.
  • Casualty, disaster and theft losses may be tax deductible as well. These losses are reported on Form 4684 and Form 1040.

Each deduction has its own restrictions and instructions. If you don’t understand how to apply the deductions to your specific needs, consult a tax advisor. There are some tax advisors that offer free services (if you qualify, usually based on income).  Tax software such as TurboTax will help you find deductions that you might not have known qualified for. Even if you pay for your taxes to be done by an accountant, it is generally well worth the money you save with their knowledge on applying these deductions and credits properly.

Please keep in mind that this article is not meant to be advice.  There could be plenty of other tax deductions available for you as well.

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