Jill on Money 12/24: Year-end investment and tax tips, retirement, fixed annuities

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It was a pre-Christmas/Hannukah miracle: economic reports showed marginal improvement and the House approved a two-month extension of the payroll tax cut and benefits for the long-term unemployed. As a result, the S&P 500 returned to the black on the year, closing at 1265 (the index closed at 1257.64 on December 31, 2010.)

So with just four trading days left in the year (markets are closed Monday), there were a bunch of year-end tax and investment questions on the Christmas edition of  "Jill on Money".

Given the economic gyrations of the past few years, many people find themselves juggling their financial lives across state lines. Jeff was forced to relocate to TX for work, but still remains a WI resident and wanted to know whether any of the money he spends in Texas is tax deductible. Meanwhile, Les is living in GA, though still owns a property in HI and wanted to understand what the rules are around claiming expenses against rental income.

E-mails from Kathy and Luke focused on investment allocation for retirement accounts. Each of them asked about annuities, which gave me an excuse to remind everyone why now may not be the best time to plunge into a fixed annuity.

Anil asked about tax selling in two separate brokerage accounts - one in his name and one in his wife's. The question was a perfect lead-in to an explanation of the rules surrounding tax loss selling.

What if I told you that I could guarantee a 7-8 percent after-tax return? Sounds pretty sweet, right? Well that's what Brian and his wife are going to earn, if they use their combined base income of $210,000 to accelerate the pay down of their student loans. For good measure, I was able to reiterate that while blue chip companies like P&G, GE, J&J and Ford might pay reasonable dividends, they are not safe.

Finally, Bradley from MI purchased a mutual fund from his bank and now is not sure what he should do. The fund is down, but there may be penalties if he sells.

Here are web sites and resources mentioned in this week's show:

-- Year-end tax tips

-- Mutual fund cost basis methods and calculator

-- Immediate Annuity Calculator

-- 5 Rules for Immediate Annuities

-- Immediate Annuities: Security or Snake Oil?

-- 9 Questions to Ask a Financial Advisor

-- How to generate income from your portfolio

-- IRS Business Expenses

-- Deductible rental expenses

Thanks to everyone who participated and to Mark, the BEST producer in the world. If you have a financial question, there are lots of ways to contact us:

Call 855-411-JILL and we'll schedule time to get you on the show LIVE

Send an email: askjill@moneywatch.com

Tweet me: @jillonmoney

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    Jill Schlesinger, CFP®, is the Emmy-nominated, Business Analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and Chief Investment Officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.