Did someone say ‘fire sale’?

To celebrate the return of one of our favorite shows ever, we revisit the tragic torching of Bluth’s Frozen Bananas. In the iconic Arrested Development episode Top Banana, Michael, George Michael and Gob watch the Bluth family banana stand burn — only to later find out exactly what George Sr. meant when he said “there’s always money in the banana stand.” And where there’s money, there are usually some taxes, too.

We turned to Lynn Ebel of the Tax Institute at H&R Block for some answers to our most pressing questions.

Could the Bluths take a casualty loss deduction?

If the banana stand is destroyed by local vandals, the owners can take a deduction for the casualty loss in the amount of loss in value that is not covered by insurance. A casualty loss occurs where property is destroyed by an unexpected or unusual force, including destruction caused by vandalism. However, no casualty loss deduction will be allowed if the banana stand was intentionally destroyed by one of its owners, such as by arson. So, no deduction for the Bluths in this case.

Also in this episode, Maeby steals cash from the register, and then attempts to conceal her theft by throwing out unsold bananas “so the numbers would match.” Could the Bluth family deduct the cost of the bananas Maeby threw away?

Though the owners of the banana stand can typically deduct the cost of bananas that are unusable to due spoilage, they cannot deduct the cost of bananas they consume themselves — or that their children may simply throw away in an ill-conceived scheme to extract cash from the business.

Are banana stand employee wages taxed if the employee is a family member?

Even though the banana stand was owned by the Bluth company, George Michael’s and Annyong’s wages were still subject to regular employment taxes if they were employees. It is true that payments for the services of a child under the age of 18 who works for his or her parent in a trade or business may not be subject to social security and Medicare taxes. But this special exception only applies if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. Here, the Bluth company was likely a corporation, so the exception would not apply.

Ed Note: Long weekend! The cooler’s packed, the kids are ready to go, and you’re ready to hit the open road. But before you get going on your Memorial Day weekend road trip, keep these smart saving tips in mind — brought to you by Northern Cheapskate’s Christina Brown.

A long weekend, warm weather, and a big desire for a change of scenery can only mean one thing: road trip!

Before you hit the road, check out these tips to keep your budget from taking a hit while you enjoy a mini-vacation:

Save on gas.

Gas prices are at record highs, but you can still find ways to save.

Shop around for the best prices using an app like Gas Buddy. Use coupons or gas station loyalty cards to get discounts on gas, and pay with a credit card that gives you cash back on your purchases.

Get your car ready for the trip.

An oil change and a tune-up can go a long way in improving your gas mileage. Make sure your tires are inflated properly, too. A car that’s in good running order will not only be more fuel efficient, but it will help ensure you don’t have to deal with costly repairs on the road.

Drive responsibly.

Speed limits aren’t just there for safety – they help make sure you’re driving at optimal speeds for fuel efficiency too. Avoid stop-and-go driving, speeding and excessive braking to get more miles per gallon.  And make sure to pack light! A car loaded to the gills with luggage will get horrible gas mileage.

Buddy up.

Road trips are even more fun with friends! Bring some friends on your trip and you can split the cost of gas and even share the driving duties.

Plan lodging before you go.

You’ll sleep better when you find great deals on places to stay. You can use websites like Priceline or Hotels.com to find deals on lodging, or you can contact hotels directly to see what deals are available.  Don’t forget to take advantage of who you are. For example if you are a member of AAA, are in the military, or you are a senior citizen, you may be eligible for a discount.

If you’re on a tight budget, you can arrange to stay with friends and family. Just be sure to help out however you can and don’t overstay your welcome!

And if you’re feeling very adventurous, you can go camping. Invest in a tent, some sleeping bags and some camp cookware and you’ve got the makings of inexpensive road trips for years to come.

Save on food.

Food can be a big budget buster when you’re on a road trip.

You can easily save money (and calories) when you pack your own snacks and drinks for the car ride.  Pack reusable water bottles and fill them up along the way. You’ll save a fortune on drinks.

Stay at hotels that offer free breakfast. If you have kids, look for places to stay where they can eat free.

If your room has a microwave and a fridge, you can easily make a meal in your room. Bring a few convenience items from home or stop at the grocery store on your way into town. A few room-cooked meals will help you save money.

Sign up for the e-mail lists of numerous restaurants in the area and use the coupons you get to save. And don’t forget to ask the locals – they’ll tell you where to get the best food for the best prices!

Get creative with entertainment.

Of course, once you get to your destination, you’ll want to actually DO something.

Pick up the local newspaper or check the local tourism websites to find free or low-cost activities. Check the hotel lobby, the public library and gas stations for flyers and coupons to local venues. Stroll through a local park or explore the local music scene at a coffee shop or bar. And remember: Your hotel probably offers some amenities (like the pool) for you to enjoy.

What else can you save on?

Ask for discounts everywhere you go. The worst that can happen is that you’re told “No.”

Travel during off-peak times. You can save a lot of money on lodging if you travel during the week instead of on the weekend.

Avoid overpriced souvenirs and take lots of photographs instead.

The most important thing to remember is that road trips should be fun! Make sure the memories you make last longer than the money you spend.

The countdown is on. Students from all over the world will migrate to large metropolitan areas over the next few weeks to start their dream internships. Some of these are going to be paid internships, while others, unpaid. Regardless of the pay, they all have one thing in common: the need to budget.

I was an unpaid intern – in fact, I had 15 unpaid internships when I was in school (hence the title, Intern Queen). I understand the need to budget, the need to get all of your ducks in a row, and make sure you can actually afford what’s happening over the summer. The summer internship was hands-down the best time of my college life. I had the privilege of interning for some of the best companies in the world, making friends from all over the country, and being independent in a large city for the first time. With each internship experience, I learned more about my personal and professional goals and myself. These internships were priceless but the summers could bepricey. Below are some tips that I used to budget for my internships, many of which can help you prepare for yours!

1. Get a Part-Time Job.

If you have an unpaid internship this summer, it should only require 12-15 hours per week. You should be able to simultaneously manage a part-time job. The easiest part-time jobs to land are waiting tables (in the evenings after you internship and on the weekends) or working at a small boutique (on the weekends or on days off). I’ve also had friends pick up secretary jobs or lifeguarding jobs over the summer to help pay for things.

2. Make a Budget.

If it makes sense on paper, it can make sense for your summer. Make note of how much you are getting paid from your internship (if anything) or how much you’ve saved up over the school year for the summer. If your family is giving you any money towards the summer, make note of that as well. Then, write down all of your expenses (rent, food, gas – if it applies, subway tickets, entertainment, etc.). Determine how much extra money you need to raise on your own to make ends meet. That will help when trying to figure out if you need a part-time job or not.

3. Say No, If Necessary.

When you are an intern, you make a ton of new friends. These intern friends are going to want to hang out all of the time. It’s so important that you have an understanding of your budget so that you can say no when needed. If they are going to a super expensive restaurant or an ultra trendy bar where you know the drinks are going to cost an arm and a leg –sayno! Another option is just to eat ahead of time at somewhere affordable and go to the dinner for the company. Do what it takes to stay within your budget.

4. Look for Deals.

When making plans, look for the deals. Look for bars with no cover charge, restaurants that have specials, and buy supplies for wherever you are living in bulk. You are independent this summer and need to make smart decisions.

5. Put a Cap On It.

We talked about creating a budget. I also suggest you put a cap on what you will spend over the summer. You don’t want to empty your bank account in one summer. Pre-determine the maximum amount of money you will spend so that you can make decisions around that. If you hear about something that sounds fun but will wipe out your account – refer to point #3 – just say no.

What are your best tips for getting by as a paid or unpaid intern?

Ed Note: 

With Memorial Day coming up this weekend, many people will be looking for summer airfare tips as the unofficial summer vacation season begins.  As a budget traveler, I’ve done a lot of research on how to find the cheapest flights and I’ll admit it – I am a bit of a geek about this stuff.  While that may not be the sexiest image for a travel writer, it’s a useful skill when trying to save money on flights.  So if you’re planning a family vacation, summer trip, or just want a relaxing weekend getaway, here are a few tips to help you save on summer airfares.

1. Select the cheapest days to fly: Tuesday, Wednesday, and Saturday

Whether it’s a summer vacation or off-season adventure, these three days will always get you the cheapest airfares.  If you want to save even more money, take a red-eye, mid-morning or dinner time flight.

2. Choose the best time to fly for a summer vacation

Avoid holidays such as Memorial Day, 4^th of July, and Labor Day weeks and also weekends – they’re too expensive.  Save money and fly in June or late in August.  If you can leave before kids get out of school or go on vacation when kids have already started back to school, flights will be a little cheaper.

Being flexible with your dates, days, and times are the best way to save money on airfares.

3. Avoid each other on the plane – don’t sit together

If you’re flying with two or more people, do a search for just one airline ticket instead of two.

If there’s one seat by itself for $150 but two seats together for $250, you will pay $250 each for the two seats together.  If you search for 1 ticket at a time, you would pay $150 for one ticket and $250 for the other. That’s how airfare searches work – you will get quoted the smallest price for the number of seats together that you select.  Also, airline priority seating fees mean a family of three or more could pay higher prices to sit together.  Welcome to the family airline fee.

4. Circumvent airline fees

If you’re a frugal flyer who likes budget airlines, save money and fees on Southwest, AirTran, Jetblue, and Virgin Atlantic.  Most airlines now charge for checking your bags.  Spirit Airlines charges you for carry-on bags.  Frontier Airlines will be doing the same.  Have a pet or unaccompanied minor, want to eat on the plane, or rub your belly and pat your head? There’s a fee for almost all of those. Just because you bought your airline ticket doesn’t mean you’re done with the cost of flying.  Check out this helpful infographic on airline fees for US airlines.

5. Don’t rely on airfare search engines

While sites like Expedia, Orbitz, Travelocity, and others seem like a one-stop shop for airline tickets, some airlines advertise their tickets on their sites only.  By searching Southwest, Frontier, American, Virgin, JetBlue, Alaska, you will find tickets that don’t appear on the airline search engines.  You may also find offer cheaper flights. Use a search engine to compare prices and then go to specific airlines sites (especially for Southwest) to see if you can find a better deal.

6. Know when to purchase your airline ticket

Now you know when to fly, where to look, what to pack, and which family member you don’t want to sit beside on the plane. To get the best deal, book your flight at least 6 weeks before departure.  With airline prices on the rise and highest demand during summer, the sooner you can book your flight the better.  Book two or three months in advance or whenever you find a great deal.

For early summer flights, book right now.  For mid-summer flights, book soon. For late summer, do your research and book when you find a great deal.  The earlier you plan, the earlier you can start looking for deals.  Set up airfare alerts on farecompare and airfarewatchdog to keep track of daily or weekly deals for your destination.

7. Don’t fly all the way to your destination

That old expression “time is money” applies here.  Book flights to major cities and airports (i.e. San Francisco to Boston).  Avoid the connecting flights to/from smaller airports and drive, take the train, swim, bike, or run. If driving or taking a train for 2 or 3 hours is cheaper than paying for $800 for a family of 4 to take a $200 flight from Boston to Newport, Rhode Island then drive.

What are your favorite ways to save on airfare?

Our heartfelt condolences to all of the families and first responders who continue to deal with the horrific outcomes of yesterday’s storms. H&R Block is a national sponsor of the Red Cross Disaster Relief efforts. Please donate today. You can help right from your mobile phone with a $10 donation to the Disaster Relief fund by texting the word REDCROSS to 90999. Your wireless bill will reflect the $10 charge. You must be 18 or older to donate this way.

You may also call 1-800-RED CROSS for more information or visit here.

H&R Block is proud to be an American Red Cross Disaster Responder. Our donations ensure the Red Cross can respond immediately to threats like the recent storms in Oklahoma so victims receive the help they need during and after crisis strikes. For more information on the American Red Cross disaster response or to help in your community, visit the Red Cross here.

The winner won a little over $590 million. He or she can choose to be paid in installments over 30 years,  at close to $20 million a year, or a lump-sum option of a little over $370 million to be received all in 2013. This reason for the smaller amount of the lump is that it is the “net present value” of the future right to the income — because a dollar today is more than a dollar in 30 years, especially if that dollar could be invested over 30 years.

Either option the winner picks, he or she will be hitting the highest marginal tax bracket when the payments are received. The top federal tax rate in 2013 is 39.6%.

Even though not everyone knows lottery winnings are taxable, Powerball certainly does. If you win above a certain amount, 25% will be automatically withheld from your winnings for federal income tax purposes. Powerball sends you a Form W-2G showing the amount of lottery winnings paid to you during the year and the amount of federal income tax withheld. This also gets sent to the IRS.

The automatic withholding definitely helps come tax time when you calculate your tax bill. But it doesn’t take a tax professional to know that the 25% is a drop in the bucket considering that the tax rate will be 39.6% on such huge sums of money.

This lucky winner had better be paying estimated tax payments in advance throughout the year; the amount of tax withheld from the lottery winnings will not be nearly enough to cover the winner’s federal tax bill. If the winner fails to do so, underpayment penalties will apply.

Stephanie Halligan, The Empowered Dollar

When I’m saving up for a large purchase that’s a few months or a few years away, I always create a very visible and daily reminder of my goal. Reminding myself every day of my long-term plans helps me curb impulse buys and find little ways to save money. For example, when I was saving up for a trip to Vietnam, I wrapped a note around my debit card that said, “Every $1 you spend today is one less bowl of Vietnamese Noodle Soup tomorrow.” That was enough to get me to think twice about what I was about to buy!

David Weliver, Money Under 30

Create a designated income stream for a designated goal. Whether you want to go on vacation, buy a home, or start an IRA, look for a new way to earn money aside from your paycheck. You might take on side gigs on weekends or simply sell some unused stuff on eBay. Either way, take all your profits and put them directly toward your savings goal.

You can, of course, supplement your savings with regular automatic transfers each payday, but finding that extra income stream – even a temporary one – will help you reach your goals faster than you ever thought!

Ginger, Girls Just Wanna Have Funds

Hoard money that you might spend on unnecessary everyday items and set it aside for that big purchase or financial goal. Sacrifice now in the short-term to meet your long term aspirations. Before every purchase, question whether or not it takes you one step toward your goal. For example, finding an extra $500-$1000 in your budget might mean cutting cable, spa treatments, happy hours, eating out/lunch at work etc., for a period of time. In the end, you’re a few thousand dollars closer to your goal.

David Ning, Money Ning

When you are saving up for a vacation or a big purchase, try to chart your progress by tying it to a specific date of when you’ll have the money saved up. For example, say you project that you’re able to save $100 a month for your next vacation, which will cost $700. If you deposit that first $100 on June 1, it means you’ll have the total by December 1 according to your schedule. Then, whenever you are able to save more than $100 in a given month, just make a simple calculation and see how it affects the goal date. The same goes for times when you are able to save less than $100. When you start realizing how much saving a bit more, or even a bit less, can shorten or increase the time until your next vacation, you’ll be much more motivated to save more.

We’re all excited to make the big purchases in our lives. Whether it’s a first home or a dream car, these purchases have a significant impact on our lives and finances.  And that says nothing of our investment purchases, which may seem small from month to month, but add up to significant amounts, we hope, over a lifetime.

Often lost in the excitement of these purchases are the tax ramifications. It’s easy to only consider the cost of the item itself when making the purchase, but the tax consequences of our decisions often have significant ramifications on our finances.

Here are some of the big tax expenses (and a few benefits) tied to the big purchases most of us will make.

Buying a home

Buying a home you’ll live in offers both tax advantages and disadvantages. First, let’s look at the taxes you’ll pay.

As part of the transaction, most states require the payment of conveyance or transfer taxes. Think of this as a sales tax on real estate, which varies from state to state. For example, in Connecticut, the total conveyance tax will be at least 1%. As a result, a typical $200,000 home would rack up an additional $2,000 in conveyance tax.

Once you own the home, you’ll also be required to pay property tax. Virtually everyone in the United States pays property tax on their homes, which is levied by the state and local government. If you have a mortgage, your property tax is generally paid through escrow payments to your mortgage company. The amount of property tax varies by location and is typically based on the assessed value of the property.

Now, onto some tax advantages of homeownership. First, if you itemize your deductions, you’ll be able to deduct from your income the property tax you paid.  In addition, in most cases the interest you pay on your home mortgage is deductible from your income. There are limitations on this deduction, which you should factor in to your home-buying decision.

A second tax advantage kicks in when you sell your home. When you sell most items at a gain, the IRS comes in and takes a piece of the pie as capital gains tax. But with houses, assuming you’ve met certain requirements, you can avoid paying taxes on up to $250,000 of the gain. For a married couple, that number goes to $500,000. There are specific rules for what’s eligible, so check the IRS website to ensure you qualify.

Buying a car

As if buying a car wasn’t expensive enough, the tax and governmental compliance burden placed on car ownership can be extreme. And unlike owning a house, there are generally no tax benefits to owning a car, unless you are using it for business purposes.

Sales tax is levied on the sale of cars, just as if you were purchasing any other item. If you purchase your car from a dealership, they will take care of all of this for you. However, it’s important to realize that sales tax is still due even if the car was purchased in a private sale. For example, in Connecticut, a sales tax of 6.35% is due on the sale of cars for less than $50,000 (it goes up to 7% for more expensive vehicles). The average $20,000 car, therefore, gets a $1,270 tax tacked on top of it.

Vehicles are also generally subject to an ongoing property tax that is paid annually. This may be in the form of registration tags (like in Arizona), or in the form of a direct property tax (like in Virginia). As with the sales tax, these property taxes can reach into thousands annually; the determining factor is usually the value of the vehicle. On the positive side, property tax can be itemized as a deduction on your federal income tax.

Finally, here are two other tax consequences to keep in mind. First, if the car you buy fails to meet a minimum of 22.5 miles per gallon, it is subject to a federal gas guzzler tax. Second, and on the bright side, there are some plug-in hybrid and electric cars that qualify for a tax credit.

Investments

There are a lot of tax consequences to consider when investing in stocks, bonds, mutual funds and ETFs. We’ll cover three of the more significant ones.

First, tax deferred accounts like 401(k)s and IRAs enable you to defer the tax liability until retirement. Most financial experts recommend maxing out the contributions on retirement accounts if at all possible. If you qualify, you can also consider a Roth 401(k) or a Roth IRA. These accounts don’t offer a tax advantage at the time of the investment, but your money grows tax free.

Second, for investments in taxable accounts, be mindful of the dividends and capital gains that mutual funds can generate. Even if you haven’t sold shares of a fund, they can generate significant tax liability as the fund manager buys and sells investments within the fund. One way to gauge the tax efficiency of a fund is through its turnover ratio. This shows the percentage of assets within the fund that are sold each year.

Third, it’s important to consider the tax ramifications of investing in dividend paying stocks. Stocks that pay dividends have become popular as interest rates on bonds and even high yield savings accounts have fallen to historic lows. Dividends, however, generate federal and, in most cases, state taxes. On the other hand, qualified dividends may be taxed as capital gains which have more favorable rates than ordinary income- even after the increase in capital gains rates and the Medicare surcharge on investment income. Having just returned from the annual shareholder’s meeting of Berkshire Hathaway, I’m reminded that Warren Buffett doesn’t pay dividends to Berkshire shareholders. Buffett cites the tax consequences as one reason. This isn’t to say that dividend-paying stocks should be avoided. Rather, the tax consequences should be carefully considered.

So the main takeaway is to make sure you’ve considered the tax consequences of big purchases. They can often be neglected, even when they have major consequences for your finances.

Ed Note:

The home-buying process can be overwhelming. From choosing the right neighborhood to finding a home with the right number of bedrooms – how do you know where to start?

Here are a few tips that can help you “ignore the small stuff” and focus on the most critical qualities in a home.

1. Can you grow into this home?

Buy a home for the future, not the present. Imagine yourself a decade into the future and buy a home to match that lifestyle.

Maybe you only need two bedrooms now, but as your family grows, you’ll need four bedrooms. Perhaps living in a good school district isn’t important now, but will become essential in ten years. Maybe you don’t need a dedicated home office right now, but as your career advances you’d like to have one.

Remember: you can’t just wait until the end of the lease term if you decide that you don’t like an aspect of your home. Buy a home that represents the lifestyle you anticipate for the future.

2. Can you afford the essentials?

The question isn’t “How much home can I afford?” The question is, “How much home do I need?”

Write a list of your “must-haves,” the essentials that you won’t compromise on. Maybe you’re adamant that you want a three-bedroom home in a good school district, for the sake of your future family.

Then check out the prices of basic three-bedroom homes in your ideal school district. I’m referring to a basic home, with vinyl and laminate – not a luxury abode with granite countertops and stainless steel appliances. Those can come later.

If you can afford your must-haves, proceed forward with buying the house. If not, wait until you’re more financially prepared.

3. Focus on structure, not fixtures

What are the big-ticket repair and renovation items?

If you said “hardwood floors, stainless steel appliances, custom maple cabinets and tile showers” – you’re wrong. Those are nice fixtures. But they’re not the big-ticket items.

The big-ticket items include your roof, foundation or crawl space, HVAC unit, electrical paneling and other structural and mechanical elements. These are often “invisible” – and as a result, they tend to get ignored by sellers.

A seller who wants to impress a buyer might spend $2,000 on granite countertops, while ignoring the $20,000 new roof that needs to get installed.

When you’re buying a house, pay close attention to the quality of its mechanical and structural details. Don’t worry as much about the fixtures. You can swap out carpet for hardwood flooring at your leisure, but you can’t be so relaxed about replacing your roof.

Got a real estate story to share? Advice of your own? Hit up The Community.

Ed Note: Attention, new grads! The world is your oyster. But parts of this big blue planet can be pretty pricey — especially if you’re just starting out on your own and trying to select the first locale where you’ll be making a living. You’ve heard your career counselors advise you to consider ‘cost of living’ when negotiating a salary, but what *is* cost of living, exactly? And how do you factor it into your big decisions? Amelia Granger of Nerd Wallet explains.

In New York, people order a beer at a bar and pay $9 without raising an eyebrow. Head to Alabama, and no one will pay that kind of money for a domestic draft. But make it all the way out to San Francisco, and that price suddenly starts seeming plausible again. Why is that? If we’re all living in the same country, using the same currency and contributing to the same economy, why do the prices of little things like beer vary so dramatically?

What is “cost of living”?

Your overall cost of living is determined by a lot of factors—though the price of beers at bars tends to be more a factor of whether you’re in an urban or a rural environment. Coming up with a meaningful number for cost of living can be difficult, given the ever-shifting variables involved, but it’s an important approximation that has to be made often. Factors such as population density, cost of utilities like electricity and gas, average income per capita of residents and the growth rate of the area mean that, while you’re still in the same country, each area is often its own economic microcosm.

Why does cost of living matter?

If you’re trying to decide where to live, money is probably foremost on your mind. Whether you’re moving because you’re graduating from college, looking for a new job in your field, going back to graduate school or fulfilling a long-time dream of living in a big city, you should be preparing for a change in cost of living.

And if you have never experienced a major shift in cost of living before, watch out. If, for instance, you just accepted a job and you’re excited about the big salary you’re about to start earning, you need to think about what those dollars will actually buy you. Let’s say you live in Chicago and make $35,255 at your job. Then you take a new job in San Francisco—and the starting offer is $50,000! But before you start shopping for townhouses in Pacific Heights, use an online cost of living calculator to generate a side-by-side comparison. Believe it or not, those two salaries are roughly equivalent in Chicago and San Francisco. In other words, think about expanding your apartment search to Oakland.

I know the cost of living in a city. Now what?

If you’re moving, the cost of living will factor into all of your decisions. You need to re-review your financial basics, such as decisions about whether you should buy or rent your home. Don’t let the change of scenery brought about by a move de-rail your long-term goals. Ask yourself, “am I saving enough in my 401(k)” and if the costs of your new city mean you won’t be able to save enough, you need to think twice. If a new move is going to stretch your resources, you need to be sure that you still have enough funds to maintain financial goals and achieve retirement success.

It’s unavoidable that moving will take a bite out of your finances, between hiring a mover or renting a truck, paying first and last months’ rent on a new apartment and all the other small moving-related costs that can really add up. But will this be a mere variable cost that will disappear when your boxes are unpacked?

Remember to separate the cost of the move from the cost of living in your new area. Moving costs occur one time—and then they disappear. But a raised cost of living isn’t going anywhere. Do your homework, and don’t let the superficial appeal of a fresh start in a new city obscure the real impact a move will have on your finances.

Have more cost of living questions? Have a great (or scary) experience to share about your first gig out of college? Head over to The Community and get the conversation started.