Money Management

Binance.US has laid off another 100 members of its staff, and its CEO has resigned. Find out what this means for Binance.US customers. 

Beleaguered crypto exchange Binance continues to capture the headlines for all the wrong reasons. This week, Brian Shroder, the CEO of Binance.US, resigned amid news that the company would lay off a further 100 staff. It’s the second round of layoffs this year, and according to The Wall Street Journal, the latest cuts represent about a third of its workforce. Chief Legal Officer Norman Reed will take the helm on an interim basis.

In June, the Securities and Exchange Commission (SEC) filed charges against various entities in the Binance empire, including Binance; its founder, Changpeng Zhao; and Binance.US. In addition to the SEC charges, the Commodity Futures Trading Commission (CFTC) has charged Zhao and entities connected to the Binance platform with willfully evading U.S. law.

Binance.US was founded in 2019 to serve U.S. investors who are unable to access the Binance international exchange. In theory, it is a distinct company from Binance, but one of the SEC’s allegations is that the two exchanges were not as separate as they say.

Regulatory issues are impacting Binance.US’s operations

The layoffs and Shroder’s resignation are both signs that Binance’s regulatory issues are affecting its business. According to Bloomberg, the platform’s trading volumes have shrunk dramatically. It may take some time for these cases to play out in court, but in the meantime, the exchange faces significant obstacles in terms of its image and the services it can offer.

For example Binance.US says it will become a “crypto-only exchange.” It is readying itself for the point where users cannot make deposits or withdrawals from their bank accounts. The regulatory issues have made its banking partners wary (and it needs them to process dollar deposits and withdrawals). Binance.US initially suspended U.S. dollar withdrawals following the SEC’s announcement. It was later able to reintroduce the service, but has warned customers this may not last forever.

Finally, it’s worth noting that the SEC initially wanted to freeze Binance.US’s assets, arguing that the funds could be moved offshore. The exchange told the court that this would cause the company to shut down completely. Following court-ordered mediation, the two sides reached a compromise. The deal means that U.S. customer assets will be ring fenced and kept in accounts that can only be accessed by U.S. personnel.

What it means for investors

Binance.US may well find a way through its regulatory issues, but the departure of its CEO is yet another warning sign. As an investor, if you have crypto on the Binance or Binance.US platform, consider moving it elsewhere. Sure, Binance and Binance.US may survive. But why take that risk? If you leave your funds on the platform and it collapses, you could lose everything.

As we touched on above, Binance.US may not be able to maintain its U.S. dollar withdrawals and deposits indefinitely. If you might want to convert your crypto to dollars and cash out, it makes sense to do this sooner rather than later. Otherwise your only option would be to move your crypto to another platform or an external wallet.

If we only take one lesson from the recent crypto crashes, whether that’s FTX, BlockFi, or Celsius, it is that centralized exchanges are not bank accounts. They are not safe places to keep your money. Here are two reasons why:

If an exchange fails, your money won’t be protected by FDIC insurance. Cryptocurrency is a relatively new and unregulated industry and there is very little in the way of investor protection.If you have funds on a cryptocurrency exchange when it fails, the money you deposited may get tied up in lengthy bankruptcy proceedings. You may recover some of it, but there are no guarantees.

The revelations about what happened behind the scenes at FTX are scary. Putting aside the mismanagement and lack of controls, customer funds were siphoned off without their knowledge. That doesn’t mean we should assume that all cryptocurrency exchanges are doing similar things. But lack of regulation means we can’t always know for sure what these centralized exchanges are doing with our money.

Finding a safe place for your crypto

One of the questions I’ve been asking myself this year is how to store my crypto in a way that’s safe and accessible. I used to keep my assets on a centralized crypto exchange where it was easy to stake and earn interest on my holdings. But this year I moved the majority of my crypto off platform.

Putting funds in a crypto wallet is a good way to protect yourself against exchange failure. The biggest upside is that you’re in complete control of your crypto. The biggest downside is that if you lose your security phrase, you may never be able to access your crypto. Wallets also aren’t as simple as centralized exchanges — you’ll need to do some research to understand how they work and what the fees are.

Cryptocurrency investing carries many risks. From the platform you use to buy it to where you chose to store it to the volatility of the assets themselves, there is a lot to think about and manage. If you’re not comfortable with the risks involved, there are plenty of other investment opportunities out there.

For example, if you have cash to invest, open a top brokerage account and stick to less-risky assets like stocks and bonds. If a brokerage account fails, SIPC insurance kicks in to protect your securities and cash up to a certain point. The same is not true for crypto holdings.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Wireless carriers are competing for your business and offering iPhone 15 deals to lure you in. Read on to view some of the best offers. 

Apple recently unveiled its latest tech wizardry in the form of the iPhone 15, and many consumers are interested in getting their hands on one. Demand for Apple’s iPhones has surged over the past few years, pushing up the company’s U.S. smartphone market share from 40% in mid-2018 to 55% currently, according to Counterpoint Research.

The base model iPhone 15 sports 128GB of storage, an A16 Apple Bionic processor, an all-new 48-megapixel camera, Apple’s Dynamic Island feature, and — for the first time on an iPhone — a universal USB-C charging port.

All of this doesn’t come cheap, though. The starting price for the base iPhone 15 is $799. The good news is that there are a few ways you can snag the latest iPhone without derailing your personal finances. Here’s how.

1. Boost Mobile

Boost Mobile is offering a free iPhone 15 Pro for people who sign up for the carrier’s smartphone membership plan. The Pro model is an even higher-end version of the iPhone 15, with an A17 processor, a new titanium casing, and a more advanced camera. It also starts at a pricey $999.

Boost Mobile is giving the iPhone 15 Pro away for free — no iPhone trade-in required — if you sign up for the company’s Boost Infinite Access plan.

Boost Infinite Access is a membership plan that costs $60 monthly and gives you unlimited talk, text, and data. And after 12 months on the plan, you get to upgrade to the latest iPhone model for free.

Boost’s deal may be a good option if you upgrade iPhones frequently, want minimal out-of-pocket costs for a new phone, and like the convenience of having a straightforward payment per month.

2. AT&T

If you’re an existing AT&T customer or are looking to switch to the carrier, you can get a free iPhone 15 by trading in an eligible phone and signing up for an unlimited plan. The fine print shows that the lowest-priced unlimited plan starts at $75 per month before discounts.

AT&T says you’ll get up to $830 in bill credits if your smartphone trade-in is valued at $130 or higher. The company didn’t list all the devices and their values, but you can enter your current device in a drop-down menu to see how much you’re eligible for.

For example, my wife’s iPhone X only qualified for $350 in bill credits, while my iPhone 11 qualified for the full $830 in bill credits.

3. Verizon

Verizon offers a few iPhone 15 deals, including one for existing customers who trade in an eligible iPhone. The carrier says that eligible iPhone trade-ins can be worth up to $830 if you’re on an Unlimited Plus or Unlimited Ultimate plan.

The company also offers a free iPhone 15 Pro to new and existing customers who add a new line on its Unlimited Ultimate plan. You also have to trade in an old iPhone, which Verizon says can be any iPhone in any condition.

Verizon also says on its website that customers can choose an Unlimited Plus or Unlimited Welcome plan, which may qualify you for either $830 or $415 off the new iPhone 15, with an eligible smartphone trade-in.

4. T-Mobile

T-Mobile says on its website that new and existing customers can get a free iPhone 15 Pro if they have an eligible trade-in and are on the company’s Go5G Plus or Go5G Next plans.

Separately, the company is also offering a discount of up to $650 off any iPhone 15 model for customers who sign up for its Magenta MAX plan, $350 off the device for customers who opt for the Go5G or Magenta plan, and $200 off on nearly all other T-Mobile plans, when trading in an eligible device.

The carrier also noted that when customers buy any iPhone 15 model through T-Mobile, they can get $700 off the second iPhone 15 when adding a new line on “almost all” T-Mobile plans.

Keep this in mind before signing up for an iPhone 15 deal

Some of these offers may be exactly what you’re looking for and give you a good deal on a new iPhone 15. But before you whip out your credit card and sign up, be sure you look at all of the fine print.

For example, you’ll likely have to pay taxes and other fees, like an activation fee, when signing up for these deals.

Additionally, many of these offers require a specific phone plan, some of which are pricey. According to tech website Tom’s Guide, unlimited data plans from major carriers range in price between $60 to $90. If that’s outside of your budget, getting a free or discounted iPhone 15 may not be worth the price of the monthly plan.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

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This tactic provides an opportunity to grow your retirement savings and reduce your tax burden in the long run. Read on to learn more! 

Are you planning to switch jobs? Or have you inherited a 401(k) plan from your previous employer? If so, then you might be considering a rollover to maximize your retirement savings. However, rolling over a 401(k) plan can lead to sizable tax payments, especially if you withdraw the funds before age 59½ and you don’t roll over the funds into another qualified plan.

But what if I tell you there’s a way to avoid or significantly reduce your tax payments? Yes, it is possible — through a mega backdoor Roth IRA.

What is a mega backdoor Roth IRA?

A mega backdoor Roth IRA is a strategy that allows you to contribute after-tax dollars to your employer’s retirement plan and then roll over the funds into a Roth IRA account. With a mega backdoor Roth IRA, you can save an additional $43,500 per year (as of 2023), which is well above the standard Roth IRA contribution of $6,500 per year. This technique can help you save a significant amount of tax-free money for your retirement, especially if you have a high income.

One important thing to note about a mega backdoor Roth IRA is that it is only available to individuals who have access to a 401(k) plan that allows for after-tax contributions. This is because a mega backdoor Roth IRA requires you to contribute money to your 401(k) plan beyond the traditional pre-tax limit. If you don’t have access to such a retirement plan, this strategy won’t be available to you.

How to execute a mega backdoor Roth IRA

To take advantage of a mega backdoor Roth IRA, you need to follow a few steps. First, you need to maximize your traditional 401(k) contribution limit, which is $22,500 in 2023. Next, you need to contribute additional funds to your 401(k) plan beyond the pre-tax limit, up to the annual after-tax contribution limit, which is $66,000.

Finally, you need to convert the after-tax contributions to a Roth IRA. This conversion process is what makes your contribution tax-free. You will also need a 401(k) plan that allows in-service withdrawals. These withdrawals are vital for the mega backdoor Roth IRA process: You contribute after-tax income, then promptly make an in-service withdrawal before the contributions generate taxable returns during a rollover.

If your retirement plan does not permit in-service withdrawals, you can still perform a mega backdoor Roth IRA after leaving your current job, but you will likely be subject to taxes on any investment earnings during the rollover.

Pros and cons of a mega backdoor Roth IRA

The strategy allows you to contribute a significant amount of after-tax dollars to your retirement plan — up to $43,500 in 2023. There are several major benefits of a Roth IRA, such as tax-free growth and qualified withdrawals that are tax-free. The Roth has an income limit though, so a mega backdoor Roth IRA allows high-income earners to take advantage of a Roth.

However, the strategy’s effectiveness depends on your income level. It might not be suitable for people with lower incomes. You will have to max out your 401(k) and then still have enough disposable income to take full advantage of this strategy. In addition, not all employers offer a 401(k) plan, and if they do, they will need to allow after-tax contributions and in-service withdrawal. Lastly, the strategy is complicated, requiring compliance with IRS rules and possible tax consequences.

A mega backdoor Roth IRA is a powerful strategy that enables you to contribute more after-tax dollars to your retirement account, thus growing your nest egg and reducing your tax burden. But it requires careful planning, compliance with IRS regulations, and the right income level. If you’re eligible, consult with a professional to assess the strategy’s effectiveness and suitability for your retirement goals. Ultimately, a mega backdoor Roth IRA can help diversify your retirement portfolio and provide tax-free retirement income in the long term.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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Income tax is only one consideration when deciding where to live. Discover what else to ponder as you pick a new home state. 

As of 2023, nine states have no state income tax at all. And this might sound excellent, especially if you currently live in a state on the higher end of the state income tax spectrum like I do (South Carolina).

Of course, all other things being equal, it’s better to pay less in taxes. But in the real world, all other things are not equal when comparing one state with another. Here’s what you should keep in mind when considering whether moving to a state without an income tax could make sense for you.

What states have no income tax?

I won’t keep you in suspense. As of 2023, there are nine states that have no income tax. In alphabetical order, they are:

AlaskaFloridaNevadaNew HampshireSouth DakotaTennesseeTexasWashingtonWyoming

The reasons these states have no income tax vary. After all, states need to generate revenue to run their government and provide essential services from somewhere. Some — like Florida and Nevada — get a lot of revenue from tourism. Alaska makes a lot of money from oil. And some, as we’ll discuss in the next section, generate revenue in other ways.

Just one part of the financial picture

Obviously, there’s a lot more that is involved with choosing where you live than state income taxes. Maybe you want to live within driving distance to your relatives, or you don’t want to live somewhere with cold winters. But for our purposes, let’s just look at the financial considerations of choosing a place to live.

To put it mildly, state income tax is just one of many costs of living in a certain part of the United States. Here are a few other things to consider that could potentially negate (or add to) your savings on state income taxes.

Home affordability

As of June 2023, the median home sales price in the United States is $416,100. But some areas cost significantly more or less. Looking at our no-income-tax states list, the average home value in Washington is $593,406. The difference in your mortgage payment or rent could more than exceed the state income tax you’ll pay elsewhere.

Insurance costs

The national average auto insurance policy costs $1,682 per year, but some states charge significantly more for car insurance. In Florida, for example, the average policy is $2,560 annually, which is 52% greater than the average. Nevada, Texas, and Wyoming also have above-average auto insurance costs, according to Carinsurance.com. Home insurance is a similar story. Texas has the fifth-highest homeowners insurance rates in the nation, and in some parts of Florida, insurance costs have doubled over the past few years due to increased natural disaster damages combined with rapidly rising property values.

Property taxes (and not just on houses)

One of the biggest sources of revenue for state and local governments is property taxes, and some of the states without income taxes have above-average property taxes that help make up for it. New Hampshire has the third-highest property tax rates in the U.S., and South Dakota, Washington, Alaska, and Texas are also in the top half of the list. Plus, half of U.S. states (including New Hampshire, Nevada, and Wyoming) also charge annual property taxes on vehicles you own.

Sales taxes

Last but certainly not least, most states have sales taxes, and that’s especially true for some of the states with no income tax. In fact, with a combined state and local sales tax of 9.548% on average, Tennessee has the highest sales tax in the U.S.

The bottom line

There are two key takeaways. First, the absence of income tax isn’t nearly as important as living somewhere you love and that meets your needs. And second, just because a state doesn’t have any income tax doesn’t automatically make it a tax-friendly place to live. There are several other financial factors to consider as well, so make sure to evaluate the whole picture when choosing your next state to call home.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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