EPA study supports more natural gas

NEW YORK (CNNMoney)

"As the administration and EPA has made clear, natural gas has a central role to play in our energy future," the agency said in a press release. "The administration continues to work to expand production of this important domestic resource safely and responsibly."

EPA outlined several steps it's taking to assess the impacts fracking -- short for hydraulic fracturing -- has on the nation's water supply, as directed by Congress in 2009.

Steps include:

-- Analyzing existing data from natural gas companies on chemicals and practices used

-- Modeling how discharging waste might impact the water

-- Lab testing on water discharge

-- Testing fracking chemicals for toxicity

-- Testing groundwater in five regions near drilling activity

As expected, the study contained no new data or conclusions. The final results are not expected until late 2014.

Related: World's 10 most expensive energy projects

Some see the lack of data or negative comments in Friday's progress report as a positive for the industry.

"It signals that the Obama administration has no real appetite for additional federal regulations until 2014 at the earliest," said Nitzan Goldberger, a natural gas analyst at Eurasia Group, a political risk consultancy. "That's good news for the oil and gas guys."

The Obama administration has tightened some rules around fracking, but for the most part has left regulation up to the states.

Fracking involves injecting massive amounts of water, sand and some chemicals deep underground in a bid to crack shale rock and ease the flow of oil and natural gas.

The process has unleashed an energy boom in the United States, creating thousands of jobs, driving down the price of oil and natural gas and cutting energy imports to levels not seen in decades.

But it's also raised serious concerns over its effects on the environment, including air pollution from trucks and wells, its links to earthquakes and fears that it is contaminating drinking water.

For environmentalists, the negatives seem to outweigh the positives.

Fracking was once seen by some environmentalists as a technology that, given the proper regulations, could be done safely and provide a fuel that emits far fewer greenhouse gases than coal. Natural gas was seen as a good alternative to coal, at least until renewables like wind and solar were ready for prime time.

But declining costs for renewables, more instances of water contamination, uncertainly over the heat-trappng nature of natural gas that escapes from wells unburned, and a fear that cheap gas is crowding out wind and solar have led many to change their minds.

Several environmental groups are calling for an immediate ban on fracking, while others favor a gradual phase out combined with greater federal regulation.

On the other side are many analysts and economists that believe this technology can give the United States a significant economic and geopolitical advantage.

First Published: December 21, 2012: 2:54 PM ET

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Going over the cliff: What changes, what doesn't

Senate Majority Leader Harry Reid may need to do some heavy lifting to pass a fiscal cliff deal in the Senate, after House Speaker John Boehner's so-called Plan B did not garner enough support in the House.

NEW YORK (CNNMoney)

The good news: It won't be the end of the world.

The bad news: Going over the cliff could create problems that no one should have to deal with, simply because Congress and the White House couldn't get the job done on time.

Practically speaking, however, there is likely to be a "grace period" of a couple of weeks during which Congress could pass a deal to ward off the bulk of scheduled tax increases and spending cuts. And there are ways both may be postponed temporarily while lawmakers work that out.

Your paycheck: If you'll be paid during the first week in January, your company's payroll processor will probably be cutting your check during Christmas week. So far, however, the IRS hasn't told the payroll companies how much tax to withhold for 2013.

Unless new withholding tables are issued, payroll processors will continue to use 2012 withholding rates for the early January paychecks. In that sense, your paycheck in early January won't be much different than what it was in late December.

But your paycheck still could be smaller, because the 2% payroll tax holiday is expiring. Starting in January, workers will once again have 6.2% of their wages up to $113,700 withheld to pay for Social Security, up from the 4.2% rate that's been in effect for the past two years.

Effectively that means someone making $50,000 might get about $83 less a month in their paychecks. Someone making twice that would see their pay reduced by roughly $167 a month.

If you're getting a bonus, you'll likely have more withheld there, too, said Michael O'Toole, senior director of government relations for the American Payroll Association. That's because there's one supplemental withholding rate that applies to bonuses. This year it's 25%, but it's set to rise to 28% on Jan. 1, unless Congress decides to change it.

For paychecks that will be cut during the second, third and fourth weeks of January, payroll processors will likely continue to use 2012 income tax withholding tables if they've heard nothing from Treasury and the IRS by that point, O'Toole said.

CNN: Breakdown of support for Plan B

There also is some debate whether Treasury Secretary Tim Geithner will have the authority to tell employers that they should continue to use the 2012 withholding tables until further notice if he chooses.

The other option, of course, is that the IRS could issue new withholding tables reflecting 2013 law, which means everyone's tax rates will go up officially on Jan. 1. In that case, paychecks that are processed in January will have more withheld than they do currently.

If, as expected, Congress eventually chooses to extend the Bush tax cuts for all but the highest earners, adjustments would need to be made for paychecks that went out earlier in the year.

Treasury did not indicate to CNNMoney whether it would issue new withholding tables by Jan. 1.

Your 401(k) and IRA: There's no telling how markets will respond if fiscal cliff gridlock persists into 2013.

They've been relatively sanguine so far. But that may not be the case going forward.

After news that House Speaker John Boehner tabled Plan B because it lacked sufficient support, U.S. stocks fell Friday by just under 1%. World markets also ended the day modestly in the red.

Then again, some believe, markets may not move much on fiscal cliff news - whether Congress cuts a deal soon or not.

Your 2012 tax return: Here's where things potentially become a dumb mess. The IRS warned lawmakers that if they don't act to protect the middle class from having to pay the Alternative Minimum Tax for tax year 2012 by Dec. 31, up to 100 million taxpayers may not be able to file their 2012 taxes until late March.

That would mean their refunds will be delayed. And they wouldn't be injecting those refunds into the economy during the first quarter.

Based on Treasury Department records from the past three years, refunds paid during January, February and March combined have ranged from $117 billion to $136 billion.

Related: What's in the fiscal cliff?

Government spending: Unless lawmakers avert the so-called sequester, a series of automatic cuts will reduce the budgets of most federal agencies and programs by 8% to 10%.

But that doesn't necessarily mean those cuts would have to occur immediately, according to a former official with the Office of Management and Budget.

Both the White House budget office and federal agencies themselves will have some latitude to postpone the cuts from occurring "for several weeks if necessary," added OMB Watch, a group that monitors the federal budget.

The White House Budget Office did not respond to questions from CNNMoney.

Doctors' pay: Absent a fiscal cliff deal that includes a so-called "doc fix," Medicare physicians are facing a nearly 27% cut in their payments for treating Medicare patients.

But here again there may be a few weeks' grace period for Congress to change its mind and reverse the cut. That's because a claim submitted will be paid no less than two weeks after it's received.

Unemployment benefits: A federal extension of unemployment benefits is set to expire. If Congress does not renew it, workers who lost their jobs after July 1, 2012, will only receive up to 26 weeks in state unemployment benefits, down from as many as 73 weeks in state and federal benefits that have been available in 2012. As a result, more than 2 million of the long-term unemployed will run out of benefits in January, according to the National Employment Law Project, an advocacy group.

If Congress chooses early next year to keep the extension in place, and makes the extension retroactive, then many of the 2 million who fell off the rolls may be paid retroactively, said Rick McHugh, a NELP staff attorney.

First Published: December 21, 2012: 4:39 PM ET

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'Dairy cliff': Milk prices may double in New Year

If Congress doesn't act on an expiring protection for dairy farmers before Jan 1, milk prices could double.

NEW YORK (CNNMoney)

With Congress spending all its time trying to avert the fiscal cliff, a slew of other legislative matters are going unattended. One of them is the agriculture bill which, if not addressed, could lead to a doubling of the price of milk early next year.

It works like this: In order to keep dairy farmers in businesses, the government agrees to buy milk and other products if the price gets too low. The current agriculture bill has a formula that means the government steps in if the price of milk were to drop by roughly half from its current national average of about $3.65 a gallon.

Problem is, the current bill expired last summer, and Congress had been unable to agree on a new one. Several protections for farmers have already expired, and several more are set to do so over the next few months. One of them is the dairy subsidy, which expires January 1.

But instead of leaving farmers entirely out in the cold, the law states that if a new bill isn't passed or the current one extended, the formula for calculating the price the government pays for dairy products reverts back to a 1949 statute. Under that formula, the government would be forced to buy milk at twice today's price -- driving up the cost for everyone.

"If you like anything made with milk, you're going to be impacted by the fact that there's no farm bill," U.S. Secretary of Agriculture Tom Vilsack told CNN's Candy Crowley in an interview on State of the Union airing Sunday, Dec. 30.

"Consumers are going to be a bit shocked when instead of seeing $3.60 a gallon for milk, they see $7 a gallon for milk. And that's going to ripple throughout all of the commodities if this thing goes on for an extended period of time," Vilsack said.

Related: Independent farms rake in millions

Sky-high milk prices wouldn't necessarily be good for dairy farmers either, according to Chris Galen, a spokesman for the National Milk Producers Federation, which represents over 30,000 dairy farmers.

While it might provide a short term boost to profits, there's a fear that consumers would either cut back on dairy or opt for imported dairy products. It could also force food makers to search for alternatives to dairy, like soy.

"We call it the dairy cliff," Galen said.

Fortunately, there's still time for Congress to act.

Galen said the government would have to issue a notice saying it was going to pay the increased price for dairy products, then set up a schedule for when purchases would start, a process that could take a few weeks.

"It's not like people would dump blocks of cheese on the USDA's front lawn January first," he said.

To prevent the price spike, Congress either needs to extend the current bill, pass a new bill, or enact some provision to keep the 1949 law from taking effect.

Given the current state of the fiscal cliff talks and Congress' inability to get things done in general, dairy lovers might want to stock up now.

First Published: December 21, 2012: 3:31 PM ET

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Should I build my own target-date fund?

NEW YORK (Money Magazine)

Essentially, you're asking whether you're better off building your own target-date retirement fund or buying one off the shelf.

While you might be able to lower your expenses and thus boost your return with the DIY approach, it depends on how much you have to invest, which funds or ETFs you choose and how much work you're willing to put into building and managing your own target-date portfolio.

To illustrate, let's take a look at the Vanguard target-date fund designed for someone your age, the Vanguard Target Retirement 2045 (VTIVX).

This fund invests 90% of shareholders' money in stocks and 10% in bonds by divvying up its assets among three Vanguard index funds as follows: total stock market index (63% of assets), total international stock index (27%) and total bond index (10%). To invest in this fund, you pay annual expenses of 0.19% of assets, or $19 per $10,000 invested.

You could create a virtually identical portfolio by just investing your money in a total stock market index, a total international stock index and a total bond market index fund in the same proportion a target fund holds them. But you wouldn't necessarily save any money by doing so.

Related: Index funds - A simpler, cheaper way to invest

Why? Because if you prorate the expenses to reflect the percentage that each fund would represent in your portfolio -- 63% of the total stock market index's 0.18% annual expenses, 27% of international stock fund's 0.22% cost and 10% of total bond market's 0.22% expense ratio -- you end up with pretty much the same 0.19% in total expenses. (I say "pretty much" because the total bond market fund in the target date fund isn't available to individual investors and has slightly different expenses than the one that is.)

But there are a few ways you may be able to pay less.

One is to invest in the same three underlying index funds, but buy a different share class of those funds.

When Vanguard assembles its target portfolios, it uses "Investor" shares. Vanguard has a cheaper version -- called "Admiral" shares --but doesn't use them in its target portfolios. You, however, can build your own target fund with the cheaper Admiral shares.

There's one, rub, though: Each of the Admiral shares requires a $10,000 minimum initial investment, as opposed to a mere $1,000 minimum for the target-date fund.

As a practical matter, that would mean you would have to create a portfolio with at least $100,000 in assets in order to meet the $10,000 minimum for the bond index fund, while at the same time assuring that the bond fund represents no more than 10% of your portfolio overall.

Related: What's my retirement number?

If you can clear that hurdle, duplicating the 2045 target fund with Admiral shares would reduce your annual expenses by almost half from 0.19% to 0.10%. But while that represents a nearly 50% reduction in expenses, in dollar terms we're not talking about a huge difference: about $90 a year for every $100,000 invested. Whoopee!

The second way you might be able to do better is by building the equivalent of a target fund portfolio with ETFs, which many firms, including Vanguard, allow you to buy without paying trading commissions.

Vanguard requires only a $3,000 minimum investment to open a brokerage account and invest in ETFs, so by going with ETFs you can get around the $10,000 minimum for Admiral shares.

And since Vanguard's fees on the Admiral share and ETF versions of its total stock market, international stock index and total bond index funds are identical, you could reap the same savings in annual expenses as with the Admiral shares. (Vanguard's brokerage firm levies a $20 annual fee for accounts with balances under $50,000, but you can sidestep that by agreeing to electronic delivery of confirmations and statements.)

There's one other move you could try: Going with the funds or ETFs of another firm, such as Fidelity or Schwab, both of which have been chipping away at the fees on their index funds and/or ETFs.

For example, Schwab now charges just 0.04% for its version of a total stock market index ETF and 0.05% for its total bond market index ETF. Schwab doesn't offer the equivalent of a total international stock index ETF that includes small-caps and emerging markets, but you could cobble one together by combining a few separate international Schwab ETFs.

I estimate that by mixing and matching various Schwab ETFs, you could create something close to the Vanguard target-date fund for roughly 0.06% in annual expenses. That's about 40% lower than the 0.10% or so that you would pay with Vanguard ETFs.

Again, though, the dollar savings won't exactly blow you away.

Even on a $100,000 investment, the difference would be about $130 a year vs. the Vanguard 2045 target fund and $40 compared to a DIY target portfolio made up of Vanguard Admiral funds or ETFs. In fact, the savings could be even smaller, as ETFs have other potential costs such as the bid-ask spread and the extent to which the ETF sells at a discount or premium to net asset value.

Which brings us to the larger question: Does it really makes sense to go to the trouble of creating your own target-date portfolio?

The idea behind these funds is simplicity and ease.

Related: Is investing in two target-date funds smart?

A target fund gives you a diversified portfolio of stocks and bonds appropriate for your age and shifts more of its assets to bonds as you age so your savings are less vulnerable to stock-market shocks as you near and enter retirement. They're not perfect, but target funds can provide a reasonable investing strategy that many investors may not be able to come up with or stick to on their own.

If you build your own target portfolio, you have to set your asset allocation and maintain a "glide path," or gradually move out of stocks and into bonds.

Even if you mimic a target-date fund for someone your age, you've still got to do the work. That will include periodically selling shares to rebalance the mix between domestic stocks, international shares and bonds. If the funds are held outside a tax-advantaged account, such sales could mean paying tax on realized gains.

Bottom line: If you're investing a large sum and willing to monitor and fine tune your homemade target fund, then I suppose the potential savings you can reap might be worth it. But for the overwhelming majority of investors considering a target-date fund, I think buying a target fund off-the-rack is a more realistic approach.

First Published: December 20, 2012: 4:44 PM ET

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Fallout out from fiscal cliff inaction

The last-minute fiscal cliff negotiations are creating needless uncertainty and administrative headaches.

NEW YORK (CNNMoney)

Dragging out the negotiations this far has created needless uncertainty and pushed some individuals and businesses to try to protect themselves against something the government may or may not do.

Lawmakers' delay in averting the cliff -- which is likely to be averted eventually -- has also made it hard to plan and has set the stage for needless administrative messes next year.

"This really is malfeasance," said Joseph Minarik, director of research at the Committee for Economic Development.

Refunds could be delayed for months: The IRS warned lawmakers this week that if they don't act to protect the middle class from having to pay the Alternative Minimum Tax by Dec. 31, up to 100 million taxpayers may not be able to file their 2012 taxes until late March.

That would mean their refunds will be delayed. And they wouldn't be injecting those refunds into the economy during the first quarter.

Based on Treasury Department records from the past three years, refunds paid during January, February and March combined have ranged from $117 billion to $136 billion.

Fiscal cliff indecision leaves paychecks up in the air

Payroll processors left in the dark: Those who cut paychecks for a living are genuinely perplexed about how much money to withhold in income taxes from workers' wages starting in January. If they don't receive any guidance from Washington, they'll stick with 2012 withholding tables, they say.

They're just hoping that if lawmakers can't reach a deal until next year, that any income tax changes they approve not be made retroactive to Jan. 1. If they are retroactive, then payroll systems will have to be altered to make corrections for 2013 paychecks already issued.

Gift giving grows: If Congress does nothing, the gift and estate tax will soar next year. But most in Congress support a more lenient version of the tax -- they just don't agree on how lenient.

Nevertheless, estate lawyers tell CNNMoney that they've seen a huge transfer in wealth this year by folks hoping to beat a potentially higher gift and estate tax.

Doctors' facing pay cut: Medicare doctors have been put on notice: The Centers for Medicare & Medicaid Services will have to process payment claims according to current law, which means a 27% cut in pay starting in January.

Never mind that most in Congress want to avert the scheduled cut. They have done so regularly in the past.

Once physicians submit a claim, it takes at least two weeks before the claim is paid. So if Congress passes a so-called "doc fix" quickly next year, that could potentially prevent pay cuts from occurring.

Or not. It's impossible to say.

"With a full year to stop this drastic cut, it is absolutely inexcusable that Congress has failed to act, leaving Medicare patients and physicians to deal with the consequences," said Dr. Jeremy Lazarus, president of the American Medical Association.

First Published: December 20, 2012: 6:19 PM ET

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Peter Madoff, brother of Bernard, sentenced to 10 years

NEW YORK (CNNMoney)

That's the sentence that federal prosecutors had sought for Peter Madoff as the result of a plea deal. He pleaded guilty, on June 29 in U.S. District Court for the Southern District of New York, to the charges of conspiracy and falsifying investment records.

Madoff had admitted to lying to clients and the Internal Revenue Service while working with his older brother Bernard at their financial firm, which had been a front for a pyramid-style scheme since at least the 1970s.

Peter has said he was shocked at his brother Bernard's arrest on Dec. 11, 2008 and that he didn't know his brother was stealing. But he also explained to prosecutors how he concealed information from the feds. He admitted such details as filling out financial forms with different colored pens to create the false impression that the forms were filled out on different dates.

"I am deeply ashamed by my conduct," said Peter Madoff before being sentenced on Thursday, where he said that he was "sorry" for his misdeeds. "I have tried to atone by pleading guilty. I accept full responsibility for my actions."

Defense lawyer Russell Wing said that, unlike his brother Bernard, Peter was "not a knowing participant" in the Ponzi scheme.

"Peter Madoff is not Bernie Madoff," said Wing, addressing the judge.

Judge Laura Taylor acknowledged that "perhaps he didn't didn't know about the wider Ponzi scheme," but that Peter nonetheless "contributed" to the scheme and engaged in "calculated, long-term crimes of deception," including lying to the feds to conceal the size of his firm and its activities.

Related: Madoff controller pleads guilty

The judge said that even as the existence of the Ponzi scheme became obvious, Peter Madoff helped his brother prepare more than $300 million worth of checks for family members, and took out $200,000 in cash for himself.

"The enormity of the criminal activity that led to this day cannot be underestimated," said the judge.

A couple of dozen victims attended the sentencing and were allowed to address the court.

"I ask you to show the same compassion to Peter Madoff that he showed to us: none," said Michael DeVita, an investor who lost an undisclosed amount of money to Madoff's firm.

Peter is the latest Madoff family member or associate to appear in court for participating in the Ponzi scheme, where thousands of victims lost an estimated $20 billion. Bernard was sentenced to 150 years on March 31, 2009, just three months after his arrest, when he pleaded guilty to running the largest, most sweeping Ponzi scheme ever. He currently resides at a federal prison in Butner, N.C.

Bernard Madoff masqueraded his scheme as a legitimate Wall Street firm. His victims thought they were investing their money in the markets, but Bernard was actually using the money to fund a lavish lifestyle for himself and his wife Ruth. They owned a $7 million Manhattan penthouse as well as luxurious homes in Florida and France, along with a yacht and a collection of expensive jewelry.

Related: New York A.G. reaches Madoff settlement with Ivy Asset

Bernard tried to insulate his family members and associates from the legal fallout resulting from his arrest, but those efforts failed. Five of his former employees face a total of 33 federal charges, including Daniel Bonventre, Annette Bongiorno, Joann Crupi, and computer programmers Jerome O'Hara and George Perez. Their court date is set for October next year.

Bonventre, the former operations director for Madoff's firm, was charged with conspiracy, falsifying company records and securities and tax fraud.

In addition, Irwin Lipkin, the former controller of the Madoff investment company, pleaded guilty in November to federal charges of falsifying documents and conspiring to commit securities fraud. He admitted to making false filings to the Securities and Exchange Commission.

Madoff's former accountant, David Friehling, pleaded guilty in 2010 to nine counts including securities fraud, investment adviser fraud, false filing with the SEC and tax-law violations. He could face up to 114 years in prison, but his sentencing has been postponed multiple times.

Related: Madoff ruined thousands, including his son

One of his sons, Mark, committed suicide in 2010, on the second anniversary of Bernard's arrest.

Earlier that year, his wife had filed for a name change. By then the name "Madoff" had become synonymous with "Ponzi."

Bernard's wife and two sons were not charged with crimes. But Irving Picard, the court-appointed trustee in the Madoff asset recovery, sued Ruth for than $40 million. Lawsuits against the Madoff family total about $200 million.

Bernard Madoff was constantly under pressure to find new victims for his scheme, which fell apart in tandem with the recession, as the growing demand for remittances outweighed the amount of fresh money coming in.

First Published: December 20, 2012: 5:50 PM ET

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TARP bailout close to breaking even

NEW YORK (CNNMoney)

The big banks had already paid back their loans, and last week, the Treasury Department sold its remaining stake in AIG (AIG, Fortune 500). On Wednesday, General Motors (GM, Fortune 500) said it was buying back 200 million shares from the government. Bailed-out companies had also paid nearly $43 billion in dividends and interest over the past four years.

That leaves a loss of just under $14 billion, including $6 billion for programs to prevent foreclosure that were never meant to be paid back.

The shares of banks and automakers that Treasury still owns is likely to fetch close to that much, if not more.

For example, Treasury will still own 300 million shares of GM stock that it plans to sell during the next 15 months. At current prices, the stake alone is worth more than $8 billion.

The Treasury also owns a 74% stake in Ally Financial, as well as $5.9 billion in preferred shares. While the exact value of those holdings isn't known because Ally shares are not publicly traded, the holdings could easily top the $6 billion gap still remaining after GM.

Though Treasury no longer owns shares in the nation's biggest banks, it still holds stakes in 213 small banks that have been unable to raise the capital they need to repay taxpayers. Treasury expects to sell its holdings in about two-thirds of those banks in 2013.

Related: Three answers to the auto bailout debate

Not everyone thinks TARP should be counted as this close to break-even. One issue is how to count dividends and interest. The Special Inspector General for TARP does not include them, arguing those payments were owed for use of the bailout funds.

The TARP watchdog also doesn't count $17.6 billion from the sale of AIG shares that Treasury got from the Federal Reserve.

Related: Too early to call AIG bailout a success

Neil Barofsky, the original Special Inspector General and a critic of the bailout, acknowledges that a lot of money has been paid back. "I'm pretty agnostic as to what should be counted [as a profit or loss]," he said. "But it seems like under almost any of the official estimates, the loss will be much smaller than anyone thought in 2009."

Even so, he argues the bailout failed at its mission of getting banks to loan out money they received, and helping to stabilize the battered housing market.

Even if taxpayers break even on TARP, it wasn't the only bailout to consider.

The largest was $187.5 billion for mortgage finance firms Fannie Mae and Freddie Mac. Even with the $50.5 billion in dividends, taxpayers are still out $137 billion from that rescue.

First Published: December 19, 2012: 1:50 PM ET

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Lack of AMT fix could delay 100 million tax returns

Without an AMT "patch" in place by Dec. 31, up to 100 million taxpayers may not be able file their 2012 taxes until late March. And their refunds will be delayed, the IRS says.

NEW YORK (CNNMoney)

That's the latest estimate from the IRS, which would have to do some serious system reprogramming in the absence of an AMT provision.

Here's the problem: Income exemption levels under the "wealth tax" -- as the AMT is known -- were never adjusted for inflation since it was enacted decades ago. So Congress has regularly passed an AMT "patch" to correct for that by raising the exemption levels.

Except that lawmakers have so far failed to do so for 2012. And tax filing season begins in less than two weeks.

Without a patch, $45,000 for joint filers and $33,750 for single taxpayers is exempt from the AMT. But adjusted for inflation, those levels would jump to $78,750 and $50,600 in 2012, according to bills in the House and Senate.

CNN: Obama, Boehner remain at odds

No AMT fix would mean "lengthy delays of tax refunds and unexpectedly higher taxes for many taxpayers, who will be unaware that they are newly subject to AMT liability," IRS Acting Director Steven Miller said in a letter to House and Senate tax writers on Wednesday.

Without a patch, he estimates that close to 30 million additional taxpayers would have to pay the AMT.

And, he added, "[I]f Congress were to act at some point next year to enact a new AMT patch, the time and substantial expense necessary for the IRS to reprogram its systems to reflect expiration of the patch would ultimately be wasted."

The most aggravating thing about the situation: Both parties will agree to patch the AMT. The only question is when. At the moment, the patch is being held hostage to the fiscal cliff negotiations.

First Published: December 19, 2012: 5:34 PM ET

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Sheryl Sandberg made $50 million selling Facebook shares

Facebook COO Sheryl Sandberg has been selling Facebook shares steadily since October 31, the first day that her shares were unlocked.

NEW YORK (CNNMoney)

Zuckerberg's No. 2, chief operating officer Sheryl Sandberg, has cashed out around $50 million since Facebook (FB) went public in May. Her latest sales came this week, when she sold nearly 310,000 shares for $8.4 million.

Sandberg has plenty more left in her coffers. On the day of Facebook's IPO, she reported holding 46.6 million shares and stock options (including a chunk of not-yet-vested restricted units) -- a stake worth almost $1.8 billion at the time, based on Facebook's $38 per share IPO price. She has sold off just 2 million of those shares so far.

Sandberg is using a pre-arranged trading plan, which means she has no control over the specific timing of her sales. Such plans are a common way for top executives and company executives to cash in on a portion of their holdings while avoiding accusations of insider trading.

Facebook representatives did not respond to a request for comment.

Like Zuckerberg -- who recently donated stock worth a whopping $500 million to the Silicon Valley Community Foundation -- Sandberg appears to be using some of her shares to spread the philanthropic wealth. In November she donated 429,184 shares valued at around $10 million to an unidentified recipient.

For Sandberg, Zuckerberg, and their charities, those shares aren't worth as much a they once were; Facebook's shares are down more than 27% from their IPO price. Still, the stock has improved over the last two months, with Wall Street responding favorably to Facebook's growing ad sales and efforts to monetize its growing pool of mobile users.

Zuckerberg says he doesn't plan to sell Facebook shares until at least September 2013. Other early employees and investors have taken advantage of their chance to sell -- including Peter Thiel, the company's first big investor, and company co-founder Dustin Moskovitz.

First Published: December 19, 2012: 1:53 PM ET

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Money leaks and how to plug them

Plug those money leaks. See which of these money leaks apply to you and start saving.

(Money Magazine)

Still, you may be missing some "money leaks," those small expenses that you hardly notice but that add up over time.

See also: 12 ways you're wasting money

Some are costs you forgot you're shouldering. Others are regular bills you've been meaning to review for years. Yet another group is expenses you could save on if you took the time to check out cheaper options.

Total up which of these leaks apply to you, and start savings hundreds -- even thousands -- a year.

YOU SET IT AND FORGOT IT

What was perfect for you five years ago may be costing you too much today.

What to do if you're forgetting...

...you still have cash in your money-market fund earning 0.01%

The leak: Up to $94 on $10,000 in savings

The plug: Money funds are paying an anemic 0.01% on average, yet savers still have $2.6 trillion sitting in them, says the Investment Company Institute. Why!? Move your cash into an online savings account, such as those offered by Ally Bank (0.95%) or Discover (0.8%).

...to audition new car insurance companies

The leak: About $170 annually on a typical $900-a-year policy

The plug: About 75% of policyholders automatically renew without getting a new quote, a recent J.D. Power and Associates study found.

Related: 9 expert tips on saving money

Yet according to the Texas Office of Public Insurance Counsel, drivers who have stayed with the same insurer for more than eight years could save 19% by switching. Robert Hunter, director of insurance for the Consumer Federation of America, recommends getting annual quotes from at least four companies with low complaint ratios on NAIC.org.

...you've already paid for your home alarm system

The leak: $360 a year

The plug: The first few years you have a security system, the monthly fee often covers the cost of equipment. After that, you can pay for monitoring only and cut a $55 charge down to $25.

Don't count on the security company to automatically adjust your rate. Call and ask, says Stan Martin, executive director of the Security Industry Alarm Coalition.

...how little your car is worth 10 years off the lot

The leak: $170 a year

The plug: Once your car is 10 years old, the cost of repairing it after an accident could be more than the car is worth, says Philip Reed of Edmunds.com.

Related: 9 ways to cut your energy bills

Dropping collision coverage for your wheels and covering just injury and property damage could save up to 40%.

...the landline phone gathering dust in your kitchen

The leak: $50 or so per month, once you add in those unavoidable fees

The plug: If you have spotty cell service or are worried about your minutes, use an Internet calling service like Skype ($60 adapter and $8 a month) or a VoIP option like magicJack Plus, which plugs into your phone -- allowing you to make calls over the Internet without a computer.

The $70 device includes a year of free calls within the U.S. and Canada ($30 a year thereafter).

...how much you used to pay your hairdresser

The leak: That $80 cut used to be $60. There goes $120 a year.

The plug: If your hairstylist, lawn guy, or other service pro gets too expensive, say so, leaving him room to lower the price, says Jodyne Speyer, author of Dump 'Em: How to Break Up With Anyone From Your Best Friend to Your Hairdresser. If he doesn't, let him know you're moving on.

YOU OVERLOOK CHEAPER OPTIONS

You do your research, but sometimes you miss a less expensive choice.

What you miss when you pay for...

...stuff you'll use once or twice

The leak: $605, if you buy a high-end camera for a family reunion rather than rent it for $95 a week

The plug: Consider how often you'll use a big-ticket item and run the numbers for buying vs. renting. An online search should turn up a rental site for what you're after.

Need a dress for your nephew's wedding? Buy one for $180, or borrow it from Rent the Runway for $35. Try a store like New York City's Adorama for camera equipment, Home Depot for tools, REI for outdoor gear, and Sport Chalet for athletic goods.

...monthly trips to the dog groomer

The leak: $400 or more a year

The plug: It's fine to clip just every three months -- provided you're willing to do some maintenance, says Wendy Booth of the National Dog Groomers Association of America. Brush and comb your dog at least twice a week, untangling mats or trimming them with clippers ($75 and up).

Another option: Ask your vet to suggest a grooming school that offers student discounts, which typically run 20% to 40%.

...high-turnover mutual funds

The leak: Larger trading costs that eat into your returns

The plug: The funds that replace their holdings the most frequently have only a 31% chance of outperforming the market, says Russel Kinnel, director of mutual fund research at Morningstar: "You're better off steering clear."

Related: When to sell a mutual fund

The brokerage and other costs that managers ring up by moving in and out of stocks on a regular basis don't show up in the expense ratio. So check your fund's turnover rate at Morningstar.com or in the prospectus. If the entire fund turns over 1 1/2 times (150%) or more a year, it's too much.

YOU JUST DON'T GET AROUND TO IT

Cutting costs has a way of falling to the bottom of your to-do list.

You keep meaning to...

...see whether you could pay less for home insurance

The leak: If you've updated your alarm system, you could knock $132 off the typical bill.

The plug: A new alarm or sprinkler system could reduce your cost by up to 15%, while a bigger overhaul, like revamping your electrical, plumbing, and heating and cooling systems, could mean a discount of 40% or more, according to State Farm.

Related: Why home insurance costs so much

Update your insurer whenever you make a significant change to get your discount.

...stop using the post office to pay bills

The leak: Let's say you pay 10 bills via the mail every month. At 45¢ a pop, plus 25¢ or so per check, that's $84 a year.

The plug: Pay bills through the company website, or sign up for online bill paying through your bank. Both are free -- and save you the trip to buy stamps.

...quit spending so much money on lunch

The leak: The typical worker spends nearly $2,000 a year on lunch, according to a study by staffing company Accounting Principals.

The plug: Okay, so you're never going to brown bag it every day. Here's a more realistic option: Pick up a jumbo pack of snacks and drinks and tote a week's worth into the office every Monday. You'll save $10 to $15 a week (or $460 to $690 a year).

...figure out why you feel a draft in the living room

The leak: Your fireplace's flue damper could be open, allowing hot air to -- literally -- leak up the chimney.

The plug: More than 60% of homeowners leave the damper open routinely, says Joe Pate, president of Enviro Energy International, which could cost $200 a year in lost heat.

If your damper is broken or just not stopping the draft, insert an inflatable flue seal ($50), or add glass doors to your fireplace ($250 and up).

...start grocery-shopping with a list

The leak: The typical American throws out $28 to $43 worth of food each month, says the Natural Resources Defense Council.

The plug: Use an app like Shopping List for iPhone (free) to plan your weekly grocery trip. To use up what you already have, plug ingredients into a website like recipematcher.com.

...take care of that annoying leaky faucet

The leak: Sealing leaks will trim $80 or more off the typical family's annual water bill.

The plug: A single home can leak 10,000 gallons a year, according to the EPA, adding at least 10% to your water bill. Replace worn faucet washers and gaskets regularly. Investing $200 in a water-sense toilet can save you about $2,000 over 30 years.

...see whether your favorite restaurant ever offers coupons

The leak: Sites like Groupon and LivingSocial offer restaurant deals of up to 50% per meal. Using a coupon on one $60 meal a month will save you $360 a year.

The plug: Recent LivingSocial deals include half off at a high-end D.C. sushi spot and a discounted prix fixe with a Food Network star in Philadelphia.

Of course, spotting the most appealing offers can mean wading through a lot of deal emails, so sign up for an aggregator like Yipit to see the daily offers in one click.

...switch to a credit card without foreign-transaction fees

The leak: If you ring up $3,000 in credit card charges in another country once a year, you'll add $90 to your vacation bill.

The plug: Credit card foreign-transaction fees are about 3% of your purchase, says Anisha Sekar, vice president of credit and debit products at Nerdwallet.com.

Try a fee-free card from Capital One, or go with a credit union, which typically charges a less painful 1%. If you travel enough to justify the annual cost, rewards cards like the BankAmericard Privileges with Travel Rewards ($75) also waive transaction fees.

READERS SHARE THEIR MONEY LEAKS

Cut the cost of daily splurges

We've done a lot of the usual trimming back on services, but still had a taste for the 'luxury' of grinding coffee beans for a great pot of coffee every day. When prices of beans kept going up, we found we could roast our own coffee, using green beans we buy online and a popcorn popper. We can buy green beans (including shipping charges) for about $6.50 a pound -- less than half of what we paid before -- and roast as needed, so it's fresher than store-bought. -- George Reed, Geyserville, Calif.

Sign up for auto-pay options

I was able to cut a $12.95 monthly banking fee from Wells Fargo by having my Wells Fargo Mortgage payment paid each month under an auto pay plan. -- Terry Doroff, via Facebook

Make the most of your memberships

I'm a technology professional and member of several professional societies and organizations. I called my car insurance company to see if they had any partnerships with these organizations that would mean a better rate -- and they did! Now I get a significant discount, thanks to an group I was already a part of. -- Ryan Ferguson, Tampa, Fla.

Get rid of any excess plastic that carries an annual fee

When I looked at my American Express card statements for the past two years and realized that the only charge to the card was the annual fee, I knew it was time to get rid of it after 40 years of membership. Savings: $55 a year. -- John Strachan, Ballston Spa, N.Y.

Go paperless

I opted to receive quarterly statements via email from my mutual fund company to avoid a $10.00 annual maintenance fee. -- Marc Hardekopf, via Facebook

First Published: December 18, 2012: 2:36 PM ET

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