The IRS has issued a statement clarifying an otherwise confusing situation for retirees hoping to make charitable donations directly from an Individual Retirement Account (IRA). The confusion began when Congress extended the timeframe to make a 2010 charitable donation from your IRA. The deadline should have been December 31, 2010 –but recognizing that their own delays had caused problems, Congress extended the deadline to January 31 of this year. The IRA charitable donation is a popular rule, which had expired at the beginning of 2010, allowing taxpayers age 70-1/2 or older to donate up to $100,000 a year of IRA…
The number of unmarried couples is on the rise, and with them a myriad of legal snarls and entanglements. In fact, if you are not married to your partner, but have shared assets or living arrangements, the Wall Street Journal article says you may experience a sort of (un)marriage penalty. According to the Census Bureau, the number of opposite-sex unmarried couples living together in the U.S. jumped some 13% in 2010 from the previous year, to about 7.5 million. The bureau also estimates the number of same-sex couples living together rose roughly 30 percent, to about 620,000 this year from…
If you’re feeling charitable this holiday season, I certainly encourage you to follow those passions and make heart-felt charitable donations. However, while you certainly want to be cheerful giver, there’s no reason you shouldn’t also be a tax-savvy one! There are a number of ways to accomplish a strategy to both support worthy causes, and reduce your tax-bite at the same time. In fact, MarketWatch recently offered a concise list of five tax-savvy strategies: 1. Donor-Advised Funds: A donor-advised fund is like your own private foundation, without the onerous administrative costs or duties. Although you lose final say in the…
For many, bankruptcy carries a stigma of personal failure and shame. Still, filing for bankruptcy protection may be a viable option for a growing number of seniors who find their incomes shrinking while their bills – particularly medical bills – continue to rise. USA Today recently reported a study from the University of Michigan Law School showing that people age 65 and older are the fastest-growing segment of the population seeking bankruptcy protection. It’s a matter of simple math. Medical expenses, taxes and other costs keep going up, while Social Security hasn’t had a cost of living adjustment, pension and…
The new tax bill contains a little-known loophole that, if you act quickly, could save a big tax bite for those who want to make substantial gifts to grandchildren. The Generation Skipping Tax (GST), in place since 1986, is a second layer of tax applied to gifts that “skip” a generation – for example, gifts made to grandchildren if the parents are still alive. The loophole in the new tax bill not only confirms a 0% GST for all of 2010 (making the law more clear) but widens that loop hole substantially, albeit temporarily, through the end of this year,…
Until the Patient Protection and Affordable Care Act of 2010 (ACA), the only health care coverage available to persons with disabilities was Medicare or Medicaid. For persons with disabilities who have a limited work history, unless they became disabled before age 22 and later qualified for Medicare upon the worker parent’s retirement, disability or death, Medicaid has been the only available source of health care coverage. Consequently, the ACA eliminates the option for health insurance companies to deny coverage for a preexisting condition. Therefore, the new health insurance provides options for people with disabilities. Since September 23, 2010, health insurance…
A little-known aspect of the Small Business Jobs Act of 2010 is the temporary waiver on fees for some loans guaranteed by the Small Business Administration (SBA). The fees, which can range from two to 3.5 percent of the loan amount, can be substantial on high-value loans. While some business borrowers may not feel the pinch, since the fees are typically rolled-into the financing of the loan and not charged upfront, the fee waivers still account for significant savings – especially if the loan value is high. For example, consider a recent article in the Burlington Free Press, highlighting a…
The suspicion should be nothing new, but Consumers Union and the LA Times recently released warnings about reverse mortgages, and it’s worthwhile to repeat them here. The biggest problem with reverse mortgages is that they can be made to appear too attractive to retired senior citizens, when in fact they can be quite risky. Seniors should be wary of reverse mortgages, rather than be misled by them. Reverse mortgages allow seniors to tap into their home equity for cash or a line of credit, often with the claim that the money needn’t be paid back until the borrower dies….
The speculation won’t be over until the final bill is written up, passed, and signed into law, but with prospects looking reasonably good for the Obama Tax Proposal, it may be time to review your year-end tax planning. Reuter’s is ahead of the game and recently listed their top three suggestions: Timing on deductions and income: If you thought you were going to see increased taxes in 2011, you may have planned to push income forward into 2010 and deductions back into 2011. With the Bush-era tax cuts extended to all income brackets this won’t be the case and…
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