Avert Panic! Make a Plan!

I had a great time on WVXU (91.7) with Chris Disimeo and Mark Heyne, talking about my workbook "A Caring Gift:  Click on the headline to listen.

Have you ever been asked to water a neighbor’s plants when they were on vacation? Did they leave instructions?  What if that neighbor was hospitalized suddenly, or possibly never coming home again? Where will you find the instructions?

The workbook, “A Parting Gift” is available on my website.  It is a workbook where you can leave instructions to make it easier for family or friends to help you, whether you’re just away on vacation or off to your eternal home. The workbook covers everyday matters, like taking care of the family dog and cutting the grass; serious things, like bank accounts and insurance; and complicated things, like Mother’s china and Grandmother’s quilt. 

The 4 essential pages, from the workbook, are available on the website for download at no charge. 

Last call for 2016 tax returns

The last day to file your extended personal income tax return is October 16!  If you owe tax, pay as much as possible to minimize interest and penalties.  BTW, if you live or work in a disaster area, you may have more time to file.  Your return may not be due until January, 2018!  Check the IRS.gov disaster relief page for more information

Considering Creative IRA Investments?

Thinking about taking control of your IRA to invest in something different?  Be very cautious.  IRAs cannot invest in some types of investments.  Loans and Unrelated Business Income can create tax complications.  Self-dealing, like paying yourself a management fee, can disqualify the IRA and make the entire account taxable.  

Are you thinking about making large gifts to the children?

Have you heard about the gift tax exclusion?  Most people have heard that there’s no need to file a gift tax return for gifts totaling less than $14,000.  But that’s a tax rule.  If an elderly family member makes gifts of any amount, and then later finds themselves in need of help with medical or long-term care expenses, those gifts are called “improper” and disqualify them for Medicaid assistance.  Medicaid looks back 5 years to tally up improper gifts.   (August, 2017)

Home Caregivers and Your Taxes

Do you have a household caregiver in your home?  Whether for an elderly family member or a child, this caregiver might be an employee.  You are responsible for payroll taxes and filing the appropriate payroll tax returns.  You should also protect yourself from accidents in the home by enrolling in Worker’s Compensation.  (June, 2017)

Tax refund? or tax bill?

Did you get a nice tax refund J ?  Or did you owe the IRS L ? While some people like to use their tax withholding as a savings tool, it’s usually wiser to only have as much tax withheld as needed.  To avoid surprises at filing time, update your exemptions by filing a new W-4 with your employer early in the year.  (May, 2017)

Don't forget to make your IRA contribution

IRA Contributions must be made by the due date of your tax return. Your total contribution to a traditional and Roth IRA combined generally cannot exceed $5,500 ($6,500 if you are 50 or over).   Your deduction may be limited if you or your spouse are covered by a retirement plan at work and if your income exceeds certain levels.  (April, 2017)

Tax Day is Coming!

Tax Day is coming!  An extension of time to file is not an extension of time to pay.  Don't let IRS penalties and interest pile up.  First, pay as much as you can, online, by check, or by using the IRS2Go app.   If you need credit, consider using a credit card or loan.  The cost may be lower than the IRS interest and penalties.  You can also set up a payment plan with the IRS, using their online payment agreement tool.   (April, 2017)

Foreign Account Reports Due April 15

Do you have a foreign bank account or investment?  You may be required to report this twice.  Report it once on Form 8938, with your personal tax return, and again on the Foreign Bank Account Report (FBAR) FinCEN Form 114.  These returns are now due April 15.  (April, 2017)

Debt forgiven? You may have taxable income.

Have you had a dispute with a contractor or service?  If your debt is cancelled, you may have cancellation of debt income and receive a 1099 from the business.  In many cases, this is taxable income.  (March, 2017)

Will the loss of a loved one impact your own tax return?

Was there a death in your family?  Have you received some money from the estate?  Don’t be in a hurry to file your personal tax return.  Ask the estate representative if you’ll be receiving a K-1.  Most of the distributions you receive from an estate probably won’t be taxable, but there could be some taxable income reported on a K-1or 1099.  Sometimes the K-1 even reports a loss.  You’ll need to include that income or deduction on your own tax return.  (March, 2017)

Crowdfunding leads to tax-time confusion

Crowdfunding raises money for many different purposes—personal, business, and charitable.  The purpose determines how these are treated for tax purposes.   Sometimes these contributions are a gift; sometimes they’re an investment that will offset future income; sometimes they are a deductible charitable contribution.  If you’re receiving the benefit of crowdfunding contributions, you may have taxable income or you may have a tax-free gift, even if you receive a 1099-K.  Ask your tax preparer to help you with this.  (March, 2017)