Interesting Articles

Taxpayers should be on the lookout for new versions of these two scams

By the IRS
July 2, 2019

With scam artists hard at work all year, taxpayers should be on the lookout for a surge of evolving phishing emails and telephone scams.

Taxpayers should watch for new versions of two tax-related scams. One involves Social Security numbers related to tax issues. The other threatens taxpayers with a tax bill from a fictional government agency. Here are some details about these scams to help taxpayers recognize them:

The SSN scheme

  • The latest twist includes scammers claiming to be able to suspend or cancel the victim’s Social Security number. This scam is similar to and often associated with the IRS impersonation scam.
  • It is yet another attempt by con artists to frighten taxpayers into returning robocall voicemails.
  • Scammers may mention overdue taxes in addition to threatening to cancel the taxpayer’s SSN. 

Fake tax agency

  • This scheme involves a letter threatening an IRS lien or levy.
  • The scammer mails the letter to the taxpayer.
  • The lien or levy is based on bogus overdue taxes owed to a non-existent agency.
  • The fake agency is called the “Bureau of Tax Enforcement.” There is no such agency.
  • The lien notification scam also likely references the IRS to confuse potential victims into thinking the letter is from a legitimate agency.

Both these schemes show classic signs of being scams. The IRS and its Security Summit partners – the state tax agencies and the tax industry – remind everyone to stay alert to scams that use the IRS or reference taxes. Being alert is especially important in late spring and early summer as tax bills and refunds arrive.

Avoid California & Other State Taxes With Supreme Court Trust Ruling?

By Robert W. Wood
June 24, 2019Credit: Shutterstock

In North Carolina Dept. of Revenue v. Kimberley, the U.S. Supreme Court unanimously ruled that a state could not tax an out of state resident on trust income without minimum contacts. If you live in a high tax state (in California, rates top out at 13.3%!) you might be slapping an out of state trust together to stockpile income and assets in Nevada, Delaware, etc. But will it work? You could avoid California taxes by moving, of course, as many do shortly before a major income event. You might be selling a company, settling a lawsuit, or about to sell a mountain of Bitcoin. Done carefully and with the right kind of income, a tax-motivated move can cut the sting of high state taxes. Of course, even moving to avoid state taxes can be tough to orchestrate, and states can audit and push back. A newer and still largely untested approach involves setting up a new type of trust in Nevada or Delaware. A ‘NING’ is a Nevada Incomplete Gift Non-Grantor Trust. A ‘DING’ is its Delaware sibling. There is even a ‘WING,’ in Wyoming. The usual grantor trust for estate planning doesn’t help, since the grantor must include the trust income on his own tax return.

With a Nevada or Delaware Incomplete Gift Non-Grantor Trusts, the donor makes an incomplete gift to the trust, and the trust has an independent trustee. The idea is to keep the grantor involved but not as the owner. New York State changed its law to make the grantor taxable no matter what, but the jury is still out on these trusts in California and other states. Some marketers of NING and DING trusts offer them as alternatives or adjuncts to a physical move. The idea is for the income and gain in the NING or DING trust not to be taxed until distributed, when the distributees will hopefully no longer be in the high tax state. The trustee must not be a resident of the high tax state. Tax-deferred compounding can yield impressive results, even if only state tax is being sidestepped. Parents frequently fund irrevocable trusts for children, and may not want the trust to make distributions for years, removing future appreciation from parent's estates.

Poll: 1 in 4 Americans don’t plan to retire — ever

By The Associated Press
July 7, 2019Results of AP-NORC poll on attitudes of workers toward retirement.

According to government data, about 1 in 5 people 65 and older was working or actively looking for a job in June.

For many, money has a lot to do with the decision to keep working.

"The average retirement age that we see in the data has gone up a little bit, but it hasn't gone up that much," says Anqi Chen, assistant director of savings research at the Center for Retirement Research at Boston College. "So people have to live in retirement much longer, and they may not have enough assets to support themselves in retirement."

When asked how financially comfortable they feel about retirement, 14% of Americans under the age of 50 and 29% over 50 say they feel extremely or very prepared, according to the poll. About another 4 in 10 older adults say they do feel somewhat prepared, while just about one-third feel unprepared. By comparison, 56% of younger adults say they don't feel prepared for retirement.

Among those who are fully retired, 38% said they felt very or extremely prepared when they retired, while 25% said they felt not very or not at all prepared.

"One of the things about thinking about never retiring is that you didn't save a whole lot of money," says Ronni Bennett, 78, who was pushed out of her job as a New York City-based website editor at 63.

Tax audits drop, according to latest IRS data

By Kay Bell
July 7, 2019IRS audits FY 2013-2018_IRS Data Book 2018

Much is made of the United States' voluntary compliance tax system.

The IRS depends on every taxpayer to honestly and accurately report his or her earnings and figure the correct tax due on the amounts.

Apparently, we agree with the self-reporting system, with most taxpayers saying cheating on taxes is wrong.

Of course, part of the reason we look askance at fudging Form 1040 figures is because we're afraid the IRS will catch us.

However, our fear of a tax audit might be exaggerated, according to the latest IRS Data Book.

Fewer return reviews: Audits, or examinations as they're called by the IRS, come in many forms.

The more common methods include correspondence audits, where the IRS looks over your return and it finds issues, sends you a written notice with its question, and field audits, which are face-to-face queries about your return.

In fiscal year 2018 — that's from Oct. 1, 2017, through Sept. 30, 2018, and detailed in the recently released IRS Data Book 2018 — the tax agency says all forms of its audits applied to only 0.6 percent of all individual income tax returns.

Since a fiscal year straddles two years, the IRS also noted audit figures for calendar year, the tax reporting period that individuals use in filing their annual 1040s.

In calendar year 2017, the IRS audited almost 1 million returns.

Unique Planning Challenges Of Directly Owning Real Estate Inside An IRA

By Michael Kitces
June 19, 2019

At the end of 2018, Americans had nearly $9 trillion in IRAs. Most of that money was (and continues to be) invested in “traditional” types of investments, such as stocks, bonds, mutual funds, ETFs, and annuities. But for those investors who wish to look elsewhere for returns, IRAs can provide a substantial amount of flexibility.

One investment option that is particularly popular when it comes to non-traditional IRA assets is direct-owned real estate. Direct-owned real estate refers to properties in which an owner (or a company controlled by that owner) has direct title to the property. But while the allure of non-traditional, non-stock-market-based investments like direct real estate can be an attractive proposition for many investors – especially in times of increased market volatility – such investments can also create unique planning challenges not normally associated with traditional investments.

Notably, though, direct-owned IRA real estate increases the likelihood of running afoul of the prohibited transaction rules. IRA owners, for instance, are prohibited from personally using their IRA-owned real estate, or performing even the smallest of repairs on the property themselves. Purchasing or leasing such properties personally is also off-limits, even when such arrangements are done as an “arms-length” transaction at a fair market value/rate.

But the list of potential challenges doesn’t stop there. Cashflow problems are also more prevalent when low-liquidity assets like direct-owned real estate are purchased within an IRA. The IRA, for instance, must have enough cash on hand to cover all of its “investment” expenses, including repairs and maintenance, taxes, and even the purchase of a property in the first place. And while an IRA can secure financing in the form of a non-recourse loan (i.e., a mortgage), such loans tend to limit the amount of capital that can be borrowed and can lead to Unrelated Debt Financed Income, which can complicate things even further by creating an income tax bill that must be paid by an investor’s IRA! All while other tax benefits normally associated with real estate, such as depreciation and the 20% pass-through deduction, are forgone (since the investment is owned in the tax-deferred IRA “shell”).

Congress Passes Bill to Force Charities to File Tax Forms Electronically

By Alex Daniels
June 14, 2019

Congress has approved legislation that would require most nonprofits to file their informational tax returns with the Internal Revenue Service in an electronic format that is easily searchable by the public, a move that would give nonprofit officials, regulators, journalists, and scholars a clearer look into nonprofits’ operations.

The bill, which passed the Senate by voice vote Thursday, awaits President Trump’s signature. If signed into law, the provision would take effect next year.

Small nonprofits, those with annual revenue of less than $200,000 and assets of less than $500,000, may ask the Treasury Department for a two-year delay if filing electronically would create an "undue burden."

Comparing Finances

Watchdog groups have been pressing Congress to require nonprofits to file in "machine-readable" formats, which allow users to sort, search, and aggregate data about nonprofits’ finances, governance, and programs. Doing so would allow the public to get a better view of how individual nonprofits stack up to their peers and how nonprofits in a certain region compare with others across the country.

Oregon Shakespeare Festival says its finances are strengthening as donations rise, ticket sales recover

By Jim Flint
July 23, 2019
Open to the sky, the Oregon Shakespeare Festival's outdoor Allen Elizabethan Theatre seats 1,200 people. Featured in the photo are the 2017 set and ensemble in "The Merry Wives of Windsor."

ASHLAND – Despite 2018 wildfire smoke that forced canceling or moving 26 performances and the ensuant loss of nearly $2 million in revenue, Ashland’s Oregon Shakespeare Festival is in sound financial condition, with donations up.

That’s according to the festival’s acting executive director, Paul Christy, and director of development, Torrie Allen. On Monday, they presented the festival’s 2018 annual report and a look at OSF’s future to a crowd of about 400 at the Angus Bowmer Theatre, one of the festival’s three venues.

The festival projected lower ticket sales for 2019, believing that fear of smoky skies would reduce attendance in late summer. However, ticket sales have exceeded expectations so far, and with no smoke yet in sight, July and August sales are higher than anticipated. The festival said it would release specific figures at the end of the season.

Revenue took a hit last year not only from the affected outdoor performances, but also from a dramatic drop in ticket sales generally in July, August and the first part of September.

“We had to draw from our savings,” Christy said.

An injection of 3.9% of the organization’s $40 million endowment fund made up about three-fourths of the revenue shortfall.

The Retirement Quiz That Everyone Is Failing

By Robert Laura
June 18, 2019
Wake up to the new reality of retirement planning (photo credit: Getty)

Below are 10 of the most difficult retirement questions you will ever be asked.  It’s a short but painful test that is designed to give people pause and question the ways they have been taught to think about and plan for retirement.

Each question only requires a simple “Yes” or “No” answer. Scoring is simple, each “Yes” answer counts for 10 points.  When finished, total up all “Yes” answers for your final grade %.  Anything below a 60% is failing and should garner your immediate attention.

1) Did you know that 23 of the 43 most stress life events can take place at or near retirement?

In fact, the act of retirement by itself is in the top 10 of the most stressful list.  The reality is, transitions of any kind can be difficult and take time to acclimate to.  Knowing this ahead of time and having access to the tools and resources for it can go a long way in helping you deal with the ups and downs you may experience when you leave the workplace.

2) Do other people want you in their social network for retirement?

In my retirement coaching books, workshops, and sessions I often talk about the essential role of one social network in retirement.  This includes talking about who you want to surround yourself with.  However, where most people fall short is assessing their role in friendships.  Are you a good friend who invests time and support in others?  Are you fun, optimistic and reliable?   What traits do you seek in friends and what traits do you offer?

Four retirement scenarios and how new legislation could help

By Susand Tompor
June 16, 2019

All across the spectrum, savers – whether it's baby boomers or millennials – are fretting about whether they'll really, truly ever afford to be able to retire. 

So it should be no surprise that Washington is looking at some key changes as part of a bipartisan retirement bill called the SECURE Act – or Setting Every Community Up for Retirement Enhancement. The bill passed the House in May and awaits action in the Senate. 

Too often, of course, many people haven't saved up all that much.

It's estimated that about 48% of households age 55 and older had no retirement savings in 2016 (such as in a 401(k) plan or an IRA), according to a U.S. Government Accountability Office review. 

When people are saving, many times their nest eggs won't go all that far especially if they end up living 10 or 20 years after they retire. 

The average 401(k) balance was $103,700 in the first quarter of 2019, based on an analysis of nearly 17 million retirement accounts held through Fidelity Investments nationwide. After a fairly strong market early this year, that's up 8% from the end of 2018. 

The average IRA balance was $107,100, a 9% gain from late 2018. 

Final HRA rules permit integration with individual health insurance

By Sally P. Schreiber, J.D. 
June 17, 2019

The Departments of the Treasury, Labor, and Health and Human Services (the Departments) jointly issued final regulations governing health reimbursement arrangements (HRAs) (T.D. 9867). The final regulations allow integration of HRAs with individual health insurance coverage (or Medicare), if certain conditions are satisfied. The rules also allow certain HRAs to be recognized as excepted benefits.

HRAs are generally account-based group health plans funded solely by employer contributions that reimburse employees for health care costs.

The Departments noted that the regulations were being issued to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup health insurance coverage (generally coverage on the individual market).

Integration with individual health coverage

The rules remove the prohibition on integrating an HRA with individual health insurance coverage, if certain conditions are met, and contain requirements that an HRA must meet to be integrated with individual health insurance coverage. The final rules denote these plans as “individual coverage HRAs.”

The Departments are concerned that allowing HRAs to be used may result in employers’ encouraging higher-risk employees who have higher expected medical claims to obtain insurance on the health insurance exchange for individual health coverage, which could destabilize the individual health insurance marketplace by steering more high-risk people to it.

Market Talk! S. Oregon Real Estate

By Pete Belcastro
June 13, 2019

We’re pretty much in agreement that summer has arrived in S Oregon. (Officially this Thursday)  Hopefully, smoky skies will not be a part of the next few months of discussion we will be having..

Meanwhile, Real Estate sales continue to show our market is quite active.  The biggest news from last week was that inventories were way up.  More than 100 alone in Jackson County, that’s the most we’ve seen.  Other notes: only a handful of closings in Josephine County, but sellers received over 98% of their listed price.  

You’ll want to catch last week’s Real Estate Show with guest Travis Hand, owner of Rogue Inspection Services. Travis is an instructor for the Rogue Valley Association of Realtors, and shares all aspects of a general home inspection, plus the many  types of other inspections buyers and sellers might consider. He joins co-host Alice Lema and me for an in-depth look at the world of real estate inspections.

Eight Things You Need To Know About The Death Tax Before You Die

By Christine Fletcher
May 20, 2019


The federal estate tax (sometimes called the death tax) is a one-time tax that is imposed at death. If you die with a certain dollar amount of assets – currently, estates under $11.4 million are exempt, but this reverts back to $5 million in 2026 – a federal estate tax return is required and a tax will be due. If a return is required, it is due nine months after the date of death. 

Sometimes people confuse the estate tax with an income tax, but it is not a tax on income. It is a transfer tax imposed on the wealthy at death.If you die with a gross estate under $11.4 million in 2019, no estate tax is due. If your gross estate is over $11.4 million, you pay a tax on the overage. In general, the tax rate is between 18% and 40%, but it gets to 40% pretty quickly. 

The large exemption amount is due to the recent changes in the tax laws that took effect in 2018. The federal estate tax amount used to be $5 million adjusted for inflation. It is now $11 million adjusted for inflation, so it increases every year. However, beware that it is scheduled to return to $5 million adjusted for inflation on January 1, 2026.

Here is what you need to know.

Large gifts are part of the calculation. If you made any large gifts while you were alive, these are counted into your estate when the tax is calculated. For example, if you gifted $5 million to your children in 2012, you no longer have $11.4 million worth of exemption – you have $6.4 million worth. 

Don’t forget these tax breaks if you’re renting out your home this summer

By Darla Mercado
May 15, 2019
Family with body board and beach towel leaving beach house

Got a home in a tourist destination? A cash windfall and a few tax breaks could be yours this summer.

Though it’s only May, a number of locales are becoming standouts for summer travel.

In particular, the number of bookings to Rosarito, Mexico, are up 548% year over year, while reservations to short-term rentals in Destin, Florida, have increased by 419% from 2018, according to Airbnb.

A home with the right details will command a hefty price tag — and a fine bit of income for the owner.

For instance, a two-bedroom apartment with beach views in Destin is going for $206 a night, Airbnb found.

While the prospect of a side income is attractive, homeowners hoping to rent their properties have to navigate the tax code. That’s where things get tricky.

About 1 in 7 homeowners polled by Vacasa, a vacation rental company, said that they didn’t know what they need to submit on tax forms as rental owners.

The company polled 1,006 individuals who own their primary residence and earn income from renting one of their properties.

“From a tax perspective, it’s important to understand how the home is classified: Is this a personal residence or a rental property?” asked Robert Westley, CPA and a member of the American Institute of CPAs’ personal financial specialist credential committee.

5 ways to avoid regret with Social Security, retirement planning

By Russ Wiles
May 19, 2019

Life is filled with choices, and some of them will lead to regrets. That's certainly true in the financial area, where Americans routinely grapple with difficult decisions.

Most everyone has financial regrets (if they're being honest), though 15% of respondents in a survey by said they have no such concerns.

Maybe these people put all their money into the stock market at the start of the bull rally in 2009, bought their dream homes with little cash down and adequately funded their retirement accounts and children's college education. But chances are, they didn't.

At any rate, here are five issues related to retirement and Social Security that can cause second-guessing years from now.

1. Don't tap Social Security early

Yes, there might be good personal reasons to start taking Social Security retirement benefits as soon as you can, at age 62, or soon thereafter. These include a recent job loss, financial stress such as that centered around high medical bills and even an expectation that you might not live that much longer and want to recoup the money you paid into the system.

What Are The Best And Worst States For 529 Plans?

By Stephen Nelson
May 21, 2019Credit: Getty Royalty Free

What are the best states for a 529 education savings plan? What problems are there with these plans? These are tax-advantaged programs, sponsored by states, that allow your investments to grow tax-free and be spent without a tax bite for educational expenses.  Stephen Nelson, a wealth manager at Aldrich Wealth in Carlsbad, Calif., tells us how to pick the right one for you:

Larry Light: Let’s say I’ve decided to start contributing to a 529 plan for my kid’s education. Now what?

Stephen Nelson: 529 plans are the best way to save for college due to the tax-free growth and tax-free withdrawals if used for college expenses. However, the decision doesn’t end there. There are some more hidden hurdles with 529s that many people are unaware of that could hurt their savings growth or make the withdrawal process frustrating when it actually comes time to pay for college.

Light: What are some of these obstacles that people aren’t thinking about?

Nelson: First thing, direct sold savings programs versus broker sold savings programs. Many people don’t know the difference when they sit across from an advisor and are discussing setting up a 529 Plan.

Broker sold programs are 529 plans set up through an advisor or broker. You can’t enroll in these programs on your own. But direct sold programs can be enrolled in directly through each state’s plan manager and done from your home computer. Most people don’t realize that the direct sold programs are better and less expensive than the broker sold kind. The fees and sales charges on broker sold programs are so high, you’d be better off not even funding a 529 plan.

How do you pay taxes on bitcoin? Congress demands explanation

By Kari Paul
April 17, 219â??There is virtually no guidanceâ?? on how to handle Bitcoin transactions when reporting taxes, says an attorney.

US lawmakers asked the the Internal Revenue Service how US residents should pay taxes on bitcoin and other cryptocurrencies, in a remarkable letter that shows just how unregulated the cryptocurrency space remains.

More than a decade after bitcoin was first introduced, the IRS has released just one public notice on how to pay taxes on digital holdings. That lack of guidance is leaving American taxpayers with “unacceptable” ambiguity on reporting requirements, the letter signed by 21 members of Congress on Monday said.

“Taxpayers deserve clarity on several basic unanswered questions regarding federal taxation of these emerging exchanges of value,” according to Tom Emmer, a congressman from Minnesota who signed the letter. “Guidance is long overdue and essential to proper reporting of these emerging assets.”

The IRS did not respond to a request for comment.

As it stands, cryptocurrency is treated as property by the US government, meaning capital gains taxes apply to every transaction, whether it’s buying a $1m home or a $2 cup of coffee.

But questions remain regarding how to determine the value of currencies at a given time and how to account for events like initial coin offerings, in which companies raise money by selling virtual currencies to investors. Thousands of initial coin offerings have raised billions of dollars in recent years, making reporting increasingly complex.

“From a tax reporting standpoint, it can be very complicated just tracking the gains and losses on each transaction, but it gets more complex year after year,” said Alex Kugelman, a tax attorney based in San Francisco who counsels clients on paying cryptocurrency taxes. “There is virtually no guidance and it is very frustrating trying to navigate.”

When It Comes to Social Security, 70 is the New 65!

By Suze Orman
September 2018cash, social security card and social security check

So if you have even the slightest concern about your financial security in retirement, I want you to think of age 70 as the new 65, especially where Social Security is concerned.

The right way to think about Social Security

You should hardly ever start taking Social Security at age 62, which is when you can first elect to receive your retirement benefit. That’s especially true if you’re single or the higher earner in your marriage. If you start taking it at 62, your monthly payout will be 25 to 30 percent less than what you would get by waiting until your full retirement age (66 or 67, depending on the year you were born). Plus, if you take Social Security early and you die before your spouse, his or her survivors benefit will be lower, too.

A better plan is if you wait until 70. Every year you wait between your normal retirement age and 70, Social Security will add a guaranteed 8 percent to your eventual monthly payout.

I want to make sure you didn’t glide by what I just said: 8 percent. Guaranteed. Right now you’re lucky to find a bank account that pays 2 percent annually. The deal you get from Social Security if you wait is one of the best risk-free ways to boost your later-life income.

Now I know many of you are howling: “But, Suze, I worked so hard. I want to get what’s mine. What if I end up dying young, before I collect my Social Security?”

But let me ask you to consider the consequences of not dying young. If you retire in your early 60s, will your savings be able to support you for another 30 years?

 It’s not the first 10 or 15 years of retirement that concern me — it’s how you’ll fare if your retirement stretches another 10 or 15 years beyond that.

And that’s where delaying Social Security can be the most precious tool in your retirement planning kit. Delaying your Social Security start date until age 70 entitles you to a monthly payout that’s more than 75 percent higher than your age-62 benefit. That’s a whole lot more money to support a much older you.

4 merry tax moves to make in May

Wednesday, May 01, 2019
By Kay Bell

Happy May Day! It's the annual May 1 global holiday celebrating the contributions of workers.

But the other mayday often comes to mind when taxes are involved.

If it's a tax distress signal you're sending out as the merry month of May begins, here are some moves that could help ease your tax trepidations.

1. File your 2018 return.
If last month you didn't file your 2018 tax return, either because you got an extension or you neglected to send the Internal Revenue Service a Form 1040, do that. Now.

If you didn't file anything or, more importantly, didn't pay any due tax, Uncle Sam has been racking up penalty and interest charges since April 16 (or the 18th for Maine and Massachusetts filers). Getting a return in ASAP will stop those charges.

Even if you officially got more time to file, just because you have until Oct. 15 to finish your taxes doesn't mean you should keep procrastinating. The sooner you get this tax task off your plate, the more time you'll have to do other, probably more fun, things in this merry month of May and the rest of the summer.

2. Find a camp for your kids.
School will be done in a few weeks and that means that unless you find a way to keep your children occupied, they'll be underfoot. Day camps are great ways to keep them entertained and often educated.

Even better, if you and, if your married, your spouse work, you can count day camp costs in claiming the Child and Dependent Care tax credit. There are income limits, but some parental taxpayers could get a credit — which is a dollar-for-dollar reduction of any tax owed — of up to $1,050 to look after one child or up to $2,100 if two are more kids are involved.

Congress to I.R.S.: Don’t Even Think of Helping Taxpayers

By The Editorial Board
April 10, 2019

Congress has landed on one of those rare ideas that commands support from both Democrats and Republicans. Unfortunately, it’s a bad one.

On Tuesday, the House approved legislation misleadingly titled the Taxpayer First Act that includes a provision prohibiting the Internal Revenue Service from developing a free online system that most American households could use to file their taxes. The Senate is considering a similar piece of bipartisan legislation.

This makes no sense. Congress should be making it easier for Americans to file their taxes. Instead of barring the I.R.S. from making April a little less miserable, why isn’t Congress requiring the I.R.S. to create a free tax filing website?

Better yet, the United States could emulate the roughly three dozen countries, including Chile, Japan and Britain, where most taxpayers do not need to fill out tax returns. In some of those countries, the accuracy of tax withholding is sufficient to obviate the annual filing process. In others, the government sends out completed forms to most taxpayers. In Estonia, filing taxes can be done in less than three minutes.

The federal government collects enough information about most American households to mail out a completed tax form that people would simply need to verify, sign and return. President Ronald Reagan proposed a version of just such a system. In 1998, Congress passed a law instructing the I.R.S. to develop such a system by 2008. President Barack Obama endorsed the concept during the 2008 presidential campaign. It still hasn’t happened.

How Divvying Up Household Financial Responsibility Impacts Financial Knowledge Over Time

By Derek Tharp
April 10, 2019

Financial knowledge plays an important role in enabling individuals to engage in good financial behavior. However, like other forms of knowledge, financial knowledge is subject to decay if we don’t apply and reinforce that knowledge regularly. While this may seem fairly obvious, the reality is that the many decisions we make – including the decision to retain (or delegate) responsibility for making financial decisions – may influence our development and retention of financial knowledge.

In this post, Derek Tharp – lead researcher at, and an assistant professor of finance at the University of Southern Maine  delves into the recent research on how financial knowledge may increase or decrease over time based on how a couple allocates responsibility for making financial decisions.

A recent study from Adrian Ward and John Lynch provides some interesting insights into how the divvying up of financial decisions among couples may influence financial decision making. Contrary to what many may expect, the authors found that the initial assignment of financial responsibility was not influenced by levels of financial knowledge at the beginning of the relationship. While this may seem counterintuitive, from an economic perspective, it is the individual with the comparative advantage (rather than the absolute advantage) that we would expect to take on a larger share of financial responsibility in an efficient outcome. For example, despite a CFO’s potential absolute advantage over a stay-at-home spouse’s financial knowledge, it may be the case that it is better for the household financially if the CFO focuses on their work rather than managing household finances. Because all households have limited time and resources, the reality is that some trade-offs in all areas of life are ultimately inevitable.

Long-term, the assignment of financial responsibility appears to influence financial knowledge, with spouses who take on 100% of the responsibility becoming most knowledgeable, whereas those who take on no financial responsibility (i.e., delegate those responsibilities to their partner) actually experience a reduction in their financial knowledge over time. Furthermore, while those who share responsibility do appear to each see modest knowledge gains with time, those gains are much smaller than the gains experienced by households with one member specializing in financial responsibility.

Tax audit odds are low, but if it happens be prepared

By Kay Bell
April 08, 2019

Afraid you'll face an Internal Revenue Service audit? Don't bet on it, says a veteran oddsmaker.

The tax audit odds for 2019 will be approximately 1 in 172, says's James Murphy, a sportsbook consultant and specialist in novelty betting odds.

25% of filers worry about audits: That slim audit possibility, however,  didn't seem to affect folks who participated in a LexingtonLaw survey conducted before this tax season started.

The Salt Lake City-based law firm found that a quarter of Americans are afraid they'll be audited.

Older filers are more worried. Thirty-three percent of those older than 65 are concerned about a possible tax audit.

And in an apparent flip of gender worry roles, men who participated in the survey were 12 percent more fearful of an IRS follow-up than women.

Not to worry, at least not so much: Murphy, however, says we all should chill. Americans are much more concerned than we should be about tax audits.

Thanks to a confluence of factors, including budget cuts for the IRS, the odds of being audited by the IRS had dropped from 1 in 90 at the peak in 2010 and 2011 to around 1 in 160 last year, says Murphy.

And while the actual number of federal tax audits varies from year, Murphy's projections suggest that this year the chances that the IRS will take a closer, second look at your 1040 are even lower. Specifically, the aforementioned 1 in 172.

House passes bill to modernize IRS

By Naomi Jagoda and Cristina Marcos
July 9, 2019

The House on Tuesday passed legislation aimed at modernizing the IRS, the latest step forward for a bill that has bipartisan support from lawmakers in both chambers of Congress.

The bill passed easily by voice vote.

The vote comes less than a week before the April 15 tax filing deadline. It also comes one week after the House Ways and Means Committee advanced the bill, also by voice vote.

"The bill will improve the Internal Revenue Service and help our taxpayers," said Rep. John Lewis (D-Ga.), the author of the measure.

The legislation would make targeted reforms to the IRS in a number of areas, including taxpayer services, taxpayer rights during the enforcement process, identity theft protection, information technology and electronic systems.

But despite the bipartisan support for the bill, it has not been free from controversy.

A provision in the bill codifies the IRS's partnership with tax preparation companies to allow them to offer free filing software for low- and middle-income taxpayers. But it has drawn criticism from stakeholders who say it bars the IRS from providing its own free electronic tax filing system.

About half of teens can’t pass this basic 8-question financial quiz. Could you?

By Catey Hill
April 7, 2019

Teens have angst — about money.

About one in three teens don’t believe that they’ll be financially independent from their parents by age 30, according to a survey of 1,000 U.S. teens ages 13-18 released this week by youth organization Junior Achievement USA and Citizens Bank. And they don’t think they’ll be hitting major money milestones in a timely manner either. Just 44% think they’ll be saving for retirement by 30 and only 43% think they’ll have paid off student loans by then.

“These survey findings show a disconcerting lack of confidence among teens when it comes to achieving financial goals,” said Jack Kosakowski, president and CEO of Junior Achievement USA, in a statement. “With a strong economy, you would think teens would be more optimistic.”

But when you look at how little teens know about money, maybe these findings aren’t so surprising after all. Indeed, a number of surveys find that teens financial knowhow is lacking. One recent one — an 8-question financial foundations quiz put out by the National Financial Educators Council, which works to increase access to financial education — found that only about half of 10-14 year olds and 56% of 15-18 year olds could pass its test. Here are some of the sample questions:

What should you research and be prepared to pay prior to moving into a rental property? 
A) Current month’s rent 
B) Last month’s rent. 
C) Security deposit. 
D) Expenses associated with establishing utilities. 
E) All of the above.

Which loan term is best if you want to reduce the total amount you will repay over the life of the loan? 
A) 3-year 
B) 5-year 
C) 7-year 
D) 10-year

By Paul Sullivan
April 5, 2019

Growing up in central Connecticut in the 1980s, Joshua Siegel loved everything about flying. He couldn’t afford flying lessons, let alone his own plane, but he kept dreaming.

By his 20s, he had achieved some financial success and was able to take advantage of a new tax deduction meant to spur private plane sales in the aftermath of the Sept. 11 terrorist attacks.

Using the tax break, he deducted the entire cost of a new Cessna more quickly than he could have otherwise — five years versus 20 years or more. The plane was restricted to business use, but it fulfilled a childhood dream for virtually no money.

“My cost to fly, between 2001 and 2005, was free,” he said. After that, he sold the plane, and had to pay tax on the sale.

The deduction — known as bonus depreciation — was enhanced in Republican lawmakers’ sweeping tax overhaul, which was meant to strengthen manufacturing by offering a tax break to any business that invested in equipment or machinery. But because it also allowed the full cost of a plane to be deducted in the first year of ownership, it has bolstered sales of new and used planes.

Shipments of general aviation aircraft rose nearly 5 percent in 2018 from the year before, according to data from the General Aviation Manufacturers Association, an industry trade group.

How Business Owners Get Preferential Tax Rates With 199A QBI Deduction-Production Income

By Jeffrey Levine

April 3, 2019

One of the most significant changes made by the Tax Cuts and Jobs Act of 2017 was the creation of new IRC Section 199A, which provides small business owners with an up-to-20% deduction on the profits of their business. High income business owners have a number of complicated restrictions and/or “tests” that can reduce or eliminate that deduction, but for taxpayers with income below the start of their applicable phaseout range ($160,700 for single filers / $321,400 for joint filers) the deduction calculation is far more straightforward. Taxpayers “simply” receive a deduction equal to 20% of their (combined) qualified business income. Or, if lower, simply 20% of their taxable income (less capital gains and qualified dividends).

Notably, this potentially-lower 20%-of-taxable-income limit on the Qualified Business Income (QBI) deduction means that small business owners need to have some level of non-QBI income, to absorb the various tax deductions (e.g., the standard deduction or itemized deductions) they claim on their personal return, or they may not get the “full” QBI deduction on their business income. And while some business owners do have substantial amounts of non-qualified-business-ordinary-income, enabling them to receive the 20% deduction on the full amount of their Qualified Business Income, other business owners’ incomes are completely (or, at least, substantially) comprised of only Qualified Business Income. In such situations, the business owner’s deductions effectively get applied against their Qualified Business Income, reducing their QBI deduction (to “just” 20% of taxable income after those deductions).

However, not all deductions claimed on the personal tax return create this QBI deduction “problem” for small business owners. Some above-the-line deductions, such as the deduction for SE tax, SEP IRA contribution, and self-employed health insurance reduce both qualified business income and taxable income. Other above-the-line deductions, such as the deductions for IRA contributions, HSA contributions, and student loan interest, along will below-the-line deductions (either itemized deductions or the standard deduction) reduce only taxable income, potential limiting what could be a higher QBI deduction to 20% of taxable income.

The IRS Tried to Take on the Ultrawealthy. It Didn’t Go Well.

Ten years ago, the tax agency formed a special team to unravel the complex tax-lowering strategies of the nation’s wealthiest people. But with big money — and Congress — arrayed against the team, it never had a chance.

by Jesse Eisinger and Paul Kiel
April 5, 2019

On June 30, 2016, an auto-parts magnate received the kind of news anyone would dread: The Internal Revenue Service had determined he had engaged in abusive tax maneuvers. He stood accused of masking about $5 billion in income. The IRS wanted over $1.2 billion in bacThe wealth team embarked on a contentious audit of Schaeffler in 2012, eventually determining that he owed about $1.2 billion in unpaid taxes and penalties. But after seven years of grinding bureaucratic combat, the IRS abandoned its campaign. The agency informed Schaeffler’s lawyers it was willing to accept just tens of millions, according to a person familiar with the audit.k taxes and penalties.

The magnate, Georg Schaeffler, was the billionaire scion of a family-owned German manufacturer and was quietly working as a corporate lawyer in Dallas. Schaeffler had extra reason to fear the IRS, it seemed. He wasn’t in the sights of just any division of the agency but the equivalent of its SEAL Team 6.

In 2009, the IRS had formed a crack team of specialists to unravel the tax dodges of the ultrawealthy. In an age of widening inequality, with a concentration of wealth not seen since the Gilded Age, the rich were evading taxes through ever more sophisticated maneuvers. The IRS commissioner aimed to stanch the country’s losses with what he proclaimed would be “a game-changing strategy.” In short order, Charles Rettig, then a high-powered tax lawyer and today President Donald Trump’s IRS commissioner, warned that the squad was conducting “the audits from hell.” If Trump were being audited, Rettig wrote during the presidential campaign, this is the elite team that would do it.

Best Ways to Use Debt to Your Advantage

April 01, 2019

Today we’re going to talk about the best ways to use debt (leverage) to your advantage. The original title to this post was How Much Leverage Risk Should You Take, but alas, this one is more clickbaity and does better with the search engines, so I was overruled. We actually ran a post from Passive Income MD a couple of days ago that discussed using leverage in a rental property portfolio, but this post will focus more broadly on debt.

Katie and I don’t actually borrow money anymore. My “student loans” (primarily time owed to the military) were paid off four years out of residency in 2010 and then we had some mortgage debt until 2017, a little under 11 years out of residency. We were debt-free less than seven years after moving into our “doctor house.” We enjoy being debt-free for the improved security, improved cash flow, emotional wellbeing, and frankly, the status symbol, pretty much in that order. That said, we DIDN’T pay off our mortgage at the first available opportunity. For a couple of years, we took advantage of low-interest rate debt in order to invest. There were a few other times in our financial life when we used debt as a means for growth.

Is Your Debt a Disease or a Tool for Growth?

The vast majority of docs suffer from excessive comfort with debt. However, there are also people on the opposite end of the spectrum, that are missing out on an employer match or the significant long-term tax and asset protection benefits of retirement accounts in order to pay off very low-interest rate debt. Those folks are likely making a mistake. Most of my readers, however, are somewhere in the middle, struggling with the invest in a taxable account vs pay down debt question. That’s actually the question I see most often in my work–a young doc has figured out how to live on significantly less than she makes and wants to know what to do with the capital generated by doing so. As such, I’ve tried a few times over the years to provide some sort of a priority list or some rules of thumb. It usually looks something like this:

  1. Get any available employer match

  2. Pay off high-interest rate (8%+) debt

  3. Max out available retirement accounts

  4. Invest in assets with high expected returns

  5. Pay off moderate interest rate (4-7%) debt

  6. Invest in assets with moderate expected returns

  7. Pay off low interest rate (1-3%) debt

  8. Invest in assets with low expected returns

IRS Publishes Guidance On Interplay Between $10,000 SALT Cap, Tax Treatment Of State Tax Refunds

By Tony Nitti
March 29, 2019State and local income tax written in a note.

Ever heard of the “tax benefit rule?”

It’s a basic premise of the tax law providing that if you deduct an amount you paid in one year, and then later recover all or a portion of that payment, well…it stands to reason that you should have to include that recovery in income. The purpose of the tax benefit rule is this: as you know, tax calculations are done on an annual basis. Despite this fact, a taxpayer who deducts an amount and recovers some or all of that payment in a future year should be “put in more or less the same after-tax position as if only the proper amount had been deducted.” 

Makes sense.

When it comes to the tax law, however, things always work better in concept than in practice. Deductions are a matter of legislative grace; thus, in many cases, a taxpayer will pay an expense and get no deduction — or a partial deduction — for that payment, and then recover some or all of that payment in a future year. What is to be done in this case?

That’s where Section 111 kicks in. In it’s simplest form, this provision states that a taxpayer does NOT have to include in gross income any amount that represents a recovery of prior amounts paid, if the taxpayer did not receive any tax benefit from those payments when they were made; i.e., the taxpayer could not deduct those amounts in full or at all.

Half of Older Americans Have Nothing in Retirement Savings

By Ben Steverman
March 26, 2019

The bad news is that almost half of Americans approaching retirement have nothing saved in a 401(k) or other individual account. The good news is that the new estimate, from the U.S. Government Accountability Office, is slightly better than a few years earlier.

Of those 55 and older, 48 percent had nothing put away in a 401(k)-style defined contribution plan or an individual retirement account, according to a GAO estimate for 2016 that was released Tuesday. That’s an improvement from the 52 percent without retirement money in 2013.

Two in five of such households did have access to a traditional pension, also known as a defined benefit plan. However, 29 percent of older Americans had neither a pension nor any assets in a 401(k) or IRA account.

The estimate from the GAO, the investigative arm of Congress, is a brief update to a more comprehensive 2015 report on retirement savings in the U.S. Both are based on the Federal Reserve’s Survey of Consumer Finances.

The previous report found the median household of those age 65 to 74 had about $148,000 saved, the equivalent of an inflation-protected annuity of $649 a month.

“Social Security provides most of the income for about half of households age 65 and older,” the GAO said.

The Employee Benefit Research Institute estimated earlier this month that 41 percent of U.S. households headed by someone age 35 to 64 are likely to run out of money in retirement. That’s down 1.7 percentage points since 2014.

EBRI found these Americans face a combined retirement deficit of $3.83 trillion.

As the deadline for tax filing falls, the effects of the tax act are becoming clearer.
By Peter Eavis and Keith Collins
April 15, 2019

That gap has since closed, however, and many who saw smaller refunds may have received the benefit of the tax cut throughout the year, in the form of bigger paychecks.

About 65 percent of taxpayers received a cut in their overall liability, according to estimates by the Tax Policy Center, and only about six percent paid more.

It’s the last day to file your taxes (or ask for an extension), and the end of one of the most confusing tax-seasons in a long whileWhile tax cuts are arguably one of the Trump administration’s biggest achievements to date, and businesses have been celebrating the profit windfall they received from a lowering of corporate rates, many Americans seem not to have noticed that individual taxes also fell.

Chalk that up to an early drop in the size of tax refunds for some, and the fact that, divided over a year’s worth of paychecks, the tax benefit may not have seemed consequential.

Now that the effects of the tax act are becoming clearer, here are some early conclusions about its impact on people and businesses:

Individuals Owed Less, but Did They Notice?

In the first few weeks of the tax season, the average refund processed by the Internal Revenue Service was significantly less than in the previous year — by as much as 17 percent.

That gap has since closed, however, and many who saw smaller refunds may have received the benefit of the tax cut throughout the year, in the form of bigger paychecks.

About 65 percent of taxpayers received a cut in their overall liability, according to estimates by the Tax Policy Center, and only about six percent paid more.

Leaving an IRA to a loved one? How to avoid a tax bomb

By Darla Mercado
December 9, 2018Little king.
  • Naming a trust as a beneficiary of your retirement account can help protect heirs who are minors, disabled or vulnerable to creditors.
  • Failing to correctly structure your trust could accelerate the liquidation of your IRA, resulting in a massive taxable distribution.
  • Remember: Trusts only need $12,500 of taxable income in 2018 ($12,750 in 2019) in order to be subject to the top tax rate of 37 percent.

You wouldn't trust your toddler with a pile of cash, right? Well, this estate-planning technique may allow you to safely pass your IRA on to future generations — if you do it right.

When it comes to naming a beneficiary of your retirement account, the first person to come to mind is likely your spouse. Your kids, if you have them, might be a close second.

However, your children or grandchildren won't always be in an ideal position to receive a windfall, particularly if they are minors, disabled or spendthrifts.

That's when a trust might make sense.

"The real reason for having a trust as an IRA beneficiary is because there's some element of control," said Ed Slott, a CPA and founder of Ed Slott & Co. "People who name trusts as beneficiaries are doing it to protect a very large IRA."

It's easy to mess up this, however.

In the first place, not all IRA custodians permit you to list a trust on your beneficiary form.

Second, the tax code has a specific list of conditions for trusts that act as beneficiaries to retirement accounts. Failure to closely follow the IRS rules could result in an accelerated distribution of your IRA and a raft of taxes.

Here's what you should know.

Four conditions

In order for a trust to be viable as a designated beneficiary, it must meet a four-part test.

1. It must be valid under your state's law.
2. It must be an irrevocable trust — a trust that generally can't be changed once it's established — or one that will become irrevocable at your death.
3. The beneficiaries must be identifiable from the trust document.
4. The IRA custodian or retirement plan administrator must have received a copy of the trust by Oct. 31 of the year following the year of the IRA owner's death.

4 Big 401(k) Mistakes to Avoid in 2019

By Maurie Backman
December 8, 2018"401K" in gold letters on wooden planks.

Though not everyone has access to a 401(k), if you're able to save in an employer-sponsored plan, you have a great opportunity to build a solid nest egg in time for retirement. That said, the more careful you are in managing that plan, the better it'll serve you when you're older -- and that's why you'll want to avoid the following mistakes at all costs.

1. Not knowing annual contribution limits have increased

Currently, workers under 50 can contribute up to $18,500 to a 401(k), while those 50 and older can contribute up to $24,500. But beginning in 2019, you get an even greater opportunity to save in your 401(k), since the annual limits are increasing to $19,000 for younger workers and $25,000 for those 50 and over. If your goal is to max out next year, be aware that it'll take an extra $500 to do so.

The good news, however, is that you'll lower your 2019 taxes even more by contributing a full $19,000 or $25,000, depending on your age. Because traditional 401(k)s are funded with pretax dollars, putting in an extra $500 will automatically reduce next year's IRS bill by whatever percentage constitutes your effective tax rate. For example, if your effective tax rate is 30%, that extra $500 will lower your 2019 taxes by $150.

2. Not taking advantage of catch-up contributions

As the name implies, catch-up contributions allow savers 50 and over to make up for lost time by putting more money into their retirement plans during the tail end of their working years. With an IRA, savers 50 and older get to put in an extra $1,000 on a yearly basis. With a 401(k), that catch-up is far more substantial at $6,000 a year. And if you're behind on savings, it can also spell the difference between retiring comfortably and falling short income-wise.

Imagine you're 57 years old and push yourself to make a $6,000 catch-up in your 401(k) for the next 10 years. If that money delivers a 7% average annual return on investment, those catch-ups alone will add $83,000 to your nest egg -- which is why it pays to save as much in a tax-advantaged manner as the IRS will allow you to.

2018 charitable contributions may not be tax-deductible

By Terri Russel
December 7, 2018

RENO, Nev. (KOLO) It's a busy time of year for the Catholic Charities donation center. All anyone has to do is drive up and drop off items, which will be sorted there and put out on the sales floor.

Each time donors are offered a receipt, which can be used for tax purposes. But this year because of a new tax structure, deducting charitable contributions on your taxes may not be as straightforward.

"It is my favorite answer; it depends. The standard deduction for a married couple filing joint was $12,700; that is now to almost double to $24,000. And what that does, in effect, is make the target for whether you are going to itemize or not a lot higher," says Kirk Gardner, a CPA and partner with Eide Bailly.

Estimates show before the new tax laws, about 30% of taxpayers itemized. With the new tax law, that number could go down to about 10%.

Taxpayers may find the increased standard deduction will lower their tax bills more than itemizing did, and they'll end up not taking the charitable deduction.

This is not news to places like Catholic Charities. They and other non-profit organizations say they can't predict what will happen now or in the months to come as people start preparing their taxes.

10 year-end tax-planning tips after tax reform

By Michael Cogn
December 3, 2018

Last December’s tax-reform bill upends conventional tax-planning strategies and dramatically changes the landscape for this year’s tax filings. Here are 10 of the most important 2018 year-end tax-planning considerations for individual clients from Grant Thornton.

1. Double-check your withholding and estimated taxes.

The individual tax changes cut both ways. Your clients may be familiar with the major deductions they’re losing, but less familiar with the impact of some of the more favorable changes like the expanded tax brackets. It’s not easy or intuitive to figure out what it all means to your clients' bottom line. There’s no substitute for actually running the numbers. If your clients are in danger of being penalized for underpaying tax throughout the year, they can make up the shortfall through increased withholding on their salary or bonus. Bumping up their last quarterly estimated tax payment can still expose them to penalties for underpayments in previous quarters. But withholding is considered to have been paid ratably throughout the year, so a big jump in withholding on high year-end wages can save them in penalties.

2. Clients should understand whether to take the standard deduction.

Millions of taxpayers who routinely itemized deductions in past years are expected to take the standard deduction in 2018. That’s because the standard deduction is doubled, while dozens of itemized deduction are repealed and the state and local tax deduction is capped at $10,000. It’s critical for clients to know whether they should expect to take the standard deduction before making decisions on year-end spending on things that generate itemized deductions. Taxpayers generally would not get any additional deduction for things like charitable gifts or elective health care procedures if they do not itemize deductions.

How to Decide Whether to Relocate for a Job

By Rebecca Knight
December 3, 2018

Sometimes the perfect job isn’t down the street, but rather thousands of miles — or perhaps even an ocean — away. If you’re offered a job in a different location, how do you know if it’s worth relocating? Who should help you make the decision? And, how do you weigh the potential upsides like money and opportunity against costs like the impact on your family or the loss of your existing network?

What the Experts Say
Whether or not to relocate for a new role is a big decision both professionally and personally. “There are so many factors to consider,” says Jennifer Petriglieri, an assistant professor at INSEAD and author of the article “Talent Management and the Two Career Couple.” “What’s the opportunity? What’s the longevity [of the job]? And what’s the family situation?” Indeed, the decision is especially complicated if you have a partner and children, says Matthew Bidwell, an associate professor at Wharton whose research focuses on patterns of work and employment. “It’s not just, what does this mean for your career, but what does this mean for our family?” he says. Relocating for a job can often be “great for your personal and professional development,” but it’s also “a risk and a leap into the unknown.” Here are some ideas to help you think through whether the move is right for you.

Think holistically
When you’re wrestling with a big decision, “there’s a temptation to get out an Excel spreadsheet and weigh the pros and cons,” says Petriglieri. But this is an instance where Excel comes up short. “When you’re choosing one life over another, it becomes an identity choice: Who do I want to become? What kind of family will we be?” The job is only one piece of the puzzle. Consider your “holistic happiness and satisfaction.” Think about the lifestyle that the new location affords or lacks. Are you suited for small town life? Or do you prefer a big city? Do you want to spend your weekends traveling? Or do you want to feel rooted in a community? The answers to these questions will help you uncover what this “move means for you, your partner, and your children,” she says. “When it’s a difficult choice, it means that no option is clearly better than the other.” Try to think beyond the immediate move,” suggests Bidwell. “Ask: What is best for us in the long-term?”

November 9, 2018

You received an offer letter and couldn’t be more excited to start your new gig. While this is a fresh start for your career, it’s also a great time to hit the reset button on your finances.

It’s so important to take some time to reassess your spending and financial goals before that first paycheck arrives. If you don’t, there’s a good chance you’ll fall victim to lifestyle creep, end up losing thousands of dollars in 401(k) matching, or still struggle with the same money problems you had before.

Not sure what to do? Here are six smart financial moves you should make when starting a new job.

1) Update your budget

When most people get a raise, they experience lifestyle creep. They automatically start spending more money and their expenses quickly catch up to their higher salary. When you see people who make great money but are living paycheck to paycheck, this is almost always the culprit.

To avoid lifestyle creep, use half of your pay increase to upgrade your lifestyle and save or invest the other half. If you do this starting with your first new paycheck, you’ll get the best of both worlds -- more spending money and an effortless savings boost.

Give yourself a holiday gift by making these 10 year-end tax moves

By Kay Bell
November 05, 2018

Turkey GIF_South Park-Comedy Central_GIPHY

It's November! The start of the holiday season. Time to get into the festive spirit with some year-end tax moves.

"Whoa! Wait! What the what are you thinking?" you say. "I'm still adjusting to Standard Timeand already have a huge to-do list to make sure my family has the perfect Thanksgiving. Then as soon as that's over, I've got to start with the plans for December's merriment."

I hear you.

But I also know you need to add taxes to the mix. Now. Before you get all involved in Turkey Day and Christmas or Hanukkah or Mawlid an Nabi or whatever holy day your faith follows these last two months of the year.

If you don't, all the other important non-tax stuff that demands your attention as the year winds down will suck up all your time and you'll miss out taking some tax-smart tax actions.

And several tax moves to make before 2018 ends are especially important because of changes under the Tax Cuts and Jobs Act (TCJA).

To help you get through your year-end tax revelries (we do revel in taxes, don't we?) quickly so you can turn your attention to those other celebrations, here are 10 tax things to consider and, where applicable, complete ASAP.

The new QBI deduction is finally clearer

By Tony Nitti, CPA 
November 1, 2018

QBI deduction

New Sec. 199A, enacted by P.L. 115-97, known as the Tax Cuts and Jobs Act (TCJA), provides taxpayers a deduction of up to 20% of qualified business income (QBI) earned from a business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate. For business owners with taxable income in excess of $415,000 (for married taxpayers filing jointly; $207,500 for all other taxpayers), no deduction is allowed against income earned in a specified service trade or business (SSTB). In addition, when the owner's taxable income from any trade or business exceeds those same thresholds, the deduction is limited to the greater of:

  • 50% of the owner's share of the W-2 wages paid by the business, or

  • 25% of the owner's share of the W-2 wages paid by the business, plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) of qualified property.

Any initial excitement business owners felt about the birth of Sec. 199A was tempered, however, as questions arose as to the types of businesses that qualified for the deduction and how the various limitations would be interpreted and applied (see "Understanding the New Sec. 199A Business Income Deduction," The Tax Adviser, April 2018). Thankfully, on Aug. 8, 2018, the IRS released proposed regulations (REG-107892-18) that address many of the biggest unknowns that have plagued the provision since its enactment, including the following:

Your coworker with the annoying sit-stand desk may be onto something

By Mark Wilson
July 24, 2018

To sit or stand? It’s the great debate of modern office drones. A new, yearlong study about the ergonomics of work suggests you might want to do both. In the study, people report feeling physically better, more active, and more productive after using sit/stand desks.

The insights come from a paper published by the Icahn School of Medicine at Mount Sinai, in collaboration with researchers from the Center for Active Design, global architecture firm Perkins+Will, and furniture manufacturer Steelcase. Their study tracked 67 participants in a real office environment (architects in the Perkins+Will office in Atlanta) over a year. Half were randomly assigned to traditional sitting desks, and the other half a desk that could switch between sitting and standing modes.

“A lot of the literature [to date] was done in the lab–artificial places,” says Elizabeth Garland, the associate professor at Mount Sinai who led the study. “This is one of the first projects for a such a long period of time in a real-life situation.” Put simply, it’s hard to study the human factors involved with the long-term ergonomics of work life if people aren’t actually being studied at work.

Child tax credit now higher, more widely available

By Katherine M. Hetherington, J.D., LL.M. 
Child tax credit
June 1, 2018

As tax practitioners prepare to counsel clients about the loss of dependency exemptions on 2018 tax returns, there is good news to offer in the form of the enhanced child tax credit. The legislation known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, doubled the credit amount, increased the refundable portion, and expanded its scope to include dependents other than qualified children. In addition, the TCJA broadened the pool of taxpayers eligible for the credit by significantly increasing adjusted-gross-income (AGI) phaseout ranges.

New Sec. 24(h) contains eligibility requirements and other changes to the child tax credit effective for tax years 2018 through 2025.


Under the TCJA, a taxpayer's potential credit amount begins to phase out at $400,000 of modified AGI (MAGI) for joint filers and $200,000 for all others. These amounts are not adjusted for inflation. Formerly, the credit began to phase out at $110,000 for joint filers, $55,000 for married filing separately, and $75,000 for all others. The distinction for married filing separately no longer exists, and the threshold for joint filers nearly quadrupled (for others, the threshold rose by 166%).

Mortgage Rates Head To 6%, 10-Year Yield To 4%, Yield Curve Fails To 'Invert,' And Fed Keeps Hiking

By Wolf Richter
September 20, 2018

There's an interesting thing that just happened, which shows that the US Treasury 10-year yield is ready for the next leg up, and that the yield curve might not invert just yet: the 10-year yield climbed over the 3% hurdle again, and there was none of the financial-media excitement about it as there was when that happened last time. It just dabbled with 3% on Monday, climbed over 3% yesterday, and closed at 3.08% today, and it was met with shrugs. In other words, this move is now accepted.

Note how the 10-year yield rose in two big surges since the historic low in June 2016, interspersed by some backtracking. This market might be setting up for the next surge:

And it's impacting mortgage rates - which move roughly in parallel with the 10-year Treasury yield. The Mortgage Bankers Association (MBA) reported this morning that the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment rose to 4.88% for the week ending September 14, 2018, the highest since April 2011.

And this doesn't even include the 9-basis-point uptick of the 10-year Treasury yield since the end of the reporting week on September 14, from 2.99% to 3.08% (chart via; red marks added):

New Law Makes Credit Freezes Fre

By Elizabeth Garcia and Julia Cherry
September 17, 2018

Identity theft can happen to anyone, but consumers will soon have a new free tool to help protect themselves against scammers who would steal their financial information. The three nationwide credit reporting agencies in the U.S. (Experian, Equifax, and TransUnion) will be required by a new law to allow consumers to “freeze” and “thaw” their credit report for free.

The new law, called The Economic Growth, Regulatory Relief, and Consumer Protection Act, will go into effect on September 21, 2018. When the new law goes into effect, freezing and unfreezing your credit will be simpler and free. The new law also allows any parent to freeze their child’s credit. A child’s credit report is especially valuable since it is clean and often not monitored regularly..

Consumers will still have to freeze their credit at each individual credit bureau, however, it can be done through their online portals that will make the process much simpler. Upon receiving a freeze request, the agency is required to do so within one day. Unfreezing a credit report must be completed within one hour of the request.

Do Not Ignore IRS Form 1099-C - It Will Not End Well

By Peter J Reilly
September 20, 2018

Pay attention.  This is one of my posts with an important lesson rather than an entertaining story.  The lesson comes from a Tax Court decision - TCM 2018-140.  You will find out the taxpayer’s name if you read the case, but my practice in cases like this is to use a different name, since he might not want to be made more famous by this decision.  We’ll call him Joe.  In 2010, Joe had two debts discharged.  One was for $64,045 and the other for $300,134.

Each of the servicers sent him Form 1099-C.  And of course, they each sent a copy to the IRS.  Joe did not have a really strong year income wise in 2010, so he thought he did not need to file a return, which is why he ended up in Tax Court facing over $150,000 in tax and penalty.  It did not go well.  The lesson is to not be Joe.  Don’t just ignore Form 1099-C. I could leave it at that, but that would be too short a post.  So let’s look at the decision a bit and then consider what Joe should have done and the happy result that likely would have produced.

The Decision

It was pretty ugly.  Here are some high points.

"Although petitioner received those Forms 1099-C, he chose to ignore them when the time came to file his Federal income tax return (return) for 2010. Instead, petitioner determined that because he did not earn wages that year he did not have an obligation to file a return for 2010, and he acted accordingly."

Right there Judge Nega is letting you know things are not going to go well for Joe. He “chose to ignore them when the time came to file”.  That is pretty harsh.

Child tax credit now higher, more widely available

By Katherine M. Hetherington, J.D., LL.M.
June 1, 2018
Child tax credit

As tax practitioners prepare to counsel clients about the loss of dependency exemptions on 2018 tax returns, there is good news to offer in the form of the enhanced child tax credit. The legislation known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, doubled the credit amount, increased the refundable portion, and expanded its scope to include dependents other than qualified children. In addition, the TCJA broadened the pool of taxpayers eligible for the credit by significantly increasing adjusted-gross-income (AGI) phaseout ranges.

New Sec. 24(h) contains eligibility requirements and other changes to the child tax credit effective for tax years 2018 through 2025.


Under the TCJA, a taxpayer's potential credit amount begins to phase out at $400,000 of modified AGI (MAGI) for joint filers and $200,000 for all others. These amounts are not adjusted for inflation. Formerly, the credit began to phase out at $110,000 for joint filers, $55,000 for married filing separately, and $75,000 for all others. The distinction for married filing separately no longer exists, and the threshold for joint filers nearly quadrupled (for others, the threshold rose by 166%).

Here's Some Potential Good News About Required Minimum Distributions

By Maurie Backman
September 16, 2018
Senior man looking at a laptop with serious expression

If you've been reading up on tax-advantaged retirement accounts such as IRAs and 401(k)s, you've probably heard the term "required minimum distribution" tossed around on more than one occasion. Required minimum distributions, or RMDs, are annual withdrawals that must be taken when you house your retirement savings in a traditional IRA or any type of 401(k). But thanks to an executive order from President Trump at the end of August, the rules surrounding RMDs may come to change.

Currently, you're on the hook for RMDs starting at age 70 1/2. Specifically, you must take your first RMD by April 1 following the year in which you turn 70 1/2. All subsequent RMDs must then be taken by the end of their respective calendar years. President Trump's order, however, seeks to possibly push back the age at which RMDs first come into play, thereby buying retirees far more flexibility.

Why the change? Primarily, it boils down to the fact that Americans are living longer, and therefore should be given a more generous period of time during which to grow their savings. Pushing back the age at which RMDs kick in would be a huge benefit to millions of seniors, which is why it pays to keep our fingers crossed and hope this change is implemented.

A decade since the housing crash, a new story emerges

By Rachel Layne and Irina Ivanova
September 15, 2018

As many as 10 million Americans are believed to have lost their homes because of the financial crisis that erupted a decade ago, according to the St. Louis Federal Reserve.

The crisis wiped out almost $8 trillion in household stock-related wealth and $6 trillion in home value after banks, mortgage lenders and financial companies provided loans to speculators, house flippers and people who couldn't afford to pay, spinning the economy into the worst financial disaster since the Great Depression.

Homeownership is below pre-crisis levels

At the end of June, roughly 64 percent of homes were owner-occupied, according to statistics from the St. Louis Fed. That's below the historic highs of 2004, four years before the bankruptcy of Lehman Brothers, widely used to mark the acceleration of the crisis.  

Navigating the 3 estimated tax penalty safe harbors

By Kay Bell
September 14, 2018


Each year, the Internal Revenue Service assesses estimated tax penalties against millions of taxpayers. This added money typically is due the IRS when a taxpayer pays too little total tax during the year.

The last time the IRS released complete estimated tax penalty data was three years ago. The federal tax agency said back then that the average estimated tax penalty, which is based on the interest rate charged by the IRS on unpaid tax, was about $130.

Back in September 2015, the IRS said it was seeing more taxpayers run into the estimated tax penalty. The number jumped about 40 percent from 7.2 million in 2010 to 10 million in 2015.

Both the amount of the average estimated tax penalty and the number of folks who have to pay it could be even bigger now, thanks in part to the Tax Cuts and Jobs Act (TCJA) changes to the tax code.

What's subject to estimated tax: The IRS has been encouraging all taxpayers who have income that isn't subject to withholding — that includes investors, folks with sharing economy side jobs, full-time self-employed individuals and retirees living off pensions — to do a paycheck check-up using the tax agency's TCJA-updated online withholding calculator.

When you're entering earning into the online calculator, don't forget about that couple of hundred from a state lottery scratch off, those sports that paid off or the nice chunk of change you got from renting out your lake house over the summer. Those are taxable, too.

When wives earn more than their husbands, they both do something pretty terrible

By Jillian Berman
July 26, 2018

In her most recent stand-up special, Hard Knock Wife, comedian Ali Wong describes one of the most tangible ways her life has changed since rising to prominence last year.

“Now I make a lot more money than my husband,” she tells the crowd. “My mom is very concerned that he is going to leave me out of intimidation. I had to explain to her that the only kind of man that would leave a woman who makes more money is the kind of man that doesn’t like free money.”

The joke’s warm reception highlights an awkward reality: It’s increasingly common for wives to make more than their husbands — about 38% of wives earned more than their husbands in 2015, according to the Bureau of Labor Statistics — and it’s also common for that to make people uncomfortable.

New research suggests that even the couples themselves haven’t totally come around to the idea psychologically. And that could be influencing the way we understand inequality between genders.

How Taxes And Inflation Do A Number On Your Retirement Earnings

By Larry Light
September 13, 2018

Taxes and inflation have this nasty way of diminishing your money in retirement. Investors who have amassed a $1 million portfolio find that this money has a way of shrinking before they have spent a cent of it. That’s the dispiriting message of Lewis Walker, a financial planning and investment strategist at Capital Insight Group in Peachtree Corners, Ga. He sketches out this problem—and what you can do about it:

Larry Light: So we have a lot of millionaires these days?

Lewis Walker: Adam Shell of  USA Today has noted that the number of 401(k) millionaires hit a record high. As of June, 168,000 people had $1 million in their Fidelity 401(k) accounts, versus 118,000 people a year earlier.

When folks squirrel away more money to support financial independence, that’s wonderful. Of the 1% of Fidelity account holders who reached the $1 million milestone, they know it took time. They stayed diligent about contributions, allocating mostly to stocks, perhaps increasing contributions in down markets when equities were on sale.

US household incomes grew in 2017, yet inequality worsensld 

By Christopher Rugaber
September 12, 2018

The income of a median U.S. household rose for a third straight year in 2017 as solid economic growth helped put more people into full-time jobs. But income inequality also worsened as the wealthiest Americans enjoyed even larger pay increases.

Incomes for a typical U.S. household, adjusted for inflation, rose 1.8 percent, from $60,309 in 2016 to $61,372. The proportion of Americans living in poverty also dropped for the third straight year, to 12.3 percent from 12.7 percent.

The figures suggest that the nation’s very low unemployment rate — 3.9 percent — is forcing businesses to convert more part-time workers to full-time status. And with the ranks of the unemployed dwindling, companies are hiring more people who previously weren’t looking for work. During 2017, the unemployment rate averaged 4.4 percent, the lowest level in 17 years.

The number of people with jobs rose by 1.7 million in 2017, the Census report said. And the number of workers with full-time permanent jobs increased by 2.4 million.

Do You Have Attorney-Client Privilege With Your Accountant? Here's A Workaround

By Robert W. Wood
September 4, 2018

Taxes and the IRS can be unsettling, and may cause you to worry over many questions. How aggressive are you being? Are you claiming something the IRS may view as over the top? Do you have exposure for past years, and would amending past returns make the situation better or worse? How much can you safely tell your accountant, and how much can you reveal in writing without fear it will be used against you? What is good planning, what is over the line? What is fraud, and how long do you have to worry?

Think carefully when you come to the penalties of perjury language on your tax return. In the run-up to tax filing season and year-round, government press releases about tax convictions, guilty pleas and indictments help remind you to fly right. But taxes are complex, and the line between creative tax planning and tax evasion isn't always clear.

You do not have attorney client privilege with your accountant. In contrast, if you tell a lawyer secrets (say you are hiding money offshore), the IRS cannot make your lawyer talk. The IRS generally can’t even make your lawyer produce documents. The attorney-client privilege is strong precisely so that clients (in both civil and criminal cases) will be forthcoming with their lawyers. Accountants, however, don’t have this privilege. If you make statements or provide documents to your accountant, he can be compelled to divulge them no matter how incriminating

Avoid making these 3 huge tax mistakes ahead of your retirement

By David McKnight
September 7, 2018

You’ve been saving diligently for retirement, stashing funds in IRA’s and 401(k)s for a few decades and watching the power of compounding interest turn your money into far more than you ever imagined. Your house is paid off, your kids have graduated from college, and now you’re getting ready to distribute those dollars that you worked so hard to accumulate.

But how do you spend down those IRA and 401(k) accounts without giving more than your fair share to the IRS? After all, paying unnecessary taxes is a great way to run out of money a whole lot faster than you’d like.

Here are three tax mistakes that investors should avoid if they hope to wring every last bit of efficiency from their retirement dollars.

Mistake: Assuming you’ll be in a lower tax bracket in retirement

Our government’s debt has ballooned to $21 trillion, and the real spending has only just begun. About 78 million baby boomers are marching out of the workforce and onto the rolls of programs such as Social Security and Medicare. Boston University professor Laurence Kotlikoff puts the total unfunded costs of these obligations at $200 trillion. Do you think the federal government will be able to honor these promises without raising more revenue over the course of your retirement? Most economists say no.

New Medicare Cards Are Being Issued. Here’s What You Need to Know.

By Ann Carrns
AAugust 31, 2018

As people across the country receive new, safer Medicare cards in the mail, advocates are warning about fraudulent callers who try to dupe people into paying money or divulging personal information.

The government is gradually replacing Medicare cards for the 60 million people covered by the federal health plan. Previously, the cards used the recipient’s Social Security number as his or her Medicare number, which posed a risk of identity theft. Congress mandated a change in 2015.

“It took a very long time, but it’s in the works,” Sue Greeno of the nonprofit Center for Medicare Advocacy said.

The new cards use an 11-character Medicare identifier that contains both numbers and letters, according to the Center for Medicare and Medicaid Services, the agency that runs Medicare.While the cards are safer, criminals are always alert to new ways of scamming people, said Amy Nofziger, a fraud expert with AARP. Recent calls to the group’s fraud help line indicate that some people have received calls asking for a fee in order to deliver a new Medicare card, or asking for personal information before a new card can be issued.

Union dues no longer deductible under new tax law

By Kay Bell
September 3, 2018Utility workers cleaning up storm damage_Utility Workers Union of America AFL-CIO via Facebook

Almost 15 million United States workers belonged to a union in 2017, according to the latest annual data from the U.S. Department of Labor's Bureau of Labor Statistics.

Union membership last year was divided almost equally between public employees (7.2 million) and private sector workers (7.6 million). 

These unionized workers are our communities' teachers, police officers, firefighters, utility employees, transportation workers, telecommunication personnel and construction crews. Heck, there's even a freelance writers union.

Fewer unionized workers: The number of wage and salary workers who belonged to unions in 2017 was almost 11 percent, statistically unchanged from 2016 memberships. That's not good news for unions.

In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.

There are many reasons for the decreasing numbers.

Receive An IRS Summons? Here's What To Do

By Robert Wood
August 21, 2018
The vast majority of IRS audits involve the big agency telling you what they want to see, and you handing it over. This is most frequently done with what the IRS calls Information Document Requests, IDRs for short. But sometimes matters escalate to an IRS summons. And sometimes the IRS issues a summons to a third party, trying to get information about someone else. If you are issued a summons, in many cases you probably will want to comply. If you don’t, the government can actually sue you. In the vast majority of cases, the government wins these disputes. The government usually gets the data, and it does not like to have to sue to collect it. In that sense, fighting over the data is usually not where taxpayers (or third parties) want to spend their money. Eventually, the merits of the tax dispute must be addressed, and that is generally be the real fight, not the documentary preliminaries.

Many tax disputes end up getting compromised. Of course, there can be times when it is appropriate to clam up and stop cooperating. There may be privilege issues, for example. Third parties often must protect the privacy of their account holders, customers, etc. But for most taxpayers it can be worth considering voluntary compliance. Almost any IRS correspondence is stressful, but when a request for substantiation or documents looks like legal process, stress levels go higher. Usually, the IRS asks for information in an IDR, on IRS Form 4564. You are under no legal obligation to respond, but you generally should. Otherwise, your case with the IRS will escalate. The first way an IRS probe usually escalates is from an IDR to a summons.

When a $1,000 Gift Is Better Than $1 Million

By Paul Sullivan
August 17, 2018

In the era of mega-philanthropy, small gifts can get overlooked or dismissed. But if done right, they can have just as great an impact as multimillion-dollar ones.

In Litchfield County, a Connecticut enclave known more for its wealthy summer residents than its struggling working class, local organizations are benefiting from bite-size largess.

The Gathering Place in Torrington, Conn., helps the homeless in the northwestern part of the state get showers, clean clothes and basic social services. But a few years ago, the organization could not pay its rent or utilities and was on the verge of closing until it received a $4,000 donation.

In another instance, a volunteer fire department in the same part of the state wanted to buy a device that detected gas leaks, but it did not have the money. It received $1,000, enough to make the purchase.

Family-related tax law changes mean that taxpayers with dependents need to check their withholding

By Kay Bell
August 16, 2018

Baby_Mother_Grandmother_GreatGrandmother_by Azoreg_Wikipedia

Things get complicated when you have kids. Those complications are, well, even more complicated when it comes to tax filing.

The Tax Cuts and Jobs Act (TCJA) made a variety of changes, in effect at least for tax years 2018 through 2025, that will affect millions of parents.

Here's a quick look at key tax changes for dependents.

Exemptions are eliminated: Under prior law, personal and dependent exemptions were excellent. These tax breaks helped filers reduce income, allowing them to arrive at a smaller taxable amount.

Even better, the specific dollar amount exemptions (adjusted annually for inflation) for both filers (and spouses, if married filing jointly) and qualifying dependents, were available regardless of which deduction method, either standard or itemized, used.

By Megan Leonhardt
August 16, 2018

Over 44 million Americans have student loans, with the average debt hovering around $33,000. And yet that's not the No. 1 source of debt for the average older millennial.

Millennials between the ages of 25 and 34 have an average of $42,000 in debt each, according to Northwestern Mutual's 2018 Planning & Progress Study. The biggest source? Credit card debt.

Credit card balances make up a full fourth of the average older millennials owe, while student debt accounted for about 16 percent, according to Northwestern Mutual. The findings are based on a survey of over 2,000 U.S. adults, including an oversampling of more than 600 millennials.

"As you grow older, your expenses increase. The additional pressures that come onto the pocketbook only grow and your disposable income shrinks in a lot of cases, even if your salary is growing," Emily Holbrook, director of planning for Northwestern Mutual, tells CNBC Make It.

9 Reasons Why You Should Consider A Living Trust

By Christine Fletcher
August 16, 2018

Clients often think trusts can do everything – as if they are magical creatures – the unicorn of estate planning. All their problems are solved because they have a trust. That may be the case, but it may not. Different trusts do different things.

Living trusts are often the topic of small talk at social gatherings or on the golf course, but not many people know what they actually do. They are “living” because they are created now, while you are alive. You sign it and it becomes an enforceable document. Your living trust can be revocable or irrevocable. A revocable trust can be revoked or amended by you. An irrevocable trust cannot be changed by you once it is signed. Because an irrevocable trust cannot be changed, you want to be extra careful to understand its terms. The vast majority of people will start with a revocable trust.

A typical estate plan includes a will that “pours over” your assets to a revocable trust. On your death, any assets in your name alone will become part of your estate. Your will then directs the executor of your estate to hand them over to the trustee of your trust to administer them.

5 top tax reform opportunities for individuals

By Shaun Hunley
August 14, 2018A printout of Congress's tax reform bill, "The Tax Cuts and Jobs Act," alongside a stack of income tax regulations

As we enter into the tax planning stage of the year, the focus shifts to helping clients understand the impact of the Tax Cuts and Jobs Act and optimize their tax positions. That is no small task, given that there are over 130 new tax provisions.

Here are the top five TCJA tax planning opportunities for individuals in 2018:

No. 5 — Itemized deductions versus the standard deduction

The Tax Cuts and Jobs Act roughly doubles the standard deduction. This means that for 2018, joint filers can enjoy a standard deduction of $24,000. However, the new law suspends personal exemption deductions and eliminates or limits many of the itemized deductions. For example, the state and local tax deduction is now capped at $10,000 per year, or $5,000 for a married taxpayer filing separately. Also, the Tax Cuts and Jobs Act temporarily eliminates miscellaneous itemized deductions subject to the 2 percent floor (like tax preparation fees and employee business expenses) and limits the home mortgage interest deduction to home acquisition debt of up to $750,000, or $375,000 for a married taxpayer filing separately.

14 Ways for Everyone to Save on Taxes Under the New Tax Law

By the editors of Kiplinger's Personal Finance
August 10, 2018

We’re living in a new tax world now, thanks to the overhaul passed by Congress last year. A number of breaks bit the dust, but some new ones were introduced as well. Your 2018 return will be the first to file under the new rules, but the time to look for tax savings is now.

One of the best ways to cut your taxes is to set money aside in a tax-deferred retirement account. Not only are you doing the wise thing by saving for a winning retirement – you could trim your income enough to fall into a lower tax bracket.

So if your employer offers a tax-deferred program like a 401(k), make sure that you are:

  • Participating, so that you don’t miss out on any match your employer provides.

  • Putting in as much money as you can.

If you have your own business, you have several choices of tax-favored retirement accounts, including Simplified Employee Pensions (SEPs) and individual 401(k)s. Contributions cut your tax bill now while earnings grow tax-deferred for your retirement.

Since the contribution limits for these programs are high ($55,000 per year if you’re under 50, $61,000 if you’re 50 or over), they can be a substantial shelter for big earnings, if you’ve got them.

A Financial Plan Is Useless Without These Two Things

By Adam Sarhan
August 8, 2018

A financial plan is a comprehensive evaluation of an individual's current and future financial state. We all know the importance of creating a solid financial plan but most people fail to do it. Even the few that do create one fail to follow up and update it as the years pass and their financial situation changes. Here are two mistakes most investors make when they create a financial plan.

They Don't Follow-Through:

Even though people pay money to create a financial plan, most investors do not follow it and actually implement the advice in the plan. It's amazing- but if you speak to enough Certified Financial Planners (CFPs), they will tell you that most people do not follow through with the mutually agreed upon financial plan. I spoke to John C Pak, CFP® RICP® Financial Planner at Otium Advisory Group in Los Angeles California, and he told me that it is very common for people to create a financial plan but fail to implement it. John told me about one example, "I had reached out to the young client 90 days after our last meeting to follow up on the tasks assigned to him and he admitted life got busy and the plan was somewhere collecting dust." You would think this is an isolated one-off event. Surprisingly, it's not. It happens often.

6 Factors to Consider Before Using Your Retirement Savings for Caregiving

By Rachel Hartman
August 8, 2018Caregiver ? woman helping senior man with shopping

If you're looking after an aging parent or loved one, you may cover costs that come with caregiving without thinking about it. It's easy to pay out-of-pocket expenses, such as groceries, gas and medical equipment that's not covered by insurance. But as care needs increase, costs often do too. Among those who care for a loved one, 44 percent spend $5,000 or more per year on caregiving costs, according to the 2017 Family Caregiver Journey survey by, an online resource for caregivers.

These extra costs frequently create tension even for caregivers with financially sound budgets. It might be hard to set aside money for your own retirement, or you may consider withdrawing money from your retirement accounts to pay for care. To avoid dipping into savings, follow these expert-backed strategies to reduce what you need to spend on caregiving. Read on to learn what can be done to help alleviate costs and preserve your own retirement funds.

Here's How To Refresh Your Retirement: The 4% Rule Of Thumb

By Kerri Zane
August 7, 2018

There is a longstanding 4% rule of thumb that was developed in the mid-1990s outlining how much a person could safely withdraw from retirement savings each year and still have a nest egg to last a lifetime (aka 30 years). But many investment advisors have suggested that this is old-school and that there are a variety of factors and new possibilities to consider.

Many advisors like CFP David Storch at Rose Capital Investments think that while it's a good rule of thumb, it doesn’t address issues such as increasingly high healthcare costs, longer life expectancies and jobs that are sustainable throughout old age.

So while the 4% rule is a good baseline, it’s necessary to plan according to your lifestyle and expectations during retirement. Here are some additional investment ideas that could be right for you.

How Large Of A 401(k) Balance Do You Really Need?

By James Brewer
August 7, 2018

Recently, I read an article that questioned how some people could build million dollar plus 401(k) balances. Someone might need a $1 million plus balance depending upon assumptions about lifespan and budgets. However, I don’t believe that everyone needs to make the sacrifices required to attain a million-dollar balance. You should start with the question “How large of a 401(k) balance do I really need?”

401(k) balance or retirement nest egg

Let’s start by determining your strategy for creating retirement income. Do you want to have a chicken that produces eggs or are you planning on eating the chicken? I believe most people are much better off having a chicken that produces eggs that can be consumed on a regular basis. This strategy takes the 401(k) amount and converts it into some type of fixed annuity. Rather than you retaining the risk of running out of money, you transfer the risk to insurance companies you choose.

IRS issues proposed regs. on 100% bonus depreciation

By Sally P. Schreiber, J.D. 
August 6, 2018

The IRS issued proposed regulations (REG-104397-18) providing guidance on Sec. 168(k), which was amended by P.L. 115-97, known as the Tax Cuts and Jobs Act (TCJA), to increase the allowable first-year depreciation deduction for qualified property from 50% to 100%.

The TCJA extended and modified bonus depreciation, allowing businesses to immediately deduct 100% of the cost of eligible property in the year it is placed in service, through 2022. The amount of allowable bonus depreciation is then phased down over four years: 80% will be allowed for property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026. (For certain property with long production periods, the above dates will be pushed out a year.)

The TCJA also removed the rule that made bonus depreciation available only for new property and extended the period in which certain other property (including plants and films, television, and live theatrical productions) will qualify for 100% depreciation. These new rules generally apply retroactively to property acquired or placed in service after Sept. 27, 2017 (the TCJA was enacted Dec. 22, 2017).

12 Reasons Why You Should Gracefully Resign from a Nonprofit Board

By Gene Takagi
August 6, 2018Exit sign used in an article about nonprofit board

Are you a valuable and valued board member for a nonprofit? If not, a graceful resignation and reassignment may be good for you and the organization.

12 reasons why you should resign from a nonprofit board:

  1. You’re serving on the board more for personal benefit than for public benefit.

  2. You have a material financial interest in a transaction with the organization that would be damaging if known by the public.

  3. The organization’s values or activities are inconsistent with your personal values.

  4. You are unable to support the organization when a board action is taken contrary to your vote.

  5. The organization is not operating consistent with the law and/or its own governing documents or policies despite your efforts to insist on compliance.

The Most Surprising Top Reason For Retirement Happiness

By John Wasik
August 6, 2018

While money is always important in working life and retirement, having a pile of cash doesn't guarantee retirement happiness.

Something a little bit harder to measure may weigh more than your retirement satisfaction. It's called well being.

For most, well being is a state of mind. If you don't have it, you could be prone to illness, loneliness and even premature death, according to some new research.

That's not to say that having enough money for retirement isn't important. Poverty is not a positive outcome in most places. And this problem is fairly large: Some 50% of families surveyed in theNational Retirement Risk Index, may not have enough money to maintain their pre-retirement standard of living.

But let's say you have saved enough for retirement, which means having socked away roughly eight times your salary by age 60. That's about half a million dollars for someone earning $60,000 now. What's really important to live even longer?

Here's How Much Money You Save By Cooking At Home

By Priceonomics
July 10, 2018

Intuitively, we all know there are benefits to cooking at home. You can use healthier ingredients, set portions to a reasonable size, avoid food allergies, and of course you can save money compared to ordering restaurant delivery or using a meal kit service.

But just how much money do you save by cooking at home? We decided to analyze our recipe data to find out the true cost of cooking at home from scratch, compared to delivery from a restaurant or a meal kit service. 

We analyzed data from Priceonomics customer wellio, a platform that breaks down millions of recipes into single ingredients and matching those to grocery items from local stores. That allows us to measure the ingredient cost for a wide variety of recipes. For 86 popular dinner recipes, we decided to look at the average cost per serving of cooking from scratch and compare it to the cost per serving of ordering from a restaurant or a meal kit delivery service.

We found on average, it is almost five times more expensive to order delivery from a restaurant  than it is to cook at home. And if you’re using a meal kit service as a shortcut to a home cooked meal, it’s a bit more affordable, but still almost three times as expensive as cooking from scratch.

Retirement Dream Home Mistakes to Avoid

By Rodney Brooks
July 10, 2018

Many people dream of retiring to warm weather states like Florida or Arizona and spending leisurely days golfing, fishing or walking along the beach. But those dreams can easily turn into a big retirement mistake. As great as it may feel to retire in a bucket-list destination, moving to a new home in an unfamiliar area requires a careful plan. Take care to avoid these pitfalls when relocating for retirement.

1. Don't get stuck in a location just because of its beauty or weather. Retirement home decisions must take into consideration much more than the area's scenery. "While it may seem great to live out retirement in a sunny state, it may not be as glamorous as you think," says Ben Barzideh, a wealth advisor at Piershale Financial Group in Crystal Lake, Illinois. "We've seen people move to a state and buy a retirement home, and they are bored and miserable and want to come back. They sell the home, sometimes at a loss."

Some people who live in colder climates decide they want to retire in Florida without really knowing what it's like. "They’ve never lived in Florida, don't know about the weather and the traffic, but they are in a rush to buy a house," says Dan Routh, an associate advisor at Exencial Wealth Advisors in Oklahoma City. He suggests that you go to Florida and rent for a year to see if that's a place you want to live.

Will The Cost Of Healthcare Devour Your Retirement Income?

By David Rae
July 9, 2018

Will healthcare costs devour your retirement income? New estimates may cause you to adjust your retirement plans.

The dream is that you will eventually turn 65 and all your healthcare worries will be covered by Medicare. I hate to be the bearer of bad news but in the real world, healthcare costs in retirement years can take a ridiculously large chunk out of your retirement income.

The average 65-year-old couple retiring this year will need about $280,000 to cover healthcare in retirement, according to a new study from Fidelity. That stunning amount is more than many households have saved. The estimates are about half that figure for single folks. It’s important to point out that women can expect to spend a bit more as they tend to live longer. Perhaps equally important is that long-term care expenses are not included in that total. Ouch!

Countdown to Retirement: A Five-Year Plan

By Peter Finch
July 6, 2018

For most of your working life, it wasn’t exactly a pressing concern. You might have pondered it for a few minutes as you skimmed your company’s benefits handout, checking to see if your new glasses were covered or if you’ll be reimbursed for your gym membership. Retirement was more like a vague, distant concept rather than something that would actually happen one day.

Then, suddenly, you hit your late 50s or early 60s and you realize, almost without being aware of it, that you’ve begun paying closer attention to those commercials about annuities, reverse mortgages and Medicare Part B, and you’re no longer reflexively tossing those AARP mailings straight into the trash.

Now, retirement looms with terrifying urgency. Do you have enough savings? Is your money invested too aggressively — or not aggressively enough? Do you need long-term-care insurance? Do you have a will? What even is a reverse mortgage?

Charitable Donations Are Tough To Get Under The New Tax Law. Here's The Work-Around

By Rich Kahler
July 10, 2018

The revamped tax code is expected to curb deductions for charitable giving this year. The reason: The standard deduction has almost doubled, to $12,000 for single filers and $24,000 for couples. Surmounting those levels to gain the charitable write-off, which is only available through itemizing, will be tough next tax season. But Rick Kahler, the founder of Kahler Financial Group, in Rapid City, S.D., has a way around that:

Larry Light: What’s a good method to handle charitable donations under the new tax law?

Rick Kahler: With changes to standard and itemized deductions under the new tax law, many CPAs and tax attorneys are recommending a strategy of bunching or bundling deductible spending into alternate years.

One way to bundle charitable deductions efficiently and effortlessly is through a donor-advised fund, or DAF.

Light: How does that work?

Thousands of Americans stand to be denied passports due to unpaid taxes

By John Bowden
July 6, 2018

Hundreds of thousands of Americans stand to be denied new or renewed passports under a 2015 law requiring the IRS and State Department to deny passports to Americans with more than $51,000 in overdue tax debt.

An IRS spokesman told The Wall Street Journal that as many as 362,000 Americans fall under the category of those with outstanding debt for whom the State Department should deny passport applications or renewals.

The State Department confirmed separately to the Journal that some passports had already been denied under the enforcement, as the IRS sends the names of those with outstanding debt in batches to the agency.

For now, agency officials stressed that they are just denying applications for new or renewed passports, and were not revoking passports from any Americans with outstanding debt.

The Best Tools For Learning How To Manage Money

By Frances Bridges
June 27, 2018

Learning how to manage money is an imperative life skill, and there have never been more accessible resources to teach people how to manage money, invest and plan for the future. Really the market is flooded; an overwhelming number of books, blogs, apps, podcasts, etc. that give their audience free financial information is impossible to sift through, there simply are not enough hours in the day. But knowing the fundamentals of finance: how to manage loans, debt, budgets, mortgages, insurance, investing, etc. will facilitate your future. So to save some time, here are the best free resources for a personal financial education:


One of the most accessible and most popular personal finance tools available, and it is excellent. Mint is free, it is easy and helps you maintain the budget you set by sending you notifications when you've hit a certain budget for the month. It helps you maintain the good financial habits you want to start forming now. It is one of the best tools on the market that gives you a great overlook of your financial health.

2. Learnvest 

In the interest of full disclosure, LearnVest is a fellow Forbes contributor. But it is a wonderful, helpful resource, and considered to be a personal finance 101 of sorts. Whether you want to know more about earning, saving, budgeting, taxes, mortgages, investing, etc. it is a great resource whether you are just learning about money, or you are trying to deepen your understanding of it.

‘Hurry Up and Get a Divorce’? For the Rich, There’s an Incentive

By Jim Tankersley
July 2, 2018

For the wealthiest Americans, there may never be a better time to get divorced.

A change in the new Republican tax law will eliminate a tax break for alimony payments that are finalized after Dec. 31, prompting financial planners and lawyers to warn wealthy clients that if they have been contemplating filing for divorce, they had better act fast.

Under the law, Americans who finalize or modify divorce agreements in 2019 or later will no longer be able to deduct alimony payments from their taxes. Agreements signed before the end of the year will still qualify for the annual deduction — a distinction with large financial implications for couples where one partner earns substantially more per year than the other.

“I have never wanted to counsel people, hurry up and get a divorce,” said Fern Frolin, a divorce lawyer at Mirick O’Connell in Boston, whose clients often have high incomes. “I always want to say, ‘Take your time, think if this is the right thing for you.’ But in this particular instance, we could be talking about 15 to 20 years of support, and shifting the tax burden for the last years of a person’s working life.”

5 Invaluable Retirement Planning Tips for Women

By FBB Capital Partners
Jun 26, 2018

Jot these down, ladies. 

As a certified planner, I often answer questions about how women should plan for retirement and how women can "keep up" with men. Because women tend to outlive men by an average of two to three years, we face a unique set of challenges. But beyond life expectancy, a woman preparing for retirement shouldn't try to keep up with anyone else-male or female.

Still, there are a few considerations women should take into account. When planning for retirement, women should generally plan to live beyond the average age (88 years old for a woman turning 65 this year, versus 86 years for a man). And because we tend to earn less than our male counterparts, on average, we are likely to have accumulated less in our retirement savings accounts. Combined, these factors put women at greater risk to outlive their retirement savings.

I work with a number of couples who delegate financial duties to one partner-in many cases a male partner. But as we grow older, it becomes increasingly important for both partners-especially women- to be literate in basic personal finance and investing. I strongly encourage my clients to share this responsibility, so that the surviving partner is prepared to manage her own nest egg, should she be called upon to do so.

The Distributional Impact of the Tax Cuts and Jobs Act over the Next Decade

By Huaqun Li and Kyle Pomerleau
June 28, 2018

On December 22, 2017, President Donald Trump signed into law the bill known popularly as the “Tax Cuts and Jobs Act” (TCJA). The TCJA made changes to both the individual income and corporate income tax, while scaling back the estate and gift tax. Over the next decade, we estimate that the TCJA will reduce federal revenues by about $1.8 trillion on a conventional basis. In addition, the TCJA is projected to improve the incentives to work and invest, boosting the size of the economy. We estimate that the economy will be about 2 percent larger than it otherwise would have been between 2018 and 2027.

The reduction in tax liability will boost taxpayers’ after-tax income. However, the tax law’s impact on taxpayers each year over the next decade will vary due to the phase-in and phaseout of many provisions and, most notably, the expiration of most of the individual income tax cuts. While most taxpayers will see a tax cut in 2018, many will end up seeing a tax increase by 2027 if the individual income tax cuts expire as scheduled.

In addition, the larger economy will also mean higher incomes for taxpayers. However, the economic effects of the tax law will take time to materialize. As a result, individuals’ after-tax incomes due to higher wages and capital income will not occur immediately. Rather, they will gradually increase over the next decade.

How Tax Reform Impacts Worker Classification

stressed business man on steps looking at laptop

By January Colandrea, CPA
June 26, 2018

For years, being an independent contractor meant paying more taxes, but with the 2017 tax reform changes the classification of independent contractor may be a much better choice.

Before your clients take the plunge into self-employment status or switch employees to independent contractors, here are some key points to help your clients understand their classification decisions, resulting tax effects and what happens if they make the wrong classification.

Defining the Classifications

Each year, the IRS updates Publication 15A, Employer’s Supplemental Tax Guide, with a section entitled “Who Are Employees?” A worker’s status is determined based on the degree of control in three categories:

27 Cheapest Places Where You'll Really Want to Retire

By Stacy Rapacon
June 26, 2018

If you're looking for a cheap retirement destination, you can pretty much count out the West Coast, the Northeast, Alaska and Hawaii. Still, more than half of U.S. states offer at least one great affordable place for you to retire in. Cost of living is a crucial factor for retirement planning. After all, you need to make sure your daily expenses don't put too big a strain on your fixed income. Indeed, 67% of people say they'd move to a less expensive location to have a more financially comfortable retirement, according to a survey by Merrill Lynch and Age Wave, a research firm focused on the aging population.

To that end, we identified which of our 50 Best Places to Retire in the U.S. offer below-average living costs. On top of affordability, all these places rank well with us, taking into account safety, median incomes and poverty rates for retirement-age residents, as well as residents' sense of well-being and the availability of recreational and health care facilities. And they're scattered all across the nation. Take a look.

IRS guidance still needed on key tax reform issues

By Amy Wang
June 27, 2018

As a CPA in tax, you know it’s vital to stay on top of tax reform. That means you’re watching the news coverage. You’re reading the articles. You’ve subscribed to e-News and various news alerts. You’re joining webcasts and taking self-study courses.

But there’s still a lot to learn, and some information just isn’t available yet.

The U.S. saw the most significant overhaul of its tax code in more than three decades at the end of last year. And when the Tax Cuts and Jobs Act was finally signed, it set off a guidance chain reaction at the Internal Revenue Service (IRS).

While processing its typically heavy busy-season workload, the IRS also focused on issuing guidance on several high-priority changes to allow for effective implementation of the new law. The IRS continues to issue news releases, notices, instructions and other forms of informal guidance on the most pressing items.

Retirement Bills in Congress Could Alter 401(k) Plans

Rep. Kevin Brady (R., Texas), chairman of the Ways and Means Committee, said he hoped the new retirement bill will attract bipartisan support.

By Richard Rubin and Anne Tergesen
July 17, 2018

Lawmakers are working on the biggest changes to U.S. retirement savings in more than a decade, exploring several proposals that could make it easier for small companies to offer 401(k) plans and for workers to guarantee themselves an annual income after they retire.

The efforts start with a bipartisan Senate bill and House Republicans’ plan to make retirement and savings a crucial part of their push for tax legislation this summer and fall. It isn’t clear which, if any, measures are likely to survive the legislative process, but the broad interest in encouraging savings gives lawmakers a chance at passing something this year.

Among the proposals Congress may consider are a new type of savings account that is more open-ended than current vehicles, ways to encourage savings that can be tapped in an emergency and the repeal of a provision that prevents people over age 70 ½ from contributing to traditional Individual Retirement Accounts.

Student-Debt Forgiveness Is a Wonderful Boon, Until the IRS Comes Calling

By Josh Mitchell
June 24, 2018
Students took pictures during the May 2017 graduation ceremony at Columbia University in New York. Many student-loan borrowers with large debts hold graduate degrees or attended prestigious private schools.

Students seeking relief on their college and graduate-school debt could be sitting on a hidden tax bomb: Billions of dollars in one-time bills from the Internal Revenue Service for any debt they get forgiven.

The tax bills are a feature of the “income-driven repayment plans” that have been offered by the Education Department since 2007. One version of these plans allows borrowers to set their monthly student-loan payments at 10% of their discretionary income. The balances often grow over time because the payments aren’t big enough to cover accruing interest.

Private-sector workers pay for 20 or 25 years. At the end of that period, any remaining balance would be forgiven. Under federal tax rules, that disappearing debt is considered part of a borrower’s income for that given year, and taxed as such.

14 open areas on tax reform

by Mark A. Luscombe
June 25, 2018

While the Tax Cuts and Jobs Act, enacted at the end of 2017, promises on the whole good news for taxpayers for 2018, tax planning to take maximum advantage of those provisions has been difficult due to continuing uncertainties as to how to interpret various provisions of the tax reform legislation. 

The Internal Revenue Service has yet to issue any proposed regulations on the subject, instead issuing a series of notices, information releases and frequently asked questions telegraphing what that guidance is likely to say on certain key points when it is eventually issued. Congress has also not been quick to follow up on the enacted legislation with technical corrections or with its promised Tax Reform II effort. 

Acting IRS Commissioner Dave Kautter has indicated that TCJA guidance may take a couple of years and that, in some cases, the best guidance to taxpayers may come from the instructions to forms for 2018 tax returns. 

California court kills billionaire's plan to divide state in three

Major cities such as Los Angeles and San Francisco would have been divvied up between the three new states. By Associated Press
July 18, 2018

A measure that would divide California into three parts will not appear on the ballot in November, the state supreme court decided Wednesday.

The justices ordered the secretary of state not to put the ballot initiative before voters, saying significant questions have been raised about its validity. The court will now consider the merits of a challenge brought by an environmental group.

The Planning and Conservation League argues that dividing the nation’s most populous state into three would drastically change California’s government structure beyond what can be accomplished through a ballot initiative.

Honey, I shrunk the 1040 tax return!

By Kay Bell
June 22, 2018

GOP House Speaker Paul Ryan touts postcard tax return_Speaker-dot-gov

Every year the Internal Revenue Service makes tweaks to tax returns. Often it's simply updating annual inflation adjusted amounts. Other times it's adding or subtracting a line due to law changes.

But for 2018's filing material, there will be large-scale form alterations thanks to the major changes made by the Tax Cuts and Jobs Act (TCJA).

Among the new law's modifications for the 2018 tax year will be the actual size of the oldest of the tax returns, the long Form 1040.

Republicans say their long-promised postcard-sized version of Form 1040 is on its way.

The new IRS Form 1040 could be released as soon as next week, and it will be significantly smaller than the current version, according to Treasury Secretary Steven Mnuchin.

"It will be a postcard, as we have promised," said Mnuchin during a press conference this week celebrating the six-month anniversary of the Tax Cuts and Jobs Act. "Hardworking taxpayers won't have to spend nearly as much time filling out their taxes."

10 Tax Efficient Ways Clients Can Give to Charity

By Bryce Sanders
June 21, 2018
voluteers hold out seedlings in a circle

Americans are philanthropic in terms of time and money spent and as such your clients would probably benefit from your advice in how to make charitable donations in the most tax efficient manner.

Many people put giving to charity into the same category as putting money in the collection plate or donating to a Salvation Army bell ringer during the holidays. It may not always be cash, but it’s out of their cash flow.

Before handing over any money, you want to follow a few simple rules. Make sure the organization is a recognized charity. It should have a 501(c)(3) designation from the IRS, for one. Unless it’s pocket change, your gift should be acknowledged in writing by the receiving organization.

Five Steps To Help Secure Your Retirement

By Joel Johnson
June 15, 2018

One of the biggest fears plaguing individuals approaching age 55 is whether they will have enough money to support or maintain the lifestyle they desire. The question that I have heard over and over again throughout my almost 30 years in the financial planning industry is, “Will I run out of money during retirement?” This question, although daunting for some, is a real eye-opener for others. Outlined below are five suggestions to help secure your retirement:

  1. Analyze guaranteed income like pension and social security to expose you to a shortfall

Overall, you want to come up with a retirement plan and the first thing needed to do is to analyze where your guaranteed sources of income are coming from.  Social security, pensions, beneficiary of a trust are all examples of guaranteed income and those should be identified as they become the baseline for determining how much is needed from your investments.

A "most serious problem" at the IRS: Private debt collectors

By Ray Martin
June 18, 2018

Last year the IRS reactivated a program using private debt collectors to collect unpaid taxes from individuals with delinquent tax debts. According to the National Taxpayer Advocate, the IRS' Private Debt Collection (PDC) program is a "most serious problem."

A troubling finding of a recent report was that taxpayers, whose tax debts were assigned to private collection agencies, entered into installment agreements that they are unable to afford, with approximately 43 percent earning income below their allowable living expenses. 

To make matters worse, the program costs the U.S. Treasury more than the money it brings in. Part of the reason may be that the private collection agencies can keep up to 25 percent of what they collect.

Social Security Card Replacement Limits May Come As A Surprise

By Kelly Phillips
June 14 , 2018

In the blockbuster movie, Jumanji: Return to the Jungle, the players watch as tally marks on their arms slowly disappear. Eventually, one of the characters, Dr. Smolder Bravestone, realizes that the tallies represent their remaining lives: They have just three. The limit poses a challenge for the players as they maneuver through the jungle.

I may not have been threatened by charging rhinos or ravenous mosquitoes, but I did have to navigate through the Social Security Administration’s website earlier this week—also daunting— and along the way I found out that taxpayers have limits, too. I always assumed that your Social Security card was infinitely replaceable. It is not: You are limited to three replacement cards in a year and ten during your lifetime.

Social Security cards were first issued by the Social Security Administration (SSA) in November 1935. In the following year, John D. Sweeney, Jr. of New Rochelle, New York, received SSN 055-09-0001, the first Social Security record established in the country (interestingly, Sweeney never received any Social Security benefits).

By Andrew DePietro
June 13, 2018

Retiring rich is definitely harder these days than a few decades ago. Wages, which had increased without fail for nearly 30 years, began to stagnate in the mid-1970s. For the bottom 90% of earners, real income outright fell between 1972 and 2013. At the same time, jobs with employee pensions have all but vanished, severely limiting available means of income for today’s retirees.

Thus, there are major forces beyond your control that are making retiring rich harder. So, don’t make it worse by neglecting what you do have control over. The top retirement experts have weighed in on how best to take effective control.

The New Tax Form Is Postcard-Size, but More Complicated Than Ever

By Jim Tankersley
June 25, 2018

The Trump administration’s new “postcard” tax form still must be mailed in an envelope, unless you want your neighbors to see your Social Security number. It will save a little bit of time for some taxpayers but could add pages more paperwork for millions of others.

A draft copy of the new version of the standard 1040 income tax form, obtained by The New York Times, shows the administration has succeeded in its goal of shrinking the form that most Americans send to the Internal Revenue Service every year. The new form eliminates more than half of the 78 line items from the previous form, reducing it from two full pages of text to one double-sided half page.

Fed Raises Interest Rates and Signals 2 More Increases Are Coming

By Jim Tankersley and Neil Irwin
June 13, 2018

WASHINGTON — The Federal Reserve raised interest rates on Wednesday and signaled that two additional increases were on the way this year, as officials expressed confidence that the United States economy was strong enough for borrowing costs to rise without choking off economic growth.

Jerome H. Powell, the Fed chairman, speaking in unusually blunt terms at a news conference on Wednesday, said the economy had strengthened significantly since the 2008 financial crisis and was approaching a “normal” level that could allow the Fed to soon step back and play less of a hands-on role in encouraging economic activity.

The Fed’s optimism about the state of the economy is likely to translate into higher borrowing costs for cars, home mortgages and credit cards over the next year as the central bank raises interest rates more quickly than was anticipated

Do Californians Want Their State Split in 3? We’ll See in November

By Laura M. Holson
June 13, 2018

For several years, the Silicon Valley entrepreneur Timothy Draper has sought to break up California, citing its unwieldy size as damaging to the state’s schools, livability and the economy. In November, California residents will get their chance to vote on his latest proposal: to divide the world’s fifth-largest economy into three separate states.

Mr. Draper, who made his fortune investing in start-up companies, is proposing that the state of 40 million people be split into three entities with roughly the same populations. Northern California would comprise the upper part of the state, including Silicon Valley and San Francisco; Southern California would include a vast swath of the inland’s verdant farmland, stretching to San Diego; a third state, simply called California, would hug the coastline from Monterey to Los Angeles.

If Californians approve the controversial ballot measure, which academics and others say faces many obstacles, it would still need the blessing of the California Legislature and the United States Congress. Politicians, for one, may be wary of splitting up a state that has long voted Democrat.

When is a debt worthless – and tax deductible?

By Roger Russell
June 12, 2018

The U.S. Tax Court

Just because a creditor thinks a debt has become worthless doesn’t mean they can deduct it, according to a recent Tax Court ruling.

A debt that becomes wholly worthless within the taxable year is deductible as a business bad debt. To deduct a business bad debt, the taxpayer must show the existence of a valid debtor-creditor relationship, that the debt was created or acquired in connection with a trade or business, the amount of the debt, the worthlessness of the debt, and the year that the debt became worthless.

The recent Tax Court case, Sarvak v. IRS, T.C. Memo 2018-68, illustrates the problem with determining just when a debt becomes worthless. It faulted the taxpayer for not providing objective proof that a bad debt became worthless in the year he claimed.

IRS Announces Interest Rates For Late Payments And Tax Refunds

By Kelly Phillips
June 11, 2018

Interest rates are staying put - at least when it comes to the Internal Revenue Service (IRS). The IRS has announced in Revenue Ruling 2018-18 that interest rates will remain the same for the third calendar quarter (beginning July 1, 2018) as they did for the last quarter.

The rates for the third quarter for individuals will be:

  • 5% for overpayments; and

  • 5% for underpayments.

Under the Internal Revenue Code, interest rates are determined on a quarterly basis. For individual taxpayers, the overpayment and underpayment rates are calculated using the federal short-term rate plus 3%. The most recent interest rates are computed from the federal short-term rate determined during April 2018.

Heirs of Heirs of Heirs of Heirs Love Dynasty Trusts

By Ben Steverman
June 10, 2018

Everyone dies eventually, but if you’re wealthy enough, your money might live forever. Dynasty trusts are a tool to make that possible. Thanks to the tax overhaul signed by President Donald Trump in December, these trusts are getting new attention from ultra-wealthy Americans looking to provide for the financial needs of grandchildren, great-grandchildren and beyond.

1. What are dynasty trusts?

Most trusts -- bank accounts held by one person, a trustee, for the benefit of another person or group -- come with expiration dates. A few states, including Delaware and South Dakota, permit trusts to last forever. People from across the U.S. can open dynasty trusts in these states, and top wealth planning firms say they’re doing so.

2. Why are they getting popular now?

The tax overhaul doubled -- to $11.2 million for an individual and $22.4 million for a married couple -- the amount that can be passed to heirs without triggering estate and gift taxes. But these higher thresholds are only in place until 2025, giving the rich a potentially limited opportunity to pass more wealth to family members tax-free, while also exerting some control over how heirs spend their inheritances. The higher exemption amounts also mean wealthy families can transfer enough assets to dynasty trusts to justify their extra set-up and administration costs.

How homeowners win and lose under the new tax law

By Bill Bischoff
June 11, 2018

Home values are surging in many areas, and rents are going up too. These factors make buying a home seem more attractive than ever. As a bonus, the cost of ownership is reduced by any tax savings. But those tax savings may be less than you expect or even nothing after the new Tax Cuts and Jobs Act (TCJA). Here’s what you need to know about federal income tax advantages for home ownership after the new law.

Home ownership write-offs that are still allowed under the TCJA

The cost of renting a personal residence is generally a nondeductible personal expense (an exception is when you use part of a rented home for business purposes, such as a deductible home office).

In contrast, our beloved Internal Revenue Code allows you to write off some home ownership expenses as itemized deductions. But for 2018-2025, the TCJA seriously curtailed deductions for home mortgage interest and property taxes.

Maurie Backman
Jun 11, 2018 at 5:02PM

Couple reviewing documents

1. They make money a priority

Recognizing the importance of money is essential to being financially content and secure. Half of those surveyed by Ameriprise agreed that money is a key factor in their lives and relationships, and making time to talk about money can lead couples to a better financial place. Along these lines, actively following a budget is a good way to keep money on the brain and ensure that you're managing and spending it wisely. If you don't already have a budget, spend an hour this weekend creating one with your partner. This will help ensure that you both understand where your money is going.

2. They sync up on financial goals

Maybe your priority in the next five years is to buy a house, while your partner is eager to establish a college fund for your children. Both are noble goals, but if you're not on the same page about them, it's an instant recipe for conflict. In the aforementioned study, the happiest couples were those who communicated openly about financial goals and got on the same page. And while it's OK to have different priorities, discussing them will help you get to a place where you're allocating your money equitably to ensure that both of you wind up content.

By Robert H. Frank
June 8, 2018

Single-payer health care systems deliver better outcomes at much lower cost than those that rely primarily on private insurance, as we do in the United States.

Considerable evidence supports this claim. And because of these cost savings, I said in a recent column, the United States could switch to a single-payer system without requiring painful sacrifices from anyone.

Several readers pointed out an apparent flaw in my argument. Since the biggest savings result from lower payments to service providers, wouldn’t the transition be painful for physicians and other health care professionals?

The answer is less obvious than may appear. It is true that there clearly would be constraints on the income of doctors and other service providers in a single-payer system, and many of them would surely feel aggrieved by any attempt to reduce their salaries.

The ‘Fiduciary Rule’ May Sound Boring, But Its Collapse Threatens Your Retirement

By Katherine Chiglinsky
June 8, 2018

Among all the financial reforms launched during the Obama administration, the fiduciary rule may have been the most important to ordinary investors. Issued by the Department of Labor in 2016, the rule required brokers working with retirement accounts to put clients’ interests ahead of their own—for example, by recommending an annuity that was better for the client rather than one from a company that paid the broker a bigger commission. The regulation was hailed as an historic win by consumer advocates, and the financial-services industry began remaking many of its products and pay structures to comply.

Now the regulation is all but dead. In March a federal appeals court struck it down, and the Trump administration has not appealed the ruling. Where does that leave retirement investors? The outlook is anything but clear.

In April the Securities and Exchange Commission released its own plan for investor protection. In a proposed rule that runs hundreds of pages, the agency says it wants brokers “to act in the best interest of the retail customer” but adds, “We are not proposing to define ‘best interest’ at this time.” Instead, the agency lists “obligations” of brokers to ensure they don’t place their own interests before those of their clients and says financial companies must “establish, maintain and enforce policies” that are designed to spot and mitigate conflicts. “We don’t know what they mean by ‘best interest,’ ” says Barbara Roper, director of investor protection at the Consumer Federation of America. “And that is a problem they need to fix because this regulation, as drafted, depending on how it’s interpreted, could be anything from the status quo to a significant improvement in investor protection. And if it’s vague, it’s going to be difficult to enforce.”

A Florida City Wants More Retirees, and Is Going After Them

By Elizabeth Olson

June 8, 2018

In Florida, one city is not waiting for retirees to show up but is recruiting them to resettle there.

While older people flock to the state each year, relatively few head to Tallahassee, a tree-lined city in the Panhandle where lawmakers hold forth in the Capitol and streets spill over with students who attend the area’s major universities.

Tallahassee, which is not growing as fast as the rest of the state, is looking to attract new residents, including small-business owners who can generate jobs. A key part of the city’s efforts is expanding its population of retirees, and it has adopted some unusual tactics — including subsidizing a few people to move there.

A community project is working to recruit baby boomers who are hitting retirement age and looking to move someplace warmer and more affordable but who may not have thought of Tallahassee as an alternative to destinations like Sarasota, Boca Raton or even Panama City, which is also on the Panhandle.

Balancing the Benefit and the Burden of Wealth

By Paul Sullivan
June 8, 2018

So much for that old saw that money can’t buy happiness. A new survey of people who have built significant wealth on their own found that money has actually bought them a lot of happiness.

The majority of those surveyed — 300 people with assets of $1 million to $20 million — said they equated wealth first and foremost with peace of mind. Happiness came in second, with more than half of the respondents citing it.

But life with money is not all Champagne and caviar. The respondents said that their wealth made them feel satisfied and grateful, but it also gave them a greater sense of responsibility. Many cherished the way their wealth had allowed them to spend time with their families, but some regretted losing the family time they had sacrificed in the pursuit of financial freedom.

According to some estimates, this could cost you $280,000 or more if you're retiring today.

By Michael Douglass
June 3, 2018A jar of coins on top of a notecard that says "PLAN," on a wooden table.

If you've read any personal finance content online, you know about the need to predict your retirement expenses. Some of these are easy -- you can guess how much you'll spend on food based on your current budgeting. The same goes for clothes, diversions, and a host of other things.

Some expenses are more difficult to gauge -- like how much you'll travel when you're no longer limited by accrued vacation days. Or how much you'll spend spoiling your grandkids.

Some are downright impossible to predict, like how much healthcare in retirement will cost you. The only thing we know for certain: It'll be a lot.

How much will healthcare cost?

This question actually has two components:

  • How much treatment will you need -- or put differently, how healthy will you be?
  • How much will that treatment cost?

Maybe you're in your 40s right now and trying to predict how healthy you'll be when you're 70. That's 30 years away. And your parents aren't a good barometer since they grew up in a fundamentally different treatment paradigm.

Which brings us to door No. 2: How much will treatment cost? Well, that depends on what new medical advancements are made in the next 30 years and how much drug companies decide to charge -- which, if you watch the news, you know isn't necessarily predictable or fair.

By Caroline Kitchener
April 20, 2018A woman and man sitting far apart on a bench

A joint bank account has, traditionally, been a sign of commitment. As newlyweds start their lives together, it is perhaps the clearest way for them to say, to each other and to the world, “What’s mine is yours, and what’s yours is mine.”

But these days, some young couples are skeptical. “There has been a generational change,” said Joanna Pepin, a doctoral candidate at the University of Maryland who studies the organization of money in romantic relationships. “The research we have shows that, cross-culturally, more people are keeping money separate.” Indeed, a Bank of America study published earlier this year seemed to suggest that Millennial married and cohabitating couples were more likely to hold separate accounts than previous generations were.

Pepin says this trend is particularly pronounced among low-income couples, who are likelier to value access to their own earnings over the show of commitment and loyalty that comes with the decision to merge finances, a quality often prioritized by higher-earners.

Some of this has to do with Millennial marriage trends more generally. Compared to previous generations, Millennials get married later in life, and thus significantly more of them live together before marriage. Because cohabiting couples are far more likely than married couples to keep finances separate, a certain inertia develops. “Once you’ve established your relationship norms,” Pepin asked, “why would you change them?”

10 financial questions for the one you love 

March 22, 2018Why Is It So Hard to Talk about Money?

Over the course of our lives, there are many uncomfortable questions and conversations to be had. Those dealing with money are perhaps the most persistent and difficult.

A survey by Wells Fargo found that 44 percent of Americans see personal finance as the most challenging topic to discuss with others, more so than subjects like death, politics, and religion. And despite the fact that money is a leading cause of stress in relationships (and commonly cited as the primary reason couples divorce), Time magazine reports that 40 percent of couples don’t discuss how they would manage their money before getting married.

The repercussions of not talking about our finances can be severe, with negative consequences to our health, wealth and happiness. When we conduct field research with the Common Cents Lab, our goal is to understand money decisions and motivations better. In our interviews, we frequently encounter individuals that accumulate crippling debt, miss opportunities to save, or are unaware of basic financial strategies that would improve their well-being—often because they were embarrassed to ask their friends and family for advice about money.

6 Simple Steps to Improve Your Retirement Strategy

By Rachel Hartman
May 30, 2018          

It can be tough to imagine retirement when it's far in the future. But the decisions you make now about saving and investing will impact the retirement lifestyle you get to live. To simplify the process, try spending a small amount of time, such as an hour or two, working on your retirement plan. You’ll find small changes often make a big difference later, when you’re ready to step into the next phase of life. Follow these steps to improve your retirement strategy.

1. Look at your 401(k) plan. If your employer offers a 401(k) plan but you’re not sure how much to contribute, take a few minutes to find out. Examine what you have contributed so far this year, and think about how much you’ll be putting in during the months ahead. “Making sure that you’re maximizing your contribution to your 401(k) plan at work is one simple way to boost your financial strategy for retirement,” says Nicholas Camp, president of NRC Wealth Strategies in Cranberry Township, Pennsylvania. If you are 50 or older, you can contribute up to $24,500 to a 401(k) plan in 2018. If you’re younger than 50, the maximum deposit is $18,500.

Legislation Would Establish Retirement Benefits Commission

By Rebecca Moore
May 29, 2018

U.S. Senators Todd Young (R-Indiana) and Cory Booker (D-New Jersey) introduced legislation to establish a federal commission charged with reviewing private retirement benefit programs and submitting a report to Congress on how to improve private retirement security in the United States.

A press release from Young notes that private retirement systems have undergone significant changes over the past 40 years as traditional pensions have become less common. Individuals must now prudently plan for their own retirement security through retirement savings accounts like 401(k) plans. In addition, Young notes that the economy is undergoing another shift, as workers are more likely to work in the ‘gig economy,’ defined by serial employment or the contingent workforce. For these workers, it is particularly difficult to save for their own retirement.

“With many individuals reaching retirement with little to no savings of their own, we must take a serious look at our current retirement programs and make the changes necessary to help secure the futures of so many hardworking Americans,” says Young. “Our bill would enact a commission to better understand how we can strengthen private benefit programs and ensure our current and future generations have the tools necessary to plan for retirement.”

Retirement: 3 steps to overcome a 401(k) savings shortfall

By Ken Fisher
May 27, 2018
Piggy bank.
Are you saving enough for retirement? Fidelity’s tally of 401(k) millionaires just hit an all-time high. Yet the Economic Policy Institute warns the median retirement savings for families with wage-earners aged 44 to 49 is just $6,200. If that low number sounds more like you than Fidelity’s eye-popping savers, keep your chin up. It’s never too late to start putting aside money.The older and poorer you are, the more folks will tell you the road is hard. Maybe the naysayers have you convinced saving is futile. But while it might be more challenging, if you save and invest well, using a 401(k) or IRA, you can still build a retirement nest egg. 

Here are the stories of people who my firm’s 401(k) division helped overcome savings shortfalls:

The reliable partners
Early in their careers, this couple compared their employers’ 401(k) plans and found that one offered a better employer match. So, for 15 years, they maxed out that plan but didn’t save in the other. That one account grew nicely. But so did their expenses and projected costs. With the average American retirement now costing more than $703,000, one partner discovered they would need to save more than the individual 401(k) contribution limit, currently $18,500 a year. So, they finally started contributing to that neglected account. 

If your household’s retirement needs exceed your partner’s savings, start contributing to your own retirement account ASAP. Even if you’re in your 40s, with a few decades until retirement, you should have enough time to reap stocks’ long-term rewards big time.

The most and least expensive places to live in America

By Andy Kiersz
May 26, 2018most expensive places in america

America's big coastal cities are really expensive.

The Bureau of Economic Analysis recently released data on personal income and the cost of living in 2016 for metropolitan and nonmetropolitan parts of states, including the relative cost of living in different parts of the country.

Regional price parity is an index that sets the national average cost of goods and services at 100, with a particular region's RPP showing how the cost of living in that region compares with that average.

For example, the New York metropolitan area had an RPP of 122 in 2016, meaning the city and its suburbs are about 22% more expensive than the national average.

Meanwhile, Beckley, West Virginia, had an RPP of 78.8, meaning goods and services cost about four-fifths as much as the national average.

10 Tax Moves To Make Before Summer Begins

by Kelly Phillips
May 25, 2018

As the warmer weather finally makes an appearance, many of us are dreaming about summer: lazy days spent by the pool, at the shore or just sprawling in the grass (although, honestly, those of us with kids know that this never actually happens). With a more relaxed schedule, summer can be a great time to catch up on your to-do list, including tax moves to save before year-end. Here are 10 tax moves to make now:

1. Take a good look at retirement accounts. If the thought of lounging around this summer has you thinking about early retirement, now is the time to do a check on your retirement savings. Contributions to a traditional IRA are immediately tax-deductible, while contributions to a Roth IRA are tax-favored at retirement. Additionally, the more money that you can sock away into your 401(k) or other retirement savings plan, the better, since most contributions are made with pre-tax money. That goes for self-employed persons, too: SEP IRAs and solo 401(k) plans allow for long-term savings and immediate tax benefits.

2. Shore up health care accounts. With healthcare costs on the rise, now is an excellent time to do a quick check on your health care accounts, including your healthcare flexible spending account (FSA) and your health savings account (HSA). FSAs are set up by an employer as a benefit plan, often in connection with a high deductible or high co-pay health insurance plan. They can be funded by you, your employer, or both; the most common arrangement involves voluntary contributions to a plan taken out of your paycheck with additional contributions made by your employer on your behalf. With an HSA, you can contribute pre-tax dollars directly from your paycheck - even without an employer contribution. And unlike the FSA, the HSA is not a use it or lose it account, so the funds roll over at the end of the year (there's no penalty or guesswork involved).

Want to Get Rich? Ten 1-Sentence Personal Finance Rules Anyone Can Follow to Become a Self-Made Millionaire

By Jeff Haden
May 24, 2018

Every month I get a number of advance copies of personal finance books.

Each includes tens of thousands of words that promise and occasionally deliver something new, even though wealth building, like losing weight, can be summed up in five words: 

Spend less than you earn. Eat less than you burn. (Hey, that rhymes!)

Here are a number of one-sentence personal and business financial guidelines to keep you on track:

1. Only make investments you can explain to your kids. 

(No, "Because Elon Musk is awesome!" doesn't count.)

As Warren Buffett says, "The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."

That's also true where analyzing investments is concerned. Like a unique selling proposition (USP), if you can't explain it in a sentence or two, you haven't figured it out.

2. The best investment you can make is in yourself.

Spending time every day investing in yourself -- improving your skills, improving your connections, improving your health and fitness -- will produce better long-term results than any other investment you can make.

Plus, it's the one investment outcome you can almost totally control. 

The Complicated Taxation of America’s Retirement Accounts

By Erica York
May 22, 2018

Personal saving, the setting aside of resources today to get benefits in the future, is taxed in a variety of ways in the United States. Ordinary income tax treatment taxes income when first earned, and, if saved, taxes the returns on the saving (the reward one “buys” by saving). By contrast, income used for immediate consumption is taxed only once by the income tax; the income tax does not fall again on what one buys with the after-tax income. This second layer of tax on the rewards for saving favors immediate consumption over delayed consumption.

The tax treatment of retirement accounts, however, removes this bias for a limited amount of personal saving. Neutrality is achieved in one of two ways: defer tax on the saving and tax all returns of principal and earnings, or tax the amount saved up front and exempt all returns from additional tax. Either way, saving in retirement systems and consumption face the same lifetime tax burden, in present value. This neutrality is limited, though, by numerous rules and restrictions that govern retirement accounts, making the tax structure of long-term savings complex and biased.

Congress should consider reforms to the complicated structure of long-term saving vehicles. Discriminatory taxes on capital income discourage saving and slow capital formation, lowering the growth of employment, wages, and GDP. Removing contribution and age limitations and eliminating withdrawal penalties for tax-neutral savings accounts would make the tax code more conducive to personal saving and would improve long-term growth.

3 Social Security Secrets Most Americans Don't Know

By Dan Caplinger
May 20, 2018Two Social Security cards next to a $100 bill on a flat surface.

Social Security plays an essential role in providing the income that Americans need after the end of their careers. Although it's important to make the most of your benefits, Social Security is complex enough that many people don't fully understand everything they should about the program, and that can end up costing you after you retire.

Most people understand that Social Security provides income that's tied to your work history, but many key details fly under the radar. Below, we'll reveal the three secrets about Social Security that most people got wrong, according to the results as of May 18 of a recent MassMutual quiz about the program.

Small Tax Hike Could Keep Social Security Solvent for Decades

By Bernice Napach
May 16, 2018

It’s been said that fixing Social Security is not that complicated if only there were the political will to do so.

Proposals include raising the income cap on which Social Security taxes are levied — the cap iscurrently $128,400 — or eliminating it entirely; reducing benefits overall or for only the more affluent; and raising the age at which recipients can collect full retirement benefits — it’s currently 66 for those born between 1943 and 1954; 67 for those born in 1960 and later. For those born in each year between 1954 and 1960, an additional two months is added per year to age 66.

Alicia Munnell and Andrew Eschtruth, the director and associate director for external relations, respectively, at the Center for Retirement Research at Boston College, include another fix in the center’s latest brief, Modernizing Social Security: an additional 1.42 percentage-point increase in the Social Security tax paid by workers and employers on top of the 6.2% they each already pay.

That change alone would eliminate the 75-year deficit in Social Security and provide funding at current benefit levels for everyone through at least 2090, according to Munnell and Eschtruth. There would be no need to cut benefits 25% by 2034 because the Social Security old-age trust fund would not be depleted by then, which is expectation if no adjustments are made.

Number of Americans with $1 million saved sees big jump

By Kate Gibson
May 21, 2018

A scary number of Americans have little-to-nothing saved for retirement, yet the count of those who've managed to sock a million dollars or more away for their golden years is growing. 

While still comparably teeny, the number of people with $1 million or more in their 401(k) rose to 157,000 at the end of the first quarter, a 45 percent jump from a year ago. That's according to Fidelity Investments, one of the nation's biggest administrators of workplace retirement accounts.

However, those who reached the elite status didn't get there overnight. 

In fact, most have been saving for about 30 years, Fidelity's internal analysis found. Workers who've saved 15 years had an average balance of $379,600, up from $330,200 a year ago.

Employees who've saved in a company's 401(k) plan for a decade held an average of $290,100, a record-high balance and up from $250,500 a year earlier.

"It's important to take a long-term approach to retirement savings," Kevin Barry, president of workplace investing at Fidelity Investments, said in a statement. "Making regular contributions over time is a key part of building your savings, especially a retirement nest egg."

In addition to reaping gains from the market's strong showing, other habits many of the 401(k) millionaires follow include contributing enough to get their full company match, not cashing out accounts when switching jobs and not taking out loans against their accounts. Also, Fidelity noted that the 401(k) millionaires held 76 percent of their savings in equity mutual funds.

Money matters are easy to botch, but here's the one blunder U.S. adults feel the worst about.
By Maurie Backman
May 20, 2018 Closeup of man with serious expression

When it comes to money matters, we all have our share of regrets. Some people wish they hadn't taken on quite so much student debt. Others lament taking on too much house and struggling with their bills as a result. But if there's one mistake Americans are really bemoaning, it's not saving for retirement early enough. That's the latest from a Bankrate survey, which found that while workers on a whole are in bad shape retirement-wise, an estimated 40% of older employees don't have any retirement savings at all.

If you're looking to retire comfortably, you should know that Social Security alone won't pay your bills. Rather, you'll need savings of your own to maintain a reasonable standard of living. So no matter where you are in your career, it's time to start saving as much as you can, as soon as you can. Otherwise, there's a good chance you'll be kicking yourself down the line.

The importance of saving early
If you're fairly young, you may be wondering what the rush is to save for retirement. After all, you have your whole career ahead of you. But it's this line of thinking that's already gotten so many older workers into trouble. Remember, while your income might go up as you progress in your career, thereby opening the door to more savings opportunities, your expenses are likely to follow suit. Therefore, if you think your 20s or 30s are a bad time to start building a nest egg, what with your nagging student loan and credit card payments, just wait until your 40s and 50s, when mortgage costs, home repairs, and college tuition for your own kids start eating up a large chunk of your income.

If You Itemize Your Deductions, It's Time For A Checkup On Your Taxes

By Kelly Phillips
May 18, 2018

Did you itemize your deductions on a Schedule A last year? If so, the Internal Revenue Service (IRS) encourages you to do a quick checkup on your taxes. By plugging your current tax data into the withholding calculator on the IRS website, you can do a "paycheck checkup" and avoid any nasty surprises at year end.

Why the need for the checkup? There have been many changes as a result of tax reform. The Tax Cuts and Jobs Act, which was signed into law in 2017, mostly took effect for individual taxpayers beginning in the 2018 tax year. Significant changes to itemized deductions could affect your tax bill. Those changes include new tax rates, limits on the deductions for state and local taxes (SALT taxes), a cap on the amount that you can borrow for purposes of the home mortgage interest, and exclusions for certain kinds of job-related expenses.

In addition, the new law affects the way that sole proprietors and pass-through entities are taxed. Depending on your income level and occupation, some of your income might be subject to a deduction of up to 20% of business-related income.

Is It Too Soon to Tap Your Retirement Funds?

By Maurie BackmanSenior couple looking at documents
May 19, 2018 

You've spent years socking money away month after month, and now you're ready to access the cash you've accumulated in your IRA or 401(k). But withdrawing funds at the wrong time comes with consequences that you'll need to consider before you start tapping those accounts. With that in mind, here are a couple of reasons to consider waiting before taking money out of a retirement plan.

1. You're not yet 59 1/2
Your IRA or 401(k) is supposed to serve as a source of retirement income, so the IRS doesn't want you to start withdrawing funds until you're at an age where you might conceivably retire. In the agency's mind, that age is 59 1/2, which means that if you access your money before then, you'll incur a 10% early-withdrawal penalty on whatever amount you remove.

There are some exceptions to this rule. If you withdraw up to $10,000 from your IRA before 59 1/2 to purchase a home for the first time or use your money to pay for higher education, you won't get hit with that 10% penalty. Similarly, if you have a 401(k) but then separate from the company sponsoring it in the year you turn 55 or later, you can take penalty-free withdrawals from that plan, even if you're not yet 59 1/2.

Finally, if you're housing your savings in a Roth IRA, you can withdraw your principal contributions at an early age without penalty. (The logic behind this is that you never received a tax break on that money, so there's no penalty for removing it early.) Otherwise, you'll need to wait until 59 1/2 to avoid being penalized.

Mortgage applications fall for the sixth straight week

By Glenn McCullom
May 16 2018Mortgage applications slide

Mortgage applications decreased by 2.7% and fell for the sixth straight week as key interest rates fell slightly, according to the Mortgage Bankers Association.

"Treasury rates increased very slightly over the week, as the general sentiment was that inflation in April was not as strong as expected, despite a solid economic outlook," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.

The MBA's Weekly Mortgage Applications Survey for the week ending May 11 found that the refinance index decreased 4% from the previous week to its lowest level since August 2008. The refinance share of application activity decreased to 35.9% from 36.3% the previous week.

The seasonally adjusted purchase index decreased by 2% from one week earlier and the unadjusted purchase index decreased by 2% compared to the previous week and was 4% higher than the same week one year ago.

50 Ways The World is Getting Better

By Ben Carlson
April 26, 2018

You don’t have to look too far to find negativity these days.

Just watch the news, go on social media, or even have conversations with friends, family members, or co-workers.

You’ll likely hear or read about political instability, natural disasters, murder, disease, or an endless list of bad news you can find 24/7 because of the free flow of information. Every year people label the current year the worst year ever but these people have obviously never read a history book.

The combination the negativity and availability bias make it easy to assume the world is getting worse on a daily basis. It feels as if we’re now taking one step forward and two steps back.

In reality, this is the greatest time in history to be alive. The world has seen an unbelievable amount of progress over almost any time horizon you look at. It’s just that bad news is an event or headline while good news is a process or statistic. Bad news makes for a better story and stories are what stick with us, not statistics.

7 Steps to Pay off Debt in Retirement

Rachel Hartman
May 17, 2018

If you’ve entered retirement with a mortgage, credit card balance or car loan, it may seem tough to tackle the debt on a fixed income. The advantage you have is time: You can use free hours to improve your financial situation. Work up a plan and follow it to wipe out debt. Here are some steps you can take to pay off loans and enjoy the remainder of your retirement days debt-free.

Look over your accounts. If you’re not sure how much debt you have, start by adding up all loans, mortgages and credit card bills. Then check the interest rates attached to each balance. “The first thing to remember is that debt isn’t always bad in retirement,” says Andrew Zimmer, a certified investment management analyst at Overland & Shanahan Wealth Advisors in San Diego. “For example, if you have a 0 percent interest auto loan, don’t pay it off to get out of debt, just keep making minimum payments.” Another potential good debt is your mortgage, because you might be able to take advantage of the interest deduction on your tax return.

Credit cards usually have the highest interest rates, while other loans might have lower rates. “If the interest rate on your debt is 1 to 3 percent, and your investment portfolio’s expected annual rate of return is 4 to 6 percent, then you might consider making payments in order to allow investments to grow,” Zimmer says. “If the debt interest rate is comparable to or more than the investment portfolio’s expected annual rate of return, then it’s likely better to pay off the debt.”

How Well-Funded are Pension Plans in Your State?

Katherine Loughead
May 17, 2018

Pensions Funding Ratio Tax Foundation

Recently released data from The Pew Charitable Trusts shows the strain on state retirement systems across the nation as state pension funds strive to keep pace with pensions owed to public employees.

As of fiscal year (FY) 2016 (the most recent data available), states reported a combined $1.4 trillion in state pension plan funding deficits. Below-expected returns on investment and insufficient state allocations contributed to widening shortfalls in numerous states since we reported on the FY 2014 data last year.

This week’s map uses FY 2016 data to show the funded ratio of public pension plans by state, calculated by measuring the market value of state pension plan assets in proportion to each state’s accrued pension liabilities. Lower funded ratios indicate when a state’s pension plan is not adequately funded, while higher funded ratios are evident in states whose pension assets are keeping relatively good pace with accrued liabilities. 

The nonprofit sector is the third largest employer in America

By Ben Paynter
May 14, 2018

Nonprofits talk a lot about their missions to do good and change the world, but the collective might of these groups has strengthened quality of life within the U.S. another way: As a sector, the nonprofit world represents the country’s third largest employer.

Nearly 12 million people work for various social good groups. By comparison, just over 12 million labor in manufacturing, and another 16 million earn paychecks from retail trade. Among nonprofits, more than half of those jobs are in health care, with social services and education also accounting for a large share.

Charitable Giving Tax Deduction Act

Matt Hadro
May 11, 2018

A bipartisan bill, the Charitable Giving Tax Deduction Act, was introduced today by Congressman Chris Smith (R-NJ) with Rep. Henry Cuellar (D-TX) as an original co-sponsor, to protect taxpayers and encourage charitable giving.

“Charitable organizations, including churches, synagogues, and other religiously-based entities, are the life-blood of services to those in need in our society, and I am committed to a tax policy that amplifies their ability to serve our community,” said Rep. Smith. “Americans have been generous patrons of charitable causes, and we want to ensure that everyone has the support they need to continue their generosity to charitable and philanthropic causes.”

“It is always important to give back to the community,” said Congressman Cuellar. “This bipartisan bill not only encourages us to help our fellow neighbors, but it also makes sure that taxpayers can receive their due deduction for charitable giving if they choose not to itemize. I am glad to support this legislation that will encourage charitable actions.”

Smith’s bill would make charitable tax deductions universal and “above-the-line,” allowing all taxpayers the option to write off charitable donations on their taxes whether or not they choose to itemize, providing maximum relief for those looking to donate to tax-exempt charitable organizations. The amount of charitable contributions would not be capped under Smith’s legislation.

Americans Unfamiliar With 529 Plans

By Lee Barney
May 14, 2018

Only 29% of Americans know that 529 plans are an education savings tool, Edward Jones found in a survey. This is down from 32% in 2017. 

Given three other options as to what a 529 plan is, 17% said it is a retirement savings plan, 11% said it is a form of life insurance, and 9% said it is a low-cost health plan.

“It’s concerning to see the percentage of individuals who still don’t know what a 529 plan is or understand its usefulness in preparing to tackle education expenses,” says Danae Domian, an Edward Jones principal. “A 529 plan is a tax-advantaged savings plan, available to anyone, that is designed to encourage preparation for future education costs. There’s a misperception that only parents can establish these plans. But, in reality, any person can set up a plan for any student.”

However, 35% of Gen Xers and 27% of Millennials know what a 529 plan is. The survey also found that awareness increases as household income rises, with 52% of those in a household earning $100,000 or more correctly identifying a 529 plan. By comparison, only 17% of those with less than $35,000 in household income could do the same.

The Big Threat To Your 401(k): Student Loan Debt

By Ashlea Ebeling 
May 14, 2018

What does student loan debt have to do with retirement? A lot. Student loan debt is eating into Americans’ 401(k)s, threatening retirement security. “For young people, it’s a growing problem,” says Craig Copeland, senior research associate at the Employee Benefit Research Institute.

401(k) workplace retirement plan balances are lower for those with student loan debt than for those without it, Copeland found in new research he unveiled at an EBRI policy forum last week. Families ages 45 to 54 without student loans have a median 401(k) balance of $80,000 versus just $46,000 for those with student loans. Families with heads younger than 35 without student loans have a median $11,000 401(k) balance versus $8,000 balance for those with student loans.

Student loan debt is a problem across all ages and all income levels. In 2016, 26% of families had outstanding student loans, up from 12% in 2001. But that overall number masks what’s going on for young people, Copeland says. For families with heads under 35, it’s pushing towards half that have student loan debt.

Here's Why You Should Check Your Work Email First Thing in the Morning

By Robin Madell
May 14, 2018  

Nearly every productivity top-10 list recommends quashing the urge to start your day, smartphone in hand, with a peek at your inbox when you wake up. One point that's often given for avoiding the habit of the early-morning email check is based on the belief that looking at it as your first act of the day puts outside agendas ahead of your own. Another reason commonly trotted out is the assumption that reviewing and composing email are more mindless activities that should be saved for later in the day, after you've channeled your best morning energy toward your most important tasks.

While there are certainly compelling reasons to follow the crowd with this advice, it isn't quite that straightforward. What you do for a living, the kind of job you have, whom you work with and your professional goals should all play a role in your decision-making about whether or not it makes sense to prioritize email before breakfast or save it as an after-lunch task. The fact is that it often makes sense to at least graze your inbox before moving on with other planned items on your calendar and to-do list.

Fewer Americans Renounce Citizenship, But Taxes Still Drive Them

By Robert W. Wood 
May 14, 2018

For the first time in five years, the number of Americans who renounced their citizenship fell slightly in 2017 (5,133) from the previous year (5,411), which had been a record. The total for the first quarter of 2018 was 1,099. In recent years there has been a marked upswing in expatriations, and tax considerations are often at least a part of the equation. Moreover, these published numbers are probably lower than the actual number of those who expatriated. How complete these lists are remains unclear. Despite the official list, many leavers are not counted, and both the IRS and FBI track Americans who renounce. 

The figures for recent years show an important trend. The total for calendar year 2016 was 5,411, up 26% from 2015, which had 4,279 published expatriates. The 2015 total was 58% more than in 2014. The reasons for renouncing can be family, tax and legal complications, and some renouncers write why they gave up their U.S. citizenship. Expats have long clamored for tax relief. One law motivating some is FATCA, the Foreign Account Tax Compliance Act. FATCA has been ramped up worldwide, and requiring an annual Form 8938 filing if your foreign assets meet a threshold.

Tax Considerations For Business Owners In The Cryptocurrency Space

By Bryce Welker
May 14, 2018

The blockchain has completely dominated the news cycle for the last quarter of 2017 and is looking to do the same for the first quarter of 2018. Bitcoin and Ethereum, two forms of blockchain-based virtual currency that were only spoken of in nerdy subcultures only a few years ago, have suddenly become household names. With tales of massive fortunes being amassed through the buying and selling of these coins, everyone is looking to get a piece of the pie in this gold rush for the 21st century.

Part of the reason for the staggering highs that these blockchain-based currencies have achieved is the lack of regulation. As a radically new and decentralized form of currency, Bitcoin and altcoins like it have been subject to market surges and crashes that may have been manipulated artificially by bad players. If cryptocurrency is to replace fiat currency as the dominant holder of value, it’s going to need to address this complete lack of regulation.

IRS adjusts health savings account limits for 2019

By Michael Cohn
May 11, 2018An American flag flies outside the Internal Revenue Service headquarters at sunrise in Washington, D.C.

The Internal Revenue Service has issued a revenue procedure providing the 2019 inflation-adjusted amounts for health savings accounts.

In Revenue Procedure 2018-30, the IRS said the annual limitation on deductions for an individual with self -only coverage under a high deductible health plan is $3,500 for calendar year 2019. Also for next year, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,000.

A “high deductible health plan” is defined as a health plan with an annual deductible of no less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co- payments, and other amounts, but not premiums) don’t exceed $6,750 for self-only coverage or $13,500 for family coverage for 2019.

10 Financial Scams to Avoid in Retirement

By Rachel Hartman
May 9, 2018 Senior Woman Giving Credit Card Details On The Phone

Those who have saved consistently are likely to enter retirement with      a large nest egg. While your accumulated savings can provide a comfortable living, this strategy also has certain risks. Predators know that many retirees have spent years saving, and thieves set up specific schemes geared toward seniors. Here are some common scams to be aware of in retirement, as well as what to do to protect your finances.

1. Medicare scams. A person calls you or knocks on your door and claims to be a Medicare representative. You’ll then be asked to share personal information, including an insurance identification number. Once you share this information, the scammer will use it to bill Medicare for fake services, and then pocket the money. “If someone says you need a replacement Medicare card or that you need a new supplemental policy, hang up the phone or close the door,” says Justin Lavelle, chief communications director of BeenVerified, an online background check platform. Medicare will not be calling individuals about the new Medicare cards that will be mailed out in 2018 and 2019, and there is no charge for the updated card.

Planning for a Secure Retirement

Penelope Wang
February 8, 2018

Retirement planning has always been full of uncertainties: How much longer will you be able to work? How much savings will you have when you stop working? How many decades will that money need to last? But for anyone nearing retirement, or already there, the level of uncertainty has rarely been greater than it is right now.

Most significantly, Congress and the White House have been overhauling many rules that have a big impact on consumers generally and retirement savers in particular. One of the most sweeping changes is the new tax law that will greatly limit deductions and other breaks. That could have a major impact on your taxable income.

Restaurant tips rule change could short-change wait staff

Kay Bell
February 4, 2018

Daily Kos petition against Trump Labor Department tip pooling rule change

If you're going to a restaurant or bar today to watch the Super Bowl instead of to your buddy's for an LII party, tip your servers well.

They soon could be losing their gratuities.

That's the worst-case scenario feared by wait staff and employee advocacy groups under the Trump Administration's effort to reinstate tip pooling.

Five Things You Need To Know About Identity Theft And Tax Returns

Kelly Phillips Erb
February 2, 2018

With tax season in full swing, identity-theft-related tax fraud has become a hot topic. While taking steps to protect yourself from identity theft is always smart, it's important that you don't get too caught up in the hype. I've received a number of emails from panicked taxpayers who, after watching various news spots on the dangers of identity-theft-related tax fraud, are feeling confused and pressured. Unfortunately, some of the advice making the rounds - while certainly sensational - isn't very practical. Here are five things you need to know about identity theft and tax returns:

1. Not all data breaches or computer hacks result in identity-theft-related tax fraud.

If you've maxed your 401(k), here's another way to save big

Darla Mercado
February 1, 2018

A doctor demonstrates an app on an iPad to review medical tests of one of his patients at Northwest Medical Center in Margate, Florida.

Financial advisors don't have to look far for the next big growth opportunity: It's right in clients' health-care plans.

Say hello to the health savings account, which works in tandem with high-deductible health insurance.

HSAs offer a triple-tax benefit: Assets in them grow free of taxes. Savers can contribute to them on a pretax or tax-deductible basis. Finally, account holders can tap the assets free of taxes, provided the money goes toward qualified medical expenses.

3 tax moves to make in February 2018

Kay Bell
February 1, 2018

OK, I took some liberties with the traditional poem. But it is true that despite its reduced days, February still provides plenty of time to make some key tax moves.

Here, since it is a short month, are three.

Planning for a Secure Retirement

Penelope Wang
February 1, 2018

Retirement planning has always been full of uncertainties: How much longer will you be able to work? How much savings will you have when you stop working? How many decades will that money need to last? But for anyone nearing retirement, or already there, the level of uncertainty has rarely been greater than it is right now.

Most significantly, Congress and the White House have been overhauling many rules that have a big impact on consumers generally and retirement savers in particular. One of the most sweeping changes is the new tax law that will greatly limit deductions and other breaks. That could have a major impact on your taxable income.

Most tax statements should be at least on their way today

Kay Bell
January 31, 2018

Every tax season, the April filing deadline gets the most attention. But today, Jan. 31, also is a big tax day. It's when most statements with information you need to complete your Form 1040 (or 1040A or 1040EZ) are supposed to be delivered.

Technically, the Internal Revenue Service gives these information statements the same leeway it offers filers on Tax Day. Earnings and other tax-related statements due today are considered on time as long as they're on the way, either electronically (if you agree to that delivery method) or via snail mail by Jan. 31.

Timing Tax Savings With Deduction Lumping And Charitable Clumping

Michael Kitces
January 31, 2018

Consolidated Standard Deduction In 2018 Under TCJA Vs Prior 2017 Law With Personal Exemptions

Congress allows taxpayers to claim various tax deductions that will reduce their taxable income. In some cases, the deductions are intended as tax incentives to encourage certain behaviors (e.g., deductions for charitable giving); in other cases, they’re tax subsidies to mitigate the net after-tax cost (such as the deduction for mortgage interest or various miscellaneous itemized deductions).

To simplify the tax filing process, all taxpayers have the option to simply claim a “Standard Deduction” – literally, a standardized dollar amount, depending on your tax filing status, that is available to virtually everyone. In 2017, these thresholds were $6,350 for individuals, and $12,700 for married couples (plus an additional standard deduction for those who are blind, or over age 65).

Tax Reform Moves to the States: State Revenue Implications and Reform Opportunities Following Federal Tax Reform

Jared Walczak
January 31, 2018

 Income Starting Points on the Federal Form

Key Findings

  • States incorporate provisions of the federal tax codes into their own codes in varying degrees, meaning that federal tax reform has implications for state revenue beyond any broader economic effects of tax reform.
  • Because the base-broadening provisions of the new federal tax law often flow through to states, while the corresponding rate reductions do not, most states will experience a revenue increase. The vast majority of filers will receive a tax cut at the federal level, but they could easily see a state tax increase unless states act to prevent one.

After 45 Birthdays, Here Are '12 Rules for Life'

Megan McArdle
January 30, 2018

Yesterday was Jan. 29, meaning that Oprah Winfrey and I are each a year older: 64 and 45.

Forty-five is somehow a very definite year; there is no question that you aremiddle aged.

Voices Pros and cons of the new tax law for real estate owners

Heidi Henderson
January 30, 2018

A copy of the "Tax Cuts and Jobs Act," a 1,097-page Republican tax bill, including 503 pages of legislative text.

The new tax laws have both experts and amateurs pouring over the details as the upcoming tax season dawns. For real estate owners, however, there's one surefire boon: bonus depreciation.

Under the prior law, there was a 50% bonus depreciation for property placed in service in 2017, 40% for 2018, and 30% for 2019. Qualified property has to be new, not used.

Alicia Munnell: The Social Security Fix No One Wants

Jane Wollman Rusoff
January 30, 2018

Soon-to-be retirees should keep three crucial pieces of advice in mind, Munnell says.

Most retirees’ eagerly anticipated golden years will be tarnished by insufficient income and a consequential decline in standard of living unless consumers and policymakers get cracking now to avert this bleak scenario.

So says Alica H. Munnell, professor of management sciences at Boston College and director of its Center for Retirement Research, who, in an interview with ThinkAdvisor, discusses three critically important pieces of advice financial advisors can give clients who are nearing retirement.

House Passes Senior Safe Act

Melanie Waddell
January 29, 2018

The U.S. House of Representatives passed H.R. 2255 legislation, which includes The Senior Safe Act, late Monday to help protect seniors from financial exploitation.

Both H.R. 2255, the Housing Opportunities Made Easier (HOME) Act, and the Senior Safe Act (formerly H.R. 3758), had been standalone bills.

5 Things Your Kids Should Know Before They Inherit Your Money

Matt Hausman
January 29, 2018

An inheritance shouldn't come as a big surprise to your beneficiaries. They need to be prepared for the gift, and the taxes and decisions that come with it. So even if it's awkward, you need to have a chat.

Many parents fail to get their financial affairs in order, neglecting to take care of such things as wills, living wills and powers of attorney. But even those who think they’ve covered all of their estate-planning bases often leave one of the most important tasks undone: They fail to talk to their adult children about the money they’ll be leaving them someday.

Americans will need $1.5M to retire comfortably

John Aidan Byrn
January 27, 2018

They’ve moved the goal posts for Americans hoping to score a financially-sound retirement — and millions of workers are going to be irked.

You’re now going to need a minimum of about $1.5 million to retire comfortably — not the cool $1 million that had been prescribed for decades.

You can thank the fact that Americans are living longer, interest on savings is low and that Social Security is no longer a foregone conclusion, according to Rebecca Walser, a tax lawyer and certified financial planner.

As Tax Season Kicks Off, Here's What's New On Your 2017 Tax Return

Kelly Phillips Erb
January 27, 2018

There has been a great deal of information about the new tax reform law and what it means for the current tax year. But with tax season for the 2017 tax year just around the corner, taxpayers want to know what’s new for 2017. Here’s what you need to know about changes to your 2017 tax returns (the one you’ll be filing beginning on Monday):

Do I have to file a federal income tax return?

Three high-tax states sue to fight legislation that cuts deductions

Ben Popken
January 26, 2018

Homeowners in areas with high state and local property taxes are hopping mad after the new federal tax bill passed — and now Democratic governors in some of those states are fighting back.

New Jersey and Connecticut joined New York in suing the federal government over the new GOP-led tax overhaul plan signed by President Donald Trump just before Christmas. The plan would cap the deductions taxpayers can take for their state and local taxes, or SALT, including their property taxes, at $10,000 — less than half what New Jersey's average property owner currently claims.

Californians Love Living in Oregon, Study Shows. Oregonians Want to Live Someplace Else.

Elise Herron
January 26, 2018

Portland's housing crunch, and the fight over whether to solve it by building into the sky, made WW's front page this week. The failure of Portland to build apartments to keep up with demand has caused many to blame at a familiar scapegoat: transplants moving here from out of state.

But an illuminating new study shows that Oregonians are moving out of the state just as frequently as people from other states are moving in.

It’s Tax Time: What to Remember

Ann Carns
January 26, 2018

Tax season officially opens next week, so it’s time to get your documents organized if you haven’t already.

The Internal Revenue Service will officially begin accepting individual returns on Monday. You can file earlier, however, if you’re ready and have all the necessary forms, like the W-2 income statement from your employer. If you want yours to be among the nearly 155 million individual returns the I.R.S. receives this year, you can prepare it now using do-it-yourself software — or have it done by a professional tax preparer — and have the form sent automatically when the agency opens for business next week.

It has been 20 years now — are you taking advantage of a Roth IRA?

Russ Wiles
January 25, 2018

Envelope marked Roth IRA with $100 bills in it, and eyeglasses nearby.

Roth Individual Retirement Accounts have been around 20 years now, which is long enough for most Americans to have gotten familiar with them. But a lot of people still don't own one of these accounts or hold relatively small balances, despite their substantial tax benefits.

"Not enough people are taking advantage of them," said Ed Slott, a retirement-account specialist in suburban New York City who publishes an online newsletter devoted to IRAs of both the traditional and Roth variety.

The top retirement decisions facing older workers

Steve Vernon
January 25, 2018

As workers in their 50s and 60s transition into their retirement years, they face several important planning decisions. But which ones will have the most impact on their finances? 

You might think that finding the very best investments or minimizing taxes are really important. However, those would be the wrong answers for many middle-income workers.

How High Are Cigarette Tax Rates in Your State?

Colin Cook
January 25, 2018

Cigarette Tax Rates 2018

For this week’s map, we take a look at cigarette tax rates across the nation and how they vary from state to state. Each state’s cigarette tax is levied in addition to the federal tax rate of $1.0066 per 20-pack of cigarettes.

Connecticut and New York share the highest tax rate with $4.35 per pack, trailed by Rhode Island ($4.25), Massachusetts ($3.51), and Hawaii ($3.20). Conversely, Missouri has the lowest rate at 17 cents per pack, followed by Virginia ($0.30), Georgia ($0.37), and North Dakota ($0.44). The average tax rate among states is $1.70 per pack.

Who can take the new business tax deduction? Even tax experts aren't sure

Jeanne Sahadi
January 25, 2018

That's because there are many unanswered questions about a major business tax break under the new tax law: A 20% deduction on business income for owners, partners and shareholders in so-called pass-through entities -- e.g., S-corps, LLCs, partnerships and sole proprietorships.

Not everyone will qualify. And if they do, the deduction may apply to a smaller percentage of their income than they'd expect.

U.S. Existing-Home Sales Fall as Supply Drops to Record Low

Katia Dmitrieva
January 24, 2018

Sales of previously-owned U.S. homes fell in December for the first time in four months, as the market struggles with record-low supply and rising prices, figures from the National Association of Realtors showed Wednesday.

Key Takeaways

The decline, deeper than economists estimated, indicates inventory issues across the U.S. are limiting Americans’ ability to purchase despite low mortgage rates and a solid job market. The low supply reflects a confluence of trends: New construction hasn’t kept up with housing needs; baby boomers are living longer and more often aging in place; and single-family homes that might have been purchased by first-time buyers are instead being rented out by investors who gobbled up foreclosures after last decade’s crash.

Do You Need To File A Tax Return In 2018?

Kelly Phillips Erb
January 24, 2018

Tax season opens on Monday, January 29, 2018. The Internal Revenue Service (IRS) expects to process nearly 155 million individual tax returns in 2018. Will you be filing one of those returns? And more important, do you need to?

For the 2018 tax filing season, you'll report the income and corresponding deductions for the tax year 2017. That includes pay received in 2017 but not pay that you receive in 2018 for services performed in 2017 (you'll report that income next year).

Here's how much your home remodel will pay you back

Diana Olick
January 24, 2018

As home prices and mortgage rates rise, more and more homeowners are choosing to stay put and remodel.

Yet, depending on the project, some of the returns are diminishing. Remodeling spending is expected to approach $340 billion in 2018, a 7.5 percent increase over last year, according to Harvard's Joint Center for Housing Studies.

Government funding bill postpones 3 Obamacare taxes

Kay Bell
January 23, 2017

When Congress overwhelmingly approved — a 266-150 vote in the House, 81-18 margin in the Senate — a bill on Monday (Jan. 22) to fund the federal government, a lot of folks celebrated.

Federal workers, who were off work just one day, of course were happy.

Retirement Risks Keep Rising, and This Is Why

Justin Fox
January 22, 2018

Half of working-age households in the U.S. were on track in 2016 to be able to maintain their standard of living in retirement, according to the National Retirement Risk Index report out this month from the Center for Retirement Research at Boston College. Thanks mainly to rising home values, 1  that's better than in 2010 or 2013. But it still means that half of working-age households aren't prepared for retirement, up from just 30.4 percent in 1989.

The National Retirement Risk Index

Congress Blesses Roth IRAs For Everyone, Even The Well Paid

Ashlea Ebeling
January 22, 2018

It works like this: If you earn more than $120,000 as a single, or $186,000 as a couple, you contribute to a traditional, nondeductible IRA, instead of a Roth.  Then, presto chango, you immediately convert the money in the traditional IRA to a Roth IRA.  Congressional tax writers, in what’s known as a conference committee report, described the move as allowed by current law, legitimizing it. Previously, some tax experts expressed concern that the Internal Revenue Service might argue that the two-step process violates what’s known as the step-transaction doctrine.

“When Congress says what its intent is, that’s it. They absolutely, clearly say it’s okay. You can make a contribution to a nondeductible IRA and convert it to a Roth,” says CPA and IRA expert Ed Slott who publishes the IRA Advisor Newsletter.

Guest column: The importance of having an estate plan

Zachary F. Lamb and Bray Creech
January 21, 2018

Many people perceive estate planning as being only for the ultra-wealthy. We believe, however, that estate planning is really about making sure your wishes are carried out during difficult life events, regardless of your wealth or income level.

Historically, estate planning focused on minimizing estate taxes at death, but here we refer to estate planning as putting a plan in place that is triggered when you die or become incapacitated due to accident, illness or otherwise. 

The New 20% Pass-Through Tax Deduction: An Advisor’s Guide

Jeffrey Levine
January 17, 2018

In December 2017, President Donald Trump signed the Tax Cuts and Jobs Act into law, ushering in the biggest changes to the tax code in more than 30 years.

Among the more significant changes made by the law is the creation of a new 20% deduction for certain pass-through business income. The deduction — sometimes referred to as the 199A deduction, after the section of the Internal Revenue Code in which it can be found — has the potential to reduce some clients’ taxable income by tens, if not hundreds of thousands of dollars.

The IRS Private Debt Collection Program Once Again Looks Like A Failure

Howard Gleckman
January 12, 2018

What’s the old line about “fool me once?” When it comes to privatizing debt collections for the IRS, Congress has now tried to fool American taxpayers for the third time. According to a new report by the agency’s Taxpayer Advocate Service, the outcome is roughly the same as the last two episodes—the agency is spending far more on the program than the firms are collecting and remitting to the Treasury. This time, according to the TAS, the agency spent $20 million in fiscal years 2016-2017 on a program that generated $6.7 million in payments through last October.

Ask The Taxgirl: The $10,000 SALT Cap & Rental Real Estate

Kelly Phillips Erb
January 12, 2018

Taxpayer asks:

Dear Taxgirl,

Would someone who owns business real property in their own name (not in a LLC or Partnership or corporation) and files on Schedule E face the $10,000 cap.

10 cities where housing is still a buyer's market

Bonnie Sinnock
January 12, 2018

No. 10: Houston-The Woodlands-Sugar Land, Texas

A tight housing inventory has led to rising prices and stiff competition for house hunters in much of the country. But in some cities, homebuyers still have the upper hand.

"With reduced inventory and appreciating home prices an issue in much of the country, real estate market conditions are challenging," says Phil Karp, senior manager of brokerage services at "Many markets have become overheated, but there are still markets where smart buyers can find more affordable homes."

Should Tax Reform Change How You Save for Retirement?

Maryalene LaPonsie
January 11, 2018

It's the most sweeping tax reform enacted in decades, but don't expect the Tax Cuts and Jobs Act to significantly change how you save for retirement.

"I don't know that it fundamentally changes the advice we give," says David Brinkman, an investment relationship manager for Schneider Downs Wealth Management Advisors in Columbus, Ohio.

IRS Releases New 2018 Withholding Tables To Reflect Tax Law Changes

Kelly Phillips Erb
January 11, 2018

The Internal Revenue Service (IRS) has updated the income-tax withholding tables for 2018 to reflect changes made by the new tax law. The updated tables reflect the new rates for employers to use during the 2018 tax year. Employers are instructed to use the 2018 withholding tables as soon as possible, but not later than February 15, 2018. Until employers make the switch, they're instructed to use the 2017 withholding tables. That's why your early 2018 paychecks may look a little different than you expect - by the end of February, your check should reflect the changes (the exact timing depends on your employer and your pay period/frequency).

Where Did Americans Move in 2017?

Morgan Scarboro
January 11, 2018

Where Did Americans Move in 2017?

States compete with each other in a variety of ways. Competing to attract and retain new residents is just one example.

United Van Lines tracks its customers’ state-to-state migration and releases the data yearly. By comparing the number of inbound moves to the number of outbound moves, United Van Lines data gives us early insights into annual interstate migration, available much sooner than government data sources.

Tax identity thieves get a head start on 2018 filing season

Kay Bell
January 10, 2018

Some folks are taking seriously the traditional tax advice to start annual tax filing tasks early. Unfortunately, those folks are crooks.

The Internal Revenue Service and its Security Summit partners in state tax agencies and the tax industry have announced that they're seeing early signs that cyber criminals already are working to infiltrate the tax process.

Here’s Five Reasons to Use Direct Deposit for a Tax Refund

January 9, 2018

As taxpayers prepare for the January 29 start of filing season, they should consider a direct deposit of any refunds due. It’s easy, safe, fast — and the best way to get a refund. That’s why 80 percent of taxpayers choose it every year.

IRS Direct Deposit:

  • Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. They can use IRS Free File to prepare and e-file federal returns for free.  Taxpayers who file a paper return can also use direct deposit.

What You Need To Know About Taxes & Cryptocurrency

Kelly Phillips Erb
January 9, 2018

Cryptocurrency is riding high these days. But even as more investors are taking a chance on new currencies like Bitcoin, Ethereum, and Ripple, many are still confused about how to treat it for federal income tax purposes. In 2014, the Internal Revenue Service (IRS) issued guidance to taxpayers (downloads as a pdf) making it clear that virtual currency will be treated as a capital asset, provided they are convertible into cash. In simple terms, this means that capital gains rules apply to any gains or losses. But taxes are rarely simple. Things can get complicated very quickly. Here are the basics:

  • For those taxpayers buying and selling cryptocurrency as an investment, calculating gains and losses are figured the same as buying and selling stock. That's true, as well, when it comes to basis, holding period and a triggering event.

21 Million Taxpayers Will Stop Taking the Charitable Deduction Under The TCJA

Howard Gleckman
January 8, 2018

The Tax Cuts and Jobs Act (TCJA) will shrink the number of households claiming an itemized deduction for their gifts to non-profits from about 37 million to about 16 million in 2018, according to new Tax Policy Center estimates. At the same time, the new law will reduce the federal income tax subsidy for charitable giving by one-third, from about $63 billion to roughly $42 billion.

Overall, the TCJA will reduce the marginal tax benefit of giving to charity by more than one-quarter in 2018, raising the after-tax cost of donating by about 7 percent.

Britain looking at 'latte levy' to reduce coffee cup waste

Kay Bell
January 7, 2018

Kay's Starbucks coffee choices montage

While I make my coffee at home during the week, I'm a Starbucks fan on weekends.

During hot Texas summers, those icy Frappuccinos are heaven. Heck, even in our not-that-cold winters, I get them.

(Note to Starbucks: I sooo missed the Chile Mocha option this past holiday season. This flavor should be a regular, year-round option, especially here in Texas where chile peppers are one of the major food groups. We even have an official state pepper. But I digress. But bring it back, please!)

To Incorporate Or Not To Incorporate: Breaking Down Your Options Under The New Tax Law

Kelly Phillips Erb
January 5, 2018

The Tax Cuts and Jobs Act (TCJA), or what's referred to as the new tax reform law, was signed into law on December 22, 2017. Since that time, taxpayers and tax professionals alike have been mulling what the provisions of the new law might mean - and how to be best get around them. Tops in the minds of many taxpayers: Should I incorporate to save money?

There is no one size fits all answer to this question. But here are some general guidelines:

Trump poised to take action on Medicaid work requirements

Peter Sullivan
January 5, 2018

The Trump administration is preparing to release guidelines soon for requiring Medicaid recipients to work, according to sources familiar with the plans, a major shift in the 50-year-old program.

The guidelines will set the conditions for allowing states to add work requirements to their Medicaid programs for the first time, putting a conservative twist on the health insurance program for the poor.

What Percentage of Lottery Winnings Would be Withheld in Your State?

Morgan Scarboro and Jared Walczak
January 5, 2018

What Percentage of Lottery Winnings Would be Withheld in Your State?

The Powerball Jackpot has hit $550 million and Americans in 43 states and D.C. are lining up for tickets. Sooner or later, there will be at least forty-five big winners of the current Powerball game, and forty-four of them are already known. That’s because only about half of Powerball ticket revenue is returned in the form of prizes, which is lower than the average for other lottery games. The rest of the jackpot, less the consortium’s administrative costs, fills the coffers of the forty-four states participating in Powerball.

Taxes as Charity? New Jersey Towns Try to Elude G.O.P. Tax Law

Nick Corasaniti and Alan Rappeport
January 5, 2018

FAIR LAWN, N.J. — Faced with a new federal tax law that limits state and local tax deductions, three communities in New Jersey have come up with a novel solution: They want people to donate to a town-run charity as a way of mitigating their property taxes.

The three towns — Paramus, Park Ridge and Fair Lawn — announced on Friday that they would allow residents to donate the same sum they would have been charged in property taxes to pay for municipal services. Under the tax bill signed by President Trump last month, deductions for state and local taxes, including property taxes, are limited, but charitable donations are not.

Tax Law Changes You Haven’t Heard

Keith Schroeder
January 5, 2018

Plenty has been written about the recent tax bill. Most news reports repeat the same information. I want to expand on what is widely known to include some lesser opportunities to reduce taxes and pitfalls most people (and many tax professionals) are unaware of.

This post will cover a wide variety of tax issues that are changing. It will repeat a few facts published here and here previously.

State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

Jared Walczak
January 5, 2018

Key Findings

  • Several states are exploring strategies to preserve the full state and local tax deduction for high-income residents, which is capped at $10,000 under the new tax law.
  • In California, legislation has been filed to allow residents to make contributions in lieu of taxes, making a voluntary contribution to a new California Excellence Fund and then claiming the full amount as a credit against state income tax liability, since the state and local tax deduction is capped but the charitable deduction is not.

Economy adds 148K jobs in December

Vicki Needham
January 5, 2018

The U.S. economy added a modest 148,000 jobs in December, below expectations, but the figure caps off the seventh consecutive year of annual employment growth above 2 million, the longest streak since the web boom of the 1990s.

The unemployment rate held at 4.1 percent for the third straight month, the lowest level since December 2000, when it was 3.9 percent, as the economy maintained steady growth through a series of major hurricanes late in the summer, the Labor Department reported on Friday.

State governments are already gaming the Republican tax overhaul

Patrick Clark, Bloomberg News
January 4, 2018

SALT deduction biggest loser states

Before the ink was dry on the Republican tax bill signed into law late last month, experts predicted that state governments would try to shield their residents from tax hikes they’ll suffer from a sharp reduction in state and local deductions.

It didn’t take long.

Give Your 401(k) a New Year's Checkup

Rebecca Lake
January 3, 2018

Have you thought about your 401(k) lately? A 2017 survey from Scarborough Capital Management found that 43.6 percent of retirement savers spend just one to two hours per year managing their workplace plan. A little more than 25 percent said they lacked basic know-how about their 401(k).

If you've been more hands-off than hands-on with your plan, the beginning of a new year is a prime opportunity to check in and see how your portfolio is progressing.

Nonprofits Must Move Swiftly to Fight for Sound Public Policies

Tim Delaney and David L. Thompson
January 3, 2018

The destructive tsunami the new federal tax law unleashes is about to pound the nation’s nonprofits and foundations. The law that Congress passed and the president signed in the waning days of 2017 has created the most dangerous policy environment across the state, local, and federal levels that we’ve ever seen in the decades we’ve spent focusing on how governments and nonprofits interact.

That may sound like hyperbole. It is not.

When To Take Social Security – A Pro/Con

Cory S. Fawcett
January 3, 2018

Surgeon, physician, and blogger Cory S. Fawcett published a blog post a few months ago advocating that physicians take their Social Security as soon as they can. I told him that I thought he blew it with that post but thought it might make for a very interesting Pro/Con post on the site if I wasn’t able to change his mind. We set up the ground rules so that we were both operating from similar assumptions with our numbers. We assumed a single doctor who had made $200K a year during his career and was stopping work at age 62 with a $2M nest egg composed of 60% tax-deferred money, 30% taxable money, and 10% Roth money. This doctor was facing a decision of whether to start taking Social Security right then or delay it to 70. We’ll start with Dr. Fawcett’s post.

Take Your Social Security At Age 62 – Dr. Cory S. Fawcett

Early Retirement Aligns With Early Death, Study Finds

Emily Zulz
January 2, 2018

(Photo: AP)

Many Americans choose to claim Social Security as soon as possible.

Social Security eligibility begins at age 62, and approximately 31% of all Americans begin claiming Social Security in their first month of eligibility, with men and women doing so at similar rates.

What to do with math error notice letters from the IRS

Russell Zhaochu Li, Ph.D.; Clement Chen, CPA, Ph.D.; and Keith Jones, CPA, Ph.D. 
January 1, 2018

What to do with math error notice letters from the IRS

In 2015, the IRS received more than 146 million individual tax returns and audited 1.2 million of them, a mere 0.8% (IRS 2016). At the same time, the IRS found more than 2.17 million math errors from individual tax returns and sent more than 1.67 million math error notice letters (some returns have more than one error). What are these math errors, and how should taxpayers and tax practitioners respond to them?


Op-Ed The GOP tax plan creates one of the largest new loopholes in decades

Lily Batchelder and David Kamin
December 31, 2017

The tax plan that President Trump signed into law last week creates one of the largest new loopholes in decades: a 20% deduction for “pass-through income.”

Pass-through income is business income that is immediately “passed through” to the owner’s personal tax return, thereby avoiding the corporate income tax. Proponents of the Republican tax plan claim the cut benefits small businesses, but that’s a red herring. In reality, the new deduction disproportionately benefits the wealthy, penalizes workers and, in part because it is so complex, will ultimately reward those who can afford the best tax advice.

Legal Weed Isn’t The Boon Small Businesses Thought It Would Be

Lester Black
December 29, 2017

The business of selling legal weed is big and getting bigger. North Americans spent $6.7 billion on legal cannabis last year, and some analysts think that with California set to open recreational dispensaries on Jan. 1 and Massachusetts and Canada soon to follow, the market could expand to more than $20.2 billion by 2021. So it’s no surprise that you see eager business people across the country lining up to investmillions of dollars in this green rush.

But here’s a word of warning for those looking to dive head-first into these brand-new legal weed markets: The data behind the first four years of legal pot sales, with drops in retail prices and an increase in well-funded cannabis growing operations, shows a market that increasingly favors big businesses with deep pockets. As legal weed keeps expanding, pot prices are likely to continue to decline, making the odds of running a profitable small pot farm even longer.

IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017

December 27, 2017

WASHINGTON - The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.

The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018.  A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.  State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

10 Relatively Stress-Free Year-End Moves To Make To Save On Taxes After Tax Reform

Kelly Phillips Erb
December 23, 2017

At year-end, there's generally a flurry of last-minute efforts to reduce tax bills. However, with tax reform now law (you can read about some of the provisions now), taxpayers are stressing more than usual this year over what to do to avoid writing a big check for the 2017 tax year - and not be caught off-guard in 2018. Many questions involve some pretty serious changes like, "Should I incorporate?" or "Should I capitalize my business?" But you don't have to make monumental changes in your lifestyle to see a little extra change in your pocket come tax time. Here are ten relatively stress-free year-end moves to make to save on taxes after tax reform:

1. Give To Charity.

Trump's tax law creates new challenges for IRS

Naomi Jagoda
December 23, 2017

The Republican tax bill is the law of the land — but for federal officials, the work is just beginning.

The Treasury Department and the IRS now have a mammoth task on their hands as they seek to turn the sweeping tax provisions passed by Congress into new rules and regulations.

Charities fear tax bill could turn philanthropy into a pursuit only for the rich

Todd C. Frankel
December 23, 2017

Many U.S. charities are worried the tax overhaul bill signed by President Trump on Friday could spur a landmark shift in philanthropy, speeding along the decline of middle-class donors and transforming charitable gift-giving into a pursuit largely left to the wealthy.

The source of concern is how the tax bill is expected to sharply reduce the number of taxpayers who qualify for the charitable tax deduction — a big driver of gifts to nonprofits. One study predicts that donations will fall by at least $13 billion, about 4.5 percent, next year. That decline is expected to be concentrated among gifts from the middle of the income scale. The richest Americans will mostly keep their ability to take the tax break.

TPC Shows How The New Tax Law Would Affect Different Households

Howard Gleckman
December 22, 2017

Yesterday, the Tax Policy Center released a new online tax calculator that allows you to compare the  Tax Cuts and Jobs Act with the current tax law. Today, TPC is releasing a set of new case studies that show how the new law will affect households in different situations.

The examples show what the law will mean for singles versus married couples, for people with wage income compared to those who own their own businesses, and for those who live in high-, low- and moderate tax states.

Bitcoin Sellers Cut Taxes By Moving Before Sale

Robert W. Wood
December 21, 2017

Bitcoin has captured the hearts and wallets of techies everywhere, and the returns have been positively heady. But taxes can be painful too. At the start of the crypto craze, it seemed anonymous. But now, the IRS is getting Coinbase customer data. It now seems practically mainstream, with futures and institutional investors. And on the subject of taxes, many a Bitcoin millionaire may be thinking like their forefathers did with appreciated stock. In general, shares of stocks are considered intangible assets for tax purposes. One effect of that rule is that, for tax purposes, you can take them with you when you move. If you live in California and sell your stocks and bonds, they are sourced to California where you reside for tax purposes.

What Your Itemized Deductions On Schedule A Will Look Like After Tax Reform

Kelly Phillips Erb
December 20, 2017

With all of the focus on new tax rates after Congress green-lighted tax reform (you can see those new rates here), it's easy to forget that some of the biggest changes don't have anything to do with tax rates: They're about deductions.

For 2018, the standard deduction amounts will increase from $6,500 for individuals, $9,550 for heads of households (HOH), and $13,000 for married couples filing jointly, to $12,000 for individuals, $18,000 for HOH, and $24,000 for married couples filing jointly. Most taxpayers will claim the standard deduction.

How tax overhaul would change business taxes

Alistar M. Nevius
December 20, 2017

The tax reform bill that Congress voted to approve Dec. 20 contains numerous changes that will affect businesses large and small. H.R. 1, known as the Tax Cuts and Jobs Act, would make sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings.

Here are many of the bill’s business provisions.

CHART: How The Final Version Of The Republican Tax Bill Would Affect You

Danielle Kurtzleben
December 20, 2017

On Wednesday, congressional Republicans passed their tax cut plan, handing the party and the president a major legislative victory.

The final bill looks a lot like earlier versions from the House and Senate, with minor modifications — for example, it lowers the corporate tax rate from 35 to 21 percent, as opposed to the 20 percent in both of the earlier House and Senate bills. In other cases, it finds the middle ground between the two chambers' previous bills — it limits taxpayers to deducting the interest on new mortgages up to $750,000, as opposed to $500,000 in the House bill and $1 million in the Senate bill, which is also the amount set under current law.

Without the Insurance Mandate, Health Care’s Future May Be in Doubt

Robert Pear
December 18, 2017

WASHINGTON — For years, the Obama administration said the health care system as constructed by the Affordable Care Act could not survive without a mandate that most Americans have health insurance. With surgical precision, the sweeping tax bill that Republicans plan to pass this week will do away with that mandate.

What comes next for health care is unclear.

Individual Tax Planning Under The Tax Cuts And Jobs Act Of 2017

Michael Kitces
December 18, 2017

GOP Tax Plan Summary Of TCJA

Over the past month, both the House GOP and Senate have put forth their respective proposals for tax reform – each of which passed with relatively narrow margins in their respective chambers, and both of which generated substantial controversy around key provisions. Leaving just a few weeks before the end of the year to reconcile the two in an effort to have President Trump sign the Tax Cuts and Jobs Act into law in 2017.

Have You Ever Felt Sorry for the I.R.S.? Now Might Be the Time

Patricia Cohen
December 18, 2017

After years of upbraiding and even threatening to abolish the Internal Revenue Service, Republicans must now depend on the agency to carry out their signature legislative accomplishment: a comprehensive revision of the tax code.

The task is monumental. While processing tens of millions of tax returns for 2017 under the current rules, the I.R.S. would also have to figure out how to interpret and explain a new system and put it into practice.

California considers ‘green banking’ as it transitions to fully legal pot

Patrick McGreevy
December 17, 2017

California has a possible solution to the problem of banks being unwilling to handle money from the state’s multibillion-dollar legal marijuana industry, one that officials say would be the first system of its kind in the nation.

Talks are underway between the state, banks and federal regulators on a plan to allow banks to serve a marijuana market that is expected to grow to $7 billion annually by 2020 in California. Starting Jan. 1, it will be legal to grow and sell marijuana for recreational and medical uses.

Letter: Medicare and Social Security are not entitlements

Rolayne Fairclough
December 16, 2017

Letter: Medicare and Social Security are not entitlements

We need to change the term used for Social Security and Medicare. They are not “entitlements.” Entitlement suggests a benefit that is given without merit. Excuse me. I have paid for my Social Security throughout my working life. My Social Security is taxed, and my Medicare payment is subtracted from my Social Security check each month.

A provision in the Senate’s tax bill that Medicare recipients will no longer have cancer treatments paid for by Medicare is a breach of contract. The same for Social Security; this is a retirement insurance policy paid over the years. If an insurance company in the private sector were to deny or lessen coverage it would be sued and put out of business.

Details of the Conference Report for the Tax Cuts and Jobs Act

Jared Walczak, Joseph Bishop-Henchman, and Nicole Kaeding
December 15, 2017

On Friday, House and Senate conferees signed off on a conference report resolving the differences between the versions of the Tax Cuts and Jobs Act that passed each chamber. Votes are expected in the House and Senate early next week. The 503-page conference report hews more closely to the language of the Senate than the House version, but it also reflects a range of compromises, fixes, and negotiated agreements that reflect the concerns and priorities of members in both chambers.

Even—perhaps especially—those who have followed every twist and turn of the tax reform debate can easily lose track of which provisions are in or out. Throughout the process, we have outlined the details of both the House and Senate versions, and tracked their amendments. Now that we have final language, it makes sense to start with a clean slate, looking at the provisions of the conference committee report against a current law baseline.

Dep’t. of Small Mercies: Johnson Amendment Repeal Gone from Still-Terrible GOP Tax Bill

Ruth Mccambridge
December 15, 2017

The Washington Post is reporting that the final GOP tax bill will not include a repeal of the Johnson Amendment, which is a provision that has been in effect since 1954 and prohibits partisan political activities by 501c3 nonprofits, including houses of worship. This protects charitable nonprofits from partisan pressures while still leaving room for nonpartisan organizing and advocacy.

As readers will remember, the House had, in its version of the tax bill, included the repeal applicable to all nonprofits and houses of worship, but the Senate did not include it, so it might have gone either way in the reconciliation process.

IRS issues 2018 standard mileage rates

Sally P. Schreiber, J.D.
December 14, 2017

The optional standard mileage rates for business use of a vehicle will increase slightly in 2018, after decreasing in the two previous years, the IRS announced Thursday (Notice 2018-3). For business use of a car, van, pickup truck, or panel truck, the rate for 2018 will be 54.5 cents per mile, up from 53.5 cents per mile in 2017. Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.

Driving for medical or moving purposes may be deducted at 18 cents per mile, which is one cent higher than for 2017. (The medical and moving expense deductions may be affected by the pending tax reform legislation.)

Does Your State’s Individual Income Tax Code Conform with the Federal Tax Code?

Nicole Kaeding
December 13, 2017

As the federal government continues to debate tax reform, states, and many taxpayers, are asking an important question: How is my state’s tax code impacted? The exact impacts won’t be known until the federal bill is finalized, but states have a number of things to monitor, as my colleague, Joseph Bishop-Henchman, wrote earlier this month.

To understand how federal tax reform would change state tax codes and revenues, we need to explore the idea of conformity. For reasons of administrative simplicity, states frequently seek to conform many, though rarely all, elements of their tax codes to the federal tax code. This harmonization of definitions and policies reduces compliance costs for individuals and businesses with liability in multiple states and limits the potential for double taxation of income. No state conforms to the federal code in all respects, and not all provisions of the federal code make for good tax policy, but greater conformity substantially reduces tax complexity and has significant value.

Everything you want to know about Medicare's rules on health savings accounts

Philip Moeller
December 13, 2017

The rise of high-deductible employer health plans has created one of the most unpleasant surprises for older employees: anyone on Medicare is no longer allowed to make tax-free contributions to a health savings account (HSA).

To the further consternation of many such employees, anyone age 65 or older receiving Social Security benefits must, by law, also be signed up for Part A of Medicare. This requirement, seemingly unrelated to their health plan, also will end their ability to make HSA contributions.

Average US household owes $15,654 in credit card debt

Brittany Jones-Cooper
December 11, 2017

As 2017 comes to a close, many Americans will set financial goals for the upcoming year.

Based on a recent survey, we’re guessing those goals will probably include paying down debt.

4 Big Problems with Treasury’s Report Showing Tax Cuts Pay for Themselves

Yuval Rosenberg
December 11, 2017

U.S. Treasury Secretary Steven Mnuchin discusses the Trump administration's budget plan during the Peterson Foundation's 2017 Fiscal Summit in Washington, U.S., May 23, 2017. REUTERS/Jim Bourg

For months, Treasury Secretary Steven Mnuchin has claimed that the Republican tax plan will more than pay for itself by generating faster economic growth, adding that more than 100 people in his department were “working around the clock” on modeling various estimates of the plan’s effects. But the promised Treasury analysis supporting that claim had been conspicuously missing from the debate over the tax plan.

Maybe the administration was better off that way.

Republicans fret over tax bill's unpopularity

Alexander Bolton and Naomi Jagoda
December 11, 2017

Republican lawmakers are concerned about how their tax bill is being viewed by the public and say they need to do a better job of selling it to middle-class and low-income voters. 

A CBS News poll conducted last week found that 53 percent of people nationwide disapprove of the GOP tax bill and only 35 percent approve.

Personal Solutions to the Healthcare Crisis

Keith Schroeder
December 11, 2017

In the United States healthcare has gone from crisis to tragedy. Double digit increases in insurance premiums for many years on one hand and a tax code that forces you to pay up on the other is a painful experience for many family budgets.

The current tax code contains a health insurance mandate; have health insurance or pay a tax penalty. Congress has unsuccessfully tried to end the mandate, but the current tax bill might contain language ending required health insurance coverage.

IRS Bitcoin Hunt Ramps Up, But Tax Amnesty Could Follow: Expert Blog

Robert W. Wood
December 11, 2017

IRS Bitcoin Hunt Ramps Up, But Tax Amnesty Could Follow: Expert Blog

Don’t get excited or fearful just yet. The IRS has not yet announced a tax amnesty for people who failed to report their gains and income from Bitcoin and other virtual currencies. But there has long been speculation that it might happen. And given recent developments, we may now be one step closer.

It is well-known that the IRS is looking hard at Bitcoin and other cryptocurrency transactions, hoping to scoop up some tax dollars. Frighteningly, much of the IRS attention now appears to be focused on the criminal end of the spectrum. IRS Criminal Investigation Agents evidently are being trained in the field.

Kansas's ravaged economy a cautionary tale as Trump plans huge tax cuts for rich

Dominic Rushe
December 10, 2017

Lisa Ochs, president of American Federation of Teachers-Kansas. ?I just hope the country can listen to us. Don?t do what we did.?

Is Donald Trump about to turn America into Kansas? It’s a question some worried people who live in the state are asking as the Republican party pushes through the biggest tax overhaul in a generation – an overhaul that, they claim, bears an uncanny resemblance to a tax plan that left their midwestern home in disarray.

After a failed economic experiment meant to boost economic growth blew a holein the Kansas budget as big as a prairie sky (a $350m deficit in the current fiscal year and nearly $600m in the next) state jobs and services have been slashed.

How to Increase Your Social Security Benefits -- After You Start Getting Them

Wendy Connick, The Motley Fool
December 9, 2017

Wads of US paper currency

Want a bigger Social Security benefits check? Try one of these three approaches.

Once you claim your Social Security benefits, your options for increasing said benefits are somewhat limited. However, there are a few tricks you can use to bump up your Social Security benefits even at that point. Here are three.

Withdraw your claim

The Most Important Social Security Chart You'll Ever See

Christy Bieber, The Motley Fool
December 9, 2017

Social security card with statement and calculator

More than 40% of pre-retirees and 25% of millennials plan for Social Security to provide the bulk of their retirement income, according to a 2017 Gallup poll. If you're one of the millions counting on Social Security to take care of you, take a close look at the chart posted below.

Arguably the most important Social Security chart you'll ever see, it clearly illustrates exactly why you can't rely on Social Security benefits and highlights a common mistake retirees make that could cost them thousands over the course of their lives. 

Jeff Sessions wants to crack down on legal weed — will Congress let him?

Amanda Marcotte
December 8, 2017

In all the budget and tax negotiations frantically being hammered out on Capitol Hill, one small amendment that might get lost in the shuffle could have huge ramifications. The Rohrabacher-Blumenauer amendment was originally set to expire on Friday (see update above), which would open the door for Attorney General Jeff Sessions to do what he's been hinting he wants to: Launch a federal war on states that have partly or completely legalized marijuana use.

The Rohrabacher-Blumenauer amendment, originally passed as the the Rohrabacher-Farr amendment in 2014, bars the Department of Justice from using federal funds to prosecute people buying or selling medical marijuana in states that have legalized it. It's a popular bipartisan amendment that protects 46 states, but there have been concerns about whether it will be renewed after Sessions exerted pressure in May on Congress to let the amendment die.

TaxVox: Campaigns, Proposals, and Reforms

William G. Gale
December 8, 2017

The House and Senate have passed different versions of the Tax Cuts and Jobs Act (TCJA).  Both bills would reduce federal revenues by more than $1.4 trillion over the next  decade, and would introduce large corporate tax cuts; large tax cuts for pass-through businesses and estates; and smaller tax cuts for most individual wage and salary earners.  

A key question is how the plans would change the distribution of taxes paid. Most analysts focus only on the direct provisions of the TCJA.  But government budget constraints imply that tax cuts are not free.  Tax cuts eventually will have to be paid for with higher taxes or lower spending.  

Tax Court: Alimony Payments May Not Be Deductible

Ken Berry
December 8, 2017

divorce alimony

Under current law, taxpayers who fork over alimony to a divorced or separated spouse can deduct the payments, while the recipient spouse owes tax on the income. However, as evidenced by a new case, Logue, TC Memo 2017-234, 11/27/17, not all payments qualify as deductible alimony.

The terms of the divorce decree must meet specific requirements spelled out in the tax law. And proposed legislation of late can change the alimony deduction.

Meet the "Spend Safely in Retirement" strategy

Steve Vernon
December 8, 2017

How will ordinary workers retire in a world that no longer offers traditional pensions for most? How will they decide if they have enough savings to afford retirement? And how can they generate reliable, lifetime retirement income?

These questions pose serious challenges for older workers approaching their retirement years -- especially now because the switch from traditional pension plans to 401(k) plans has placed a serious responsibility on them. They need to be their own investment managers and actuaries, and they have to decide how to best deploy their savings in retirement. It should surprise nobody that most workers don't have the skills needed to successfully answer these questions.

Rep. Walden, are you working for Oregon?: Editorial

The Oregon Editorial Board
December 8, 2017

As pressure mounts on congressional Republicans to preserve local tax deductions for Oregon and other states with high income taxes, Rep. Greg Walden has said nothing publicly about whether he will push to modify the GOP tax overhaul plan now before Congress.

The Republicans' $1.5 trillion federal tax reform package calls for eliminating a benefit that will end up hitting Oregon and a handful of other states with high taxes particularly hard.

So hard, in fact, 12 of the 13 Republicans who voted against the House version were from the high-tax states of California, New York and New Jersey. One Republican congressman from California recently blasted the bill, saying it would disenfranchise his constituents.

The Social Security number isn't dead yet, but its days are numbered

Travis Jarae
December 7, 2017


America's outdated identification methods are ripe for change, particularly from the outdated, static Social Security number to a more secure, robust and modern system.

That transition is likely to be hastened by a pressing need for greater security, privacy and transparency in the digital age, following numerous disastrous data breaches. Most notoriously, the Equifax hack saw the potential exposure of highly sensitive Social Security numbers for more than half of all American adults.

Paul Ryan aims for Medicare, Medicaid, Social Security cuts in 2018

Charlie May
December 7, 2017

There has been one inescapable question surrounding the newly passed GOP tax plan: Who will pay for it? The answer is actually not complicated, because top Republicans have already told everyone.

House Speaker Paul Ryan, R-Wis., who has long dedicated his career to drawing ire over the ever-rising national debt and deficit, has made lobbying for cuts a big part of his legislative agenda.

The Social Security number isn't dead yet, but its days are numbered

Travis Jarae
December 7, 2017


America's outdated identification methods are ripe for change, particularly from the outdated, static Social Security number to a more secure, robust and modern system.

That transition is likely to be hastened by a pressing need for greater security, privacy and transparency in the digital age, following numerous disastrous data breaches. Most notoriously, the Equifax hack saw the potential exposure of highly sensitive Social Security numbers for more than half of all American adults.

Paul Ryan aims for Medicare, Medicaid, Social Security cuts in 2018

Charlie May
December 7, 2017

There has been one inescapable question surrounding the newly passed GOP tax plan: Who will pay for it? The answer is actually not complicated, because top Republicans have already told everyone.

House Speaker Paul Ryan, R-Wis., who has long dedicated his career to drawing ire over the ever-rising national debt and deficit, has made lobbying for cuts a big part of his legislative agenda.

How would the TCJA treat my family? The same, but different

Renu Zaretsky
December 6, 2017

Just two weeks ago we hosted my parents, siblings, their spouses, and their children for Thanksgiving. We didn’t talk much about the Tax Cuts and Jobs Act (our 15 mouths were too full of food). Maybe we should have.

We may soon be living in a new tax world, and with all the changes in the House and Senate versions of the TCJA it is hard to know what it all means. We can learn some basics about the tax code, and use a handy interactive tooldeveloped by The New York Times to get a rough idea of how our tax bills might change. We can also review TPC’s analysis of the bills.

Here Are the Housing Markets That Are Going to Get Hammered by the Republican Tax Plan

Jordan Weissmann
December 6, 2017

Tough break, New Jersey.

Because they’re designed to cap popular deductions that benefit homeowners and limit the number of itemizers, the Republican tax bills are expected to put a dent in house prices around much of the United States. And, under the recently passed Senate version, nowhere seems to get it worse than the Garden State. According to modeling by Moody’s Analytics, 15 of the country’s 30 hardest hit counties would be in New Jersey. Homes in the lovely bedroom communities of Essex County, just over the river from Manhattan, would suffer the country’s biggest setback, losing more than a tenth of their value.

Only 1,700 Estates Would Owe Estate Tax in 2018 Under the TCJA

Howard Gleckman
December 6, 2017

The House and Senate versions of the Tax Cuts and Jobs Act would reduce the number of taxable estates by about two-thirds in 2018, and save the heirs of a few thousand wealthy decedents almost $7 billion dollars, according to new estimates by the Tax Policy Center. Next year, only about 1,700 estates would owe federal estate tax under either bill.

Currently, the first $5.49 million in assets (nearly $11 million for couples) are exempt from the estate tax. As a result, only about 5,500 estates pay the tax, representing about 0.2 percent of all deaths in the US.  Both versions of the TCJA would roughly double the exemption to $11.18 million ($20.36 million for couples) in 2018. Starting in 2018, they'd index the exemption for inflation using the less generous chained CPI that would also apply to the individual income tax. After 2024, the House bill would repeal the tax entirely. After 2025, the Senate bill would revert to a $5 million exemption, indexed for inflation.

This is how much money parents lose supporting their adult children

Kari Paul
December 6, 2017

Leaving the nest doesn’t always mean entering financial independence for kids these days, and parents are paying a high price for it.

Some 80% of parents are covering or have covered basic expenses for their children after they turn 18, which could cost parents $227,000 in lost savings over the course of retirement, a new study from personal finance website NerdWallet found.

My taxes probably are going up. Are yours?

Beth Pinsker
December 6, 2017

NEW YORK (Reuters) - No matter what version of the U.S. tax overhaul being considered by Congress becomes law, it looks like I am going to be paying more in taxes next year.

By how much, I do not know.

Experts are starting to find massive errors in the GOP tax bill after it went through Congress at lightning speed

Bob Bryan
December 6, 2017

As Republicans hurtle toward making their massive tax plan into law, experts are starting to find a slew of errors they say are most likely the result of a rushed process.

Republicans have argued that the plan is the culmination of years of work. But the resulting bill has moved through both chambers of Congress at legislative light speed.

13 states that tax Social Security income

Maurie Backman, The Motley Fool
December 6, 2017

Many seniors are caught off guard when they learn that they are, in fact, responsible for paying taxes in retirement. But while you may have heard that you'll be taxed on your traditional IRA or 401(k) withdrawals, as well as any income you receive from a part-time job, you may be surprised to learn that depending on where you live, your Social Security benefits could be taxed as well.

States that tax Social Security

When it’s best to claim Social Security before age 70

Mark Hulbert
December 5, 2017

Everyone “knows” that so long as you can afford to do so, you should wait until age 70 to begin claiming your Social Security benefits.

But it turns out that this isn’t always the best thing to do.

Perhaps the late Joe Granville, editor of the Granville Market Letter, was right when he said: “If it’s obvious, it’s obviously wrong.”

How Social Security Will Change in 2018

Mary C. Hickey
December 5, 2017

The big news for Social Security in 2018 is a small pay hike for the program’s 61 million beneficiaries. The average monthly payment will go up by 2 percent: from $1,377 to $1,404 next year.

It’s not much—and, worse, not everyone will see that extra money in their check because of the way deductions for Medicare premiums are taken (see more on this below). But it’s noteworthy because it represents the first significant cost-of-living adjustment (COLA) since 2012, when there was a 3.6 percent hike. Last year, seniors got just a 0.3 percent increase, and there was no raise at all in 2016. 

Trump Is About to Make Tip-Pooling Legal Again. Here’s What That Means for Restaurant Workers

Andrea Strong
December 5, 2017

Here’s everything you need to know:

If just-announced changes to Department of Labor regulations go past the proposal stage, employers will be able to pool tips earned by servers, allowing them to share the tips with untipped employees like cooks, dishwashers, and others in the back of house — if they share them at all.

Should You Pay Off Your Mortgage Before Retirement?

Tom Sightings
December 5, 2017

Owning a home can lead to a comfortable retirement. In theory, you buy a house when you're 30, faithfully make the mortgage payments for 30 years and at age 60 you own your house, free and clear. Now you have a solid nest egg and can sail into a worry-free retirement.

But more often, here's how it works in practice. You move from a starter home to a bigger house, with a bigger mortgage. You refinance to get a lower interest rate and take out some money in the process. And at age 60 you're still paying a mortgage.

RMD Decisions: 5 Great Uses For Required Minimum Distributions

Judith Ward
December 5, 2017

If you’re approaching age 70½, get ready for the annual ritual of taking required minimum distributions (RMDs) from your tax-deferred retirement accounts.

These accounts include: Traditional Individual Retirement Arrangements (IRAs), Rollover IRAs, Simplified Employee Pension (SEP-IRAs), and Savings Incentive Match Plan for Employees (SIMPLE IRAs), as well as other employer-sponsored retirement plans.* It’s finally time to pay taxes on these accounts after years of tax-deferred savings and growth.

Voices Optimizing small-biz owners’ retirement plans

Sal Favarolo
December 5, 2017

Accountants are always looking for savvy ways to help their small-business clients save on income taxes. Some strategies are more complicated than others, while some are simpler. One notable area that offers a lot of potential for income tax savings is in a client’s retirement plan.

If they do not have one, accountants are well equipped to help their client establish a plan. If your client does have one, now is a perfect time to take it out and look it over. It is important to not only ensure that clients have maximized their contributions, but also that they have maximized their tax savings. In other words, are they in the right plan? This is an important question because it is often overlooked.

Despite Many Changes, The Senate’s Tax Cut Still Mostly Benefits Business and High-Income Households

Howard Gleckman
December 4, 2017

Though the Senate made dozens of changes to the Tax Cuts and Jobs Act (TCJA) before passing the measure early Saturday morning, the bill’s overall effect on households changed little, according to a new analysis by the Tax Policy Center.  Similar to the version approved by the Senate Finance Committee, the final Senate bill would cut taxes by an average of about $1,200 in 2019, with most of the benefits going to the highest income households. By 2027, after nearly all of the bill’s individual income tax provision would expire, the average tax cut would shrink to less than $300 and the tax benefit would be even more highly skewed to the highest-income households.

How a Company Actually Plans to Spend Its Tax Cut Money

Natalie Kitroeff
December 3, 2017

ORO GRANDE, Calif. — Republicans have pitched their tax plan as an economic godsend that will offer deliverance from middling growth and set off a torrent of investment, hiring and raises. But at a quarry here in Southern California’s high desert, the outcome doesn’t look so straightforward.

The pit of rock belongs to CalPortland, which mines limestone to create the cement that goes into some of the country’s most iconic stadiums and hotels. The company would hardly object to keeping a chunk of profits that currently goes to the government. But the extra cash probably wouldn’t be enough for CalPortland to expand immediately in ways requiring serious hiring.

3 Social Security Moves to Make in Your 50s

Maurie Backman, The Motley Fool
December 3, 2017

Smiling middle-aged men

Your 50s are a pivotal time in the grand scheme of retirement -- mostly because they might be the last full decade you actually spend in the workforce. And since retirement and Social Security go hand in hand, it pays to focus on the latter in the years leading up to the former. Here are three key Social Security moves to aim for during your 50s that will eventually help you make the most of your benefits.

1. Review your earnings record for accuracy

How to avoid outliving your retirement savings

Liz Weston
December 3, 2017

Dear Liz: The wife and I are both 65. We both work, with a combined income of $125,000, of which we spend almost all. We have $550,000 in IRAs and $1 million in other investments, plus home equity of about $500,000. We’ll get $3,800 from Social Security if we start next year but plan to work until age 67. Should we wait until then to claim?

Answer: Both of you needn’t wait, but one of you should — the one who has the larger benefit.

6 Ways to Be Better at Money in 2018

Tim Herrera
December 3, 2017

Though there’s never a wrong time to get your finances in order, a new year is the perfect excuse to take a deep look at your relationship with money.

Whether you’re just starting out in your career or you’re nearing retirement, below is The Times’s best financial advice from this year on earning and saving more money and, more important, deciding what to do with all of it.

Even a $1 million retirement nest egg isn't enough anymore

Jessica Dickler
December 2, 2017

A cool $1 million has long been considered the gold standard of retirement savings. These days, it's only a fraction of what you will really need.

For instance, a 67-year-old baby boomer retiring now with $1 million in the bank will generate $40,000 a year to live on adjusted for inflation and assuming a sustainable withdrawal rate of 4 percent, said Mark Avallone, president of Potomac Wealth Advisors and author of "Countdown to Financial Freedom."

How 4 different households would fare under the tax bill the Senate passed

Irina Ivanova, Moneywatch
December 2, 2017

The Senate tax bill — which Republicans passed early Saturday morning with no Democratic support — is supposed to provide "broad relief" to companies and families. 

That is complicated by the Joint Committee on Taxation's finding that the bill will still add at least $1 trillion to the deficit and grow the economy slower than Republicans had hoped. The nonpartisan JCT has also said "every tax bracket" would pay less. Its proponents, including recent supporter Sen. John McCain, have claimed that the bill would "directly benefit all Americans." Critics, meanwhile, point to the millions of low- and middle-income families whose tax cut would be modest and whose taxes would rise in 10 years.

Living in cars, working for Amazon: meet America's new nomads

Jessica Bruder
December 2, 2017

camper van

Millions of Americans are wrestling with the impossibility of a traditional middle-class existence. In homes across the country, kitchen tables are strewn with unpaid bills. Lights burn late into the night. The same calculations get performed again and again, through exhaustion and sometimes tears.

Wages minus grocery receipts. Minus medical bills. Minus credit card debt. Minus utility fees. Minus student loan and car payments. Minus the biggest expense of all: rent.

How the tax overhaul could affect your bottom line

Reuben Fischer-Baum, Kim Soffen, and Heather Long
December 2, 2017

The Senate passed a long-awaited tax overhaul bill early Saturday morning. The bill, the biggest rewrite of the individual and corporate tax code in 30 years, would affect the pocketbooks of most Americans. It still has to be reconciled with a tax overhaul passed by the House last month before being sent to President Trump for his signature.

How the bill will affect your pocketbook will depend on many factors. And the impact could change over time, since the individual tax code provisions expire at the end of 2025. But enter your income below for a prediction about how you could be affected:

What will feature in the final version of the Republican tax plan?

Lauren Gambino
December 2, 2017

Mitch McConnell, the Senate majority leader, speaks to reporters as his party looks toward a vote on the proposed tax overhaul.

The House and Senate drafts, which help corporations and the rich and could leave millions without health insurance, must be reconciled into a single bill.

All Republicans want for Christmas is tax reform – and they are poised to get it.

The Senate Republican tax overhaul that passed early on Saturday morning is filled with traditional GOP priorities, including big treats for corporations and the most affluent sections of society. But the bill will now need to be reconciled with the House-passed version.

Senate passes tax overhaul, securing major GOP victory

Jordain Carney and Naomi Jagoda
December 2, 2017

The Senate passed legislation to overhaul the tax code early Saturday morning, handing Republicans a badly needed legislative and political victory.

Senators voted 51-49 to pass the plan, capping off days of debate and hand-wringing as leadership worked frantically behind the scenes to win over holdouts and get the proposal in line with the chamber’s rules.

Important Differences Between the House and Senate Tax Reform Bills Heading into Conference

Jared Walczak
December 2, 2017

After the Senate’s vote on the Tax Cuts and Jobs Act in the early hours of Saturday morning, Senate Majority Leader Mitch McConnell (R-KY) told reporters that while he was not predicting that the conference committee with the House would be “a piece of cake,” he was confident that the chambers could reconcile their differences. He cited efforts to “pre-conference” the bill by adopting key House priorities. For instance: “We’ve moved our initial thinking on this in the direction of the House bill, for example the property tax deduction, in order to get the bills closer together than they were.”

That will be important. When the chambers pass different versions of a bill, conferees are appointed by both the House and the Senate to produce a “conference report” that is satisfactory to the majority of conferees from each chamber. (More on this later, after the table.) The closer the two sides are going into conference, the easier the resulting process.

Advice on Dividing IRAs in a Divorce

David Ellis, CPA
December 1, 2017

couple grabbing piggybank

When a couple divorces, it is not unusual for the retirement plan of one or both spouses to be the most significant asset that must be divided. If the plan is a “Qualified Plan” such as a Defined Benefit or 401k, the plan may be divided between the spouses using a Qualified Domestic Relations Order (QDRO).

A QDRO not only allows for the tax-free division of the plan’s assets, but distributions from Qualified Plans pursuant to a QDRO are not subject to the 10% penalty for early withdrawal. Regardless of the age of the spouse receiving the QDRO distribution, no early withdrawal penalty applies (IRC Section 72(t)(2)(c)). 

Realtors Predict Tax Bill Will Cause Housing Prices To Drop In Every State

Kelly Phillips Erb
December 1, 2017

Republicans in the Senate have announced that they have enough votes to move their latest version of the tax reform bill forward. That's the case despite provisions in the proposal that have raised concerns, causing Senate Majority Leader Mitch McConnell (R-KY) to refer to the process as a "challenging exercise." One of the most controversial issues is how the bill might affect the housing market:  The National Association of Realtors (NAR) is warning that the bill will cause housing prices to drop.

At first blush, that might sound a little surprising. After all, both the House and Senate bills would preserve the mortgage interest deduction - albeit with limitations. Specifically, under the House bill, new mortgages would be capped at $500,000 for purposes of the deduction, and the deduction would only apply to your primary residence. Under the Senate bill, the deduction would remain in place for mortgages up to $1,000,000, but the deduction for equity debt (meaning re-financing not related to improving your home) would be eliminated.

10 tax moves to make by Dec. 31 — and before Congress changes the tax laws

Kay Bell
December 1, 2017

Merry Texmas Yall_Marble Falls Walkway of Lights 2011

Hello, holidays! We're so happy you and your good cheer have finally arrived.

But the arrival of December also means 2017 is almost over, giving us only 31 days to take care of tax tasks that could save us money when we file our returns next year.

This year, it also looks like Congress might actually make some tax changes, if not accomplish real tax reform. If that does happen, the good news is that we don't have to worry about deciphering them before we do our 2017 taxes.

Health Coverage Is No Slam Dunk

Janet Bodnar
December 2017

When I was editor of this magazine, I read every story—usually more than once. So when I was planning my retirement as editor earlier this year, I thought I had everything under control. Imagine my dismay when I learned that, well prepared though I was, I hadn’t reckoned on some curveballs along the way—especially with regard to Medicare and health insurance—or how labor-intensive it would be to iron out all the devilish details. So I’d like to share a few nuggets of wisdom to smooth the way for future retirees. 

Nugget No. 1:

Brian Levy
December 2017

The rules and strategies for how and when to claim Social Security benefits are so complex that many an uninformed and/or overeager retiree has lost thousands of dollars — even tens of thousands — by making the wrong choice.

According to the Social Security Administration, nearly nine out of 10 individuals 65 and up receive Social Security benefits — and for many, it is their major source of income. So, clearly, the decisions you make about claiming Social Security retirement benefits are probably some of the most important financial moves you will ever make.

Tax Reform: Worst Policy Since The Great Depression

John Early
November 30, 2017


  • The last 30 years growing at 2.5% is the weakest 30 year period since 1939.
  • The three times the top marginal tax rate was cut below 38% were all followed by below average growth.

Social Security Admin lowers 2018 taxable wage base

Kay Bell 
November 30, 2017

Back in mid-October, the Social Security Administration (SSA) announced that the wage base, that's the amount of each worker's earnings that are subject to the Social Security portion of payroll withholding, would increase to $128,700.

This week, the SSA revised that number downward.

The IRS Has Come Knocking at Bitcoin's Door

Rhett Jones
November 30, 2017

At a time when regulations, glitches, price swings, forks, hacks, and fraud can’t seem to keep the cryptocurrency-mania down, there’s a new hurdle for it to overcome: the taxman. 

Coinbase is one the largest cryptocurrency exchanges in the world and its backing by high profile investors like Union Square Ventures and Andreessen Horowitz has given it a certain amount of respectability. But it’s also a prime target for the Internal Revenue Service. Last year, the IRS asked a federal judge to order Coinbase to surrender its customer records for the years of 2013-2015 because it suspects many people trading in digital currency aren’t reporting their gains to the government. Coinbase fought the summons, but on Wednesday it lost the battle.

How much income will you actually need in retirement?

Walter Updegrave
November 29, 2017

The rule of thumb you're referring to stems from "replacement ratios" -- or the percentage of pre-retirement income you need to replace in retirement to maintain the standard of living you enjoyed during your career -- that have been calculated over the years by researchers at Georgia State University and professional services firm Aon. The replacement percentages are based largely on household spending data from the Department of Labor's Consumer Expenditure Survey.

Although the 70% figure you mention is often cited -- indeed, some people refer to "the 70% rule" -- the research shows the replacement ratio may actually be more in the neighborhood of 80% for many retirees, and upwards of 90% or so for those with very low or very high incomes (although Social Security will provide the bulk of the retirement income for low-earners, while high-earners will have to rely more heavily on savings).

Retirement Success Isn't About Net Worth, It's About Net Income

Shane Brosnan
November 29, 2017

If you're wondering if you have enough saved to retire, you won't find the answer to that critical question on the bottom of your 401(k) statement.

This isn’t your grandparents’ retirement.

America’s move from pensions to 401(k)s and IRAs has changed the way most workers think about their retirement money — and not for the better.

National Tax Security Awareness Week: Five Steps Data Breach Victims Can Take

November 29, 2017

Every day, data thefts put people’s personal and financial information at risk. There are steps that identity theft victims can take to protect their financial accounts, their identities and their tax returns.

This tip is part of National Tax Security Awareness Week. The IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

New IRMAA Surcharges On Medicare Part B and Part D Taking Effect In 2018

Michael Kitces
November 29, 2017

IRMAA Medicare Premium Surcharges In 2017

Origins Of Medicare Premium Cost Sharing Subsidies

Health insurance is expensive, including and especially for retirees who tend to have more frequent health complications associated with their age.

To help manage the cost, in 1965 President Johnson signed into law the legislation that established Medicare as the health insurance foundation for senior citizens over the age of 65 (further supported by Medicaid for certain especially-low-income populations).

National Tax Security Awareness Week: Recognize Phishing Email Scams

November 28, 2017

The IRS reminds people to be on the lookout for new, sophisticated email phishing scams. These scams not only endanger someone’s personal information, but they can also affect a taxpayer’s refund in 2018.

This tip is part of National Tax Security Awareness Week. The IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

US Consumer Confidence Rises, Hits Highest Level Since 2000

Paul Wiseman
November 28, 2017

WASHINGTON (AP) — American consumers are feeling confident as the holiday season approaches.

The Conference Board said Tuesday that its consumer confidence index hit 129.5 this month, up from 126.2 in October and highest since November 2000.

Tax bill clears Senate Budget Committee

Naomi Jagoda
November 28, 2017

The Senate Budget Committee on Tuesday advanced the chamber's GOP tax bill.

The measure was approved by a party-line vote of 12-11, with two key Republicans voting for the measure after previously expressing concerns.

How Owning a Home Can Help (or Hinder) Your Retirement

Maryalene LaPonsie
November 27, 2017

Is it possible that most Americans are getting a major part of their retirement wrong?

According to Census Bureau data, nearly 80 percent of those age 65 or older owned a home in 2017. But it may not be the right living arrangement for everyone. Not only could renting be a better option for some retirees, it could allow younger workers the opportunity to save additional money for their retirement.

Tax Bills Doom Tax-Free 1031 Exchanges Of Cryptocurrency

Robert W. Wood
November 27, 2017

Whether you can make a tax-free swap of cryptocurrency is controversial. A 1031 exchange is a swap of one business or investment asset for another. Under the tax code, most swaps are taxable as sales. That's why the IRS says bartering is taxable to both sides, whether for goods or services. Section 1031 is an exception to the rule that swaps are generally fully taxable. If you can manage to come within 1031, you can change the form of your investment without (as the IRS sees it) cashing out or recognizing income. But can you swap one cryptocurrency for another, or for other property?

This Holiday Shopping Season May Be Your Last Chance To Deduct Sales Taxes

Kelly Phillips Erb
November 25, 2017

Feeling like shopping until you drop this holiday weekend?

Save those receipts because you might be able to deduct them on your federal income tax return for 2017 - but it may be the last year that you can take advantage of the deduction. The tax reform bill currently in Congress would eliminate the sales tax deduction, along with the state and local income tax deduction.

The Form 990: Not-for-profits, you can run, but you can’t hide

Lana Richards
November 22, 2017

When it comes time to file the Internal Revenue Service’s Form 990, Return of Organization Exempt From Income Tax, do you think of it as just another task to cross off your to-do list? If so, you should know that there’s more to it than meets the eye.

Form 990: A refresher course

OregonSaves Automatically Enrolls Oregon Workers in Roth IRAs

Nicole Dieker
November 22, 2017

Here’s one more news item to be thankful for, I think—Oregon is now giving workers the opportunity to save for retirement through an automatic deduction program called OregonSaves.

Here’s a quick overview of how it works:

If you don’t want to watch the video, the tl;dw is that OregonSaves is offering retirement plans for people whose employers don’t offer retirement plans. Workers are automatically enrolled into OregonSaves, and 5 percent of their gross paycheck is automatically put into a Roth IRA, where they can choose between three different investment options: “capital preservation fund,” “target-date retirement fund,” and “growth fund.”

States Warn of Budget Crunch Under Republican Tax Plan

Alan Rappeport
November 22, 2017

WASHINGTON — Since getting crushed by the recession a decade ago, the state of Oregon has been on an economic upswing. The jobless rate has dipped below 4 percent from a high of 12 percent in 2009, home values are up and people are flocking to the state.

Net migration accounted for roughly 88 percent of Oregon’s population growth between 2016 and 2017, according to a Portland State University study.

If You Care about Social Security and Medicare, You Should Care about these Tax Bills

Melissa M. Favreault
November 21, 2017

The Joint Committee on Taxation, Congressional Budget Office, and Tax Policy Center agree that, without significant changes, the House-passed tax bill (the Tax Cuts and Jobs Act, or TCJA) would add about $1.5 trillion to our nation’s debt over the 10-year budget window. Over the longer range, this proposal would increase the debt even more.  

Someone must eventually pay for these net tax cuts, which are expected to benefit higher-income households much more than those with lower- and middle-incomes. Unless the tax cuts spur immense economic growth, which many prominent economists doubt based on decades of evidence, these cuts will harm future workers and Social Security and Medicare beneficiaries.

Senate Tax Bill Could Make Stock Sales More Expensive

Tracey Longo
November 21, 2017

The Senate wants to take away investor choice when it comes to deciding which shares to sell when offloading stock.

Lawmakers have included a provision in the Senate tax reform bill that would require investors to use the FIFO (first-in-first-out) method when selling stock. In the current rising market, forcing investors to sell their oldest shares first would mean forcing the recognition of larger gains at tax time.

5 steps to make the most of your HSA

Kelli B. Grant
November 21, 2017

If you're hoping to build retirement wealth in a health savings account, it helps to have a game plan.

There's growing buzz and excitement around health savings accounts, or HSAs, Peter Stahl, a certified financial planner and president of Bedrock Business Results, told advisors last week at Schwab IMPACT 2017 in Chicago.

IRS budget cut again, but not as much as Trump wanted

Kay Bell
November 21, 2017

It's going to be a mixed Thanksgiving in Internal Revenue Service households.

The agency definitely won't be thankful for the Senate funding bill released on Nov. 20. That Financial Services & General Government Appropriations measure proposes the IRS get $11.1 billion in fiscal year 2018.

With Year-End On The Way, Don't Forget About Tax Form Due Dates

Kelly Phillips Erb
November 20, 2017

The end of the year will be here before you know it - and that means year-end tax forms will soon be on their way.

That's right - many year-end tax forms are now due in January. As part of the Protecting Americans from Tax Hikes (PATH) Act, the filing deadline for employers to submit forms W-2 (and forms W-3) to the Social Security Administration, is January 31. The January 31 filing deadline also applies to certain forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

3 ways to get your finances in order before the end of the year

Zameena Mejia
November 20, 2017

Shoppers line up to pay for their merchandise at a checkout counter in a Target store.

For many, the holiday season marks a time of festivities, gift exchanges and time off from work. But as one year comes to an end and the next approaches, this is also a great time to get your finances in order.

That's according to Sallie Krawcheck, co-founder and CEO of Ellevestand former Wall Street executive at major institutions including Morgan Stanley, Merrill Lynch and Citigroup.

One in five American households have ‘zero or negative’ wealth

Quentin Fottrell
November 19, 2017

Millions of Americans are living on the edge.

One in five households has zero or negative wealth, according to a report released this week by the Institute for Policy Studies, a progressive think tank based in Washington, D.C. What’s more, an even greater share of African-American (30%) and Latino (27%) households are “underwater” financially. The combined impact of $1 trillion in credit-card debt, $1.4 trillion in student loan debt, and stagnant wages are taking a toll.

Why Smart People Take Social Security at 62

Motley Fool
November 19, 2017

Many of us daydream about retiring early -- and then assume that we can't. It's true that if you're way behind in saving up for retirement, you may have to toil far longer than you'd like. But early retirement is more possible for many people than they think, and Social Security can be a big help toward that end.

Here's a look at why you might want to start collecting Social Security at age 62.

When Unpaid Student Loan Bills Mean You Can No Longer Work

Jessica Silver-Greenbery, Stacy Cowley, and Natalie Kitroeff
November 18, 2017

Fall behind on your student loan payments, lose your job.

Few people realize that the loans they take out to pay for their education could eventually derail their careers. But in 19 states, government agencies can seize state-issued professional licenses from residents who default on their educational debts. Another state, South Dakota, suspends driver’s licenses, making it nearly impossible for people to get to work.

Beware year-end ID theft and quick cash scams

Kay Bell
November 17, 2017

Mantel decorations Santa head lights

I know we've yet to celebrate Thanksgiving, but I can tell that Christmas is near, too.


Well, in addition to having already decorated our house (interior only so far for us, but ho-ho-holiday lights are already on some of our neighbors' houses) for Santa's annual arrival, I'm getting the usual year-end flood of spam phishing scams promising me money just in time for the gift buying season.

In Oregon, You Can Now Save for Retirement. Unless You Object.

Elizabeth Olson
November 17, 2017

The lack of retirement savings among Americans is almost universally bemoaned but nudging, prodding and lecturing have done little to build up nest eggs for old age. So some states say they are going to make it easier to save with a simple plan: an automatic payroll deduction for retirement savings.

Oregon is the first state to roll out a plan that covers private sector workers who do not otherwise have access to a savings plan in their workplace. The deduction is an automatic 5 percent of gross pay, unless the worker opts out. Participants can reduce the percentage, if they choose. The state directs the money gathered under the OregonSaves plan to privately run low-cost investment funds.

3 Ways to Have a Happy Retirement, According to People Who've Already Retired

Walter Updegrave
November 17, 2017

“Happiness,” it’s been said, “is like a butterfly. The more you chase it, the more it will evade you.” In other words, by actively pursuing a happy state, you reduce your chances of achieving it.

That may be true from a philosophical standpoint, but when it comes to retirement planning, new research suggests there may in fact be specific steps you can take to enjoy a more rewarding post-career life.

Accountants wouldn't get lower rate under House bill

Michael Cohn
November 16, 2017

PricewaterhouseCoopers LLP's building stands in the financial district of Toronto, Ontario, Canada

The tax reform bill passed by the House on Thursday doesn’t align with the Senate proposal in the way they tax pass-through businesses such as accounting firms.

“Service industries including accounting firms, engineering firms and other firms do not get the benefit of the lower 25 percent tax rate,” said Brent Lipschultz, a tax partner in PricewaterhouseCoopers’ personal financial services practice in New York. “If you look at U.S. GDP, it comprises mostly service industries in the United States. This was just a way to appease the small business group out there. In general, partners at accounting firms will not get the benefit of the lower rate.”

Senate Plan Would Raise Taxes on the Poor, a Report Says

Jim Tankersley and Alan Rappeport
November 16, 2017

WASHINGTON — The congressional Joint Committee on Taxation said on Thursday that the latest version of the Senate tax bill would effectively raise taxes for lower-income Americans by 2021.

An analysis by the nonpartisan committee projected that, if the Senate bill becomes law, Americans earning $30,000 a year or below would pay higher taxes beginning in 2021 than they would if the bill is not enacted. The projected increase stems from the bill’s repeal of the Affordable Care Act’s mandate that most people have health insurance, a provision that was tucked into an amended version of the legislation this week.

What You Need to Know About Tax Relief for Victims of Natural Disasters

Julian Block
November 16, 2017

florida damage

Natural disasters such as winter ice storms, hurricanes, tornadoes, and wildfires have struck repeatedly in 2017, affecting millions of Americans. A spate of hurricanes in August and September have devastated coastal areas in Texas and Florida as well as U.S. territories in Puerto Rico and the Virgin Islands, pushing the IRS to spring into action with tax relief.

The tax code authorizes immediate relief for individuals — whose homes, household goods, and other properties suffer damage or are destroyed by such disasters — in the form of deductions and other tax breaks for casualty losses caused by events that the IRS describes as “sudden, unexpected, or unusual.”

Obamacare provision muddies Senate tax plan chances

Kay Bell
November 16, 2017

Making a mud pie_img_7661_2

The House is still on track to pass its tax reform bill this evening has passed its tax reform bill, but things are much less settled in the Senate.

A big part of the problem is that the upper chamber is grappling with the Byrd Rule.

This is a part of Senate arcana, named for former West Virginia Democrat Robert Byrd, under the budget reconciliation process, which allows for bills to be approved by a simple 51-vote majority. But to do that, the tax bill can only increase the deficit by $1.5 trillion in the first 10 years.

Homeownership doesn't build wealth, study finds

Diana Olick
November 16, 2017

Owning a home may help you save money, but it won't help you make money.

Households are better off taking control of their finances than relying on fluctuating home values. That is the finding of a new study conducted by Florida Atlantic University, Florida International University and the University of Wyoming.

Senate Markup Would Make Individual Tax Cuts Temporary, Corporate Tax Cuts Permanent

Kelly Phillips Erb
November 16, 2017

Days after the Senate announced the details of their version of the Tax Cuts and Jobs Act, the real work began: marking it up. Sen. Orrin Hatch (R-UT), as Chair of the Senate Committee on Finance, has released the "Chairman’s Mark" to the Act. The "Chairman's Mark" describes proposed changes to the plan.

Here are some of the highlights which affect individual taxpayers and small businesses:

5 ways an identity thief can use your Social Security number

Christine DiGangi
November 15, 2017


Having your Social Security number or card stolen isn’t quite like getting your bank account information taken — though granted, both are stressful experiences. The major difference is that you can get a new bank account number, while the Social Security Administration very rarely issues new Social Security numbers.

Why you need a Social Security number

How do you tell when it's the right time to retire?

Walter Updegrave
November 15, 2017

I don't know of any generally recognized gauge or barometer for calling it a career, but I can tell you that the decision to retire definitely isn't just about reaching a certain age. I recently took personal finance guru Suze Orman to task for suggesting as much when she recently asserted in no uncertain terms that "70 is the new retirement age -- not a month or year before."

She's right that many people may need to stay on the job longer these days to accumulate a large enough nest egg to support them in retirement. But to say that 70 -- or any single age, for that matter -- is the right age to retire? That's far too simplistic. The decision to retire involves too many subjective factors that can vary significantly from person to person to be boiled down a single number.

The House Tax Bill Is Not Very Charitable to Nonprofits

Joseph Rosenberg and Phillip Stallworth
November 15, 2017

Even though the House version of the Tax Cuts and Jobs Act (TCJA) preserves the charitable income tax deduction, other income tax provisions of the bill could reduce charitable giving by between $12 billion and $20 billion in 2018, based on new estimates from the Tax Policy Center. A second provision—repeal of the estate tax—could reduce giving by another $4 billion in the longer run.

By nearly doubling the standard deduction and either repealing or scaling back most itemized deductions, the House version of the TCJA would substantially reduce the number of taxpayers who elect to itemize. TPC estimates that fewer than 13 million taxpayers would itemize deductions in 2018 under the House version of the TCJA, down from more than 46 million under current law.

Five Facts about Charitable Contributions

November 15, 2017

With the holidays around the corner, many people will be making donations to benefit charitable organizations. However, come tax time, the person who made the donation might also benefit. That’s because taxpayers who donate to a charity may be able to claim a deduction for the donation on their federal tax return.

Here are five facts about charitable donations:

IRS Shows How to Avoid Estimated Tax Penalties

Ken Berry
November 14, 2017

financial calculator

The IRS is reminding taxpayers that they still have time to avoid an estimated tax penalty for the 2017 tax year (IR-2017-182, 10/31/17), by directing them to a web page to help raise awareness on the matter.

The “Pay As You Go, So You Don’t Owe” page features tips and resources designed to help taxpayers, including those involved in the sharing economy, better understand the rules and avoid an unexpected penalty.

The most expensive states for a private room in a nursing home

Maddy Perkins
November 14, 2017

1. Alaska

Many clients may have to live in a nursing home later in their retirement. While overall prices are increasing nationwide, the cost of care in a private room at a nursing home varies by state and sometimes city. Advisors with clients who live in pricier states need to be prepared to help them with those expenses should they arise.

The median monthly cost for an assisted living community in the U.S. is $8,121 per month, an increase of 5.50% from 2016, according to Genworth's annual Cost of Care study. The median annual cost is $97,433. There can be a wide disparity in cost between states as well as cities, with some facing even triple the median cost.

Tax increases could force home sales, survey finds

Brad Finkelstein
November 14, 2017

 Voters fear rising taxes could force a home sale

As Congress debates tax reform and which deductions to remove, a majority of homeowners from both parties worry that rising property taxes could force them to sell their house.

Over 54% of those that identified as a Democrat and 52% of Republicans feared that rising property taxes could push them out of their homes, according to Zillow's Housing Aspirations Survey.

Senate GOP Wants To Eliminate Obamacare Mandate As Part Of Tax Reform Efforts

Kelly Phillips Erb
November 14, 2017

When it comes to tax reform efforts, there's one thing that Republicans and Democrats can both agree on: it's expensive. As Senate leaders search for ways to make the numbers work, Republicans believe they might have a solution. Although there was no mention of Obamacare repeal in either of the House or Senate original plans, Republicans now plan to include language to repeal the Affordable Care Act's individual mandate .

6 Challenges of Phased Retirement

Emily Brandon
November 13, 2017

Gradually cutting back your work hours to four days a week and then three or working 20 hours per week instead of 40 or 50 sounds appealing to many people approaching retirement age. You can work fewer hours and have less responsibility, but still have a place to go where you feel productive and have enough money coming in to avoid large retirement account withdrawals. However, phased retirement arrangements aren't common because of a number of obstacles to making these programs work. Only 11 percent of early baby boomers gradually retired from their full-time jobs, according to a 2017 Government Accountability Office report. Here's a look at some of the challenges of setting up a gradual retirement.

4 Common Questions About End-of-Year Charitable Giving Strategies

William H. Byrnes and Robert Bloink
November 13, 2017

(Image: iStock)

As the year-end approaches, it‘s a good time for you, or each client’s tax professional, to review the client’s tax planning strategy to see if there is any advantage to making a charitable contribution that will included on this year’s return.

Congress is debating major changes to the Internal Revenue Code (IRC), and any changes that make it into law could affect charitable giving strategies. For now, however, the current laws still apply, and financial professionals will likely need to understand the current laws, thoroughly, to understand the changes.

Your 990: What Nonfinancial Matters Does It Reveal to the Media and Donors?

Michael Wyland
November 13, 2017

The last major revision of the IRS Form 990 was done for the 2008 tax year. Even though it’s been almost a decade, many nonprofit leaders—both staff and volunteer—seem unaware of the annual information return as anything more than something the auditor or CPA fills out as part of their work.

What most people don’t realize is that the changes have made the Form 990 even more a diverse document than it was in the past. They may also not realize that their organization’s 990 is a public document, available online for free from websites such as and In addition, all nonprofit organizations must keep copies of their last three years’ 990 filings at their principal place of business and make them available for inspection immediately upon request during normal business hours.

Pass-through taxation, part 2: The Senate tax reform bill

Kay Bell
November 13, 2017


Republicans continue to work on their tax reform bills. The House plans/hopes to vote on its bill this week, while the Senate's version, released Nov. 9, is still being analyzed.

One area getting a lot of attention is the two bill's differing treatments of pass-through entities. Income from these businesses — which include sole proprietorships, partnerships, limited liability companies (LLC) and S-corporations — is passed through to the business owners, who then report it on their personal tax returns.

3 Unique Financial Issues for Special Needs

Tom Halloran
November 13, 2017

According to the National Organization on Disability, more than 57 million people across the U.S. are living with a physical or cognitive disability. With limited assistance from government programs, this group – along with their caregivers – will need to consider additional planning decisions, especially when it comes to creating a financial strategy for retirement.

As with any challenge, knowing where to begin can be the hardest part. To help you get started, here are some considerations to keep in mind – no matter what your situation.

Preliminary Details and Analysis of the Senate’s 2017 Tax Cuts and Jobs Act

Tax Foundation
November 10, 2017

senate tax cuts and jobs act

Key Findings

  • The Senate’s version of the Tax Cuts and Jobs Act would reform both individual income and corporate income taxes and would move the United States to a territorial system of business taxation.
  • According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly lower marginal tax rates and the cost of capital, which would lead to a 3.7 percent increase in GDP over the long term, 2.9 percent higher wages, and an additional 925,000 full-time equivalent jobs.

Senate to delay corporate tax cut, breaking with Trump and House

Brett Samuels and Jordain Carney
November 9, 2017

Senate Republicans plan to propose delaying a cut in the corporate tax rate until 2019, according to a GOP senator.

Sen. Bill Cassidy (R-La.) also said the individual mandate will not be repealed as part of the Senate tax overhaul proposal expected to be released Thursday. 

Plaintiff In Successful Multimillion Dollar Suit Against IRS Speaks Out

Adam Steele, CPA
November 9, 2017

We accountants were getting nickel and dimed to death by regulatory fees and costs, and that affects the tax preparation fees that our clients have to pay. It got to the point where you say someone's gotta do something, but, when one says that, it's important to remember that each of us is someone.

It's particularly hard on CPAs and EAs (Enrolled Agents), who have always had to pay licensing fees (in Minnesota, CPAs have to annually renew both an individual, and a firm, permit; each with a fee, even if the CPA is the only one at the firm), and for required Continuing Professional Education (CPE), and for travel to get the CPEs. And woe be unto a CPA who files a renewal form, or pays a fee, or reports CPEs, a little late, he gets walloped with a steep late fee as well. All of these fees and costs factor into what the client eventually has to pay the accountant to get his taxes done.

Changes in Washington Are Fueling a Charitable Giving Boost

Michael S. Fischer
November 8, 2017

Forty-five percent of experienced donors in a new survey said they expected to increase their charitable giving this year, while only 7% expected to give less than last year, according to Exponent Philanthropy, an association of some 2,000 funders.

Of the 480 members who participated in the organization’s early September Pulse Check survey, 19% cited the current political and regulatory environment as influencing their 2017 giving.

Inflation tweaks offer U.S. workers abroad some tax relief

Kay Bell
November 8, 2017

Top expat destinations 2017_InterNations-dot-org_Expat-Insider

People definitely are peripatetic. Millions of us move every year, with around 56 million crossing national borders to new homes.

But there's one thing Americans who go abroad, be it for work or purely personal reasons (love and adventure join career as the top three reasons for expatriation), cannot leave behind. The U.S. tax code.

Providing Small Business Health Insurance Benefits With A QSEHRA

Michael Kitces
November 8, 2017

A key change to health insurance under the Affordable Care Act was the requirement that all group health insurance plans offer various “Essential Benefits” – including emergency services and hospitalizations, pregnancy and maternity and newborn care, mental health and substance abuse disorders, lab services, and prescription drugs – in addition to covering certain preventive health services at no cost, and no lifetime limits on coverage. The changes were meant to ensure that, no matter what health insurance plan someone purchased, he/she could be confident that all the typical “essential” benefits that might be expected would be included.

Paradise Papers Expose Rich And Famous Using Tax Havens  

Robert W. Wood
November 5, 2017

Forget Panama. The newest big leak showing how the powerful and ultra-wealthy stash money and assets in offshore tax havens is the Paradise Papers. It will hardly be paradise to those whose names and details are being teased out of the morass. The leak contains a massive 13.4 million documents, mostly from a single offshore finance firm. As with the leak of the Panama Papers, the Paradise Papers come from the German newspaper Süddeutsche Zeitung. The paper called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation. The Guardian is among nearly 100 media partners involved in investigating the treasure trove of documents.

New tax “reform” bill could seriously screw nonprofits and the people we serve

November 5, 2017

Hi everyone. Before we launch into today’s exciting topic, check out the pilot episode of this hilarious show called “The Humanitarians.” It’s set at an organization called Stuff We Don’t Want (SWEDOW), and had me cracking up at clever one-liners like “Have we assessed the actual need for winter coats in Sub-Saharan Africa?” Check it out. We need to support more shows about nonprofit work.

Unfortunately, the rest of this post is about tax “reform.” I know, I know, I don’t really want to talk about it either. But, like taking out the compost or putting on deodorant or remembering our partner’s birthdays, we have to do it, or else bad things happen. To reward you for reading, though, and for me to actually write this, I’m putting in pictures of bunnies throughout this post. The bunnies have nothing to do with taxes.  

IRS Warns It Has Not Announced 2018 Filing Season Start Date, Despite Rumors

Kelly Phillips Erb
November 4, 2017

Think you know when the 2018 tax filing season will open? Think again.

The Internal Revenue Service (IRS) has not yet announced the date that it will begin accepting individual tax returns for the 2018 tax filing season. As the tax agency does every year, it's continuing to update its programming and processing systems for the upcoming season. Additionally, the IRS says it "continues to closely monitor potential legislation that could affect the 2018 tax season" - in addition to the GOP tax proposal which was just announced this week, upcoming votes could include "extender" tax provisions that expired at the end of 2016 which might be renewed for the tax year 2017.

Top 5 Ways to Derail Financial Independence and Early Retirement

The White Coat Investor
November 4, 2017

Does the concept of financial independence appeal to you? Would you like to have the option to retire early? Great! Me too!

One of my goals is to help give you the knowledge and motivation to help make FI a reality. I’ve talked about why you might want to retire early and how to go about it. I would be remiss if I didn’t talk about how not to do it.

The House Tax Cuts and Jobs Act: The Impacts on Jobs and Incomes by State

Nicole Kaeding, Morgan Scarboro, and Scott A Hodge
November 3, 2017

With yesterday’s release of the House Tax Cuts and Jobs Act, Americans are trying to understand how these tax changes would impact their families. The pro-growth tax plan would simplify the tax code by eliminating most itemized deductions, while reducing marginal tax rates.

Using the Tax Foundation’s Taxes and Growth (TAG) macroeconomic tax model, our analysis found that the “the plan would significantly lower marginal tax rates and the cost of capital, which would lead to 3.9 percent higher GDP over the long term [and] 3.1 percent higher wages.”

Americans Renouncing Citizenship Hits New Record; Tax Bill Won't Change That

Robert W. Wood
November 3, 2017

The number of Americans handing in their passports forever is statistically small, but there has been another notable spike. The total for the first quarter of 2017 was 1,313. The number on the second quarter's list went up to 1,759, which is the second highest quarterly number ever (second only to the fourth quarter of 2016, which had 2,365 published expatriates). The total for the third quarter of 2017 was 1,376, putting the annual tally on track to top 2016’s record. Some observers may want to blame President Trump for the spike, but it is much more likely that longstanding tax issues are the real culprits. And the tax reform now being considered is hardly a game-changer. These 'published' numbers are probably lower than the real ones, for a variety of reasons. 

Which bracket will you be in under the GOP tax reform plan?

Kay Bell
November 3, 2017

DJT Paul Ryan Kevin Brady Diane Black tax reform

The shiniest part of the Republicans' new tax plan is the reduction in tax rates. We would go from the current seven to just four.

So how much of our earnings will fall into these new brackets?

Here's what the Grand Old Party's tax writers want in H.R. 1, the Tax Cuts and Jobs Act:

Tax Bill Kills State Tax Deduction, So California's 13.3% Prompts More Exits

Robert W. Wood
November 3, 2017

The Tax Cuts and Jobs Act is out, and you can wade through the 429 pages here. As this helpful summary of the plan states, it would eliminate the state and local tax deduction. If you pay high state income taxes--think California, New York, and many other places--you'll care about this. Tens of millions of Americans claim this tax deduction, writing off their state and local taxes to reduce their federal income tax. Lots of taxpayers, Republicans and Democrats alike, could even rethink where they want to live. After all, it already hurts to pay high state taxes. No deduction is some serious lemon juice in that state tax paper cut.

Tax Change on Mortgages Could Shake Up the Housing Market

Conor Dougherty
November 2, 2017

The Republican tax plan unveiled on Thursday takes aim at the most sacred of cows: the provision that subsidizes homeownership by allowing the deduction of interest on mortgage debt.

For most of America, the impact would be minimal. The proposed bill would make the interest deduction available on mortgage debt of up to $500,000 — half the current ceiling. But that is still more than double the median home price in the United States of roughly $200,000. Fewer than 3 percent of home mortgages are more than $500,000, according to data from CoreLogic.

How Do The Proposed Tax Cuts Compare To The 2018 Tax Rates?

Kelly Phillips Erb
November 2, 2017

Earlier today, House Republican leaders released their tax reform bill, the Tax Cuts and Jobs Act.

You can read the text of the bill, which downloads as a pdf, here. Fair warning: it's a densely written 429 pages. If you don't want to trudge through it, I've written a summary of the plan, which highlights some of the big changes - no commentary, just the facts.

How To Get Approved For Student Loan Refinancing

Zack Friedman
November 2, 2017

If you are one of the 44 million student loan borrowers who, according to personal finance comparison site Make Lemonade, collectively owe more than $1.4 trillion, then student loan refinancing should be at the top of your to-do list.

Here is what you need to know to get approved for student loan refinancing.

Don't Make These Common Mistakes Assessing Your Retirement Preparedness

Katheryn Thayer
November 1, 2017

Do you have a good sense of how prepared you are for retirement? The majority of working-age Americans (52%) are “at risk” of not having enough to maintain their living standards when they retire, according to the National Retirement Risk Index calculated by Boston College's Center for Retirement Research. So academics there were curious: how well we are able to assess our own retirement readiness? Do those who are off-track know it? Do the well-prepared still worry?

Alicia Munnell, the director of Center for Retirement research and co-author of the Do Households Have a Good Sense of Their Retirement Preparedness? brief, says, “Almost 20 percent incorrectly think they are prepared, in large part because they do not recognize that their 401(k) savings are inadequate to last for their whole retirement period.” 60% do know if they are on track or not, and the other 20% think they are not prepared when in fact they could afford to maintain the same standard of living they have now.

Next Biggest CyberScare After Equifax: 'Walking Dead' Bank Accounts

John Wasik
November 1, 2017

After Equifax got hacked and cyberthieves stole data from more than 140 million accounts, what could be worse?

Enter the "zombie" bank account. I'm not making this up. Cybercriminals are setting up fake or "phantom" accounts to fleece even more unsuspecting folks.

Ask The Taxgirl: Dependent Care Expenses & Stay-At-Home Parents

Kelly Phillips Erb 
November 1, 2017

Taxpayer asks:

I’m a stay at home mom and my husband works full time. My youngest is going to pre-school 2 days per week. My husband’s employer offers a Dependent Care Flex Spending account. Are we allowed to take advantage of that if I’m not working (or looking for work)? I’ve seen this question asked a few times with regards to the Dependent Care Credit, but I’m not sure if that is related to Flex Spending or if it’s something totally separate. has the Latest Information for Taxpayers in Disaster Areas

November 1, 2017

Taxpayers who live in an area affected by one of the many disasters this year can visit The website has details about tax relief that might benefit them. The Tax Relief in Disaster Situations page on has resources that can walk taxpayers through information related to these disasters:

  • Hurricane Irma affected Florida, Georgia, South Carolina, the U.S. Virgin Islands and Puerto Rico
  • Hurricane Maria hit the U.S. Virgin Islands and Puerto Rico
  • Hurricane Harvey affected Texas and Louisiana

How to Provide Financial Help to Aging Parents

Eileen Ambrose and Sandra Block
November 2017

Mark Kress, 59, of Sterling, Va., first realized his 88-year-old father, Willard, needed help after he saw some bills with past-due balances stacked on his father’s kitchen table. That was completely out of character for Willard, who had a successful career as a certified public accountant. 

Initially, Willard didn’t believe he needed help. For most of his adult life, he had managed his investment portfolio and done his own taxes. But over five years, Kress and his four siblings gradually persuaded their father to let them take control of his finances.

Use This Hack to Get the Most Out of Social Security

Kathy Kristof
November 2017

Getting the most out of Social Security is all about waiting as long as possible to start filing for benefits, right?

Not quite--especially if, as a business owner, you get to decide how you are paid.
You can actually live on a lot more money in retirement if you make some changes right now to your salary and take some steps to adjust your current tax bills, says Matthew Allen, a co-founder of New York City-based Social Security Advisors.

50 Ways to Save on Health Care

Kimberly Lankford
November 2017

Even with good insurance from your employer, you're most likely paying a larger share of your medical expenses than in the past -- $11,600 for the average family in 2017, according to the Milliman Medical Index. A growing portion of that cost accrues during the year, from deductibles, co-payments and coinsurance -- which now account for $4,534 of the average family's expenses. The median deductible for in-network care charged by large employers is $1,300 for employee-only coverage and $3,000 for families, according to the National Business Group on Health.

Foreign Investors Win Big, Tax-free

Steven M. Rosenthal
October 31, 2017

Last week, I described how, in the short run, foreign investors would receive 35 percent of the benefits of the lower corporate income tax rates proposed by the Trump Administration and congressional Republican leaders (the Big Six).  But their windfall could be especially generous because increases in asset values produced by the corporate rate cut would largely be tax-free to foreign investors at the shareholder level.  By comparison, US individuals generally would be subject to a 23.8 percent shareholder-level tax on their long term capital gains or dividends received.  

Four Things to Know about Taxes and Starting a Business

October 31, 2017

New business owners have tax-related things to do before launching their companies. has resources to help. Here are some items to consider before scheduling a ribbon-cutting event. 

Choose a business structure

When starting a business, an owner must decide what type of entity it will be. This type determines which tax forms a business needs to file. Owners can learn about business structures at The most common forms of businesses are:

How to support your parents while saving for retirement

Jim Sandager, For the Register
October 31, 2017

APC f FF quality caregiving from distance 0628

In their 2015 financial support survey, TD Ameritrade found that 13% of American adults are financially supporting their parents. And it appears to be a growing issue. According to the survey, 19% of millennials are helping pay their parents’ bills, compared to 13% of Generation Xers and 8% of Baby Boomers.

So what happens if you are, or become, one of those 13%? How do you help your parents through their retirement end of their lives, while still preparing for your own?

2017 International Tax Competitiveness Index

Kyle Pomerleau, Jared Walczak, and Scott A. Hodge
October 31, 2017

The structure of a country’s tax code is an important determinant of its economic performance. A well-structured tax code is easy for taxpayers to comply with and can promote economic development, while raising sufficient revenue for a government’s priorities. In contrast, poorly structured tax systems can be costly, distort economic decision-making, and harm domestic economies.

Many countries have recognized this and have reformed their tax codes. Over the past few decades, marginal tax rates on corporate and individual income have declined significantly across the Organisation for Economic Co-operation and Development (OECD). Now, most nations raise a significant amount of revenue from broad-based taxes such as payroll taxes and value-added taxes (VAT).

Top House Republican tax writers delay their reform bill until Thursday for a 'few finishing touches'

Everett Rosenfeld and Matthew J. Belvedere
October 31, 2017

House Republicans, in consultation with President Donald Trump, postponed the release of their tax bill by one day until Thursday.

"We just had a few finishing touches to do," House Budget Chairwoman Diane Black told CNBC. "We wanted to make sure we had this right when we put it out."

Tax Bill Delay Gives Republicans More Time to Wrestle With Key Details

Alan Rappeport and Jim Tankerskley
October 31, 2017

House Republicans are (still) just one day away from unveiling their long-awaited tax plan and many key details still remain in flux.

Lawmakers have paved the way for a $1.5 trillion tax cut, but the provisions under discussion would far exceed that cost. Republicans are still struggling with how to make the math work, including how to treat the wealthiest Americans, whether to get rid of some of the most valuable tax deductions and whether to make the income tax cuts temporary.

Beer Is Not A Metaphor For Tax Fairness

Leonard E. Burman
October 31, 2017

Yesterday my twitter feed exploded with cranky tweets about White House Press Secretary Sarah Sanders’s press briefing, which started with an anecdote about bar tabs and tax fairness. I thought she did a good job illustrating why some analysts think the percentage change in tax liability is the right measure of progressivity for a tax change. Her anecdote also makes quite clear why that measure is inappropriate for assessing deficit-financed tax cuts.

U.S. Consumer Confidence Just Hit Its Highest Level in Almost 17 Years

Sho Chandra
October 31, 2017

U.S. consumer confidence rose more than expected in October to the highest in almost 17 years as Americans grew more confident about the economy and job market, according to figures Tuesday from the New York-based Conference Board.

Key Takeaways

Voices Objective CPAs should oversee elections

Peter Mandel
October 30, 2017

A voter casts their ballot in Cleveland on Nov. 8, 2016.

“Voters out there are frustrated,” said a cable news analyst I flipped on the other day. It could have been almost any news show. Any political angle. Any evening.

The analyst cited “lack of disclosure” as the root cause of this problem. Not so, insisted someone in a suit on set. It’s about conflicts of interest, he said. An absence of objectivity.

Where in-home health aides cost the most

Maddy Perkins
October 30, 2017

9. Oregon

While the cost of care rose considerably across all options this year, the largest percentage increase in price occurred for home health aides, according to Genworth's 2017 Cost of Care survey. The national median yearly cost of care for home health aides is $49,192, up 6.17% this year. Retirees opting to receive home care can expect to pay caretakers up to $21.50 an hour.

Despite the hike in costs, it’s worth taking a close look at options because there are wide cost discrepancies between cities — even within the more expensive states. Clients living in pricier states might find relief for the cost burden by relocating to a city where care is less expensive. 

IRS Encourages Taxpayers to Check Their Withholding; Checking Now Helps Avoid Surprises at Tax Time

October 30, 2017

WASHINGTON —  As the end of 2017 approaches, the Internal Revenue Service today encouraged taxpayers to consider a tax withholding checkup. Taking a closer look at the taxes being withheld now can help ensure the right amount is withheld, either for tax refund purposes or to avoid an unexpected tax bill next year.

The withholding review takes on even more importance given a tax law change that started last year. This change requires the IRS to hold refunds a few weeks for some early filers claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the IRS and state tax administrators continue to strengthen identity theft and refund fraud protections, which means some tax returns could require additional review time next year to protect against fraud.

Insurance Guide 2018: Oregonians flock to high deductible health plans

Dana Tims
October 29, 2017

The number of Oregonians enrolled in high-deductible health plans surged last year, and now represents nearly half those with access to employer-sponsored coverage, new data show.

An additional 105,200 Oregon workers joined high-deductible health plans in 2016, according to research from the University of Minnesota's State Health Access Data Assistance Center. That brings total enrollment to 368,100, a 40 percent increase from 2015.

GOP plans tax blitzkrieg

Scott Wong and Alexander Bolton
October 28, 2017

GOP plans tax blitzkrieg

Congressional Republicans are feeling enormous pressure to deliver a win on tax reform before Christmas Day.

After a humiliating defeat on ObamaCare repeal, GOP leaders are desperate for their first major legislative victory of 2017 and are doubling down on their ambitious timeline to overhaul the U.S. tax code.

Tax evasion is a side hustle side effect

Kay Bell
October 28, 2017

Picking up some extra cash is nothing new. People have always taken on added work when they've needed or wanted a few more dollars.

Now, however, side hustles have become a viable employment option. They've also become a problem for the Internal Revenue Service.

The Big Six Tax Outline Would Lose $2.4 Trillion Over 10 Years, According To TPC’s New Dynamic Score

Howard Gleckman
October 27, 2017

A new Tax Policy Center “dynamic analysis” of the Big Six’s “Unified Framework” tax plan finds it would fail to achieve President Trump’s promise of a significant, permanent boost in economic growth. As a result, the outline would reduce federal tax revenue by roughly $2.4 trillion over the next decade, nearly the same as under conventional scoring.

The Memo: Trump tax reform nears crunch time

Niall Stanage
October 27, 2017

The Memo: Trump tax reform nears crunch time

President Trump faces a stark question as he and Republicans in Congress move ahead on tax reform: Can he come up with a plan that helps the people who elected him, or will most of the rewards go to the richest Americans?

The president ran for the White House as the voice of working- and middle-class Americans. His populism, stoked by close aides like erstwhile chief strategist Stephen Bannon, helped carry him to victory last November in struggling states across the Rust Belt.

Rosy White House tax cut forecast clashes with independent analysis

David Morgan and Saqib Iqbal Ahmed
October 27, 2017


(Reuters) - The White House promoted President Donald Trump's tax cut plan on Friday with a forecast of faster U.S. economic expansion and wage growth, as independent analysts said the plan would swell the budget deficit and provide little spark to the economy.

The rival projections reflected the many unknowns swirling around the plan, expected to be unveiled in legislative form on Wednesday. Republicans were still undecided on some of the hardest parts, such as how to pay for the costly cuts proposed.

6 Things A Trust Can Do That You May Not Realize

Mark Eghrari
October 27, 2017

To many people, a trust seems like a basic (albeit highly effective) estate planning tool. The maker of the trust transfers ownership of certain assets to the trust, and a trustee manages those assets for the beneficiary or that trust.

But your trust can do a lot more than that.

Virginia, New Jersey Elections Could Offer Tax Cut Lessons

Richard C. Auxier
October 26, 2017

Taxes are front and center in the only two gubernatorial races this year. The Virginia campaign centers on the Republican candidate’s individual income tax cut promises. While New Jersey’s matchup is a classic contest between a Republican pledging to cut taxes and a Democrat vowing to raise them.   

Like congressional Republicans, the GOP candidates in Virginia and New Jersey are betting that tax cuts will help them navigate difficult political headwinds. Their success could boost GOP tax cut efforts in Congress, while their failure could suggest that tax relief will have limited appeal in the 2018 congressional races.

Budget vote raises red flag for GOP on tax reform

Naomi Jagoda and Christina Marcos
October 26, 2017

The tight 216-212 House vote Thursday to pass the GOP budget is raising a red flag for Republicans on tax reform.

The GOP barely scraped up enough votes to pass their partisan budget, as 20 on their side defected.

House Narrowly Approves Budget In March Towards $1.5 Trillion Tax Cuts

Kelly Phillips Erb 
October 26, 2017

Despite the crowing coming out of D.C., there are still no new tax cuts. It is true that there was another vote in Congress. And it is also true that the vote likely paved the way for tax cuts. But for now, we're still in procedure mode. Here's what you need to know.

The House of Representatives passed a budget resolution by a vote of 216-212. All 216 of the yes votes were cast by Republicans; 20 Republicans joined 192 Democrats in voting no. You can see how your Representative voted here.

David Kautter to be named acting IRS commissioner

Alistair M. Nevius 
October 26, 2017

The White House announced on Thursday that President Donald Trump will name David Kautter acting commissioner of the IRS. The designation will take effect Nov. 13. Currently Kautter is assistant secretary of the Treasury, Tax Policy, a post that he started in August.

Treasury announced that while he is serving as acting commissioner, Kautter will continue to carry out his duties as assistant secretary. The day-to-day operations of the IRS will continue to be overseen by deputy commissioners Kirsten Wielobob and Jeff Tribiano.

Estate and gift tax exclusions increase in 2018, but kiddie tax earnings don't get any inflation bump

Kay Bell
October 26, 2017

Dirty-Sexy-Money-ABC TV_cast promo shot

It's always good to be rich, even when the inevitabilities of death and taxes meet.

That's because the Internal Revenue Code, for now, excludes a nice chunk of change from federal taxation.

Estate tax exclusion increase: It's possible that the estate tax could die again like it did in 2010, and for more than just one year if the Republican Party gets the tax reform it wants.

‘I could live simpler’: Floods and fires make Americans rethink their love affair with stuff

Lisa Bonos and Jura Koncius
October 25, 2017

As Hurricane Irma barreled toward Florida last month, Stephanie Kurleman and her family packed up three cars and evacuated to a friend’s home. “I thought I wouldn’t come back to anything,” Kurleman said, recalling the moment her family drove away from Clearwater Beach. In addition to the basics, she said they gathered documents, photos, her Bible, jewelry, plus the kids’ kiteboards.

When the storm passed, they drove back and found only minor damage. But the experience left Kurleman with an urge to purge. “I was weighed down by too much stuff,” Kurleman, 50, said. “I was prepared to start over with what I had with me,” she said, adding: “I could live simpler.”

Medical tax provisions affected in 2018 by inflation

Kay Bell
October 25, 2017

The only thing worse than being sick is having to pay for medical treatment.

One remedy that could help your pocketbook if not your ailment is the Internal Revenue Code. There are some tax code provisions that can help cover some medical costs.

What are the Most Tax-Friendly States?

Dominique Molina
October 25, 2017

fireworks at night over bridge

Thinking of moving to a tax-friendly state or perhaps you have clients who want to know which states have the best corporate tax rates?

Wyoming leads the list with an overall rank of #1, most likely due to favorable corporate tax and individual taxes. Wyoming is followed by South Dakota and Alaska to round out the top 3.  But it’s not all cold weather and northern locations, Florida holds tightly in rank #4. 

Spousal Rollover And Stretch Rules For Inherited Traditional And Roth IRAs

Michael Kitces
October 25, 2017

Under IRC Section 401(a)(9)(B), the standard rule for inherited retirement accounts (whether an IRA or an employer retirement plan like a 401(k), Roth or traditional) is that any remaining retirement account balance after the death of the original owner that is payable to a designated beneficiary shall be distributed “over the life expectancy, or over a time period not extending beyond the life expectancy” of that designated beneficiary. For the purpose of these rules, a “designated” beneficiary is defined in IRC Section 401(a)(9)(E) as “any individual designated as a beneficiary” – the key point being an individual (i.e., a human being that has a pulse and, thus, a life expectancy over which distributions can be stretched).

Ask The Taxgirl: The Difference Between Innocent Spouse And Injured Spouse

Kelly Phillips Erb
October 24, 2017

Taxpayer asks:

What's the difference in injured and innocent spouse? Years ago I separated and the IRS withheld my tax refund because of unpaid tax from my now Ex. Do I have any way to get that back?

Taxgirl says:

Tax deductions & credits affected in 2018 by inflation

Kay Bell
October 24, 2017

Millions of taxpayers depend each year on tax deductions and tax credits to cut their annual tax bills.

The main tax reduction strategy is claiming the standard or an itemized amount. Adjustments for the 2018 tax year to these tax write-offs were covered in Part 2 two of my annual tax inflation series.

On a Home Sale, Improvements or Repairs Make a Difference on Taxable Profit

Julian Block
October 23, 2017


In a story on home ownership and use tests published last week, I explained how the law allows a home seller an exclusion from taxes. This time we’ll talk about how identifying an improvement or repair to your home can have an impact on taxable profit following a sale.

Exclusions from taxes apply from taxes of up to $250,000 in profit on home sales for single filers and up to $500,000 for married couples filing jointly. But a seller whose gain exceeds the exclusion cap of $250,000 or $500,000 is stuck with taxes on the excess.

Hurricanes, tax reform could delay 2019 tax season

Kay Bell
October 23, 2017

Where the heck has 2017 gone? The countdown clock over in the ol' blog's right column is steadily ticking away the time left until Dec. 31, the deadline for most moves that could affect this year's taxes.

The Internal Revenue Service, however, has its eyes on November, which is just little more than a week away.

A closer look at the next 1040

Jeffrey Pretsfelder
October 23, 2017

The Internal Revenue Service has made a draft of the Form 1040 for the 2017 tax year available on its Web site.

Jeffrey Pretsfelder, a senior analyst with Thomson Reuters Checkpoint, highlights some of the key changes. (A text version of these changes is also available.)

The Finger-Pointing at the Finance Firm TIAA

Gretchen Morgenson
October 21, 2017

In the treacherous world of finance, where investors confront biased advice, hidden costs and onerous fees, one investment giant seems to stand apart — the Teachers Insurance and Annuity Association, also known as TIAA. Calling itself a “mission-based organization” with a “nonprofit heritage,” TIAA has enjoyed a reputation as a selfless steward of its clients’ assets for almost a century.

“Our values make us a different kind of financial services organization, known for our integrity,” Roger W. Ferguson Jr., TIAA’s president and chief executive, says on the company’s website.

The Long Story of the Movement Toward College Cost Clarity

Ron Lieber
October 20, 2017

Once upon a time, paying for college was a relatively simple task.

Parents who could often did. Teenagers with parents who lacked either the ability or the willingness to pay worked their way through school, which was easy enough to do at many schools before 1985 or so.

Rate of people without health insurance rises for first time since 2014

Peter Sullivan
October 20, 2017

Rate of people without health insurance rises for first time since 2014

The percentage of people who do not have health insurance rose to 12.3 percent in the third quarter of the year, the first such rise since ObamaCare took effect in 2014.

The hike in the uninsured rate, up 1.4 percent according to Gallup since the beginning of the year, comes as the GOP Congress has sought to repeal the law and as President Trump has threatened to allow its implosion.

When 'Independent Contractors' Get Unemployment Benefits, What It Means For Employers

Robert W. Wood
October 20, 2017

With Uber, Lyft, and many other companies that provide many different services and products, the norm these days seems to be independent contractors. The companies avoid the huge taxes, expenses, and liabilities of having employees. The workers get the freedom to work on their own, managing their own schedules. One of the great unanswered questions, of course, is how much control is too much for independent contractors, without making them employees. Many lawsuits brought by workers and by third parties are about this very question.

Tax Cuts Won’t Make America Great Again

William G. Gale
October 20, 2017

In a speech earlier this week, Donald Trump invoked Ronald Reagan’s 1981 tax cuts as a model for his own plan. Trump said Reagan’s tax cuts “unleashed the economic miracle of the 1980s” and promised his own tax cuts would boost economic growth substantially. Consider those statements “alternative facts.”

In principle, well-designed tax cuts can increase economic activity since lower marginal tax rates boost the reward for firms that invest and hire and for people who work and save more. But there is another part of the story: Lower rates also reduce the need for people to work and save more to achieve a desired living standard. And if tax rate cuts are not offset by other tax increases or spending cuts, they’ll require higher government borrowing. Those effects discourage future economic growth. 

6 Myths About Credit Freezes

Maryalene LaPonsie
October 19, 2017

For nearly three months this year, hackers had access to files at Equifax, a financial services company and one of the big three credit reporting bureaus. All told, more than 145 million people may have had their Social Security numbers, birth dates and addresses stolen. Some driver's license and credit card numbers may also have been taken.

While not the biggest security breach in history, it could be the one that causes the most damage. With Social Security numbers, addresses and birthdates, thieves can do everything from open new bank accounts to file fraudulent tax returns.

Tax Breaks On Selling Your Home, Vacation, Or Investment Property

Robert W. Wood
October 19, 2017

With a personal residence, investment real estate, or other investment property, consider taxes before you sign. Your gain will often be long term capital gain, meaning a federal tax rate of 15 to 20%, depending on your income. Depending on your income, you may have to add another 3.8% in federal taxes. That’s the net investment income tax added by Obamacare. President Trump said he would repeal it, but so far that hasn't happened.

IRS issues 2018 inflation-adjusted tax tables and many other tax provisions

Sally P. Schreiber, J.D.
October 19, 2017

On Thursday, the IRS issued the annual inflation adjustments for 2017 for more than 50 tax provisions as well as the 2017 tax rate tables for individuals and estates and trusts (Rev. Proc. 2017-58). These provisions are used to file tax year 2018 returns in 2019.

Most provisions are increasing for inflation in 2018, including the personal exemption, which increases from $4,050 in 2017 to $4,150 for 2018. The standard deduction for married taxpayers filing joint returns increases to $13,000, $300 more than in 2017. It also increases slightly for single taxpayers and married taxpayers filing separately to $6,500. The standard deduction increases for heads of household, from $9,350 in 2017 to $9,550 in 2018.

Will Corporate Tax Cuts Really Increase worker Incomes By $4,000?

Howard Gleckman
October 18, 2017

The White House Council of Economic Advisers put out a paper this week defending a very bold prediction: A cut in the corporate tax rate from 35 percent to 20 percent would boost incomes of US workers by at least $4,000-a-year.

CEA chair Kevin Hassett is a leading proponent of the theory that workers ultimately pay all the corporate tax and, thus, would receive huge benefits from a cut in the levy. If true, it would be a politically compelling argument at a time when public opinion surveys show that as much as 60 percent of the public is opposed to cutting corporate taxes.

5 amended tax return filing tips

Kay Bell
October 17, 2017


To err on tax returns is human. To forgive is Xtraordinary, and yes, the misspelling is intentional.

Tax law lets us correct mistakes we make on our 1040s via another form, the 1040X.

Most people file 1040X, which is known as amending your return, because they discovered they didn't claim a tax break that give them a (or a bigger) tax refund.

Lessons From Dentist's Tax Evasion: Cover-Up Is Worse Than Crime

Robert W. Wood
October 17, 2017

No one wants to be accused of tax evasion. And most people who end up in the situation probably did not think a criminal prosecution, much less a criminal conviction, was a serious or even a remote possibility. Recently, a Tennessee dentist named Andrea M. Henry pleaded guilty to tax evasion. Dr. Henry, 45, owned The Henry Polk Dental Group D.P.C. and The Smile Spa LLC. These dental practices were located in Cordova, Tennessee. Dr. Henry filed personal income tax returns for 2005, 2006, 2008 and 2010 to 2013, but did not pay $113,781 in income and self-employment taxes due to the IRS.

Got $1 million to retire? Here’s how long it will last, by U.S. state

Sally French
October 16, 2017

If your vision for retirement was basking in a tropical paradise, let’s hope your vision of tropical paradise resembles something more like Mississippi and less like Hawaii.

Either that, or let’s hope you were planning on a short retirement.

Data analysis site HowMuch analyzed how far $1 million goes in retirement in every U.S. state. And it turns out, you can stretch $1 million about twice as far in Mississippi as you can in Hawaii. HowMuch crunched the numbers based on the Cost of Living Index for Q2 of 2017 as well as average annual expenditure of persons with 65 years and above.

California, U.S. territory taxpayers get disaster tax relief

Kay Bell
October 14, 2017

Barranquitas Puerto Rico damage 100917 aerial view_FEMA- Andrea Booher

To borrow from James Taylor's plaintive classic, the Internal Revenue Service has seen fire and rain and is making tax accommodations for Americans having to deal with those disastrous aftermaths.

Hurricane Maria made landfall in Puerto Rico on Sept. 20, pummeling the U.S. territory with category 5 force. Three weeks later, many of the island's 3.4 million residents are still withoutpower, drinking water, food and medicine.

Here’s how much Social Security checks could increase in 2018

Jeffry Bartash
October 13, 2017

Hurricanes Harvey and Irma caused a lot of hardship, but there may be a silver lining for seniors: The storms could end up giving retirees a few extra dollars in their Social Security checks next year.

Harvey shut down major refineries in the Gulf Coast to force up the price of gasoline. And auto prices rose as many people sought to replace cars and trucks damaged by flooding in Texas and Florida.

Social Security checks are getting their biggest boost in six years

Jeffry Bartash
October 13, 2017

Seniors who collect Social Security will get a 2% increase in their monthly checks in 2018, marking the biggest gain in six years.

The cost-of-living adjustment announced by the Social Security Administration is the largest since a 3.6% increase in 2012. Might not sound like much, but it’s a lot more than the nation’s 42 million retirees got in 2016 or 2015.

Eight Lessons on How to Design Tax Reform

C. Eugene Steuerle
October 13, 2017

Endorsing the concept of tax reform is just one small step towards making it a reality. How do lawmakers, who are confronted with an almost infinite number of policy options, ensure that reform serves the public in a meaningful way?

To help focus those choices, here are eight lessons that were vital to the organization of the Department of Treasury study (“Treasury I”) that led to the Tax Reform Act of 1986, the only comprehensive base-broadening tax reform in the hundred-plus year history of the income tax.

IRS suspends contract with Equifax after malware discovered

Kathy Kristof
October 12, 2017

The IRS said late Thursday that it has temporarily suspended the agency's $7.1 million data security contract with Equifax (EFX) after malware found on the credit bureau's website again called its security systems into question. 

Equifax, now notorious for exposing more than half of all adult Americans to identify theft, maintained the latest security breach was not officially a hack. 

Trump to cut off key ObamaCare payments

Rebecca Savranksy and Nathaniel Weixel
October 12, 2017

Trump to cut off key ObamaCare payments

President Trump will end key payments to insurers selling ObamaCare plans, the White House announced late Thursday, marking Trump's most aggressive move yet to dismantle the law after multiple GOP efforts to repeal and replace it failed this year.

The Trump administration has continued making the the disbursements to insurers, known as cost-sharing reduction payments, on a monthly basis. But Trump had consistently threatened to end the payments, which are worth an estimated $7 billion this year.

More scams moving to social media, experts warn

Mark Huffman
October 12, 2017


Phishing scams have moved to social media sites, security experts warn, requiring consumers to think before they click.

The 2016 presidential campaign was rife with content labeled “fake news,” designed to sway a voter one way or the other. But scammers have adopted similar tactics, seeking access to your bank account, or even your identity, rather than your vote.

The 5 Best College Savings Plans

John Wasik
October 12, 2017

Over the years, I've become a big fan of 529 college savings plans. I set up two of them for my daughters, one of whom is in college. They are great savings vehicles with lots of flexibility and healthy tax breaks.

But not all "529" plans are equal. Some of them are downright rip-offs because they charge high fees and commissions.

Trump eases ObamaCare rules with executive order

Peter Sullivan
October 12, 2017

President Trump on Thursday signed an executive order aimed at taking action on ObamaCare on his own after Congress failed to repeal the law.

Trump said Thursday the order is "starting that process" to repeal ObamaCare. It will be the "first steps to providing millions of Americans with ObamaCare relief," Trump said.

How to buy your first home

Danish Mehboob
October 12, 2017

broke no more 2

The real estate market is soaring.

But Millennials shouldn't feel pressure to get in on the action, according to financial experts. They're the largest group of homebuyers in the market today.

Buying a home is one of the most -- if not the most -- significant purchases of your adult life. So, you'll want to make sure you're really ready.

4 signs you might never retire

Maurie Backman
October 12, 2017

Countless Americans look forward to retirement and the flexible lifestyle it tends to offer. Unfortunately, a large number of workers might never get there.

In a TD Ameritrade study, 25% of U.S. adults say they don't think they'll ever retire. And they're probably not the only ones. That's because 1 out of every 3 workers have no money set aside for the future, and that includes 30% of folks 55 and over.

Why Do We Make It So Hard For Immigrants To Pay Their Taxes?

Howard Gleckman
October 12, 2017

Why do we make it so hard for immigrants to pay their federal income taxes? Why do we throw so many roadblocks between them and their civic duty?

Many are citizens, though they may have family members who are not. Some are legal residents and some are undocumented. But wherever you come down on the current immigration debate, it seems beyond dispute that people who want to pay their taxes should be able to do so without getting hopelessly lost in a bureaucratic morass.

The road to retirement starts here

Jonathan Lynch, Manager
October 11, 2017

Older couple riding a bike

When it comes to saving for retirement, there is no one-size-fits-all plan. Each American has a unique and fluid situation, impacted by a variety of factors. Fortunately, CPA financial planners are well-versed in the different aspects that go into a tailoring a retirement plan that best fits their client’s needs.

I sat down with Leonard Wright, CPA/PFS and member of the AICPA Personal Financial Specialist Credential Committee, to learn some best practices for starting a retirement plan that helps maximize enjoyment during your golden years.

The GOP Had One Big Divide On Health Care. It Has Three On Taxes.

Perry Bacon Jr.
October 11, 2017

Remember how divided Republicans in Washington were on their plans to repeal the Affordable Care Act? Well, they are even more divided so far on their push to change America’s tax system — a bad sign for a party desperate for a big achievement in a year in which they control both houses of Congress and the presidency.

The congressional GOP divide on Obamacare repeal was fairly simple and one dimensional: a bloc of conservative members (such as the House Freedom Caucus and senators like Utah’s Mike Lee and Kentucky’s Rand Paul) who wanted to eliminate as much of the ACA as possible versus a group of more moderate Republicans (such as Maine Sen. Susan Collins) who wanted to preserve many parts of the law. White House officials and party leaders spent months unsuccessfully trying to find a middle course between these two camps.

Key conservative Republican eyes bigger tax break for charity

Naomi Jagoda
October 10, 2017

Key conservative Republican eyes bigger tax break for charity

The leader of the biggest group of House conservatives is quietly pushing to expand the number of people who can claim a tax break for charitable giving in the GOP tax-reform legislation, expected to be released within weeks.

Rep. Mark Walker (R-N.C.), the chairman of the Republican Study Committee, introduced a bill late last week without fanfare to create a new deduction for charitable contributions for those who don’t itemize. His office predicts it will likely be merged within the tax bill that Republicans are counting on to deliver their first big legislative victory this year.

Ask The Taxgirl: Should I Cancel A Form W-9?

Kelly Phillips Erb
October 10, 2017

Taxpayer asks:

I'm a contractor who signed a w-9 form but am no longer gonna do the work, am I okay or how do I cancel the w-9 form????

Taxgirl says:

You should be fine. Here's why.

The Unintended Consequences of Killing the Estate Tax

Daniel Berger
October 9, 2017

The United Framework for tax reform outlined last week by the congressional Republican leadership and the Trump Administration included a proposal to eliminate the estate tax. It also explicitly preserved the tax deduction for charitable giving, presumably because the GOP believes that contributing to non-profits is a valuable public good. Yet, by repealing the estate tax, the proposal could sharply reduce charitable contributions.

7 States With the Highest Income Tax

Matthew Frankel (TMFMathGuy)
October 9, 2017

Money on top of a tax return.

Many Americans, especially those who haven't moved around much, are often surprised at the range of tax burdens there are across the United States. States with the highest property taxes, for example, have average rates that are more than four times that of the states with the lowest property taxes.

Income taxes vary even more. On one hand, there are seven U.S. states with no individual income taxes whatsoever, and two more that are close. On the other end of the spectrum, some states have rather high income taxes, especially for high earners. Here's a closer look at the seven U.S. states with the highest individual income tax burdens, according to a report by WalletHub.

Traditional stores’ days are numbered, Aviva warns

Tom Knowles
October 9, 2017

Aviva Investors has transformed shopping locations it owns, such as the Corn Exchange in Manchester, into leisure destinations with a range of casual dining and a hotel on the upper floors

One of Britain’s biggest property owners has predicted the death of the traditional shop, as it warns that most physical stores on the high street will be wiped out by the relentless rise of online shopping.

Aviva Investors, which has £20 billion worth of property under management in the UK including several shopping centres, believes that store-based retail is set to “decline significantly”.

Family businesses get estate tax break thanks to Treasury decision to revoke tax regulation

Kay Bell
October 8, 2017

Remember back in July when the U.S. Treasury announced eight tax regulations it said were burdensome and needed to be changed or axed?

Treasury Secretary Steven Mnuchin and his staff have now finalized what they want to do with these eight rules. Three would be tossed out, including one that many say hurt family-owned and operated businesses. Two would be partially revoked. The final three would be substantially revised.

How to Plan for the Unforeseen

Paul Sullivan
October 6, 2017

Even thinking about an unexpected, life-changing event can be unsettling. But death or illness can happen at any time.

Unfortunately, people do not plan for such events. And statistically, most younger people could go years without planning and not really worry.

Kay Bell
October 6, 2017

Equifax isn't the only entity taking heat in the wake of the company's cyber security breach that exposed the personal and financial data of 145.5 million consumers.

The Internal Revenue Service is now under fire for awarding the credit reporting bureau a no-bid contract.

Should You Invest Your I.R.A. in Friends, Family or Charitable Work?

Abby Ellin
October 6, 2017

About five years ago, a good friend of William C. Brown, a tax lawyer in Des Moines, lost his job. The friend’s wife ran a child-care center in a building she owned — but because of their financial difficulties, the couple fell behind on their mortgage payments.

Their bank threatened to foreclose.

ACA: Tax Reform Should Tackle The Worldwide Tax System

Marylouise Serrato
October 6, 2017

Often overlooked and misunderstood by the Congress, US citizens living and working overseas now appear to be poised to benefit from the Administration and Congress' desire for tax reform. There is a real possibility that new international tax rules will be passed in a greater tax reform overhaul and these rules will no doubt address tax policy for individuals as well as corporations.

Las Vegas has brought in millions in donations. But where will they go?

Chris Kudialis
October 5, 2017


When tragedy struck Las Vegas on Sunday, community members, elected officials and corporations alike stepped up not only with their hearts and labor, but their pocketbooks.

More than $14 million in donations have been made to the victims of Sunday’s massacre per crowdsourcing sites like GoFundMe as well as direct individual contributions. On Sunday evening, gunman Stephen Paddock fatally wounded at least 59 attendees at a country music festival from his 32nd-floor room at Mandalay Bay.

Workers Like the Idea of State-Sponsored Auto-IRA Programs

John Manganaro
October 5, 2017

A new analysis from the Pew Charitable Trusts, “Worker Reactions to State-Sponsored Auto-IRA Programs,” makes a clear argument that workers in the U.S. broadly favor the option of turning to the government for savings opportunities when an employer is unwilling or unable to provide a retirement plan.

The analysis suggests these types of plans could likely help a lot of people who are more or less shut out of the defined contribution (DC) retirement plan arena: “At least one-quarter of nongovernmental, nonagricultural full-time workers do not have access to an employer-sponsored retirement plan, and fewer than 15% of households contribute to an individual retirement account (IRA).” Given these facts, policymakers, particularly at the state level, are examining ways to bolster retirement savings, Pew reports.

Will A Corporate Rate Cut Really Increase US Jobs And Wages?

Howard Gleckman
October 5, 2017

Kevin Hassett, chair of President Trump’s Council of Economic Advisers, argued today that the corporate tax cuts in the Sept. 27 Republican Unified Framework would boost overall economic growth. How? In large part because its corporate tax rate reductions would encourage firms to shift jobs from overseas to the US. But the claim is unsupported by the evidence.

U.S. baby boomers fall behind in paying off mortgages: Fannie Mae

Reuters Staff
October 5, 2017

(Reuters) - Older American homeowners are trailing the prior generation in paying off their mortgages, complicating their finances if they carry the loans into retirement, a report from Fannie Mae released on Thursday showed.

This lag has persisted even with an improving economy since the last recession and a housing recovery in the aftermath of the housing bust in the late 1990s, Patrick Simmons, Fannie Mae’s director of strategic planning, wrote in the article.

Does Your State Levy a Capital Stock Tax?

Morgan Scarboro
October 5, 2017

Capital Stock Taxes

Only 16 states levy a capital stock tax, a tax on the net worth of a business. These taxes are often levied at a low percentage on the wealth of a firm. Because the tax is paid in good times and bad, businesses often find themselves using precious cash flow to pay it. In broad economic terms, capital stock taxes (referred to as franchise taxes in many states) are destructive because they disincentivize the accumulation of additional wealth, or capital, which distorts the size of firms.

Yahoo Breach Update: Every single Yahoo account was impacted by the 2013 breach, now three times larger than initially reported

Michelle Caruthers
October 4, 2017

The Yahoo data breach incident that happened in 2013 was initially reported to have only impacted 1 billion users at the time making it the largest data breach in history. However, it has just been announced that the impact was, in fact, much worse as the massive data breach affected not just 1 billion but all 3 billion Yahoo users.

In addition to those who registered Yahoo email addresses, anyone with accounts for Yahoo-owned services like Flickr, Tumblr or Yahoo fantasy sports leagues are also included in the 3 billion records impacted.

Treasury to withdraw proposed estate tax rules

Naomi Jagoda
October 4, 2017

Treasury to withdraw proposed estate tax rules

The Treasury Department announced on Wednesday that it is planning to withdraw estate-tax rules proposed by the Obama administration that were widely opposed by GOP lawmakers and business groups.

The department in a report called the rules' approach "unworkable."

7 Questions Rich People Ask Their Accountant

Keith Schroeder
October 4, 2017

A year ago I started tracking the questions clients asked me. Clients were put into three categories: those with income below $50,000; those with income over $400,000; and everyone else in between in the final category.

Obsessive-compulsive disorder isn’t the reason for my behavior. I noticed questions frequently were based upon wealth. I needed to track data for a period of time to verify what I suspected was true.

Cannabis Executives Share Their Stories of Personal Financial Discrimination

Alan Bronchstein, CFA
October 4, 2017

The cannabis industry is booming. One would think that nothing could be as exciting as being a cannabis entrepreneur, but cannabis executives face challenges with financial transactions that many of us take for granted, like getting a bank account, maintaining a securities account, qualifying for life insurance or getting even getting a mortgage. It’s not that the financial institutions are necessarily anti-cannabis, but they are concerned that taking cash that is derived from federally illegal sources could jeopardize their regulatory status. Financial discrimination is widespread throughout the industry and extends beyond the hurdles over which the businesses themselves must jump.

5 Types Of Fraud In Business That Could Put You In A Bind

Mike Kappel
October 4, 2017

Running a business is hard enough when everything goes smoothly. But when you’re an entrepreneur, the unexpected happens. You need to prepare yourself for every possible situation, including fraud.

Business fraud isn’t as rare as you might think. It’s important that you know how to prevent and deal with fraud if it comes your way.

With Affordable Care Act’s Future Cloudy, Costs for Many Seem Sure to Soar

Reed Abelson
October 3, 2017

Health insurers are aggressively increasing prices next year for individual policies sold under the federal health care law, with some raising premiums by more than 50 percent.

By approving such steep increases for 2018 in recent weeks, regulators in many states appeared to be coaxing companies to hang in there, despite turmoil in the market and continuing uncertainty in Congress about the future of the law, the Affordable Care Act.

7 Ways the New Tax Fight Could Hit Annuities

Allison Bell
October 3, 2017

For the people who create and sell annuities and other insurance-based retirement planning products, the start of high-energy efforts in Washington to update federal tax rules and programs is creating hope, and fear.

The efforts could make the economy more efficient, put more money in consumers' pockets, and leave consumers in a better position to prepare for post-retirement income, acute health care and long-term care needs. The changes could even help the world create the kinds of housing, health care advances, long-term care workforce and long-term care technology that could make the aging of the world's population easier to handle.

Will Equifax hack affect 2018 tax filing season?

Kay Bell
October 3, 2017

Equifax former CEO Richard Smith_House Energy-Commerce Committee opening statement 100317

Human error, specifically one human's error, is why 145 million of us are worrying about what crooks will do with the data that was stolen earlier this year in a data breach of Equifax.

Richard Smith, the credit reporting bureau's former CEO, in testimony before House Energy and Commerce Committee today blamed the initial failure to patch a known security risk on a specific individual. He did not name that person.

All Your Equifax Breach Questions (and Some Answers) in One Place

Ron Lieber
October 3, 2017

Three weeks after Equifax acknowledged that hackers had breached the company’s system, the company’s interim chief executive, Paulino do Rego Barros Jr., apologized for its messy response. The breach meant that potentially millions of Social Security numbers, driver’s licenses and other information had been stolen, leaving many of us to wonder how vulnerable we might to identify theft.

“Answers to key consumer questions were too often delayed, incomplete or both,” Mr. Barros wrote in an op-ed column in the Wall Street Journal on Thursday.

Testimony: The Startup Slump: Can Tax Reform Help Revive American Entrepreneurship?

Scott A. Hodge
October 3, 2017

Chairman Tiberi, Senator Heinrich, members of the Committee, thank you for the opportunity to talk with you today about how to make our tax system more friendly to entrepreneurship. The Tax Foundation’s mission is to work toward a tax code that doesn’t stand in the way of success, so we applaud the interest in making our tax code friendlier to entrepreneurs.

Despite our Byzantine tax code, America is a land of entrepreneurs. The dynamism of our entrepreneurs—the willingness to try and possibly fail—is what separates the U.S. from every other nation on earth.

If you expect to get Social Security, this is the one thing to do in the aftermath of the Equifax breach

Michelle Singletary
October 2, 2017

The financial exploitation of seniors is already a problem. Now with the massive data breach by Equifax, it’s just one more thing to concern the elderly.

Many people are scrambling, trying to put in place credit freezes to prevent identity thieves from opening up credit in their name. But if you expect to get a Social Security check or you’re already getting a benefit there’s something else you should do and fast.

5 Signs Elder Care Is Ruining A Client's Retirement

Juliette Fairley
October 2, 2017

Americans caring for an aging parent may be cutting back on their own expenses, having trouble paying the bills and dipping into their savings, according to a new study.

“Our clients who are retirement age who still have parents who are alive and aging are coming into the position where they might want to be helping their parents out financially,” said Suzanne Shier, chief tax strategist with Northern Trust. “It’s not something they factored in when they were planning their own retirement years. It’s a conversation we are having more and more.”

4 Ways To Net More Financial Aid

John Wasik
October 2, 2017

The way college financial aid is determined in this country is all wrong. You shouldn't have to jump through multiple hoops and fill out forms to qualify. It should be as simple as one click.

Why, in an age in which you can order nearly anything and get it the next day, do we have to be tortured by financial aid forms? I don't have the answer for that, but I can tell you what you need to know to get aid and obtain a debt-free degree.

12 Strategies to Generate Income in Retirement

Sandra Block
October 2017

When it comes to saving for retirement, maybe you've done everything right. You started early, maxed out your 401(k) plan, invested in a diversified portfolio and avoided costly mistakes, such as cashing out your retirement plan. Fantastic. But now comes the hard part: making sure you don't outlive your money.

That's a tall order for today's retirees. Taxes, unpredictable investment returns, rising health care costs and inflation down the road can significantly erode the value of your nest egg. And perhaps the biggest challenge is that you'll probably need the money for a long time. A 65-year-old man has a life expectancy of 19.3 years; it's 21.6 years for a 65-year-old woman. If you're married, there's a 45% chance that one of you will live to age 90 and a nearly 20% chance that you or your spouse will live to 95.

How does the US tax plan compare to other countries?

BBC News
September 30, 2017

U.S. President Donald Trump acknowledges the crowd after speaking at the Indiana State Fairgrounds & Event Center September 27, 2017 in Indianapolis, Indiana. Trump spoke about his Republican tax plan.

Taxes - the perennial bugbear of the Republican party - are back in the spotlight in Washington.

Republicans this week outlined a plan to dramatically lower taxes on businesses and overhaul the code for individuals and families.

Changing the way Americans are taxed was a key campaign issue of US President Donald Trump.

7 money shows to listen to on International Podcast Day

Kay Bell
September 30, 2017

International Podcast Day Twitter feed image; click to visit

It's International Podcast Day! Why are you reading (although thank you for stopping by)? You should be listening.

That's why on this day celebrating the internet's audio offerings, this Shout Out Saturdaygoes to seven of my favorite financial podcasts.

1. Money Girl

How to stop your devices from listening to (and saving) what you say

Kim Komando
September 29, 2017

Google Home is Google's voice-activated speaker.

Yes, voice technology is amazing. You can ask your phone a question. You can talk to your speaker system and even book an Uber. With the right setup, you can verbally lock the doors in your house, dim the lights, and change the thermostat. All across America, people are embracing their oral fixation.

Virtual assistants are handy, but they’re always listening. As more manufacturers and developers jump onto the audio tracking bandwagon, you may wonder how much your devices are recording. And what happens to the audio files they gather?

The Equifax Hack Has the Hallmarks of State-Sponsored Pros

Michael Riley, Jordan Robertson, and Anita Sharpe
September 29, 2017

Investigations into the massive breach aren't complete, but the intruders used techniques that have been linked to nation-state hackers in the past.

In the corridors and break rooms of Equifax Inc.'s giant Atlanta headquarters, employees used to joke that their enormously successful credit reporting company was just one hack away from bankruptcy. They weren't being disparaging, just darkly honest: Founded in the 19th century as a retail credit company, Equifax had over the years morphed into one of the largest repositories of Americans' most sensitive financial data, which the company sliced and diced and sold to banks and hedge funds. In short, the viability of Equifax and the security of its data were one and the same.

Using a reverse mortgage to delay Social Security: does it make sense?

Mark Miller
September 28, 2017

CHICAGO (Reuters) - Delaying your Social Security benefit claim offers one of the best routes to higher retirement income - annual benefits increase 8 percent for every 12 months that you delay from age 62 to 70. But the strategy often comes with a challenge: how to meet living expenses while you wait?

How about this solution? Borrow against your house.

What Would the “Big Six” Framework Mean for Lower-Middle Income Households?

Scott Greenberg
September 29, 2017

On Wednesday, Republican leadership released a framework for a tax reform bill. One major question about the framework so far has been about how the plan would impact the tax burden of lower-middle income households.[1]

In anticipation of the plan’s release, there was already a great deal of confusion about this question. Initial reports suggested that the plan would include a 12 percent bottom bracket, which would be higher than the current bottom bracket of 10 percent – leading some to speculate that the Republican framework would raise taxes on some lower-middle income households.

Morgan Scarboro 
September 29, 2017

State & Local Excise Tax Collections per Capita

Excise taxes are particular taxes levied on specific goods or activities, not general tax bases like income or consumption. Some excise taxes are fairly well-known to the public, like cigarette or alcohol taxes, but others are more hidden, like taxes on admission for amusement businesses.

On average, these excise taxes make up a relatively small portion of state and local tax revenue – about 11 percent – but per capita collections vary widely among states. Vermont has the highest state and local collections at $1,068 per capita, followed by Nevada with $910, and Hawaii with $885 in collections per capita.

Getting personal with the GOP tax reform proposal

Kay Bell
September 28, 2017

The Money Pit Shelley Long Tom Hanks house troubles_MovieClips-dot-com

How expensive is owning a home? So expensive that many homeowners view "The Money Pit" as a documentary.

But, we console ourselves, at least we get some nice tax breaks for our piece of the American Dream.

How to Pay Off Your Mortgage Before You Retire

Wendy Connick
September 28, 2017

Large stone and shingle house with neatly kept, very green landscaping

Housing is the single biggest monthly expense for many families, so if you don't have a housing payment to worry about during your retirement years your savings will last you a lot longer. Paying off your mortgage by the time you retire isn't complicated; it just requires a little preparation.

Your repayment plan
If you know how much you owe on your mortgage, your interest rate, and how long it will be before you retire, figuring out how to get rid of the mortgage in time isn't difficult. You can even use a mortgage payoff calculator to see the effect of adding extra payments.

Inherited vs Gifted Can Lead to Big Tax Gap on a Home Sale

Julian Block
September 28, 2017

home care

Long-standing tax rules authorize an exceptional benefit for people who sell inherited assets that have increased in value — homes, stocks, real estate and works of art, to cite some common examples.

Inherited property gets what’s called a “step-up in basis” to its fair market value on the date of death of the previous owner. Thus, for tax purposes, the asset’s basis (generally, the cost of acquiring the property) becomes its value at the date of death, rather than the actual purchase price.

Boomers, Millennials Race Ahead Of Gen Xers In Retirement Planning

Gregory Bresiger
September 27, 2017

More baby boomers are getting better at saving for retirement. So are millennials, but Gen Xers still have lots of work to do.

Those are some of the conclusions of a new study from Allianz Life Insurance of North America that found 72 percent of boomers feel financially prepared for retirement, up 15 percent from a similar study in 2010.

Here's How IRS Taxes Severance Pay

Robert W. Wood
September 27, 2017

You may get severance pay when you quit your job, are laid off, or fired. You also might get severance later if you sue and settle. Whether or not your pay is labeled “severance,” and regardless of when it is paid, the IRS generally views severance like any other pay. It’s taxed as wages, so is subject to withholding and employment taxes. If your employer hands you a severance check as you walk out the door, you may well expect it to have all the payroll deductions you’re used to seeing on your regular paycheck.

The Staggering Prices of Long-Term Care 2017

Emily Gurnon
September 26, 2017

Long-Term Care

The cost of long-term care just keeps going up and most Americans keep believing — incorrectly — that the government will cover most or all of it.

Those are the findings of a new report, the Genworth 2017 Cost of Care Survey, released today by Genworth Financial.

Pot Farmer to Neighbors: Chill Out. Neighbors: No.

Laura M. Holson
September 26, 2017

McMinnville, Ore. — “This is hostile territory. Everyone hates us.”

I was riding up a steep hill near Highway 18 one August afternoon when Richard Wagner blurted out what his lawyer had told me weeks earlier: No one wanted to be his neighbor.

Mr. Wagner, 33, was seated next to his mother, Mary, who was behind the wheel of her Subaru Outback, navigating a strip of dry grass and rocks in a meadow here overlooking the Willamette Valley. Mr. Wagner’s neighbors had made it possible last year for his parents to buy 6.7 acres of land. But in February, when he told them he was going to grow and process marijuana, his quaint country fellows suddenly weren’t so chill.

The cheapest places to retire

Jessica Dickler
September 25, 2017

Birmingham, Alabama.

If, like most Americans, your retirement savings are falling short, pack your bags. You'll be better off living in Birmingham, Alabama, Memphis, Tennessee, or Detroit.

Using criteria such as groceries, housing, utilities, transportation and health care, GoBankingRates found the cheapest places to retire in the country's 150 biggest cities.

How High Are Property Tax Collections Where You Live?

Morgan Scarboro
September 21, 2017

State and Local Property Taxes Per Capita

States collect property taxes in a number of ways: some impose a rate or a millage on the fair market value of property, while others impose it on some percentage (the assessment ratio) of the market value, yielding an assessed value.

Regardless of how they are collected, property taxes are an important revenue tool for state and local governments. In fiscal year 2014, they comprised the largest source of state and local tax collections, at 31.3 percent. They also make up the largest revenue source for local governments.

Why you should discuss the nonfinancial aspects of retirement with your clients

Allan Kunigis
September 18, 2017

While there's no denying the importance of being financially prepared for life after one stops receiving a paycheck, planning for retirement needs to involve much more.

Keith Lawrence, founding partner of coaching firm LifeScape Solutions and co-author of the book Your Retirement Quest, discovered the importance of planning for the nonfinancial side to retirement while working as a human resources executive as Procter & Gamble. He saw recently retired employees returning to the company after six months. "They were bored or their spouse practically kicked them out of the house," he recalled.

Equifax Breach: Two Executives Step Down as Investigation Continues

Nicole Perlroth and Cade Metz
September 18, 2017

SAN FRANCISCO — Equifax, the credit reporting agency, said Friday that its chief information officer and chief security officer were retiring “effective immediately.” The announcement came one week after the company revealed that a cyberattack potentially compromised confidential information of 143 million Americans. On Friday, the company also provided further details about when it had discovered the breach and which part of its website had been targeted by hackers. But many details about the breach, who was behind it and the computer security defenses at Equifax are still unclear.

What We Know

Tap your retirement plan for a disaster? Usually other options are better

Russ Wiles
September 15, 2017


In the wake of a disaster like Hurricane Harvey or Irma,  a job loss or other financial trauma, it's natural to look to 401(k)-style retirement plans or Individual Retirement Accounts for help.

Retirement plans are among the largest sources of fairly liquid, non-housing money available to millions of Americans. They are tempting sources of ready cash.

Real estate: 4 reasons fewer Americans are buying homes

Matthew Frankel, The Motley Fool
September 15, 2017


While the U.S. homeownership rate has climbed slightly since reaching a 50-year low in 2016, it remains near a generational low at just 63.7%. Simply put, more people are choosing to rent than buy their homes in recent years than at any point since the 1960s.

RealtyMogul, an online real estate investment platform, recently commissioned Harris Poll to conduct a survey to shed some light on the reasons why more people are choosing to rent, and here are four major trends that help to explain the shift toward renting.

How Much Does Your State Collect in Sales Tax Per Capita?

Morgan Scarboro
September 14, 2017

Forty-five states and the District of Columbia levy a statewide sales tax. State rates vary widely among states, from 2.9 percent in Colorado to 7.25 percent in California. This does not take into account the local sales tax rates that are levied in thirty-eight states, which can significantly change the combined rate for consumers.

Hawaii and North Dakota collect the most in statewide sales tax per capita at $2,090 and $1,835 respectively, but both states’ sales tax base is extremely broad and includes many services, so they’re not strictly comparable to other states. Among the more comparable states, Washington state collects the most per capita ($1,746), followed by Nevada ($1,412). On the opposite end of the spectrum, Georgia ($515) and Alabama ($507) collect the least per capita.

Nonprofit Leaders and Fundraisers Call For Greater Diversity

Rebecca Koenig and Timothy Sandoval
September 14, 2017

Charity leaders and fundraisers called on nonprofits to build more diverse staffs and do more to engage donors from a wide variety of backgrounds at The Chronicle’sPhilanthropy NEXT conference, a gathering that tackled race, gender, and sexual orientation in philanthropy.

Nonprofit leaders must be honest with themselves about how well their organizations have grappled with diversity, some speakers said at the gathering, which was held on Thursday.

3 Big Mistakes That Can Screw Up Even the Best Retirement Plan

Walter Updegrave
September 14, 2017


If you've been saving diligently and investing prudently for retirement, that's terrific. But it's not enough.

Even people who get the basics right often fall down when it comes to other key areas of retirement planning. Which is why you want to avoid these three big mistakes that new research shows can often trip us up and undermine our retirement planning efforts.

Tax Court: Beauty Pageant Winner Loses Tax Contest

Ken Berry
September 14, 2017


Beauty is in the eye of the beholder, but the tax law isn’t as subjective, as evidenced by a new case, Lopez, TC Memo. 2017-171, 8/30/17, involving a beauty pageant winner from Indiana.

If a child earns income from a competition, he or she is responsible for paying tax on that income, as well as being able to deduct offsetting expenses – even if the parents are the ones pulling the financial strings.   

Your Social Security Number Isn’t a Secret

Bob Sullivan
September 13, 2017

Back when identity theft was mainly credit card fraud and a 100,000-record leak was a big deal — the good old days, around 2004 — my hacker friends and I would sit around and brainstorm ways to slow down what some were calling the fastest-growing crime of the century.

One method came up again and again: Someone should steal the entire database of Social Security numbers and publish it online. (No one tried — that would be a crime!) Why do something so crazy? Once and for all, it would eliminate the fantasy that a Social Security number is both a unique identifier and a secret to be used as an authenticator.

An Experiment: How Low Could Tax Rates Go If Congress Eliminated All Tax Expenditures?

Howard Gleckman
September 13, 2017

How low could Congress cut tax rates without losing revenue? To put it another way, could President Trump and the House Republican leadership fully fund the sorts of individual and corporate tax rate cuts they have been promoting by eliminating current tax preferences?

To find out, the Tax Policy Center ran three experiments: What would happen if Congress wiped out nearly every business and individual tax expenditure –more than 200 of them, by the Joint Committee on Taxation’s count?  What would happen if it preserved three important preferences for low- and moderate-income households but repealed the others? Finally, what would happen to tax rates if Congress created a reform plan that not only raised about the same amount of revenue as the current law but also distributed the tax burden in roughly the same way?

What is a Backdoor Roth IRA?

Alexis Hongamen
September 13, 2017

A backdoor Roth IRA (Individual Retirement Account) is a conversion method used by people that are not eligible to contribute to a Roth IRA.

Roth IRA

Most people are familiar with a Roth IRA. When you fund a Roth IRA, you are taking money out of your bank account that has already been taxed and placing it into this new IRA. The advantage it offers over a traditional IRA is that the growth on the contributions accumulates tax-free, meaning you won’t pay taxes on the money again when you take it out at retirement age.?

Equifax waives credit lock fees for consumers, amid criticism

Sarah O'Brien
September 13, 2017

Equifax, the credit-reporting firm facing a barrage of criticism over its response to a massive data breach at the company, will now waive certain fees related to one of its credit-protection products.

The now-free Equifax service, which involves identity-theft protection and credit-file monitoring for a year, also allows you to put a lock on your credit report at Equifax. This basically means a lender cannot access it to check on your credit score or history. You can unlock it temporarily if you need to apply for credit or a loan.

What You Need to Know About ‘Medicare for All’

Anna Edney and Zachary Tracer
September 13, 2017

In most of the developed world, everybody’s health care is paid for by the government. In the U.S., for years that idea has been relegated to the far-left edge of politics under the name of single payer. Last year, Senator Bernie Sanders, an independent of Vermont called it “Medicare for All” and put it at the forefront of his campaign for the Democratic presidential nomination. Now, with liberals revved up by their so-far successful fight to protect Obamacare from President Donald Trump and a Republican Congress, Sanders’s idea is getting some support. The legislation he introduced todaywould build on Medicare, the hugely popular insurance program for those over 65, to provide coverage to all Americans.

1. What would his Medicare for All bill do?

America’s highest-earning state probably isn’t the one you would expect

Christopher Ingraham
September 13, 2017

Pop quiz: Which U.S. state had the highest median income in 2016?

New York or California, perhaps, home to some of the nation's wealthiest cities? Maryland or Virginia, with their Washington suburbs flush with government cash? Alaska, home of the famous oil revenue checks for every man, woman and child?

All of those guesses are wrong, according to the latest 2016 income datareleased by the U.S. Census. The correct answer, believe it or not:

How to Manage the Long-Term Financial Aftermath of a Natural Disaster

Geoff Williams
September 12, 2017

Natural disasters come and go in the news, but the actual aftermath lingers long after the TV cameras go away. Not long after Hurricane Harvey hammered the South Texas coast, the administrator of the Federal Emergency Management Agency, Brock Long, said on CNN, "FEMA is going to be there for years."

At the time of this writing, with Hurricane Irma storming the country, it's unfortunately looking like FEMA will also be pretty busy in Florida and possibly in other parts of the U.S.

Having kids can really mess up retirement saving

Marlene Y. Satter
September 12, 2017

Here's another thing to make your kids feel guilty about when they ask for a new iPhone: They could be ruining your future retirement. (Photo: Shutterstock)

If you have children, you might not believe this (unless you have teenagers) – but parenthood could be putting your eventual retirement at risk.

But there are ways to avoid that risk.

So says a brief from the Center for Retirement Research at Boston College, which used the National Retirement Risk Index (NRRI) to gauge the impact of having children on the retirement security of current older working households.

IRS Collections: A primer for tax preparers

Roger Russell
September 12, 2017

CPAs, Enrolled Agents and attorneys are part of a privileged group that can represent taxpayers at all levels before the IRS, yet many choose not to extend their practice when collections issues arise. For those that do, there are some things they should know about, according to Curtis Hunter, a shareholder in the Coral Gables office of law firm Becker & Poliakoff PA.

“The first step in resolving tax disputes with the IRS is to understand the taxpayer’s rights and the alternative defenses available. Although understaffed, Collections is still a significant activity of the IRS,” said Hunter, who specializes in the areas of federal and state tax, estate planning and litigation.

Expert: Fraudsters may already be trying to use breached Equifax data

Nicole Sinclair
September 12, 2017

Forter, an e-commerce fraud prevention company, said they saw a “significant” spike in what appears to be fraudulent account takeovers this summer, something they believe could be a result of the recently-disclosed Equifax (EFX) data breach.

“In the last two months we saw about a 15% increase year-over-year in account takeover attempts,” according to Forter CEO and co-founder Michael Reitblat. “While we can’t confirm that this is related to the Equifax breach, the timing suggests that it could.”

Don't Forget Retirement Accounts In Estate Planning

Masoof Vojdani
September 11, 2017

When thinking about estate planning, the assets that typically come to mind first are your bank accounts, your house and any other owned properties, and your most valued possessions. But an equally important asset – and arguably one of the most intricate when it comes to estate planning – is your retirement account(s).

Creating a carefully designed plan with the help of your financial advisor and estate attorney in advance is essential to ensuring that your assets are protected and transferred to your loved ones in an effective way that will maximize their inheritance and minimize taxes or red tape.

Teaching Very Young Children About Money And Investing

Investment Pancake
September 11, 2017


  • Kids can learn investment basics at an extremely young age.
  • Our experience with teaching our kid about money and investing.
  • A game-like spreadsheet that parents can use to help teach their kids about investing.

Tax-advantaged ways grandparents can give to grandchildren

Kay Bell
September 10, 2017

Grandma and granddaughter enjoying the ride_Rob Bixby via Flickr CC

Happy Grandparents Day! If your pop-pop and mam-maw (insert your own personal and/or regional affectionate nicknames here) are still around, take some time to tell them how much you love and appreciate them.

Most of the time, younger — and that's definitely a relative term — folk think of grandparents as ancient. In many cases, elderly grandparents (and parents) do need some help, physically and financially, from their children or grandchildren. If that's your situation, you might be able to claim your older relatives as dependents and get some tax benefits for yourcare giving.

What your kids can do when they inherit your retirement accounts

Dan Moisand
September 9, 2017

Spouses are usually the primary beneficiary on retirement accounts but eventually retirement accounts are left to a non-spouse. Non-spouses have a different set of options to choose from.

Q.: What options will my children have when they inherit retirement accounts from mom and dad?

Health care costs in retirement will only grow— here’s how to save

Alessandra Malito
September 9, 2017

An American couple retiring this year should expect to spend $275,000 in health care costs throughout retirement — a number that has risen 6% since last year, and will continue to rise indefinitely.

The number assumes the individuals are enrolled in Medicare, but does not include expenses associated with a nursing home or long-term care, according to Fidelity Investments, the Boston-based financial services firm that analyzed these health care costs. Instead, the $275,000 includes monthly expenses that come with health coverage premiums, copayments and deductibles and out-of-pocket expenses for prescription drugs. The expected cost of health care has grown 70% since Fidelity first started tracking health care costs in 2002, and will continue to rise in the future, Adam Stavisky, senior vice president of Fidelity Benefits Consulting. “Medicare is wonderful, but by design it doesn’t cover everything,” Stavisky said.

One-quarter of people make this costly mistake when using debit cards

Maria Lamagna
September 9, 2017

Americans like using debit cards, but many don’t understand what their plastic can and can’t do.

Nearly one-quarter of consumers believe activity on their debit card impacts their credit score,when in reality, it has no effect. That’s according to a survey of 2,000 consumers this week from the personal-finance company NerdWallet. For those trying to build or improve their credit, a credit card is often a better choice, provided consumers can pay their bills in full on time, said Kimberly Palmer, a credit card expert at NerdWallet.

Bitcoin, Virtual Currency Deals Under $600 Could Become Tax Exempt

Robert W. Wood
September 8, 2017

The IRS is hunting digital currency users, since very few people seem to be reporting their transactions. The IRS is using John Doe summonses to obtain data on bitcoin and other digital currency users. The IRS is even hunting bitcoin user identities with software. IRS scrutiny is causing many people to worry that they may owe taxes, penalties and interest. Even worse, in extreme cases, the IRS could pursue tax scofflaws criminally. However, help could be on the way. A bipartisan bill, "The CryptoCurrency Tax Fairness Act," was introduced in the House by Rep. Jared Polis (D-Co) and Rep. David Schweikert (R-Az).

Financial Statement Changes: 5 Steps for Nonprofit Boards

AICPA Communications
September 8, 2017

As accounting and finance professionals, we’ve been talking about the coming changes to not-for-profit financial statements for some time now. But many others haven’t heard about the changes, including some not-for-profit board members. Board members are responsible for oversight of the financial reporting process, and as such, they’ll want to take an active role duringimplementation of the new guidance.

The Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities: Presentation of Financial Statements of Not-for-Profit Entities, was issued in August 2016. The standard applies to all not-for-profits and is effective for years beginning after December 15, 2017. Early adoption is permitted.

What the Rich Won’t Tell You

Rachel Sherman
September 8, 2017

Over lunch in a downtown restaurant, Beatrice, a New Yorker in her late 30s, told me about two decisions she and her husband were considering. They were thinking about where to buy a second home and whether their young children should go to private school. Then she made a confession: She took the price tags off her clothes so that her nanny would not see them. “I take the label off our six-dollar bread,” she said.

She did this, she explained, because she was uncomfortable with the inequality between herself and her nanny, a Latina immigrant. She had a household income of $250,000 and inherited wealth of several million dollars. Relative to the nanny, she told me, “The choices that I have are obscene. Six-dollar bread is obscene.”

Would Workers Benefit From A Corporate Tax Cut? Not Much

Howard Gleckman
September 8, 2017

President Trump and congressional Republicans are pressing ahead on a tax bill that will almost certainly include a major corporate tax cut. And they are framing their push for such a measure around the claim that workers will be the big beneficiaries of those corporate tax reductions.

They won’t.

Are Americans sacrificing food and clothing to pay their taxes?

The Economist - The Data Team
September 7, 2017

AMERICAN households are woefully overtaxed. That was the message delivered by President Donald Trump on September 6th in Mandan, North Dakota. Mr Trump told supporters that Americans labour under a “crushing” tax burden that puts the country at an economic disadvantage. He repeated a claim he has made several times, that America is the “highest-taxed nation in the world”. Only with tax cuts—the “biggest since Ronald Reagan”—would middle-income Americans get the pay rise they deserve.

Corporate Income Tax Rates around the World, 2017

Kari Jahnsen and Kyle Pomerleau
September 7, 2017

Key Findings

  • The United States has the fourth highest statutory corporate income tax rate in the world, levying a 38.91 percent tax on corporate earnings. The only jurisdictions with a higher statutory rate are the United Arab Emirates, Comoros, and Puerto Rico.
  • The worldwide average statutory corporate income tax rate, measured across 202 tax jurisdictions, is 22.96 percent. When weighted by GDP, the average statutory rate is 29.41 percent.

How Much Does Your State Collect in Corporate Income Taxes Per Capita?

Morgan Scarboro
September 7, 2017

The corporate income tax is one of the smallest sources of state tax revenue. According to Census data, in FY 2015, the corporate income tax only comprised 5.3 percent of state tax collections. As we outlined earlier this year, there are several reasons why the corporate income tax share is so low on average.

Some mistake the corporate income tax as the entirety of a business’s tax burden. However, businesses pay many types of taxes outside of the corporate income tax, including sales tax, property tax, excise tax, payroll tax, and more. The corporate income tax makes up 

Reconstructing tax & other records after a natural disaster

Kay Bell
September 6, 2017

Trying to salvage flood damaged records_Louisiana Law Blog

Maybe you didn't think the hurricane's flood waters would reach your neighborhood. Or maybe you just never kept copies, either paper or digital, of your financial and tax records.

Now, however, you find you're among the millions dealing with Hurricane Harvey aftermath that destroyed much of the Texas Gulf Coast and the Lone Star State's largest city. Or might soon face a similar situation if (when) Hurricane Irma rakes Florida.

Hiding Assets To Thwart IRS Tax Collection Can Be Criminal

Robert W. Wood
September 5, 2017

Criminal tax charges are not common, and not every charge ends in a conviction. Still, any tax charge is serious, and charges for obstructing the IRS certainly are. For example, a federal grand jury in the District of Hawaii has indicted a businessman and his accountant with tax crimes, including allegedly concealing income and assets to obstruct IRS collections. The indictment charges Wagdy A. Guirguis and Michael H. Higa, his CPA, with conspiring to defraud the IRS. The indictment further charges Guirguis with filing false corporate tax returns, failing to file a corporate tax return, evading individual income tax liabilities, corruptly endeavoring to obstruct the IRS, and tampering with a grand jury witness. Higa was also charged with aiding and assisting in the filing of false corporate and individual tax returns.

The $1.4 Million Mistake Too Many Millennials Are Making

Michael Douglass (TMFEnterprise)
September 5, 2017

Woman scratching head at crossroads.

Millennials are doing lots of good work with our savings. We're saving earlier than our parents did. We're saving more too. All that despite making around 20% less than our parents did at the same age.

But there's one thing many of us are doing wrong: We're investing in the wrong things.

U.S. economy could take big hit if DACA is revoked

Kay Bell
September 2, 2017

NBC News report on effects of DACA revocation

The White House is expected to make a decision on President Obama's Deferred Action for Childhood Arrivals (DACA) program as soon as Tuesday, Sept. 5.

UPDATE, Sept. 5: It's official. DACA is ending. In a press conference this morning, Attorney General Jeff Sessions said the Trump Administration will stop considering new applications for legal status dated after today, but will allow any DACA recipients with a permit set to expire before March 5, 2018, the opportunity to apply for a two-year renewal. The White House also issued a statement saying the "orderly transition and wind-down of DACA" also provides "a window of opportunity for Congress to finally act" on at least this immigration issue.

Net Operating Loss Carryforward & Carryback Provisions by State

Morgan Scarboro
August 31, 2017

The corporate income tax should tax only the profits of a corporation; however, profitability can vary for businesses. A business’s yearly profit may not capture its true profitability. Businesses in particularly cyclical industries may experience substantial profits during boom years, but also experience substantial losses during bust years. Over time, that same business might actually have an average profit margin.

California's 13.3% Tax On Capital Gains Inspires Move Then Sell Tactics

Robert W. Wood
August 31, 2017

Living in California has many perks, but the state's 13.3% rate is the highest marginal tax rate in the nation. When you add up to 39.6% federal taxes, it can hurt, especially for those who cannot deduct their state taxes against their federal. California's taxes were always high, but Proposition 55 extended the 13.3% tax rate 'temporarily.' How temporarily? Only until 2030! Personal income tax hikes on incomes over $250,000 started in 2012. It impacts Californians with a single income of $263,000 , or a joint income of $526,000. When people talk of moving away, in many cases, the absence of a capital gain rate that can be the straw that breaks the proverbial camel's back.

The Effects of Converting the State and Local Tax Deduction into a Credit

Kyle Pomerleau
August 30, 2017

Over the past couple of years, the state and local tax deduction has been a popular base broadener for the GOP. Nearly all GOP tax reform proposals from Congress and presidential campaigns since 2014 have included eliminating or limiting the deduction to pay for lower statutory tax rates.

Under current law, individuals who itemize can deduct the income or sales taxes they pay to state and local governments from their federal taxable income. They are also able to deduct their state and local property taxes. The state and local tax deduction is one of the three largest itemized deductions (the other two being the home mortgage interest deduction and the charitable contribution deduction). According to the IRS, $520 billion in state and local taxes were deducted in 2014; 46.5 percent of state and local taxes were deducted by taxpayers with adjusted gross income over $200,000.

IRS loosens rules for retirement plans to lend money to Hurricane Harvey victims

Michael Cohn
August 30, 2017

A boy and girl hug their grandmother's dogs after being rescued from rising floodwaters due to Hurricane Harvey in Spring, Texas.

The Internal Revenue Service granted additional relief to victims of Hurricane Harvey on Wednesday by making it easier for 401(k)s and other employer-sponsored retirement plans to give loans and hardship distributions to aid victims.

The IRS pointed out the relief is similar to what was provided to victims of previous disasters, including Louisiana floods and Hurricane Matthew.

Millennials Are Doing a Better Job Investing for Retirement Than They Get Credit For

Walter Updegrave
August 29, 2017

Man pointing pie chart

The accepted narrative when it comes to millennials and investing is that they just don't get it. They're too likely to hunker down in cash, too scared of stocks, and just too conservative for their own good.

But recent research, including a new report based on how millennials actually invest their money for retirement, suggests the conventional wisdom is wrong.

How climate change could turn US real estate prices upside down

Richard Luscombe
August 29, 2017

A man removes some possessions from his home in the aftermath of Hurricane Harvey.

If Florida gleaned anything from Hurricane Andrew, the intensely powerful storm that tore a deadly trail of destruction across Miami-Dade County almost exactly 25 years to the day that Hurricane Harvey barrelled into the Texas coastline, it was that living in areas exposed to the wrath of Mother Nature can come at a substantial cost.

At the time the most expensive natural disaster ever to hit the US, Andrew caused an estimated $15bn in insured losses in the state and changed the way insurance companies assessed their exposure to risk for weather-related events.

Alan Simpson: AARP is a 'monstrous organization' that blocks changes needed to save Social Security

Matthew J. Belvedere
August 29, 2017

The only way to stop the cycle of overspending in Washington and then fighting over raising the debt ceiling is to reform entitlements, anti-debt crusader Alan Simpson told CNBC on Tuesday.

"Do something with the solvency of Social Security, which is the biggest elephant in all the rooms," said Simpson, retired U.S. senator from Wyoming and GOP co-chair of former President Barack Obama's bipartisan debt commission. Erskine Bowles, former chief of staff during Bill Clinton's presidency, was the Democratic co-chair.

How to Turn Your Passions Into Retirement Income

Nancy Collamer
August 28, 2017

Retirement Income

Last year, Mike Liff, now 71, relocated with his wife from San Francisco to Portland, Maine to be closer to family. The retirees explored their new hometown and thanks to a chance conversation at a barbershop, Liff learned that 

“I’m having such fun,” he said. “I like to say I didn’t retire, I ‘rewired.’ To have a place to go and a purpose is really important to me — and my wife appreciates it too.”

How to Prepare Your Business Partnership for New Rules for IRS Audits

Bill Smith
August 28, 2017

How to Prepare Your Business Partnership for New Rules for IRS Audits

The IRS will begin a new way of auditing partnerships and LLCs (as most are treated as partnerships) for tax years beginning after Dec. 31, 2017. With these new rules comes the potential for a host of new disputes among partners.

Various strategies for mitigating effects of the changes will require cooperation from partners who may not be compelled to work together. Partnerships need to develop a roadmap before venturing into this new frontier. Like going to the dentist, an update to the partnership agreement may be a dreaded but necessary task to provide for this roadmap.

Estate Planning: Leaving a Home to Heirs While You’re Still Alive

Kaya Laterman
August 25, 2017

As baby boomers age and head into retirement, estate planning has become a thriving business. And how best to deal with our homes — often our most valuable asset — is among the most fraught questions that need addressing.

Sell and downsize to leave a larger pot of cash for heirs to divide? Deed the house or apartment to your adult children now to avoid squabbling after you’re gone? If so, where do you live in the meantime?

Which Areas Benefit Most From the Home Mortgage Interest Deduction?

Huaqun Li
August 24, 2017

This map shows how much U.S. taxpayers deduct in home mortgage interest by county. The measurement used here is the home mortgage interest deduction per return. It is calculated using the total of all home mortgage interest divided by number of returns filed in each county. The data source is 2014 Statistics of Income from the IRS. 

The map below shows that there is tremendous variation in terms of the average home mortgage deductions among counties. Overall, the average deduction in a county spans from a low of zero to a high of $6,365. There is also strong variation among counties within the same state. In Virginia, for example, filers in Dickenson County take only $216 on average. However, filers in Loudoun County in northern Virginia can take a home mortgage deduction of $6,365 on average.

Why Paying Yourself 5% Interest On A 401(k) Loan Is A Bad Investment Deal

Michael Kitces
August 23, 2017

Contributions to 401(k) and other employer retirement plans are intended to be used for retirement, and as a result, 401(k) plans often have restrictions against withdrawals until an employee retires (or at least, separates from service). As a result, any withdrawals are taxable (and potentially subject to early withdrawal penalties), and even “just” taking a loan against a retirement account is similarly treated as a taxable event under IRC Section 72(p)(1).

Yet unfortunately, the reality is that from time to time, employees may need to access the funds in their 401(k) plan before retirement, at least temporarily. To help address the need, Congress created IRC Section 72(p)(2), which does permit employees to take loans directly against their 401(k) or other qualified plan balance from the 401(k) plan administrator, subject to certain restrictions.

Octogenarians Rule the Rich

Ben Steverman
August 23, 2017

Sixty? That’s young — for a rich person.

Six of the 25 richest Americans are over 80, according to the Bloomberg Billionaires Index. Carl Icahn and Charles Koch, for example, are 81. Earlier this month, Sheldon Adelson turned 84 and George Soros hit 87. Warren Buffett, the fourth-richest person in the world, with a net worth of $77 billion, celebrates his 87th birthday next week. 

Got a refund? Paid a big tax bill? Time to adjust withholding!

Kay Bell
August 23, 2017

All U.S. workers know, simply from looking at their pay stubs, that our tax system is pay-as-you-earn.

Our taxes come out of our paychecks as withholding, both for federal income taxes, as well as to cover future Social Security and Medicare benefits.

Chris Lehman
August 23, 2017

Oregon state economists say the median kicker will be $89.

It’s official: Oregon taxpayers will receive a $464 million kicker next year.

The kicker is that unique Oregon institution that dishes out money to taxpayers when the state’s economists under-predict how much revenue the state will collect over a two-year period.

How Does Your 401(k) Compare?

Suzanne Woolley
August 23, 2017

For years, fees on investments in workplace retirement savings plans have been falling. Now, at least for the moment, they’re stalling.

The average expense ratio on investments in defined-contribution, or 401(k), plans dropped by a hair to 0.41 percent of assets this year, according to the latest annual survey from investment consulting firm NEPC. That follows three straight years of somewhat deeper declines, spurred in large part by regulatory pressure and a rash of high-profile class action lawsuits alleging excessive fees and plan designs that weren’t in savers’ best interests.

Tax Court: Avoiding the Dreaded Trust Fund Penalty

Ken Berry
August 23, 2017

court mallet and money

If payroll taxes aren’t remitted to the IRS in time, a responsible party may be held personally liable for the full amount of the unpaid tax; essentially, you’ll have to pay the IRS out of your own pocket. This harsh “trust fund penalty” is frequently contested in the courts.

In a new case, Hartman, DC-MI, 7/26/17, the IRS imposed the penalty on a co-owner who wasn’t even the one handling the payroll duties. Briefly stated, the trust fund penalty may be applied to anyone who is responsible for collecting or paying payroll taxes and willfully fails to do so.

Amazon says new accounting rule will change when it recognizes sales of its devices

Tonya Garcia
August 22, 2017 Inc. says a new revenue-recognition accounting rule that goes into effect for public companies in 2018 will impact the timing of when it will recognize sales of its own electronic devices as well as the gross amount of sales it claims.

The Financial Accounting Standards Board, or FASB, Accounting Standards Update (ASU) called ASC 606 will impact a wide range of customer services across retailers and restaurant chains, including credit vouchers, loyaltyprograms and credit card rewards.

Suzanne Woolley
August 21, 2017

A million dollars—it has a nice ring to it. But as Dr. Evil learned after spending 30 years cryogenically preserved, it may not be enough—for many people, certainly not enough to comfortably retire on, depending on where and how long they live.

A new report from GOBankingRates measures how long a million dollars would last for retirees 65 and older, state by state. It did that by multiplying the Bureau of Labor Statistics’ mean annual expenditures for that age group by a cost-of-living measure for each state, provided by the Missouri Economic Research and Information Center. The tally separated out annual spending on health care, housing, groceries, transportation, and utilities. 

Don't Forget About Taxes When Looking For The Perfect Rental

Kelly Phillips Erb
August 21, 2017

It may be the end of summer, but with the start of a new school year and a growing economy, the search for the perfect apartment is heating up. Finding the ideal rental in a market like Miami or Manhattan can be tough. When figuring your costs, don't overlook possible tax savings. Yes, they exist. Here's what you need to know about potential tax benefits for renters:

1. If you work from home, you may be able to deduct your rent.

You must adjust financial plans to varying inflation and returns

Narendra Nathan, ET Bureau
August 21, 2017

Goal value will gallop with inflation 
Rs 1 lakh today will be worth nearly Rs 1.5 lakh in 10ys at just 4% inflation. 

You will need to inflate your goal amount to ensure you have sufficient resources to realise all goals as prices will not remain the same. You won't be able to afford the same lifestyle with the same income for the next 10 or 20 years. 

Could you live off Social Security alone?

Michelle Singletary
August 21, 2017

When it comes to retirement, there's one question that is sure to get a lot of people to save: Could you survive if you only received Social Security?

But the fact is millions live off their monthly Social Security benefit check. How do they do it?

When should you make ‘course corrections’ to your retirement plan?

Robert Powell
August 19, 2017

Course corrections — whether you’re flying to the moon or sailing across an ocean or just shopping for groceries — are a necessary part of life.

Consider, for instance, the historic Apollo 11 flight plan in which there are 13 references to the term “course correction.” Without those and other course corrections, it’s unlikely the astronauts would have reached their goals of walking on the moon and then returning safely to Earth.

Hard-Won Advice in Books on Aging and Elder Care

Ron Lieber
Augst 18, 2017

Longevity is generally better than its alternative. But when the body or especially the mind wears out, caring for yourself or finding someone else to do it for you can impoverish you in short order.

We fail to plan for it at our peril. So when it seemed that Republicans in Washington were close to passing legislation that could fundamentally change Medicaid, I wrote five straight columns about the program. Already, the majority of Americans need Medicaid to pay for at least some of their nursing home costs or care at home because they’ve run out of money. Proposed caps on Medicaid, which have not come to pass for now, had the potential to cause enormous problems.

Aging Parents With Lots of Stuff, and Children Who Don’t Want It

Tom Verde
August 18, 2017

Mothers and daughters talk about all kinds of things. But there is one conversation Susan Beauregard, 49, of Hampton, Conn., is reluctant to have with her 89-year-old mother, Anita Shear: What to do — eventually — with Mrs. Shear’s beloved set of Lenox china?

Ms. Beauregard said she never uses her own fine china, which she received as a wedding gift long ago. “I feel obligated to take my mom’s Lenox, but it’s just going to sit in the cupboard next to my stuff,” she said.

Pre-retirement financial jitters? Here's what to do

Sarah O'Brien
August 18, 2017

retirement personal finance

Getting close to retirement and feeling nervous about your finances? You're not alone.

For people facing this major life change, angst over transitioning to non-working years can morph into fears about their savings running out even if they have planned well to prevent it.

An Inside Look at Trump’s Infrastructure Plans

Joseph Henchman
August 17, 2017

President Trump signed an infrastructure permitting executive order on Tuesday, the intended highlight of that day’s news conference. The executive order is part of the White House’s “Infrastructure Week,” and has the goal of expediting permitting for infrastructure projects by requiring each project to have a lead federal agency in charge of navigating it through the bureaucracy, and directing federal agencies to determine ways to reduce average permitting time from seven years to two years. President Trump and Secretary Chao displayed a flowchart of the existing federal permitting process, which I’ve pasted at the bottom of this post. The executive order also revoked a flood control planning process relating to global warming mitigation.

Struggling To Repay Your Student Loans? You're Not Alone

Zach Friedman
August 17, 2017

Nearly half of student loan borrowers graduate school owing at least $20,000 – which is double the share of borrowers a decade ago – according to a new report from the Consumer Financial Protection Bureau (CFPB).

“The Bureau’s research shows that people are taking on more student debt later in life, and having a tougher time paying it back,” CFPB Director Richard Cordray said.

Amazon’s Marketplace Business Isn’t a Tax Avoidance Scheme

Joseph Henchman and John Buhl
August 16, 2017

President Trump on more than one occasion has accused Amazon of not paying taxes. The latest version came out this morning on Twitter. Most assume that he’s referring to whether the e-commerce company collects sales taxes. So, does Amazon collect sales taxes? The short answer is: Yes.

Should You Sell Your Business Before You Retire?

Abby Hayes
August 16, 2017

Retirement planning is especially complicated for business owners. You have to fund your own retirement plan and decide what to do with your business before you retire.

Many retiring business owners decide to sell the business. The proceeds from the sale can help to fund retirement. However, the process of selling a business can be practically difficult and also emotional. You’ve probably spent years or even decades building up your business, products or services. You may know your employees well and want to make sure they are cared for.

Fed Officials Confront New Reality: Low Inflation and Low Unemployment

Binyamin Appelbaum
August 16, 2017

WASHINGTON — Federal Reserve officials are struggling to make sense of a new economic reality in which low inflation and low unemployment are persisting side by side.

At the Fed’s most recent meeting, in late July, most officials said they expected the phenomenon to fade away by next year as low unemployment finally starts to drive up inflation.

On Anniversary Of Klondike Fever, Here's What You Need To Know About Taxes On Gold

Kelly Phillips Erb
August 16, 2017

"Gold! Gold! In the Klondike!" On this day in 1896, a group of prospectors discovered gold nuggets in the Klondike River, kicking off a search for riches.

Those early prospectors who would immediately become wealthy from the findings were Keish (called Skookum Jim Mason), George Carmack, Kate Carmack, and Dawson (Tagish) Charlie. George Carmack, however, is typically credited for finding the gold because he filed the first claim for property in the area, though many believe that his brother-in-law, Skookum Jim, actually made the discovery.

Donating stock is a triple play: Book profits, skip capital gains and pocket a deduction

Carla Fried
August 16, 2017

With the S&P 500 index up more than 300 percent and the Nasdaq more than 400 percent since the March 2009 low, one of your bigger investment risks may be complacency.

"It is surprising the number of people who haven't taken money off the table and rebalanced," said Anthony LoCascio, a Clinton, New Jersey, certified financial planner with serious tax chops. (He's also an enrolled agent.)

Grandparents Lose Tax Benefits To Daughter's Common-Law Marriage

Peter J Reilly
August 15, 2017

The Tax Court dealt with a messy family situation last week and, as is usual, the results are not pretty. The names of the players in TCS 2017-62 are public record now, but I will not contribute further to their fame.  There are two couples involved.  I will call the first couple, the petitioners, Robin and Terry.  The other couple comes in later and I'll call them Blynne and Ashley.  Then there are three minor children who even the Tax Court does not name.  We'll call them the kids.  Everybody lived in Texas, which is important.

Grandparents To The Rescue

17 states now impose some fees on electric autos

Kay Bell
August 15, 2017


President Donald Trump signed an executive order today designed to streamline the approval process for building roads, bridges and other infrastructure.

Contractors and the transportation industry say that will help improve the building and repair of the country's roads, bridges and other infrastructure projects.

Ask The Taxgirl: Marriage & Money While Living Abroad

Kelly Phillips Erb
August 15, 2017

Taxpayer asks:

I have been married to my second wife for 1 year and I am in the process of finishing up my 2016 tax returns.

I have lived in Guatemala for 8 years and have only been in the USA two weeks the last 8 years. I will never spend more than a couple of weeks a year in the USA in future.

6 Ways To Survive Retirement Income Shocks

John Wasik
August 14, 2017

Nobody likes surprises when it comes to retirement planning. But life is full of bumps and we often suffer income "shocks" along the way.

You may lose your job in your prime earning years. Parents may need funds for home or assisted living care. Your children may not be able to find decent employment and move back in. You may get divorced. There are lots of ways to be financially shocked.

Ask The Taxgirl: Filling Out A Form W-9 When You're Paid In Cash

Kelly Phillips Erb
August 14, 2017

Taxpayer asks:

If I'm paid in cash can they make me fill out a w-9?

Taxgirl says:

Yes. How you're paid - in cash, by check, in Bitcoin or barter - doesn't matter when it comes to filling out a form W-9.

6 tax tips for startups

Accounting Today
August 12, 2017

5. Keep good records

Taxes are rarely the first thing an entrepreneur thinks about – which is why tax and accounting advisors should. With that in mind, the IRS put together a short list of tax-related considerations for start-up businesses that experts can share with clients.

(The service also offers plenty of information for entrepreneurs and their advisors at the Small Business and Self-Employed Tax Center.)

4 tax tips for new businesses

Kay Bell
August 11, 2017

You’ve had enough of being a wage slave. It’s time to start your own business. That means it’s also time to consider the tax implications of becoming your own boss.

Here are four tax matters to think about as you plan your move from the corporate cubicle to your own self-employed suite.

Which States Benefit Most from the Home Mortgage Interest Deduction?

Amir El-Sibaie
August 10, 2017

Average Home Mortgage Interest Deduction Received Per Return

Earlier this week, we reported that the Trump administration may consider reducing the cap on the home mortgage interest deduction from a maximum of $1 million acquisition debt to $500,000. We estimated that this proposal could raise as much as $95 billion to $300 billion over the next decade, depending on how the cap is structured. We also found that the tax increase would primarily fall on high-income taxpayers because they are more likely to own larger homes and have more mortgage debt. Middle- and lower-income taxpayers would be much less likely to face a tax increase.

IRS didn’t obey federal policy when deploying cloud service

Michael Cohn
August 10, 2017Treasury Inspector General J. Russell George addressing a House subcommittee

The Internal Revenue Service doesn’t have a cloud technology strategy and didn’t adhere to federal government policy when it implemented a cloud service, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, noted that in December 2010, the U.S. government’s chief information officer, Vivek Kundra, directed all federal agencies to move to a “cloud first” policy. However, nearly seven years later, the IRS still doesn’t have an enterprise-wide cloud strategy. Although the agency formed a working group in July 2016 to develop such a strategy, it’s incomplete.

Protecting Your Accounts by Text or App

J.D. Biersdorfer
August 8, 2017

Q. Which is better to use for two-step verification: getting the codes sent by text message or using an authentication app?

A. Two-step verification — also known as two-factor authentication, or 2FA for short — makes your online accounts safer by requiring a separate numeric code to be typed in after you fill in the typical password. The codes you need for that second security step can be supplied by SMS text message to your phone or from a special authenticator app connected to that account. Preprinted backup codes and voice mail messages are other ways to confirm your identity in a two-factor situation.

Employers Will Escape Obamacare-Sized Rate Hikes In 2018

Bruce Japsen
August 8, 2017

Unlike the double-digit percentage rate hikes individuals purchasing coverage under the Affordable Care Act will see next year, those with coverage at large employers will face single-digit increases, a new national survey of large employers shows.

The National Business Group on Health said Tuesday the percentage increase large companies will see next year is similar to 5% cost increases employers have experienced for five years. In its annual survey of large employers, NBGH says per employee costs are projected to increase 5% to $14,156 in 2018 compared to $13,482 per employee this year . Since employers generally cover about 70% of worker costs, employees’ 30% share next year will be nearly $4,400, which includes premium and out-of-pocket expenses .

Now that you're finally retired, don't be afraid to spend money

Charlie Jordan
August 8, 2017

Financial planning can help you enjoy your retirement years in a disciplined and efficient way.

Many people who have saved millions of dollars to retire comfortably are now scared to spend it.

A recently retired client, a woman with approximately $1 million in savings, was asked to join a group of friends on a girls' getaway vacation costing approximately $3,000. Even though she had plenty of money to take the trip, she felt uneasy because it meant breaking her lifetime habit of saving for the future. She's lived a financially disciplined life for so long that she didn't know how to handle this expense without any earnings to pay for it.

The 5 Most Powerful Wealth Behaviors

John Wasik
August 7, 2017

More often than not, other than raw math, financial success is a matter of behaving well. Most people behave badly, but it's always something you can correct.

The easiest behavioral fix involves savings. If you can make savings automatic -- either through a 401(k) or some kind of automatic savings plan -- that probably the best thing you can do to ensure you'll have enough for college, healthcare, emergencies and retirement.

Is your college scholarship taxable? Probably not

Kay Bell
August 7, 2017

College students studying on campus via MGID and On Campus Market

Here in Austin, fall 2017 classes at the University of Texas will begin on Aug. 30. But students must meet another important deadline on Aug. 18.

That’s the day that UT tuition payments are due, either paid in full or in installments. It’s a scenario playing out across the United States.

How To Have A Retirement Money Date With Your Partner

Tania Brown
August 6, 2017

I recently did a workshop with employees less than 5 years away from retirement. You might expect the group to be excited, but the predominant emotion was fear.  The biggest fear was the concern that they may be missing something in their retirement planning.

I find most people at this stage have at least run a retirement estimator to make sure they were on track to replace about 80% of their income in retirement, adjusting the percentage based on their financial needs in retirement. What I found most people have not done was a thorough retirement spending plan with their partner to make sure both have a clear idea of how much is really needed not only to retire but to stay retired. Consider setting up a “money date” with your partner to do the following:

6 Questions Every Small Business Owner Should Ask a Prospective Accountant

Jared Hecht
August 4, 2017


Everyone knows that having an accountant to assist you during tax time is critical, but outside of tax time, an accountant can be a valuable resource and trusted advisor year-round when running a business.

A good business accountant will be with you each step of the way as you grow your business, helping you to create a business plan and achieve your financial goals. But how do you find the right person or firm? We’ll take a look at the questions you should be asking to choose the right accountant for you.

Long List Of Americans Who Renounced Citizenship Is More About Taxes Than Trump

Robert W. Wood
August 4, 2017

As the dust settles on a long new list of Americans who renounced their citizenship, one organization's refrain is to renounce US citizenship not because of Trump, but because of American taxes. The latest quarterly list published in the Federal Register names the individuals who renounced their U.S. citizenship, or who terminated their long-term U.S. residency (green cards), during the second quarter of 2017. The total for the first quarter of 2017 was 1,313. The number on the second quarter's list went up to 1,759, which is the second highest quarterly number ever (second only to the fourth quarter of 2016 which had 2,365 published expatriates). Some observers may want to blame President Trump for the spike, but it is much more likely that longstanding tax issues are the real culprits.

Want To Phase Into Retirement With Reduced Hours?

Ashlea Ebeling
August 4, 2017

Employers might not advertise the fact that they offer reduced hours—or phased retirement—for older workers, but if you’re interested, you should ask. Even if your employer doesn’t have a formal phased retirement program, there might be informal options, and both are beneficial to employers and employees, according to a recent Government Accountability Office report to the U.S. Senate’s Special Committee on Aging. The reality: A quarter of full-time workers aged 61 to 66 planned to reduce hours, but only 15% ended up doing so.

Employers say these programs help with worker retention, knowledge transfer and workforce planning (new workers can be hired at a lower cost). Employees like the gradual shift from full-time to part-time work to ease into retirement.

What Is the Real Value of $100 in Your State?

Amir El-Sibaie
August 3, 2017

Real Value of $100 State Map 2017

This map shows the real value of $100 in each state. Prices for the same goods are often much cheaper in states like Missouri or Ohio than they are in states like New York or California. As a result, the same amount of cash can buy you comparatively more in a low-price state than in a high-price state.

The Bureau of Economic Analysis has been measuring this phenomenon for two years now; it recently published its data for prices in 2015. Using this data, we have adjusted the value of $100 to show how much it buys you in each state.

7 Tax Favored Strategies To Plan For Retirement Now

Kelly Phillips Erb
August 3, 2017

Credit: Aliza Grant, Forbes staff

Thinking about retiring early? To ensure that you'll have enough money to live off of in future years, sock away money now. Since income tax rates are typically higher than returns on investment, be sure to include tax planning when looking at the big picture. Here are seven tax-favored strategies to consider if you're planning for retirement now.

1. Contribute to your 401(k) and take advantage of employee matches. A 401(k) plan allows you to contribute pre-tax dollars to a retirement account where it grows tax-deferred.

Powell: Saving for retirement in the most tax-efficient manner possible

Robert Powell
August 2, 2017

Retirement plan with graphs and glasses on desk

Decades ago, saving for retirement was fairly easy. You set aside 10% of your income in a taxable account. But over the years it’s become especially complicated given the many ways we can now save for retirement.

In addition to taxable accounts, we now have traditional IRAs, Roth IRAs, traditional 401(k)s, Roth 401(k)s, health savings accounts or HSAs, and all sorts of annuities including, qualifying longevity annuity contracts (QLACs) and deferred income annuities. Plus, retirees can generate income from any number of resources, such as a reverse mortgage or cash value life insurance, when the time comes to fund their living expenses.

The Impact Of Early Retirement On Projected Social Security Benefits

Michael Kitces
August 2, 2017

Social Security Replacement Rates Based On Highest 35-Years Income


Social Security operates as an income replacement formula, with higher benefits for those who work for more years. As a result, benefits are very limited for those who don’t work for very many years, and are much higher for those with a full working career.

To avoid confusing those who haven’t worked very many years yet – but plan to – the standard Social Security benefits statement projects out anticipated future Social Security benefits based on the assumption that the individual will continue working until retirement. Which allows the individual to understand what Social Security benefit they are “on track for” as they continue to work until full retirement age. Except, of course, that not everyone actually plans to work until full retirement age!

How to avoid penalties when a planned rollover goes awry

Angeline Rice, CPA
August 1, 2017

One of the advantages of participating in a retirement plan is that the money in the plan can grow tax deferred until it is withdrawn. There are a variety of types of plans and numerous plan sponsors and institutions that administer the plans. Clients may desire to move retirement funds from one institution to another for many reasons. These reasons could include, but are not limited to: The client may be changing banking or wealth management relationships; the client may desire to consolidate various accounts that may be spread across various institutions and locations; or the client may be looking for different investment options.

Ignoring 83% Of Payroll Tax Mismatches, IRS Leaves $7 Billion Uncollected...Until Now

Robert W. Wood
August 1, 2017

The IRS is well-known for information matching. Take IRS Form 1099. It is common knowledge that if you fail to account for income reported on a Form 1099-MISC, you will receive an IRS notice asking why, or even proposing a tax bill. You might reasonably assume that employment taxes would be even more cross-checked. For example, the IRS's Combined Annual Wage Reporting (CAWR) Program compares: (1) the employee wage and withholding information reported to the IRS on employment tax forms; to (2) withholding documents filed with the Social Security Administration. The purpose of the IRS-CAWR Program is to ensure that employers report the proper amount of employment taxes and Federal income tax withholding on their employment tax returns.

Getting Divorced? How to avoid tax pitfalls when splitting up retirement accounts

Bill Bischoff
August 1, 2017

On top of all the other stuff, getting divorced is also a major financial transaction that can have serious tax implications. This is especially true when it comes to splitting up tax-favored retirement accounts between you and your soon-to-be ex. You need to plan ahead to make sure the tax results turn out OK for you. Recurring litigation between taxpayers and the IRS shows many folks falling into expensive traps that could have been easily avoided. Here’s what you need to know to keep from joining them.

Use QDROs to divide up qualified retirement plan accounts

Voices Short-term rentals may bring long-term tax problems

Rob Stephens
August 1, 2017

Short-term rentals, often called vacation rentals, have exploded onto the travel scene, becoming hugely popular with homeowners and travelers alike. With the help of technology, it is incredibly simple for a property owner to broadcast their rental across the world.

Millions of people in the U.S. are currently renting their homes or apartments on Web sites such as HomeAway, VRBO and Airbnb. With this level of activity, it is vital that accountants and tax professionals have an understanding of property rentals and income tax implications. Though sometimes overlooked, sales and lodging taxes are an entire class of taxes that expose clients to a significant liability.

Considering whether to file an income tax extension

Todd Simmens, CPA, J.D., LL.M and Les Williford, CPA
August 1, 2017

As practitioners throughout the United States reflect on tax season 2017, the last detail they might consider is whether more clients should be encouraged to file an extension. For some taxpayer clients, an extension is a regular, yearly occurrence. For others, the notion of requesting time beyond the original due date is outlandish. And there also are those for whom the decision to extend comes down to the wire, determined by whether the return can be filed by the original due date. However, an extension of time to file generally should be considered for every taxpayer and for every tax period for which an extension is available, regardless of whether the taxpayer intends to file on or before the original due date of the relevant income tax return.

IRS processing of extensions

7 Tips on Choosing the Right Executor for Your Will

Daniel A. Timins
August 2017

It’s an important question: Who can be trusted to take care of your estate when you’re gone?

When you pass away and your will is accepted for probate, your executor “steps into your shoes,” meaning he or she can perform all the legal tasks you used to do. This includes selling your property, paying creditors, bringing lawsuits, reviewing medical records and distributing your assets to others. Clearly, acting as an executor is an important job, so who should you choose to handle your final personal affairs? What traits make for a good executor, and who by default is unable to serve?

Retirement Booster: How To Find The Best HSAs

John Wasik
July 31, 2017

As hybrid investment vehicles, Health Savings Accounts, or HSAs, can be a bit of a windfall. The combine savings accounts with myriad tax breaks.

Generally, an HSA is offered through employers who provide high-deductible health plans. The idea is that you can save money in an HSA to cover out-of-pocket medical expenses.

Five takeaways from ObamaCare repeal’s collapse

Jessie Hellmann and Rachel Roubein
July 28, 2017

Three Republicans dealt what appears to be a final, fatal blow to their party’s ObamaCare repeal effort on Friday morning after a yearslong odyssey that now leaves the GOP in the wilderness.

Here are five takeaways from this morning’s drama and the monthslong Senate repeal fight.

ObamaCare repeal: Now what?

Rachel Roubein and Jessie Hellmann
July 28, 2017

ObamaCare repeal: Now what?

Senators who walked off the floor around 2 a.m. Friday after the stunning defeat of the latest GOP ObamaCare repeal effort face tough questions on how to move forward.

GOP leaders sounded pessimistic notes that the failure would lead to compromise or bipartisan work on healthcare, though some members said they hoped it would spur leaders to start a more formal process of committee work after months on Senate bills being drawn up behind closed doors.

Watchdog Report: IRS Continues To Rehire Problem Employees

Robert W. Wood
July 28, 2017

As an employer, would you rehire a former employee guilty of misconduct? Say, someone you caught falsifying official forms, peeking at secured confidential files, or misusing company property? It is hard to see how.Most employers breathe a sigh of relief when such an employee departs. You don't hire them back. How about rehiring hundreds of such misbehaving workers? Rehiring is for someone you want back, not someone who was a problem. But the IRS may be different from your average employer. The IRS continues to rehire former employees with conduct and performance issues, according to a newly released report from the Treasury Inspector General for Tax Administration (TIGTA). You can see the full report and the full IRS response here.

After Healthcare Fail, GOP Moves On To Tax Reform: Here's What They Propose

Kelly Phillips Erb 
July 28, 2017

After failing to repeal, repeal and replace, or even "skinny repeal" Obamacare, Congress is now taking on tax reform - a job many have declared will be even more difficult than health care reform. To emphasize their commitment to the task, joint leadership from the Senate, House and White House released a statement about "fixing America’s broken tax code."

The joint statement was delivered by House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX). As before, the notes in the statement were more talking points than specific policy details and echoed prior statements about what the current administration feels is necessary to move the economy forward.

White House, GOP close to releasing joint tax-reform principles

Naomi Jagoda
July 26, 2017

White House, GOP close to releasing joint tax-reform principles

The White House, congressional leaders and the chairmen of the tax-writing committees may release joint tax-reform principles as soon as this week, according to lobbyists.

Speaker Paul Ryan (R-Wis.) told attendees at an event Tuesday at the Capitol Hill Club that the unified tax-reform framework would be unveiled later in the week, and that the House Ways and Means Committee would then write legislation based on the principles, according to Hadar Susskind, senior vice president of government relations at the Council on Foundations. A representative of Susskind’s group was at the event.

A Bill Funding Arts and Humanities Endowments Passes House Committee

Graham Bowley
July 20, 2017

Four months after President Trump proposed eliminating the cultural agencies altogether, a bill to continue to finance the National Endowment for the Arts and the National Endowment for the Humanities won approval this week from the House appropriations committee.

The House bill, part of the process of thrashing out the federal budget for fiscal year 2018, includes $145 million for each endowment. The amounts represent a cut of about $5 million to each agency, but is a stark contrast to President Trump’s proposal to eliminate the endowments entirely as outlined in his first federal budget plan he announced in March.

Kay Bell
July 19, 2017


If you've been paying attention to Donald Trump Jr.'s meeting with some Russians last summer, you know the White House has given two reasons for the get-together. The explanation that caught my tax eye was that the group talked about adoptions.

The president's oldest son said that one of the Russian nationals came to Trump Tower to lobby for reversal of the Magnitsky Act. The law gets its name from attorney Sergei Magnitsky, who died in 2009 while being held in a Moscow prison.

Retirement Dread Is Replacing the American Dream

Suzanne Woolley
July 18, 2017

With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.

That boilerplate language has been featured more or less verbatim in the yearly status report from the trustees of the Social Security and Medicare funds since 2001, through presidents George W. Bush, Barack Obama and now, Donald Trump.

When you should - and shouldn't - tap your Roth IRA early

Arielle O'Shea, NerdWallet
July 18, 2017

Most retirement accounts are for one purpose: The money goes in and stays in until retirement — specifically, until the investor turns 59 1/2. Pull it out early and you'll have to pay taxes and penalties.

Understandably, that lengthy lockdown doesn't always sit well with younger investors. Sure, you may not need that money now, but there could be plenty of future circumstances in which you might. Having thousands of dollars stashed behind bars won't bail you out of a job loss, get you out of debt or unlock the door to your first home.

Airbnb collecting occupancy taxes for more of its clients

Kay Bell
July 18, 2017


Are you booking your summer vacation stay via Airbnb? You might want to budget a bit more for lodging taxes.

The popular private residential rental service collects sales and occupancy taxes on properties' leased in all or parts of 31 states, as well as the District of Columbia and the U.S. Virgin Islands. Internationally, Airbnb also is acting as tax collector in six countries.

State Inheritance and Estate Taxes: Rates, Economic Implications, and the Return of Interstate Competition

Jared Walczak
July 17, 2017

Key Findings

  • Eighteen states and the District of Columbia impose either inheritance or estate taxes, with fourteen states (plus Washington, D.C.) levying estate taxes and six states levying inheritance taxes. Of these, two states (Maryland and New Jersey) impose both taxes, though New Jersey is in the process of repealing its estate tax.
  • For decades, the federal government offered a credit against federal estate tax liability for state inheritance and estate taxes paid, which allowed states to impose a “pick-up” estate tax without increasing residents’ overall tax liability. The elimination of this credit in 2005 ushered in a new era of estate and inheritance tax competition among the states.

Trust, but verify: Keep an eye on your college kid’s spending

Amber Murakami-Fester, NerdWallet
July 16, 2017


When you’re a parent shipping a kid off to college, it’s hard not to worry about every possible financial mishap, for example: is money that was meant for textbooks paying for a music festival ticket? But there are ways to ensure students are making the right financial decisions without hovering over them.

Joint bank account
Setting up a joint checking or savings account means parents and students have access to money in the account and can see all transactions.

Don’t Do It: Don’t Start a Nonprofit

Dahna Goldstein
July 14, 2017

Do you want to make a difference? Great. Please do. But don’t start a nonprofit.

Are you concerned about what is currently happening to vulnerable populations, the environment, and media freedom? I am, too. Are you afraid it’s only going to get worse? You’re probably right. But don’t start a nonprofit.

If your Social Security benefit is smaller than expected, here's why

Kelli B. Grant
July 14, 2017

Social Security check

If you're counting on Social Security benefits, you better make sure you don't owe Uncle Sam.

Under certain circumstances, the government can seize part of your Social Security check to satisfy unpaid debts, including overdue federal taxes and delinquent federal student loans, among others. This comes out of your payments before you receive them.

Irrevocable Trusts: What You Need to Know

Dan Caplinger (TMFGalagan)
July 14, 2017

Trust document.

Many people want to provide for their loved ones but in a way that allows them to retain control over their assets. An irrevocable trust can be a great way to achieve these estate planning goals. Irrevocable trusts have advantages over alternatives like wills or revocable trusts, but they also require a different way of thinking about your assets. With the potential for substantial tax savings and other benefits, irrevocable trusts are worth considering in your personal estate planning.

How the Medicaid Debate Affects Long-Term Care Insurance Decisions

Ron Lieber
July 14, 2017

The latest version of the Senate’s health insurance bill appeared on Thursday, and it didn’t do much to change the drastic reductions in Medicaid spending that were in the original legislation.

Here’s why that’s important to nearly everyone, even people who are reasonably affluent for now: As I’ve explained in two recent columns, Medicaid is the backstop for retirees who run out of money but still need home-based care or must move into a nursing home. Medicare generally doesn’t cover those costs, and they are high enough that even people with many hundreds of thousands of dollars can end up spending everything they have the years before they die.

Not-for-Profit Gifts: Thanks or No Thanks?

AICPA Communications
July 13, 2017


Not-for-profit organizations are always thankful for the generosity of their donors. Sometimes, however, they must consider whether a proposed gift should be accepted. A gift of $100,000 in cash is easy to immediately direct toward the not-for-profit’s mission. On the other hand, a donation of real estate worth $100,000 may come with additional expenses and effort to sell the property before the proceeds are available to support the organization’s mission. Having a formal gift acceptance policy can help define when an organization should, or should not, accept a proposed gift.

Mortgage rates jump as bond market finally buys what the Fed is selling

Andrea Riquier
July 13, 2017

Rates for home loans jumped in the latest reporting week, taking the benchmark back over a key threshold for the first time since May, mortgage provider Freddie Mac said Thursday.

The 30-year fixed-rate mortgage averaged 4.03% in the July 13 week, while the 15-year fixed-rate mortgage averaged 3.29%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.21%. All three products rose seven basis points during the week.

Social Security trust fund will be depleted in 17 years, according to trustees report

Philip Moeller
July 13, 2017

stock pictures of a social security card and money. Photo by Albert Lozano-Nieto/Adobe Stock Images

The annual trustee reports on Social Security and Medicare were released earlier today and showed little change from last year. With both programs facing longer-term deficits, these annual report cards have become a doomsday clock for senior benefits.

The top line of today’s reports is that the estimated insolvency date of Social Security’s big trust fund is 2034 — unchanged from last year. The other big fund is Medicare’s hospital trust fund. Last year, it was projected to run out of funds in 2028, or 12 years. That date was rolled forward a year — to 2029 — in this year’s report.

3 Things That Can Instantly Reduce Your Nest Egg

Maurie Backman (TMFBookNerd)
July 13, 2017

A retired couple sits smiling side by side on a sofa.

One of the most challenging aspects of retirement is figuring out how much money to save. While it's not so easy to nail down a specific number, it's fair to say that the more money you sock away, the better positioned you'll be to enjoy retirement to the fullest.

But building a strong nest egg isn't just a matter of contributing to a retirement fund and leaving things at that. In fact, if you're not careful, a few mistakes during your working years could set back your savings significantly. Here are a few factors that can slash your nest egg, so be sure to avoid them at all costs.

Home care workers have our lives in their hands. They're paid only $10 an hour

Sarah Jaffe
July 13, 2017

June Habbert, a home care worker living in Miami.

June Barrett’s day as a home care worker starts at 5pm and lasts for 16 hours, overnight. All night long, she checks on her elderly clients, a married couple both in their 90s. They sleep in different parts of their Miami home, and much of Barrett’s job is spent trekking through the corridors, back and forth, to make sure husband nor wife has suddenly taken a turn for the worse. “I’m constantly on my feet,” she says.

Two million workers across the US do the kind of home care that Barrett does – the workforce has doubled in size over the past 10 years, and the Bureau of Labor Statistics predicts the field will add more jobs than any other occupation by 2024.

Don’t fall for the conventional wisdom when choosing an IRA

Kenn Tacchino
July 13, 2017

Financial planning rules of thumb can provide useful insight, but they are only a starting point.

When it comes to the decision to choose an IRA, the conventional wisdom is to use a Roth IRA if tax rates are expected to rise in retirement and choose the traditional IRA if they are expected to fall in retirement. However, even if you think you will be in a lower bracket after you retire, having some Roth assets could result in less taxes being siphoned from your annual retirement budget, which means more spending money available each year. Think of placing part of your assets in a Roth account as enabling you to have “tax diversification” in retirement regardless of your future marginal tax rate.

It's Shocking How Many Entrepreneurs Aren't Saving for Retirement

Lydia Belanger
July 11, 2017

It's Shocking How Many Entrepreneurs Aren't Saving for Retirement

Most entrepreneurs don’t think their businesses are big enough for 401(k)s. Others think it’d be too expensive to implement retirement plans. More than one-third just plan to cash in by selling their company at a later date.

A variety of factors deter entrepreneurs from saving, but there’s a major discrepancy between the percentage of small-business owners who say they’re confident they’re putting away enough for retirement and the percentage who aren’t saving at all. Sixty-two percent say they feel confident that they’re saving enough, but a full 25 percent of small-business owners report they aren’t saving a dime.

What You Need to Know About Retirement at Every Age

Kelsey Butler
July 11, 2017

Retirement evokes images of lounging on a beach, catching early dinners and, most importantly, never having to deal with your ugly morning commute ever again. But before you start fantasizing about that light at the end of the tunnel of your work life, financial experts say you need to get real about preparing for it.

No matter what stage of your life you’re in, there are crucial steps you need to be taking to make sure those dreams of a work-free life — while keeping the lifestyle you’re accustomed to — are a reality. Here’s what you need to know about getting ready for retirement in the decades to come. 

Man Accused Of Literally Giving IRS The Finger

Kelly Phillips Erb
July 11, 2017

There's angry, and then there's really, really angry. An Olympia, Washington man is under investigation after he allegedly sent a fake bomb to the Internal Revenue Service (IRS). Normand Lariviere has officially been charged with communicating a threat to injury through the mail in violation of Title 18, Unites States Code, Section 876(c).

It wasn't the first time that the 68-year-old man has sent the IRS a threatening package. Authorities say that 68-year-old Lariviere had previously mailed a marijuana cigarette, a bullet, and his own finger to the IRS as part of a series of protests. The finger was allegedly cut off with a homemade device which Lariviere later showed to authorities.

Millennials' participation in tax-favored workplace retirement plans improves, but still lags other generations

Kay Bell
July 11, 2017

Retirement savings outlook_Lincoln Financial Group

Every financial adviser recommends that we all keep close eyes on our retirement plans, either by reallocating our investments or contributing more money throughout the year.

Just last week, in fact, I put contribute to your retirement accounts on my list of 6 tax moves to make in July.

What Tax Deductions Do High-Income Earners Use Most?

Terry Sheridan
July 11, 2017

itemized deduction

New data released by the IRS sheds some light on just what tax deductions high-income earners take.

The hands-down winner is the deduction for state and local taxes, with households earning more than $200,000 annually deducting $243 billion in 2014. That’s 47 percent of all state and local taxes deducted by US households that year.

More than Medicaid: The Full Cost of ACA Repeal and Replace for States

Tracy Gordon
July 11, 2017

Congressional plans to repeal and replace the Affordable Care Act have governors worried – and with good reason. Although proposals continue to evolve, states stand to lose upwards of $100 billion each year in federal Medicaid funds under the most recent Senate leadership proposal and a House-passed bill.

But that’s not the whole story. Whatever emerges from current negotiations is also likely to restructure tax credits and  subsidies now available under the ACA to help low- and moderate-income people purchase health insurance and defray deductibles, copayments, and other out-of-pocket costs.

Texan Gets 3 Years Prison For Payroll Taxes, Why You Should Avoid Violations

Robert W. Wood
July 11, 2017

Richard Floyd Tatum Jr., 57, a Houston, Texas business owner, was sentenced to 36 months in prison for failing to pay over employment taxes. That may sound like a relatively simple tax problem, but it is anything but. Some months ago Tatum pleaded guilty to one count of failing to pay over employment taxes. The dollar amount of the violation was staggering. His company, Associated Marine & Industrial Staffing Inc. (AMI), was an industrial staffing company. It provided temporary labor to businesses in Texas and in other states. Through his company, Tatum employed approximately 1,000 people assigned to work on-site at client locations.

6 Tax Questions To Ask Before You Retire

Brian O'Connell
July 10, 2017

Senior couple with lawyer

Nearly one of every three dollars that high-income retirees spend goes to taxes, including those for federal, state, capital gains, real estate and personal property, according to a study by Lincoln Financial Group. Together, those taxes represent 31.8 percent of all household costs incurred in retirement, the study found.

As the Lincoln report points out, most future retirees don't expect taxes to be among their highest bills, which is why Americans in their 50s and 60s who are anticipating a comfortable retirement may want to rerun those numbers. Your best bet is to check with a financial professional and address these key tax and retirement questions – before you get the gold watch.

3 Serious Problems With the 4% Retirement Rule

Maurie Backman (TMFBookNerd)
July 10, 2017

Retired couple having a champagne picnic

One of the most stressful aspects of retirement is the idea of running out of money. In fact, recent data has found that older Americans are more concerned with outliving their savings than actually dying. It's for this reason that so many financial experts advise their clients to fall back on the 4% rule.

Developed in the mid-1990s by William Bengen, the 4% rules states that if you begin by withdrawing 4% of your nest egg during your first year of retirement, and then adjust subsequent withdrawals to allow for inflation, you stand a strong chance of having your savings last for a 30-year period. To be fair, the 4% rule does have a pretty solid history of success. On the other hand, it doesn't work for everyone and in fact has its share of flaws. Here are three major problems with the 4% rule you need to be aware of.

How To Spot The Worst Hidden 401(k) Expense

John Wasik
July 10, 2017

I've always hated the idea of investors paying too much for mutual funds. You can easily find off-the-shelf mutual and exchange-traded funds that hold most stocks and bonds for less than 0.15% per year in management fees.

Yet most people don't shop around for funds, the vehicles in most 401(k)s and other investment portfolios. They spend more time shopping for flat-screen televisions.

Seattle City Council approves income tax on the rich, but quick legal challenge likely

Daniel Beekman
July 10, 2017

Audience members hold ?tax the rich? signs and applaud at Monday afternoon?s Seattle City Council meeting. Council members voted unanimously to enact a new tax on high earners, approving the only income tax in Washington state. (Elaine Thompson / The Associated Press)

The Seattle City Council unanimously approved an income tax on wealthy residents Monday, a move widely expected to draw a quick legal challenge.

The measure applies a 2.25 percent tax on total income above $250,000 for individuals and above $500,000 for married couples filing their taxes together.

5 Things to Know About Your Social Security Statement

Emily Brandon
July 10, 2017

Woman working at home.: It doesn't hurt to check, but it could hurt your finances not to check.

The Social Security Administration stopped mailing paper Social Security statements to everyone under age 60 in 2017. Younger people who want to check their earnings history or taxes paid will need to view their statements online. The SSA says more than 30 million people have created a my Social Security account since they became available in May 2012. The agency expects to save $11.3 million in processing and mailing costs in fiscal year 2017 as a result of the change. Here's why you should take a few minutes to view your benefit statement online.

Find out how much you will get when you retire.

Opinion: Should I keep my 401(k) with my employer when I retire?

Mitch Tuchman
July 10, 2017

A new analysis of the retirement business points out that people are increasingly stepping away from trading and into automated, low-cost portfolios.

Three cheers for that, we say, but it raises an interesting question. Once you retire, should you stay in your set-it-and-forget-it company plan or do something different? How does "investing wellness" continue into retirement?

The Face of America's Pension Crisis

Motley Fool Staff And Jordan Wathen
July 10, 2017

Chart of Central States Pension Fund's funding percentage

Meet Tony. For years, Tony worked in a plant that manufactured industrial gases. He started working at the plant in 1979, joining the Teamsters after deciding, like many who worked there, that becoming part of the union, and participating in its pension plan, was a smart financial decision.

The plant, which used processes that were dangerous in retrospect, according to Tony, eventually declined into technological obsolescence. Newer, safer processes became the standard for producing the gases that his plant produced. After a long career, he retired from the plant, and at 58 years old, he and his wife now work at Sam's Club and continue to save diligently for retirement through Wal-Mart's 401(k) program.

Millennials' health care preferences are likely to shape any Obamacare rewrite

Kay Bell
July 8, 2017

New health care offerings preferred by generations

The Senate will get back to work next week crafting an Obamacare repeal-and-replace measure, an already difficult task made more problematic by the messages lawmakers got from their constituents over the July 4th holiday.

There are many reasons, both political and practical, that devising a health care system for all of America is so complicated. One of the key ones is because we are so diverse.

Experts On: What NOT to Do When You're Trying to Get a Mortgage

Julie Sprankles
July 7, 2017

While buying a home is one of the most exciting and rewarding things you'll do in your life, it can also undoubtedly be one of the most stressful. This is due in no small part to the mortgage approval process which, at its best, is tricky and, at its worst, downright perplexing.

When I purchased my first home, I felt like I had sufficiently done my research. My confidence never wavered as I scrolled through Zillow listings, flagging homes with the same glee I reserved as a child for marking all my must-haves in the Toys 'R Us holiday catalog.

Oregon just passed the only bike-specific tax in the country

Lizzy Acker
July 7, 2017

The twenty-first Providence Bridge Pedal took place on the morning of Sunday, August 14, 2016.  Thousands of cyclists criss-crossed the Willamette River using as many as ten of Portland's bridges, which were partially or completely closed to motorized vehicle traffic.

On Thursday, the Oregon Legislature approved an ambitious $5.3 billion transportation tax and fee package. House Bill 2017, which passed the Senate 22-7, includes a 4-cent gas tax hike, a $16 vehicle registration fee increase, 0.1 percent payroll tax and 0.5 percent tax on new car sales.

It also includes something that no other state in the country has: a tax on the sale of bikes.

Health savings accounts becoming the new IRAs

Jeff Benjamin
July 6, 2017

With more than $40 billion in total assets, health savings accounts are starting to add up to real money, which could represent another area of opportunity and responsibility for financial advisers.

Today, only about 4% of HSA savers are moving money out of safe investments and investing it in the financial markets. But as account sizes grow, more aggressive investing is expected to become more common inside these tax-friendly accounts.

IRAs not serving intended savers: CRR

Marlene Y. Satter
July 6, 2017

One big motivator for IRAs was to give workers who lacked access to a retirement plan at work a way to save for retirement in a tax-deferred account. (Photo: Getty)

When IRAs were created in 1974 under the Employee Retirement Income Security Act, one big motivator was to give workers who lacked access to a retirement plan at work a way to save for retirement in a tax-deferred account.

But according to a new brief from the Center for Retirement Research at Boston College, that’s not what’s happened. Instead, most of the new money flowing into IRAs these days comes from higher-income people, who often also have a 401(k) plan.

Yes, You Can Save Enough for Retirement — and Have Your Latte Too

Walter Updegrave
July 6, 2017

The next numbers are as follows

A recent Vanguard blog post on the benefits of compounding interest calculated that if you skipped a $3.50 cup of java every day and invested that money instead in a diversified portfolio earning 6% a year, you would end up with more than $100,000 after 30 years.

While this example nicely illustrates how the compounding of investment gains can turn even small sums into big bucks over time, people often over-hype the financial benefits of skipping that daily Starbucks run. After all, what are the odds you will dutifully avoid buying another cup of coffee every day for the next 30 years?

More than a job — businesses play a critical role in creating career opportunities for veterans

Gary Profit and Brian Stann
July 6, 2017

More than a job ? businesses play a critical role in creating career opportunities for veterans

When the Bureau of Labor Statistics releases the Employment Situation Summary this week, there is one group of individuals that might not get your attention but should be at the forefront of our minds: the men and women who have served our country in the U.S. Armed Forces.

According to the Department of Defense, in 2016, more than 200,000 military members returned home to civilian life. Unfortunately, many of them find it difficult to navigate the civilian job market and may join the ranks of the more than 340,000 unemployed veterans in our country — 40 percent of whom are between the ages of 18 and 44.

Love & Marriage: What's Tax Got To Do With It?

Ashley L. Case and Darren T. Case
July 6, 2017

Within Dr. Gary Chapman's world-renowned, best-selling book, The Five Love Languages: The Secret to Love that Lasts, disappointingly absent is any reference to the Internal Revenue Code. Surprisingly, only "Words of Affirmation", "Quality Time", "Receiving Gifts", "Acts of Service", and "Physical Touch" made the cut. Surely the 74,000+ page federal tax code (which literally begins with Section 1(a): "Married Individuals Filing Joint Returns…") would garner more attention for a sixth love language of "Favorable Tax Treatment."

Why Millennials Won't Be Buying Your House

Chris Bryant
July 5, 2017

Having been rejected by young people in the recent U.K. election, a senior minister in Theresa May’s government called at the weekend for a “national debate” on England’s 9,250 pound ($12,000) yearly student tuition fees -- which the opposition Labour Party wants to abolish.

The minister, Damian Green, got his wish. A lively discussion followed about whether it's fair to ask graduates to pay for their own education. And this isn't just a question of fairness or politics, the economic consequences of student loans are hugely important too.

Three retirement savings strategies to use if you plan to retire early

Tom Anderson
July 5, 2017

If you're lucky to have saved enough money to leave the rat race early, you still need to a retirement strategy that minimizes taxes and penalties.

Retirement account rules are stacked against early retirees. People may face a 10 percent early withdrawal penalty if they take money out of their traditional IRAs before age 59½ and before age 55 with traditional 401(k) plans and other workplace retirement plans.

IRS Warns That Pay On Disability Is Often Taxable: Here's How To Tell

Robert W. Wood
July 5, 2017

What is taxed and what isn’t can be confusing. In the case of disability pay, whether it is taxed or not usually depends on who paid for the disability insurance coverage. Perhaps your employer paid and you were covered as a fringe benefit. In that case, when you are disabled and the coverage kicks in, the benefits you receive are taxable. However, what if you paid for your disability insurance yourself, with after-tax dollars? In that case, the payments you later receive on disability are tax-free.

How to Win at Retirement Savings

Ron Lieber
July 5, 2017

While most workers are responsible for their own retirement savings these days, high schools don’t have required classes on 401(k)’s and Individual Retirement Accounts (I.R.A.s). And colleges usually don’t teach anything about Roth I.R.A.s or 403(b)’s. That’s where we come in. Here is what you need to know about saving for life after you stop working and getting on the path toward a comfortable retirement, no matter your career or the size of your paycheck.

What to Do if You Contribute Too Much to Your IRA

Wendy Connick
July 5, 2017

Adding up taxes on a calculator

While only the most diligent savers are likely to max out 401(k) contributions, IRAs are another matter. The maximum allowable contribution for IRAs in 2017 is $5,500 (and you can contribute an extra $1,000 if you're 50 or older), which is manageable for many everyday savers. And exceeding this contribution limit has serious consequences.

When Debt Is Good

Mark Tibergien
July 3, 2017

When 'debt' is called 'leverage,' business owners see opportunities.

The word “debt” is rarely expressed as a positive notion. Financial advisors coach clients to reduce financial liabilities. Politicians push to eliminate the federal deficit. College graduates bemoan daunting student bank loans. Debt is a four-letter word. That is both an absolute fact and a matter of perception.

When the same concept is called “leverage,” wealthy people and business executives see potential. Using other people's money for the purpose of acquiring an asset or funding business growth can be an effective financial management tool for those who can afford the risk and are able to repay the obligation.

6 Things To Know About Your Side Hustle And Taxes

Kelly Phillips Erb
June 29, 2017

Nick DeSantis, Forbes staff

From Uber to, there are tons of ways to make some money on the side while pursuing your dream job - or just digging out of debt. If you're hoping to pick up some extra cash with a side gig this year, here's what you need to keep in mind on the tax side.

1. Income is income. It doesn't matter if your extra income is from driving a car or trading stocks, income is reportable unless it's otherwise excluded.

8 Tips to Determine Your Not-for-Profit’s Year-End

Marc Kotsonas, CPA
June 29, 2017

Year-end planning

Not-for-profits have a luxury that most other individuals and businesses do not. They’re allowed to select their fiscal year-ends for IRS purposes. Partnerships, sole proprietorships, S corporations and other legal structures, with limited exceptions, may not. These groups generally are required to use calendar year-ends for tax filings. Read on to find out what a not-for-profit should consider when choosing a year-end date.

How does a not-for-profit choose its year-end?

If You Pay Cyberattack Ransom, Deduct It On Your Taxes

Robert W. Wood
June 29, 2017

Yet again, there has been a major cyber attack, this time on a very large scale. This time, the massive cyberattack was traced to tax software. It is said to have impacted people in 64 countries, with its origins in a Ukrainian company's tax accounting software. Reports say impacted systems are offered the chance to get files released for a simple payment of $300 in bitcoin. You might think the haul for the hackers would be huge, but evidently it was not. Still, there were clearly some people who paid, whatever the government and tech advisers were suggesting. It is understandable, since the cost of being frozen out can just be too big. So if you pay hackers ransom to keep your business operating, is it tax deductible? Whether personal or business, it probably is, although the type of deduction can vary. 

My best friend is a CPA and a CFP — and he gave me the best financial advice I've ever heard

Thomas C. Corley, Contributor 
June 29, 2017

wealthy older man hat race

My best friend, Bill King, is 11 years older than I am.

Like me, he’s a CPA and a CFP. When I was just starting out in my career, Bill gave me the best financial advice I've ever heard.

“Same house, same spouse, same car.”

Deducting your cell phone as a business expense

Kay Bell
June 29, 2017

Steve Jobs introduces the first iPhone in January 2007_MacWorld video screenshot

What were you doing 10 years ago today? If you're an extreme tech geek, you were among the thousands waiting to get your hands on the first ever iPhone.

June 29, 2017, is the 10th birthday of the mobile device that, per Steve Job's promise (or threat, depending on your point of view), has irrevocably changed lives worldwide.

Oregon Department of Revenue will undergo top-to-bottom review

Diane Dietz, Statesman Journal
June 28, 2017

Department of Revenue

The Oregon Legislature is ordering a top-to-bottom review of the state’s troubled tax collecting agency even as it prepares to hand the agency expanded powers to go after bad debts owed to the state.

Lawmakers on the Joint General Government Subcommittee ordered the Department of Revenue to undergo a $150,000 comprehensive financial audit and a $350,000 management assessment.

What jobs will still be around in 20 years? Read this to prepare your future

Arwa Mahdawi
June 26, 2017

The robots are coming, the robots are coming!

Regular reports warn us that an automation apocalypse is nigh. In January, a McKinsey & Company study found that about 30% of tasks in 60% of occupations could be computerized and last year, the Bank of England’s chief economist said that 80m US and 15m UK jobs might be taken over by robots.

10 Things Retirees Need to Know About Housing

Tom Sightings
June 26, 2017

Aerial view of housing development near San Marcos, Texas

For most retirees, your house is your biggest and most valuable asset. You might be planning to retire in place, sell it to move to a retirement mecca, use it to produce some much-needed income or leave it to your kids as part of an estate. But your home's value can fluctuate over time. Here are ten things to know about the current housing market, according to reports from the Joint Center for Housing Studies at Harvard University and the National Association of Realtors.

1. Home prices are up. According to the National Association of Realtors, U.S. home resales rose in May 2017 to 5.62 million, the third highest level in a year. The median home price has reached an all-time high of $252,800, or 5.8 percent better than a year ago.

How Much Money Can You Gift Tax-Free?

Matthew Frankel (TMFMathGuy)
June 25, 2017

Gift box full of cash

Americans can give away millions of dollars tax-free during their lifetimes, but the rules are a bit complicated. To understand how much you can give, you need to know the annual gift tax exclusion, and how estate taxes work. If you have a high net worth, you can potentially use these rules to save your heirs millions of dollars.

The annual gift tax exclusion
The first part of the answer involves the annual gift tax exclusion, which is currently $14,000 per year, per person. This applies to monetary gifts, as well as to the fair market value of gifted property. You can give up to this amount to as many people you'd like every year, and the federal government won't tax one cent. For example, if you have five children and fifteen grandchildren, you can give them each $14,000 per year. That's $280,000 in tax-free gifts every year.

How to Make the Family Business Work Across the Generations

Paul Sullivan
June 23, 2017

Yuta Suzuki was studying finance with the goal of becoming an investment banker. Then his father called.

“He came to me with a serious face and said, ‘I heard you’re good at math,’” Mr. Suzuki, 37, said. “We have a small problem. We need your help.”

His father, Toshio Suzuki, was the chef and co-owner of the restaurant Sushi Zen, which had been a Midtown Manhattan institution for more than 30 years. And his problem wasn’t so small. “When I looked at the books it wasn’t healthy,” his son said.

What To Do When You Owe Taxes You Can't Pay

Larry Light
June 23, 2017

Yikes.  A whopping tax bill appears and you can’t pay it all at once? What do you do? Our tax expert, Jim Blankenship, founder and principal at Blankenship Financial Planning in New Berlin, Ill., shows how to handle this dilemma:

For all your good intentions, you’ve found yourself in a position where you owe taxes to the IRS that you can’t pay right away. All is not lost, there are ways to deal with this situation that can be helpful if you can’t pay. The IRS has several methods you can use to arrange a plan to pay the IRS taxes that you owe over time.

Oregon’s Quest for a Gross Receipts Tax Ends…For Now

Nicole Kaeding
June 22, 2017

After months of discussions, hearings, political maneuvering, and education, the Oregon legislature has abandoned its efforts to create a gross receipts tax this legislative session. This morning, Governor Kate Brown, Speaker Tina Kotek, and Senate President Peter Courtney announced that all consideration would stop until 2019.

Following the defeat of Measure 97 on the ballot in November, Oregon’s legislature explored creating a gross receipts tax in a quest to balance its budget—the state has a $1.4 billion deficit for the upcoming 2017-2019 biennium—and to add stability to the state’s revenue streams. Oregon does not have a general sales tax, does have a constitutional restricted property tax, and relies heavily on its individual income tax to generate revenue, which is an incredibly unstable revenue source.

Pros and cons of paying off mortgage before retirement

Deborah Nason
June 22, 2017

Seniors who retire a mortgage may enjoy reduced stress, increased cash flow and significant equity cushion.

Should you pay off your mortgage before you retire? There's no clear-cut answer, as the strategy depends on the client's tax situation, asset and income levels, and attitudes toward debt and investment. Financial advisors discuss the pros and cons.


Even Lawyers Face Independent Contractor - Employee Disputes

Robert W. Wood 
June 22, 2017

There is considerable talk about tech workers and worker status. There are also big lawsuits over who is truly an independent contractor and who is actually an employee, whatever you may call them. The stakes are big for governments, for workers, and for companies whose practices are scrutinized. Independent contractor v. employee distinctions can apply just about anywhere. With workers in almost any setting, there are tax, employment law, pension, and fringe benefit reasons that the government, third parties, and workers often argue about worker status. Even lawyers can be independent contractors or employees.

Women owe two-thirds of student loan debt. This points to a slow-burning crisis

Michelle Chen
June 21, 2017

Graduates in caps and gowns

By many measures, women have leapt ahead of their male peers in higher education. Today they have higher college enrollment and graduate at higher rates, and on many campuses, women’s and gender studies programs have mushroomed on campuses nationwide. But women’s educational advancement hasn’t come cheap.

The hidden cost of academic gender parity, according to a new analysis by the American Association of University Women, is a disproportionate student debt burden; women are borrowing more to “get ahead” on the career ladder, only to find their futures constrained by the shackles of debt.

10 tax tips for newlyweds

Kay Bell
June 21, 2017

Relaxing after the ceremony_Richmond Park Wedding-Red Cloud Photography_Barney Moss via Flickr

Ever wonder why June is "the" wedding month? Me, too. So I looked it up. The Old Farmer's Almanac, which I never realized was a go-to wedding planning resource, says that June is the most popular month to marry thanks to some ancient traditions.

The Roman goddess Juno, for whom the sixth month was named, was the protector of women in all aspects of life, but especially in marriage and childbearing. So, says the Almanac, a wedding in Juno's month was, and apparently still is, considered most auspicious.

6 Money-Saving Tips You Can’t Afford to Miss

Susan C. Allen, CPA, CITP, CGMA
June 21, 2017

Money saving tips

Those fun, light-hearted GEICO commercials that ask if you are tired of paying too much for car insurance hone in on the idea of wasting your money –– paying too much for something or not getting enough.

As a CPA who is passionate about making my hard-earned money work for me, it’s important to take time to critically analyze what my cash is doing. Busy lives often lend themselves to costly complacency in one’s personal finances. Basically, we want bill paying done and our retirement planning intact with as minimal effort as possible.

Do you need to pay off your mortgage before you retire?

Dana Anspach
June 21, 2017

Many near-retirees pay extra on the mortgage each month, avidly working toward having it paid off by retirement. Is this necessary to have a secure retirement? In some cases, yes. In others, not so much. When it comes to paying off the mortgage, a one-size-fits-all answer doesn't work.

In general, lower income households with total investable assets of less than a million are best served working to pay off the mortgage by retirement.

Beware IRS Form 1099 Mistakes That Trigger Big Taxes On Phantom Income

Robert W. Wood 
June 21, 2017

Some tax mistakes make it look like you collected big, when you really didn't. They can cause tax problems, and it can be hard convincing the IRS that you are right. Take the recent case of a woman who was giddy over winning a $43 million casino jackpot. Her excitement was short-lived, as the casino claimed the slot machine malfunctioned. Oops, you didn't win after all, they said. The slot machine said it was "printing cash ticket $42,949,672.76," but it was a mistake. The casino offered her a steak dinner instead, but Katrina Bookman is suing the Resorts World Casino over the $43 million jackpot, demanding her payout. She alleges negligence, breach of contract, and negligent misrepresentation, according to Courthouse News Service.

IRS Warns Don't Rely On IRS.Gov -- It Isn't Authority

Robert W. Wood 
June 20, 2017

No one likes scrutiny from IRS

Can you rely on the IRS? In an audit, can't you cite the IRS to the IRS? You would think so, but the big tax collection agency isn't exactly a warm and fuzzy place. Plainly, the IRS has a tough job to do. Our tax law is famously complex, and administering its twists and turns in a fair way isn't easy. Still, taxpayers and practitioners alike have complained for years that you cannot rely on things the IRS tells you over the phone. In the past, there even used to be surveysshowing the track record of IRS employees answering tax questions. These surveys showed just how reliable (or unreliable), those employees were. Of course, now it’s plenty difficult to just talk to a real person at all, so perhaps the reliability function is not as big a worry as it used to be.

Here's How Much a Job Loss Now Will Cost You by Retirement

Dan Kadlec
June 19, 2017


When Americans struggle financially—if they face a job loss or a bout with illness, for example—one of the first places they turn for relief is their retirement savings accounts.

This makes some sense, at least in the short term: Such accounts typically provide ready cash. But the long-term costs are significant, and they plague more people than you might imagine.

Why some CPAs bring their dogs to the office

Cheryl Meyer
June 19, 2017

Teddy and Winston

Teddy, Winston, Louis, Auggie, Baxter, Darby,Jonnah, Toby, Roxy, and Hennessey have a lot in common: Not only are they charming canines, but they also spend their days at public accounting firms with their beloved CPA humans. The dogs bring joy to office staffs, and they help reduce tension for clients, many of whom visit the offices during nerve-wracking tax time.

According to a 2016 study by Banfield Pet Hospital, pet-friendly workplaces offer several benefits, including boosting employee morale, reducing employee stress, and providing employers a competitive edge when recruiting. While canine mascots don’t fit with all professions, public accounting sometimes gives its members flexibility to bring their dogs to the office—as long as the dogs have the right temperament and firm owners and clients don’t mind. In advance of Take Your Dog to Work Day on June 23, we asked several CPAs why they bring their dogs to work, and how these four-legged friends impact their offices. Here are their stories:

More giving, more benefit for all

Jim Eskin, For the Express-News
June 19, 2017

Microsoft Corp. Chairman Bill Gates, right, co-founded the Bill & Melinda Gates Foundation, devoted to charity. But American philanthropy doesn?t belong exclusively to the wealthiest among us. About 60 percent of Americans contribute to their favorite charities every year. Photo: TED S. WARREN /AP / AP

Would you give up $1 if you could get $3 in return?

That’s how smart the public policy investment in the charitable tax deduction has been. For every dollar a donor gets in tax relief for a donation, the public typically receives $3 of benefit. It’sunlikely government could find a more effective way to leverage private investment in community services.

The odds for tax reform appear to be more favorable now than they have been since the Tax Reform Act of 1986. The charitable deduction has buttressed the vitality of American philanthropy for a century now.

US workers forfeit half their vacation time

Jessica Dickler
June 19, 2017

As the official start to summer kicks off this week, many workers are planning their vacations — at least in theory.

In fact, workers in this country leave much of their paid time off on the table, according to a recent report by jobs and recruitment website Glassdoor. It said workers, on average, use only 54 percent of their eligible vacation time.

As More States Kill Their Estate Taxes, Will The Push To Repeal The Federal Estate Tax Become Irresistible?

Paul Caron
June 18, 2017

Tax Foundation

Want proof taxes can actually go down? In the past three years, nine states have eliminated or lowered their estate taxes, mostly by raising exemptions.

And more reductions are coming. Minnesota lawmakers recently raised the state’s estate-tax exemption to $2.1 million retroactive to January, and the exemption will rise to $2.4 million next year. Maryland will raise its $3 million exemption to $4 million next year. New Jersey’s exemption, which used to rank last at $675,000 a person, rose to $2 million a person this year. Next year, New Jersey is scheduled to eliminate its estate tax altogether, joining about a half-dozen others that have ended their estate taxes over the past decade.

ObamaCare: Six key parts of the Senate bill

Jessie Hellmann
June 18, 2017

ObamaCare: Six key parts of the Senate bill

While Senate Republicans are drafting theirhealthcare plan behind closed doors, they’ve given reporters a general idea of what might be in it.

The bill is shaping up to have a similar structure as the House’s bill, while more reflecting the principles of centrist Republicans in both chambers.

ASK A FINANCIAL PLANNER: Should I save money or pay off debt?

Jeff Rose
June 18, 2017

Create a workable budget

Certified financial planner Jeff Rose answers:

How should I prioritize spending and saving from my take-home pay when I still have tons of student loans?

I've got $30,000 left at an average rate of 7%. How much of my paycheck should be devoted to general spending, saving, and paying those off? Can I get away with just paying the minimum on my loans? I don't have any other debt at the moment.

Column: Budgeting for retirement? Plan on spending an eye-popping amount on health costs

Gail MarksJarvis
June 18, 2017

A quick look at your retirement savings and estimated Social Security payments may convince you that you're well-prepared to retire.

But before you do, consider the health care costs that await you in retirement: The average 65-year-old couple retiring in a year can expect to spend $404,253 in today's dollars on health insurance and other health care costs. When using Social Security alone to pay those costs, that couple would need to devote 59 percent of their total Social Security proceeds during retirement to health care.

The Car Was Repossessed, but the Debt Remains

Jessica Silver-Greenberg and Michael Corkery
June 18, 2017

More than a decade after Yvette Harris’s 1997 Mitsubishi was repossessed, she is still paying off her car loan.

She has no choice. Her auto lender took her to court and won the right to seize a portion of her income to cover her debt. The lender has so far been able to garnish $4,133 from her paychecks — a drain that at one point forced Ms. Harris, a single mother who lives in the Bronx, to go on public assistance to support her two sons.

Social Security benefits for spouses can pump up household income

Liz Weston
June 18, 2017

The death of a student loan co-signer could have financial ramifications for the borrower.

Dear Liz: I have a friend who has a selfish, controlling husband. When talking with her recently, she told me she got only $300 a month from Social Security based on her work history while her husband gets $1,800. I told her she should be getting $900, half of his monthly amount, as a spousal benefit. I guess he thought if she got more it would reduce his check. I told her the $900 would be in addition to the $1,800 he gets.

She has been collecting her smaller benefit for seven or eight years. Does she have any recourse? I doubt he would take her to the Social Security office but maybe her daughter would.

Amazon’s Move Signals End of Line for Many Cashiers

Claire Cain Miller
June 17, 2017

Imagine this scene from the future: You walk into a store and are greeted by name, by a computer with facial recognition that directs you to the items you need. You peruse a small area — no chance of getting lost or wasting time searching for things — because the store stocks only sample items. You wave your phone in front of anything you want to buy, then walk out. In the back, robots retrieve your items from a warehouse and deliver them to your home via driverless car or drone.

Amazon’s $13.4 billion purchase of Whole Foods, announced Friday, could speed that vision along. Amazon has already made shopping for almost everything involve spending less time waiting, doing work or interacting with people, and now it could do the same for groceries. It’s already trying with a store in Seattle, Amazon Go, that has no salespeople or checkout lines.

Ways To Reform Taxation Of Small Business

Mark J. Mazur
June 16, 2017

On June 14, I testified before the Senate Small Business and Entrepreneurship Committee on how tax reform might affect small business.  I delivered two key messages: Pass-through businesses are not necessarily the same as small businesses and one useful approach to reform for these firms may be tax simplification.

There is a broad consensus that the current system for taxing businesses is in dire need of reform. The US tax system was last overhauled in 1986. And three decades of changing business practices, increased globalization, and expanding aggressiveness in tax planning have made the current system of taxing business income woefully out of date. I told the committee that there are five major problems with the taxation of US businesses:

Voices When is it OK to throw out old tax documents?

Donna Holm
June 16, 2017

After every tax season, it’s tempting to do some spring cleaning, which often includes a massive dump of recently filed tax data.

While many firms have migrated to paperless records, many still grapple with the issue of tax record retention. One of the most confusing questions clients ask their accountants is: what do I do with my tax records and how long do I need to keep them?

DREAMers, other undocumented workers make major tax contributions to Uncle Sam, state treasuries

Kay Bell
June 16, 2017

Dreamers protest 2014

Donald J. Trump's got a lot of campaign promise policy issue irons in the fire. This week, he pulled one out a bit by deciding to let undocumented residents known as DREAMers stay in the United States.

The decision was announced as part of a fact sheet released by Homeland Security late June 15. That document's next-to-last line notes:

7 Roth IRA Benefits You Need to Know About

Maurie Backman (TMFBookNerd)
June 16, 2017

Envelope with cash with the words "Roth IRA" written on it

In a recent TIAA survey, only 19% of Americans were found to actively contribute to an IRA. If you've yet to open an account, now's the time to get moving, because the sooner you do, the more time you'll give your retirement savings to grow.

Now if you're going to start funding an IRA, you may be wondering whether you should go with a traditional account versus a Roth. While each comes with its share of benefits, here are some Roth IRA advantages you probably don't want to pass up.

How To Cut Your College Loan Repayments

John Wasik
June 16, 2017

It's always fried my bacon how many companies exploit people in debt. From debt collectors to "debt repair" firms, they are always out there.

A few years ago, I reported on firms that charged student loan holders fees to reduce or consolidate their college loans. These "debt relief" firms are still operating and only a handful have been sued. The watchdogs can't keep up with them. (Note: My research led to a book on these scams and how you can obtain a debt-free degree.)

How High Are Wine Taxes In Your State?

Jose Trejos
June 15, 2017

The treatment of wine differs extensively across the states, and at higher rates than beer because of greater alcohol content. Check out today’s map below to see where your state lies on the wine tax spectrum.

Kentucky has the highest wine excise tax rate at $3.17 per gallon, followed by Alaska ($2.50), Florida ($2.25), Iowa ($1.75), and New Mexico and Alabama (tied at $1.70). The five states with the lowest wine excise rates are California ($0.20), Texas ($0.20), Wisconsin ($0.25), Kansas ($0.30), and New York ($0.30). Notably, these rankings do not include states that control all sales (New Hampshire, Mississippi, Pennsylvania, Utah, Wyoming).

IRS Warns On 'New Twist' To Old Phone Scams

Kelly Phillips Erb 
June 15, 2017

Just because it's summer doesn't mean that scammers are taking a break. The Internal Revenue Service (IRS) has issued a warning about a new telephone scam.

In the scam, callers posing as IRS representatives advise potential victims that two certified letters were sent to the taxpayer in the mail but were returned as undeliverable. The callers then threaten to arrest the potential victim if a payment is not immediately made through a prepaid debit card. The scammer also tells the victim that the purchase of the card is linked to the Electronic Federal Tax Payment System (EFTPS) system: it is not.

Best states for keeping more of your retirement income

Ray Martin
June 15, 2017

When it comes to finding ways to cut your tax bill in retirement, your federal taxes deserve a lot of attention. For high earners, the top marginal rate is 39.6 percent, and that can go to 43.4 percent when you add the Affordable Care Act surtax of 3.8 percent on investment income.

But don't overlook state income taxes, which vary greatly from state to state. California leads the way with a top marginal rate of 13.3 percent. On the other end, seven states have no income tax at all: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. 

Drop in U.S. Retail Sales Signals Uneven Consumer Spending

Sho Chandra
June 14, 2017

U.S. retail sales fell in May by the most since the start of 2016, reflecting broad declines in categories including motor vehicles and electronics, Commerce Department figures showed Wednesday.

Key Takeaways

The May figures highlight a cautious consumer. While the value of gasoline service-station receipts dropped the most since February 2016 and weighed on overall retail sales, Americans pulled back at other merchants. The data aren’t adjusted for prices, so lower fuel costs depress filling-station results.

10 Ways to Generate Income After You Retire

Tom Sightings
June 13, 2017

A composite of retirement benefits changing in 2015.

Financing retirement has become more challenging than ever. But the good news is that we have more sources of income than we might at first realize. Here are ten ways that people generate income after they retire. Most people only need three or four to be financially comfortable.

1. Social Security. The average retiree collects about $1,360 a month from Social Security. But many people spend more than that on housing, health care, transportation and food. While Social Security may be part of the equation for financing retirement, it does not provide the whole answer. Your benefit may differ significantly from the average, based on your earnings history and the age you retire. You can retire and collect Social Security anytime between 62 and 70. The longer you wait, the higher your monthly check.

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