Sorry to disappoint. This isn't going to be a discussion of Jim Morrison and I'm sure when he made this statement, he wasn't talking about end of life planning. But the statement is very true. No one gets out alive.
All your life you plan for the future or someone plans for you when you're young. By the time you're in high school you're doing the planning. College? Trade school? The military? Once the career path is started, there's planning for your first house, a bigger car, your kids, their education and your retirement. Life moves on, one plan after the other until, if you're lucky, all those plans work out and the retirement plan that was put into place is functioning as it should. You're retired. You're taking it easy and, suddenly, all planning stops. Why is that? Do you think you're going to continue in retirement for eternity?
No, sad to say, you're going to die. Well, yes, but there's no need to plan for that. Plan or no plan, no one gets out alive. True, but we don't disappear or blow up on a certain date and that's that. Some will die peacefully in their sleep or in a quick accident, but far too many will have a long and lingering death. And some of those will linger in a mental state that makes it impossible for them to make decisions or communicate with caregivers. What then? What's the plan?
You can't stop planning when you reach retirement. You have to keep the plan going as long as you are above ground. What decisions do you want made if you can't make them? Who do you want to make them? In these days of medical miracles and longer lives, it's absolutely essential to consider what you want at the end of your life. And then you need to write it down or create a living will. Make sure the person you select "to pull the plug" is someone who can actually do it. Don't put that chore on someone who can't let you go. Maybe your spouse or children aren't the best to nominate for this position. Whoever it is, talk to them before their services are needed and let them know what your wishes are and when to take action. Don't leave your end of life planning to others.
You can consult with attorneys or find forms on the Internet to help you figure out what may need to be done and who best to do it. http://www.caringinfo.org/files/public/ad/Tennessee.pdf is a good place to start. If you're not in Tennessee, there are forms for every state. This will give you an idea of what to think about and what to discuss with your family and friends. And you can prepay your funeral expenses and even write your own eulogy. But don't put it off for too long. Although no one gets out alive, not many of us know when we're going.
Thursday, December 31, 2015
Friday, December 25, 2015
IRS Opens January 19 for filing 2015 personal tax returns
The IRS has announced that the tax extenders legislation will not slow the start of tax season. The IRS will be open for business on January 19, as planned. On this day personal tax returns, 1040 forms, can be electronically filed. All 1040s will begin to be processed at that time so sending in a paper return before that date will not speed up the process. Paper returns will be held until January 19 and processed at that time.
Tax season will end on Monday, April 18, 2016, because Washington, D.C. will celebrate Emancipation Day and when D.C. closes and the IRS takes a break, it slows down the end of tax season.
The IRS urges tax payers to make certain all tax filing forms have been received before filing a tax return, this included W-2s, 1099s and the new form 1095-A from the Marketplace for tax payers who plan to take the premium tax credit. I will be writing a separate post on these forms which are new.
E-file and direct deposit are still the quickest and safest ways to file returns and claim refunds. You can do this yourself, sometimes for free if certain qualifications are met, or for a small fee. You can also use the services of a tax professional if you prefer. If you have any questions, please post a question and I'll do my best to supply an answer.
Tax season will end on Monday, April 18, 2016, because Washington, D.C. will celebrate Emancipation Day and when D.C. closes and the IRS takes a break, it slows down the end of tax season.
The IRS urges tax payers to make certain all tax filing forms have been received before filing a tax return, this included W-2s, 1099s and the new form 1095-A from the Marketplace for tax payers who plan to take the premium tax credit. I will be writing a separate post on these forms which are new.
E-file and direct deposit are still the quickest and safest ways to file returns and claim refunds. You can do this yourself, sometimes for free if certain qualifications are met, or for a small fee. You can also use the services of a tax professional if you prefer. If you have any questions, please post a question and I'll do my best to supply an answer.
Sunday, October 25, 2015
Save for your child's retirement not her college education
Saving for your child's retirement might seem backward. Isn't the child supposed to get a good job and save for his own retirement? Yes, that's the way it was. But I know a lot of people who don't believe in the old work plan of 50 hours a week in a job your don't particularly like in the hope of living long enough to enjoy a fabulous retirement. There are a lot of ifs in there. If the child can remain employed, if the job continues to exist, if the retirement plan provided by the employer still exists at retirement and if the child is still in good enough health to enjoy her retirement.
What if your child is happiest working in a small non-profit that doesn't pay a large enough salary for retirement savings? What if the employer is a small business that doesn't offer a retirement plan? What if your child doesn't make enough money to save for retirement? What if your child is diagnosed with an illness that makes full time work impossible? There are a lot of ifs in this paragraph as well.
Everyone wants to think the future will be bright and bad things will happen to the other guy and sometimes that's true. I suggest that saving early and letting the money earn for your child is the best plan.
The longer money is invested the more it grows. $10,000 invested for 45 years at 8% (an average for the stock market in the past) would grow to $319,204. The earlier your child can begin saving for retirement the better.
Having $10,000 in an IRA by the end of college will allow your child to have something for retirement no matter what course his life takes. And if she is able to invest more in the IRA over the years, so much the better. Having at least $10,000 in an IRA by the age of 21 will allow your child the most freedom in deciding a course in life while still having a good retirement. If $10,000 is all the child is ever able to save, retirement income may still be meager but meager is better than nothing.
You may not be convinced, and still want to save for a college education, which is still a good plan. But consider the IRA. Once your child has earned income, the entire amount of of gross income can be invested in an IRA up to $5,500 annually. Investing in a ROTH IRA would mean all distributions would be tax free in the future. The more your child invests in an IRA when she is young, the more she'll have for retirement when she's older.
Many people aren't able to save for retirement at all and others only begin saving in their 40s. For a college education there are scholarships, grants and low interest loans. The student can also work a part-time job or live in his parent's home to save money for college. There are no scholarships, grants or low interest loans for retirement and although working and living with family are options for the old as well as the young, no one wants to work through retirement. Although generations sharing a home isn't a bad plan for everyone to save money.
Consider looking at your child's retirement before their college education and see if you can't start them off right for the end of life as well as for the beginning.
What if your child is happiest working in a small non-profit that doesn't pay a large enough salary for retirement savings? What if the employer is a small business that doesn't offer a retirement plan? What if your child doesn't make enough money to save for retirement? What if your child is diagnosed with an illness that makes full time work impossible? There are a lot of ifs in this paragraph as well.
Everyone wants to think the future will be bright and bad things will happen to the other guy and sometimes that's true. I suggest that saving early and letting the money earn for your child is the best plan.
The longer money is invested the more it grows. $10,000 invested for 45 years at 8% (an average for the stock market in the past) would grow to $319,204. The earlier your child can begin saving for retirement the better.
Having $10,000 in an IRA by the end of college will allow your child to have something for retirement no matter what course his life takes. And if she is able to invest more in the IRA over the years, so much the better. Having at least $10,000 in an IRA by the age of 21 will allow your child the most freedom in deciding a course in life while still having a good retirement. If $10,000 is all the child is ever able to save, retirement income may still be meager but meager is better than nothing.
You may not be convinced, and still want to save for a college education, which is still a good plan. But consider the IRA. Once your child has earned income, the entire amount of of gross income can be invested in an IRA up to $5,500 annually. Investing in a ROTH IRA would mean all distributions would be tax free in the future. The more your child invests in an IRA when she is young, the more she'll have for retirement when she's older.
Many people aren't able to save for retirement at all and others only begin saving in their 40s. For a college education there are scholarships, grants and low interest loans. The student can also work a part-time job or live in his parent's home to save money for college. There are no scholarships, grants or low interest loans for retirement and although working and living with family are options for the old as well as the young, no one wants to work through retirement. Although generations sharing a home isn't a bad plan for everyone to save money.
Consider looking at your child's retirement before their college education and see if you can't start them off right for the end of life as well as for the beginning.
Saturday, March 14, 2015
How get the most for the grocery dollar at Kroger
For most of my life, I never shopped a grocery sale paper on a regular basis. I shopped the same grocery store only to become familiar with the lay out of the inventory to speed up the hunting and gathering. Because I hate shopping, of any sort but especially groceries, it was easy to only go once a week, as recommended by expert shoppers. Shop once a week. Shop on a full stomach (hungry grocery shoppers buy a lot they don't need). Shop only with a list.
I shop Kroger. Once you become a regular Kroger shopper and get your customer loyalty card, Kroger sends out special coupons just for you on the items you buy. This works well because for every $100 spent in Kroger you get a ten cent cut in the price of gas at the Kroger gas stations which are in every Kroger parking lot. Ten cents may not sound like much but it really adds up if you shop wisely and avail yourself of all the Kroger shopping perks.
One overlooked shopping perk is gift cards. Every day, all day, the cards are doubled. That means a $25 gift card will turn into 50 Kroger gas points. Several times during the year Kroger runs a special and cards are worth four times the amount of the card. At these times a $25 gift card is good for 100 Kroger gas points or ten cents off a gallon of gas. Well, how many gift cards does one person need? You can work gift cards into everything. I go, either on line or to the store, and shop for what I need before I go buy a gift card. I don't want to guess how much I'll need and buy either too many or too few. If I want to spend $200 at Best Buy or Home Depot, I go to Kroger after I've selected my purchases and have a final price in hand. That $200 card becomes 400 gas points, doubled to 800 if Kroger is running a special. Every month I buy $50 in restaurant gift cards so we can eat at our favorite places during the month.
Another shopping perk is the weekly Kroger ad papers. For some reason it took me a long time to figure out what these papers were. I didn't realize the items in the ads were already reduced and if I had a coupon for the item, I could buy it for even less. You can read the ad in paper, on line, or on your tablet or phone with the Kroger app. Once you set up a Kroger account you can keep up with your electronic coupons which are added to your loyalty card and used automatically in the check out line. It's a wonderful system, but noting is flawless. Be sure to check your receipt at each shopping trip to make sure you have your points.
Also with the app and your loyalty card, you can set up grocery lists and add items to your list directly from the Kroger ad. The list is automatically sorted into sections of the store to streamline shopping. The app improves all the time and is very responsive to suggestions.
Often Kroger runs a mix and match sale. These sales offer an additional $1 off each item if the items are bought in multiples of 5. Coupons still count. When I buy an item in the mix and match sale, I segregate it in the cart. When I have 5 items in the mix and match sale, I move them to the "buy" section of my cart. If my daughter is shopping with me, I put the mix and match items in her cart until I have a group of 5.
I buy Kroger brands and meats at $1.99 a pound to reduce my grocery expense. I find Kroger brands are equal to if not superior to non store brands. By using coupons, gift cards and store sales, I stretch my $300 a month grocery budget into at least $375 to $400, adding $75 or $100 to my budget each month. I also get at least 40 cents off my gas each month which increases the gasoline budget.
It takes a little longer to do the grocery shopping now, both before hand when I review the sale ad and make my list and later while doing the shopping in the store, to compare prices, analyze coupons and comply with the rules of the mix and match sale, but it's worth it. By spending a little extra time getting to know Kroger's sales, using their coupons, gift cards, and mix and match sales, I regularly save $1,500 and more a year as well as buy gas at least 40 cents cheaper and often a whole dollar cheaper. It's all worth the extra effort to stay within the budget.
I shop Kroger. Once you become a regular Kroger shopper and get your customer loyalty card, Kroger sends out special coupons just for you on the items you buy. This works well because for every $100 spent in Kroger you get a ten cent cut in the price of gas at the Kroger gas stations which are in every Kroger parking lot. Ten cents may not sound like much but it really adds up if you shop wisely and avail yourself of all the Kroger shopping perks.
One overlooked shopping perk is gift cards. Every day, all day, the cards are doubled. That means a $25 gift card will turn into 50 Kroger gas points. Several times during the year Kroger runs a special and cards are worth four times the amount of the card. At these times a $25 gift card is good for 100 Kroger gas points or ten cents off a gallon of gas. Well, how many gift cards does one person need? You can work gift cards into everything. I go, either on line or to the store, and shop for what I need before I go buy a gift card. I don't want to guess how much I'll need and buy either too many or too few. If I want to spend $200 at Best Buy or Home Depot, I go to Kroger after I've selected my purchases and have a final price in hand. That $200 card becomes 400 gas points, doubled to 800 if Kroger is running a special. Every month I buy $50 in restaurant gift cards so we can eat at our favorite places during the month.
Another shopping perk is the weekly Kroger ad papers. For some reason it took me a long time to figure out what these papers were. I didn't realize the items in the ads were already reduced and if I had a coupon for the item, I could buy it for even less. You can read the ad in paper, on line, or on your tablet or phone with the Kroger app. Once you set up a Kroger account you can keep up with your electronic coupons which are added to your loyalty card and used automatically in the check out line. It's a wonderful system, but noting is flawless. Be sure to check your receipt at each shopping trip to make sure you have your points.
Also with the app and your loyalty card, you can set up grocery lists and add items to your list directly from the Kroger ad. The list is automatically sorted into sections of the store to streamline shopping. The app improves all the time and is very responsive to suggestions.
Often Kroger runs a mix and match sale. These sales offer an additional $1 off each item if the items are bought in multiples of 5. Coupons still count. When I buy an item in the mix and match sale, I segregate it in the cart. When I have 5 items in the mix and match sale, I move them to the "buy" section of my cart. If my daughter is shopping with me, I put the mix and match items in her cart until I have a group of 5.
I buy Kroger brands and meats at $1.99 a pound to reduce my grocery expense. I find Kroger brands are equal to if not superior to non store brands. By using coupons, gift cards and store sales, I stretch my $300 a month grocery budget into at least $375 to $400, adding $75 or $100 to my budget each month. I also get at least 40 cents off my gas each month which increases the gasoline budget.
It takes a little longer to do the grocery shopping now, both before hand when I review the sale ad and make my list and later while doing the shopping in the store, to compare prices, analyze coupons and comply with the rules of the mix and match sale, but it's worth it. By spending a little extra time getting to know Kroger's sales, using their coupons, gift cards, and mix and match sales, I regularly save $1,500 and more a year as well as buy gas at least 40 cents cheaper and often a whole dollar cheaper. It's all worth the extra effort to stay within the budget.
Sunday, January 18, 2015
The IRS is open for business and so am I
The IRS will be open for business on Tuesday, January 20, 2015, to begin processing 2014 tax returns. Below is some information copied directly from the IRS web site about filing and using electronic filing. If you don't file electronically, I urge you to do so. It's quick. It's easy. It's free (sometimes).
Contact me if you need me.
IR-2015-03, Jan. 15, 2015
WASHINGTON — The Internal Revenue Service announced the on-time opening of the nation’s 2015 filing season and highlighted a growing array of online services, including features that help taxpayers understand how the Affordable Care Act will affect them at tax time, along with the availability of the Free File program.
Taxpayers have until Wednesday, April 15, 2015 to file their 2014 tax returns and pay any tax due. The IRS expects to receive about 150 million individual income tax returns this year. Like each of the past three years, more than four out of five returns are expected to be filed electronically.
The IRS Free File program, available at IRS.gov, will open Friday for taxpayers, and the IRS will begin accepting and processing all tax returns on Tuesday, Jan. 20.
This year’s return will include new questions to incorporate provisions of the Affordable Care Act (or ACA). The majority of taxpayers - more than three out of four – will simply need to check a box to verify they have health insurance coverage. For the minority of taxpayers who will have to do more, IRS.gov/aca features useful information and tips regarding the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA.
“Our employees will be working hard again this season to help the nation’s taxpayers,” IRS Commissioner John Koskinen said. “We encourage people to use the tools and information available on IRS.gov, particularly given the long wait times we anticipate on our phone lines. As always, taxpayers can benefit by filing electronically.”
Koskinen announced that taxpayers can begin preparing their returns using the Free File system on Friday, Jan. 16. Available only at IRS.gov, Free File offers two filing options:
- Brand-name software, offered by IRS’ commercial partners to about 100 million individuals and families with incomes of $60,000 or less; or
- Online fillable forms, the electronic version of IRS paper forms available to taxpayers at all income levels and especially useful to people comfortable with filling out their own returns.
E-file, when combined with direct deposit, is the fastest way to get a refund. More than three out of four refund recipients now choose direct deposit. People who e-file make fewer mistakes, and it costs nothing for those who choose Free File.
In all, 14 software companies will be participating in this year’s Free File program. Additional details about the specific Free File offerings will be available tomorrow on the front page of IRS.gov when Free File becomes available.
Taxpayers who purchase their own software can also choose e-file, and most paid tax preparers are now required to file their clients’ returns electronically. In addition to Free File, commercial software companies also are currently available for taxpayer use.
The IRS will begin accepting and processing all returns — whether e-file, Free File or paper tax returns — on Jan. 20.
Like last year, the IRS expects to issue more than nine out of 10 refunds within 21 days. Again, the fastest way to get a refund is to e-file and choose direct deposit. It takes longer to process paper returns and in light of IRS budget cuts resulting in a smaller staff, it will likely take an additional week or more to process paper returns meaning that those refunds are expected to be issued in seven weeks or more.
Koskinen said, “If you haven’t already, you should consider filing electronically. It’s fast, accurate and the best way to get your refund quickly.”
Koskinen also strongly encouraged taxpayers to visit IRS.gov as a first stop for information ranging from the status of their refunds to basic tax information. He cautioned taxpayers that recent budget reductions will mean long wait times on the phone, routinely topping 30 minutes.
Information on IRS.gov and using tax software and e-file are among the options that can help people with questions about the individual shared responsibility requirement included in the Affordable Care Act, which is new to the Form 1040 this filing season.
IRS information about Health Care
The following is copied directly from the IRS web site. Please wait for your 1095-A, if you are go receive one, before filing your taxes. As always, I'm open for business when the IRS is. Contact me for an appointment if you need tax prep help.
Health Care Basics
The Affordable Care Act requires that a taxpayer and each member of their family either hasqualifying health insurance coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing their federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:
- Check the box. Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required.
Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage.
- Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage. Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return. Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when filing a return.
- Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.
- Premium Tax Credit. Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important information needed to complete a tax return.
If the Form 1095-A is not received by early February, contact the Marketplace where coverage was purchased. Do not contact the IRS because IRS telephone assistors will not have access to this information.
Taxpayers who benefited from advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile those advance payments with the amount of premium tax credit they’re entitled to based on their actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting. Use IRS Form 8962,Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.
The IRS has set up a special section at IRS.gov/aca with more information about the Affordable Care Act and the 2014 income tax return.
Alternatively, low-and moderate-income taxpayers can get help meeting this health-care requirement and filing their return for free by visiting one of the more than 12,000 community-based tax help sites staffed by more than 90,000 volunteers that participate in the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov.
The IRS also reminded taxpayers that a trusted tax professional can also provide helpful information about the health care law. A number of tips about selecting a preparer and national tax professional groups is available on IRS.gov.
The IRS urges all taxpayers, especially those claiming the premium tax credit, to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and, for those claiming the premium tax credit, and Form 1095-A from the Marketplace. Doing so will help avoid refund delays and the need to file an amended return later.
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