A credit freeze will not effect your credit rating.
WEALTH MANAGEMENT ADVISOR
Here’s a brief glance at what you’ll find in the November/December issue…
When should you pull the trigger on Social Security benefits?
When is it appropriate to start collecting Social Security benefits? As this article discusses, the answer to that question depends on such factors as the amount of benefits, additional assets, life expectancy and marital status. Individuals are also encouraged to consider the effect of earnings if they plan to work while receiving benefits. A table shows how full retirement age is determined.
Falling markets, though inevitable, provide opportunities
Investors don’t necessarily have to suffer when markets are volatile. As this article explains, investors with long-term objectives and broadly diversified portfolios can probably ignore short-term market fluctuations. In fact, volatility can provide opportunities to invest in stocks that previously were too expensive. Taking advantage of such buying opportunities may position investors for better performance.
Weighing the pros and cons of LTC insurance
Few people want to think about the possibility that they might need long-term care (LTC). But it’s important to do so, and LTC insurance can help. This article weighs the benefits of LTC insurance with the cost of the premiums and explains some of the terminology used in LTC policies.
Self-directed IRAs: Watch out for these 3 tax traps
Although self-directed IRAs enable account holders to invest in nontraditional assets such as real estate, they also contain several potential tax traps. This short article warns about unrelated business taxable income, unrelated debt-financed income and prohibited transactions.
Six Classic Techniques for Protecting Your Assets
ABLE Accounts: Families of disabled children have another estate planning option
Plan now to reduce your Net Investment Income Tax exposure
Buy LOW, Sell HIGH: A primer on value investing
Please call us at 978-970-3400 if you have any questions or would like us to evaluate how any of this may apply to your situation.
International Estate Planning: How to avoid tax traps
Taxable vs. tax-advantaged: Where you hold your investments matters!
Protect your self from tax identity theft
Should you “undo” a Roth IRA conversion?
The College Board has released college cost figures for the 2014/2015 academic year in its annual Trends in College Pricing report. Here are the highlights:
Public colleges (in-state students):
Public colleges (out-of-state students):
*”Total average cost” includes tuition and fees, room and board, and a sum for books, transportation, and personal expenses.
By now, many have given up on their New Year’s Resolutions to eat healthier, go to the gym or remove vulgarity from their speech, but there is another resolution not to give up on so quickly – to begin (or restart) saving toward your goals. The United States Personal Savings Rate has recovered from historic lows prior to the last recession, but is still short of the long term average. Whether it is for a dream vacation, a child’s wedding, or simply for a “rainy-day,” savings is essential to the financial health of all, young and old. In an era of credit card dependency, the only way to greater financial freedom is to deliberately plan for and save for the future.
Savings is both short term and long term in nature. Earmark which accounts are short term savings accounts (the savings you have setup to cover checking account overdrafts and dining out money) and which accounts are long term savings accounts (dream vacation fund or retirement savings). Many people do not have the discipline to save as those in previous generations did, but there are numerous strategies to ensure you meet your goal(s) including the following:
The American Institute of Certified Public Accountants (AICPA) has launched the “Feed the Pig” initiative to improve help people increase their savings. It is filled with interactive tools and resources to motivate you to make a savings commitment. Please visit www.feedthepig.org. There is also a site geared exclusively towards “tweens” (and their parents/teachers) who need to learn healthy financial habits before they are bombarded with credit card offers on their 18th birthdays. Please click here to visit FEED THE PIG
By sitting down and revisiting how you are intentionally spending the money you work hard for and establishing a savings strategy, you will not only keep a New Year’s Resolution, you will increase the level of control you have over your finances and will feel significantly more empowered and gratified when you can comfortably pay for your dream vacation, or your child’s wedding, or the latest life-changing technology gadget…with CASH!
Please contact us to learn how a regular savings plan is only a part of our Chronos Wealth System.
Boston CPA and Financial Planners at Wealth Management Advisors, LLC and Sullivan Bille PC present a Personal Record Retention Guide.
As the calendar turns, you may find yourself looking forward to tax preparation season. OK, maybe not “looking forward to”, but it will soon be time to dig through your paperwork and pull together the items needed for tax preparation. A question that typically arises this time of year is “how long do I have to keep (insert document name here)”. Please see below for some guidelines. As always, please give us a call if you have any questions.
INDIVIDUAL RECORDS SUGGESTED RETENTION PERIOD
Tax Return Copies Permanent
Medical Receipts 7 Years
Forms 1099 Received 7 Years
Forms W2 Received Permanent
401 K/Keogh Statements 7 years following disposition, termination, payoff
IRA Statements (deductible & nondeductible) 7/Permanent
Loan Records / Forms 1098 7 years following disposition, termination, payoff
Annuity Year End Statements 7 years following disposition, termination, payoff
Insurance Policies – Life Permanent
Insurance Policies – Other 7 years following disposition, termination, payoff
Major Purchase Receipts 7 Years
Year-end Brokerage Statements/Trade Confirmations 7 Years
Certificates of Deposit Statements 7 Years
Schedule K-1’s from Partnership or S Corporation 7 Years following disposition, termination, payoff
House Records (cancelled checks for purchase of major improvements and maintenance) Permanent
Birth and Death Certificates Permanent
Medical Records Permanent
Trust Agreements Permanent
Detailed List of Financial Assets Held Permanent
Alimony, Custody or Prenuptial Agreements Permanent
Military Papers Permanent
Photos or Videotape of Valuables Permanent
The 2014 IRA and Retirement Plan Limits are important to understand. The maximum amount you can contribute to a traditional IRA or Roth IRA in 2014 remains unchanged at $5,500 (or 100% of your earned income, if less). The maximum catch-up contribution for those age 50 or older in 2014 is $1,000, also unchanged from 2013. (You can contribute to both a traditional and Roth IRA in 2014, but your total contributions can’t exceed this annual limit.)
The income limits for determining the deductibility of traditional IRA contributions have increased for 2014 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household, and your income (“modified adjusted gross income,” or MAGI) is $60,000 or less (up from $59,000 in 2013). If you’re married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $96,000 or less (up from $95,000 in 2013). If you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $181,000 or less (up from $178,000 in 2013).
If your 2014 federal income tax filing status is:
Your IRA deduction is reduced if your MAGI is between:
Your deduction is eliminated if your MAGI is:
Single or head of household
$60,000 and $70,000
$70,000 or more
Married filing jointly or qualifying widow(er)*
$96,000 and $116,000 (combined)
$116,000 or more (combined)
Married filing separately
$0 and $10,000
$10,000 or more
*If you’re not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $181,000 to $191,000, and eliminated if your MAGI exceeds $191,000.
The income limits for Roth IRA contributions have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2014 if your MAGI is $114,000 or less (up from $112,000 in 2013). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $181,000 or less (up from $178,000 in 2013). (Again, contributions can’t exceed 100% of your earned income.)
|If your 2014 federal income tax filing status is:||Your Roth IRA contribution is reduced if your MAGI is between:||You cannot contribute to a Roth IRA if your MAGI is:|
|Single or head of household||
$114,000 and $129,000
$129,000 or more
|Married filing jointly or qualifying widow(er)||
$181,000 and $191,000 (combined)
$191,000 or more (combined)
|Married filing separately||
$0 and $10,000
$10,000 or more
The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan in 2014 remains unchanged at $17,500. The limit also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Savings Plan. If you’re age 50 or older, you can also make catch-up contributions of up to $5,500 to these plans in 2014 (unchanged from 2013). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
If you participate in more than one retirement plan, your total elective deferrals can’t exceed the annual limit ($17,500 in 2014 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan–a total of $35,000 in 2014 (plus any catch-up contributions).
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan in 2014 is $12,000, unchanged from 2013. The catch-up limit for those age 50 or older also remains unchanged at $2,500.
|Plan type:||Annual dollar limit:||Catch-up limit:|
|401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Savings Plan||
Note: Contributions can’t exceed 100% of your income.
The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2014 is $52,000 (up from $51,000 in 2013), plus age-50 catch-up contributions. (This includes both your contributions and your employer’s contributions. Special rules apply if your employer sponsors more than one retirement plan.)
Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2014 has increased to $260,000, up from $255,000 in 2013; and the dollar threshold for determining highly compensated employees remains unchanged at $115,000.
Copyright 2006-2013 Broadridge Investor Communication Solutions, Inc. All rights reserved
|No Rendering of Advice The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a qualified professional accountant.Presentation of the information is not intended to create, and receipt does not constitute, an accountant-client relationship. Internet subscribers, users, online and other readers are advised not to act upon this information without seeking the service of a professional accountant.Any U.S. federal tax advice contained in this document is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.Accuracy of Information While we use reasonable efforts to furnish accurate and up-to-date information, we do not warrant that any information contained herein or made available through our website is accurate, complete, reliable, current or error-free. We assume no liability or responsibility for any errors or omissions in the content of this website or such other materials or communications.
|The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have announced that same-sex couples who are legally married in jurisdictions that recognize same-sex marriage will be treated as married for all federal tax purposes. Guidance has been provided in the form of a Revenue Ruling (Rev. Rul. 2013-17) and associated Frequently Asked Questions.
State granting marriage is key, not state of residence
If a same-sex couple is legally married in a state that recognizes same-sex marriage, the couple will be treated as married for all federal tax purposes. This is true even if the couple resides in a state that does not recognize same-sex marriage. So, a same-sex couple legally married in a state that recognizes same-sex marriage, but residing in a state that does not recognize same-sex marriage, will be treated as married for federal tax purposes even though it’s possible the couple may not be treated as married for state tax purposes. Recognition also applies to same-sex couples legally married in the District of Columbia, a U.S. territory, or a foreign country.
Registered domestic partnerships, civil unions, and other formal relationships recognized under state law do not qualify–only couples legally married under state law will be treated as married for federal tax purposes.
Applies for all federal tax purposes
Legally married same-sex couples are treated as married for all federal tax purposes. This applies for federal estate and gift tax purposes, and for federal income tax purposes, including:
2013 tax year implications
If you are legally married on the last day of the year, you generally have to file your 2013 federal income tax return as a married individual. That means same-sex couples treated as married for federal income tax purposes will generally have to choose whether to file their 2013 federal income tax return as married filing jointly, or as married filing separately.
Prior tax years
If you were married prior to 2013, you may also amend prior year federal income tax returns, choosing to be treated as married for federal income tax purposes (assuming that you were legally married on the last day of the tax year(s) being amended). You’re only able to file an amended return, however, for any tax year still open under the statute of limitations. Generally, the statute of limitations for filing a refund claim is three years from the date a return was filed, or two years from the date tax was paid, whichever is later. For most individuals, that means claims can still generally be filed for tax years 2010, 2011, and 2012. You are not required to amend a prior year return, however.
It’s important to note that if you choose to amend a prior year federal income tax return in order to be treated as married, all items on the return must be adjusted to consistently reflect your marital status (i.e., married filing jointly or married filing separately). That is, if you amend a prior year tax return to be treated as married, you are treated as married for all items and issues related to the return.
Note: If your employer provided health coverage for your same-sex spouse and included the value of that coverage in your adjusted gross income (AGI), amending your prior year return to reflect your status as a married individual may allow you to recover the income taxes paid on the value of this coverage. Similarly, if you paid premiums for health-care coverage for your same-sex spouse with after-tax dollars, you may be able to reduce your income by these premium amounts.
Note: For tax year 2012, same-sex spouses who filed their federal income tax returns before September 16, 2013 (the effective date of the Revenue Ruling) may choose–but are not required–to amend their 2012 federal income tax returns to file as married (i.e., married filing jointly or married filing separately). Same-sex spouses who file an original federal income tax return for the 2012 tax year (or for any prior tax year, for that matter) on or after September 16, 2013, will not have a choice–if legally married for the tax year, they will generally have to file their federal income tax return as married filing jointly or married filing separately.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013.