- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
"annualcreditreport.com" 12b-1 fees 401k 401k match 403b 457b 1974 1987 2001-2002 2008-2009 active duty advisor search alternative minimum tax area agency on aging asset allocation asset protection atm automobiles bad debt bank fees banking banking on-line banking relationships banks beneficiaries benefit term black monday bond duration bond investing 101 bond ratings brazil bric bureau of consumer financial protection bypass trust capital gains career transition caregiver 101 care manager car loans cash management catch-up contributions charity china college planning commodities compound interest core series cost basis coverdell ira cpa credit credit card credit reports credit score credit union cross purchase buy-sell agreeement custodial fees daily benefit amount debit card debt decision making deflation derivatives desires directive to physicians disability insurance divorce djia dollar cost averaging downsizing ea ebri economic education elder care elimination period emergency fund employment energy credits energy tax estate planning estate tax euro european union eurozone exemption equivalent expense ratio fafsa fair isaac family care giver federal deficit federal reserve fee-only fico fiduciary fiduciary standard financial financial aid financial coach financial planning financial reform bill financial stability oversight council find an advisor flexible spending account foreign markets foreign stocks form 1099 formula clauses front-end load generation skipping tax gifting gift taxes goals and objectives good debt government grants grat greece guardianship happiness harvesting losses healthcare health care directives health care reform health insurance premiums health savings accounts hedging high deductible insurance plans homeowner tax credit housing hsa i-bonds identity theft income tax income tax preparation india inflation insurance interest rates internet tax investing investment income investments ira ira distributions irs italy itemized deductions japan laddering layoff life insurance life insurance trust linkedin long-term care lost decade marginal tax rate marginal tax rates marriage medicaid medicaid tax medical insurance medicare medicare supplement medigap money monte carlo simulation mortgage nais.org napfa nasdaq ncua needs net-operating loss carryforward net worth new year's resolutions nine minutes no-load non-cancellation non-mortgage debt obamacare occupational outlook handbook office of credit ratings ofice of credit rating own occupation partnership personality portugal post-divorce action power of attorney prescription drug benefit private school education profit sharing plan prospectus quarterly update real estate refinance regulation residual benefit retirement plan contributions retirement planning retirement plans retirement relocation ria risk tolerance roth 401k roth 403b roth ira roth ira conversion russia s&p 500 schedule c schedule d scholarships sep shop exchanges simple ira small business social security sole proprietor spain spending spending plan standard deduction step-up basis stimulus check stock market stock market recovery stock markets surrender charges tarp tax-free bond taxable bond tax credits tax loss harvesting tips total return strategies transaction fees unemployment unemployment benefits upsizing us news & world report vat volcker rule wealth building wealth management webinar wills women yield curve
Making Cents
Subscribe
How Will Health Care Reform Affect Your Small Business?
HOW WILL HEALTH CARE REFORM AFFECT YOUR SMALL BUSINESS?
Will OBAMACARE mean headaches … or hidden dividends?
Increased costs or savings in years to come? What do the federal health care reforms mean for your company? Will they lead to thousands of dollars in extra costs and more paperwork? Or will federal subsidies make this a “game changer” for small companies that have struggled to provide insurance plans?
It's All In Your Hands
IT’S ALL IN YOUR HANDS
A Post-Divorce Action Plan
You have just gone through one of the most challenging and difficult periods that a woman can experience in her life – a divorce. While many things may still be in up in the air, one aspect of your life that you should make sure you’re in control is your finances.
Financial planning for divorced women is not that much different than financial planning for married couples. Several basic elements are the same. However, the differences offer both good news and bad news. The good news: you can make plans and decisions based solely on your needs and goals. There won’t be miscommunication or conflicting ideas. The bad news: it’s all in your hands. Any mistakes will be your own and a poor decision can’t be salvaged by the income or assets of a partner.
The following post-divorce action plan offers a few things worth considering:
One way to counter the bad news is to find a trusted fiduciary fee-only CFP® professional to seek advice from. Many of these fine professionals specialize in divorce planning, and many may have walked in your shoes during their life.
After a divorce, friends are often split between spouses. Financial planners can be the same way. If you lost yours in the divorce or never had one to begin with, it’s a good time to consider finding a professional who can help you make sound financial decisions for your new life.
To find one, start simply. Ask friends or acquaintances who it was that helped them when they went through a divorce. The attorney who handled your divorce may also be a good source for a referral. It’s important to have someone help you who has previously assisted or - best of all - who specializes in helping divorced women.
Selecting the right financial professional for you is a critical step. After all, this person will be helping you with the important financial decisions you now have to face.
Long-term care insurance may become even more important post-divorce.
Long-term care policies are designed to cover the costs of care if you are unable to care for yourself because of age or if you become ill or disabled. Long-term care is especially important for women because they typically pay more for it than men do. The reason is simple: women typically live longer than men and usually require longer care during those additional years.(source)
The Cross Purchase Buy-Sell Agreement
THE CROSS PURCHASE BUY-SELL AGREEMENT
Taking Care of Your Business After You’re Gone
Business owners are builders. They spend their lives building a business that provides goods and services to their clients and provides themselves a living. But nothing can tear down that lifetime work faster than their own death, or the death of a business partner. Often, much of the value of a business dies with the owner.
Each business encounters different problems. The questions facing a sole proprietor are two-fold. First, if he or she dies, how can the heirs continue the business or keep from selling the business at fire sale prices? The executor of the estate can continue the business, but must find someone willing to run it. They can sell the business, if the heirs wish, but must find a buyer. This is made harder by the fact that any potential buyers will be in a better negotiating position, knowing the business is becoming less valuable with each passing day following the owner's death. Also, the heirs may be in disagreement over what to do with the business. Some may want to keep the business, while others want to cash out. If the business is kept running by some heirs, those wanting out would need to be compensated. If the cash to do this can't be found, this could potentially force a liquidation of the business.
The second question facing a sole proprietor is this - how does the business owner keep key employees confident that the business, and their jobs, will survive after his or her death?
If a partner dies, the surviving partner can be left with uncertainty. First, they may find themselves in business with the deceased partner's heirs - who may have different goals for the company. If the heirs wish to sell to the surviving partner, can they be paid? And will the cash needed to buy the business be on hand?
These questions can throw the value and continuation of a business into doubt. This could make creditors more likely to call loans, and key employees less likely to stay with the firm.
Buy-sell agreements are designed to answer these questions and work toward eliminating these problems.(source)
Health Care Changes in America
HEALTH CARE CHANGES IN AMERICA
Might this be the end of the debate? Most Definitely Not.
The House approves the Senate bill. Not a single Republican voted for it, but 219 Democrats did – and by a vote of 219-212, the House of Representatives sent the Senate’s version of landmark healthcare legislation toward President Obama’s desk. The President signed the bill into law on March 23.(source)But the fight is far from over. The House of Representatives also passed a collection of amendments to the Senate bill by a 220-211 margin, but the Senate must also approve this reconciliation bill – exactly as it is worded. If that doesn’t happen, then guess what … there will be another vote on the Senate version of the bill in the House.(source)(source)
“If those people think they’re only going to vote on this once, they’re nuts,” Sen. Orrin Hatch (R-UT) said on Bloomberg Television March 20. Hatch claims that Senate Republicans have the votes to force a modification of the bill passed on March 21 and boot it back to the House for a second vote.(source)
Will the reforms be overturned? Twelve state attorney generals have already filed in court to contest the bill. The conincided with the moment President Obama signed the bill.(source) What are the odds the Supreme Court will throw the reforms out? Probably pretty slim. Look at the precedents of Medicare and Medicaid. When both those federal programs were enacted, the Court twice upheld a broad federal role in health care. Yet, is this time different? The bill has different mandates than Medicare or Medicaid.
The big reforms will take effect in 2014. If you are looking forward to health insurance reform, you will have to wait a while before many of the big changes occur.
• Starting in 2014, individuals will be required to have health insurance coverage or pay an annual penalty which could climb to $750 or 2% of their income (alternately $695 or 2.5% of income), whichever is larger. Inmates, Native Americans, and those with religious objections would be exempted.(source)(source)
• In 2014, if you aren’t enrolled in an employer-sponsored health care plan, you will have to buy coverage yourself. You could shop for it through a state insurance exchange. The federal government will offer $500 billion worth of assistance to help insurance shoppers buy coverage through these state exchanges. Undocumented immigrants would not be able to buy coverage.(source)(source)
• After 2014, businesses with more than 50 employees could be fined as much as $2,000 per worker for failing to provide the option of coverage.(source)
• In 2014, insurers will be required to provide coverage to all Americans regardless of their health status.(source)
• Medicare spending will be cut by about $500 billion over the next decade, mostly in reduced government payments to Medicare Advantage plans. Democrats have claimed this will not shortchange Medicare recipients.(source)
• Federal money coming from the bill could not be used for abortions, with exceptions made in cases of rape, incest, or danger to a woman’s life.(source)
What changes are about to happen in 2010? These new rules would go into effect presently thanks to the new law.
• Insurers will be barred from revoking existing health insurance coverage on an individual, unless fraud or misrepresentation can be shown.(source)
• Insurers will not be able to limit the amount of money that can eventually be paid out on a health care policy, and it will be harder to limit the amount of money that can be paid out annually.(source)
• Seniors will get $250 payments to help them out if they face a coverage gap in the middle of the Medicare Part D prescription drug coverage plan.(source)
• Children will be able to stay on their parents’ health care policies until age 26, and they won’t be denied coverage because of pre-existing health conditions.(source)
• Adults with pre-existing health conditions will get a chance to enroll in a national high-risk insurance plan – albeit a temporary one.(source)
• Small businesses that sponsor health care plans for their workers could qualify for tax credits of up to 50% of the cost of the premiums they pay.(source)
New taxes? Yes – starting in 2013. Approval of these reforms will also bring a new 3.8% tax on investment income for individuals earning more than $200,000 and households earning more than $250,000, so the effective capital gains rate will be 23.8% for these taxpayers in 2013. Also, these taxpayers will be able to keep 8.8% less of the income resulting from taxable stock investments. The Medicare tax rate on households with income over $250,000 will also rise in 2013, from 1.45% to 2.35%.(source)(source)(source)
A huge savings? Maybe. The non-partisan Congressional Budget Office estimates that the health care reforms will reduce the federal deficit by between $65-118 billion over the next decade and by more than $1 trillion in the decade after that.(source) The proof is in the pudding, as all large entitlement programs such as Social Security and Medicare are all currently bankrupt. Might this add insult to an already bloated national debt? If history is any indication, more than likely the cost of this legislation could be disastrous for the US economy. Time will tell.
Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our list, please reply with their address
and we will contact them and ask for their permission to be added.
What's Going on with the Estate Tax?
WHAT’S GOING ON WITH THE ESTATE TAX?
Good question. Congress has elected to keep us in suspense.
0% estate taxes in 2010 … for now, anyway. On January 1, the federal estate tax went away – at least for the time being and perhaps for all of 2010 as envisioned back in 2001. President Obama and Congressional leaders wanted the estate tax to stick around in 2010 at 2009 levels (estate taxes up to 45% with a $3.5 million exemption), but lawmakers were preoccupied with other matters.(source)(source) It is time Congress focused on the estate tax. Depending on when your estate planning documents were executed, this is a real mess to sort out. Shame on Congress!
Will Washington really give families million-dollar tax breaks? If no estate tax is imposed in 2010, it could mean a savings of millions for wealthy families. There is talk of bringing the tax back retroactively – after all, the federal government could really use the money. Yet the further we get from January 1, the more difficult reinstating the estate tax for 2010 may become.
As American Institute of Certified Public Accountants vice-president for taxation Tom Ochsenschlager told MarketWatch, "They're still talking (in Congress) about making something retroactive, but at some point they can't do that … is it even constitutional? There’s a real question about that." Many of the estate planning attorneys the firm knows have expressed concern about this issue too.
The unconstitutional argument goes like this: if Congress moves to retroactively apply the estate tax for 2010, an estate could take the matter to court and point out that Congress had all year to reinstate it but failed to do so.
That argument aside, some estate planners think Congress will get around to a retroactive measure – one that would put the 2009 estate tax levels back into place for 2010.
What taxes are in place now? Some taxes still apply to estates in 2010 even if the estate tax doesn’t. People who give away more than $1 million during their life still face federal gift taxes – though in 2010, they max out at 35% instead of 45%.(source)
Also, all assets with capital gains are to be taxed at 15% above a $1.3 million federal exemption when sold by heirs in 2010. The big news here is that heirs don’t get to use a step-up this year. When they compute the value of an inherited asset, they have to use the basis (the original price paid for the asset) instead of how much that asset was worth when the original owner died. (In addition to the $1.3 million exemption per estate just mentioned, there is another $3 million exemption available for assets inherited from a spouse.)(source)
Ways to Afford Your Retirement Account Catch-Up Contributions
Ways to Afford Your Retirement Account Catch-Up Contributions
Stepping in Financially For An Older Relative at a Time of Need
Stepping In Financially For An Older Relative at a Time of Need
No one wants to give up control of their lives. That’s true for someone who’s 20 or 80. But if you sense an older relative is slowing down, or if a serious illness is threatening the finances of any loved one, it’s time to fashion a battle plan.A good first stop is a fiduciary fee-only financial planner – a financial expert with the experience to step into a tense situation and help you create a system for locating key information so you can make the necessary critical decisions. Of course, the best way to set up a system is to work with the relative before there’s a problem or in the early stages of illness. Some suggestions:
Understand their condition and strike a cooperative balance: The first step in helping someone in a crisis is not to talk about the money but to understand the crisis. Before talking about money issues, do everything possible to understand how they’re feeling and most important, how they want to handle family, work and money issues at each stage of their illness. It’s not unreasonable for someone to want to keep control until the point when they really have to give up the reins. Get them to talk about what they believe will be triggers for them to give up control, and then find out how they would like to proceed and formulate a transition plan.
Talk about legal documents: Does this parent, relative or friend have a will and necessary health directives in place? Health directives name a single individual to manage all key health decisions if a patient cannot make them; a will depending on their assets and lifestyle situation – if they have kids to raise or a business to run, for example – check to see what detailed legal instructions they have in place to manage their finances or run their business if they are incapacitated. And if those plans have not been made, they need to be made immediately with the help of a fiduciary fee-only CFP® professional and necessary tax and legal experts. An individual who is ill needs to designate people whom they trust to handle health and personal finance decisions. But if they have not planned for the future of their business, that is a third and very detailed step that needs to be addressed in collaboration with other family members as well as key co-workers or executives.
Talk about long-term care provisions: According to the American Association of Retired Persons, the average nursing home stay is 2.5 years. Whether an individual chooses long-term care in the home or in a facility, it’s important to understand that while some direct medical expenses will be covered by private insurance, Medicare or Medicaid, most of the cost including daily living expenses, will not.
Get a handle on bills and other key financial events: It’s not the most pleasant dinner table conversation, but if more people planned their affairs with the assumption that they could die or become permanently incapacitated tomorrow, survivors would have a much easier time running or settling matters in their absence. Such planning goes beyond having simple wills and powers of attorney in an easy-to-find location. It makes good sense to establish the following:
New Careers After Age 50
New Careers After Age 50
Where The Jobs Are, How to Spruce Up Your Skills and Ready Your Finances for the Change
During the recent recession, many have found themselves back in the job market after age 50 due to layoffs or changing demands at their employers. Yet as life expectancies lengthen, a late career change isn’t always a negative. It may be a welcome chance to renew, re-educate and restart a full life.
It’s possible that in the future, an over-50 career change might become a common event, maybe even a desired event in our society – which means it’s definitely worth planning for.
A visit to a fiduciary fee-only financial planner might be a good first step in planning a move to a second career or dealing with a sudden change in your career prospects. You need to plan for any possible change in income up or down in any opportunity you entertain. You’ll also need to plan how you’ll afford any training you’ll need – college or otherwise – in making that successful transition. To make an over-50 career transition successful, it’s all about preparation. So here are some ideas:
Start with research: One of the best-detailed, up-to-the-minute career resources for the types of jobs that exist in this country and their salary and hiring forecasts is the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook. This extensive online resource not only lists major career groups, but the leading occupations in it. If you haven’t been in the job market for awhile, this kind of research is a good way to reset your knowledge of your industry and whether its hiring prospects are bright. This database also lays out the need for the necessary training required to reach certain salary and career levels.
Check industries that are friendly to older workers: Healthcare and education are just two industries that are more welcoming to older workers. U.S. News & World Report has come up with its own list of popular over-50 occupations, and it’s a good starting point for people looking for flexible scheduling and other workers their age in the field.
Network: Face-to-face contact with people in your target fields is important. If you can, check out events at professional organizations in that field or attend casual networking functions to learn more. Being someone over 50, you can get an idea of whether there’s true age diversity in a field and how all those groups work together – or if you’re simply the oldest person in the room. Obviously if you feel welcome, networking will give you a better idea of which companies with someone with your maturity and experience might fit in. Consider adding your profile/resume to Linkedin.
When Doing Your Own Taxes Makes Sense
When Doing Your Own Taxes Makes Sense
And When It Doesn’t
Tax deadline is April 15, so if you haven’t begun gathering your annual tax records it’s time to do so. Every year, however, people’s lives change – they buy and sell houses and move, they take new jobs, have kids, buy and sell stock. Those and dozens more reasons might give you cause to hire a tax preparer.
It’s worth going over the primary reasons why some people should get help with their taxes and others can continue going it alone.
Should you do it by yourself? If you meet the following circumstances, you can probably do your taxes by yourself:
