When you offer gifts to anyone other than your spouse, federal gift tax rules may come into play. However, this seldom leads to any tax payments. In this blog post, we will discuss the yearly gift tax exclusion, how the gift tax and estate tax work together, and the generation-skipping tax as it applies to gifts made to irrevocable trusts.
It seems like yesterday, but in the pre-COVID-19 calm before the storm of December 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The Act had many provisions, but the most important were increasing the beginning age for taking[MKS1] RMDs from age 70.5 to 72 and a new set of guidelines that effectively ended the Stretch IRA [MKS2] for most non-spouse beneficiaries of IRAs. Well, three years later, on December 23, 2022, Congress tucked SECURE 2.0 into the Consolidated Appropriations Act of 2023, and here we go again. SECURE 2.0 has a bonanza of changes related to retirement plans. Some have broad effects and others apply to small groups of people. Implementation of the new rules is spread out over the next 10 years, but most are effective in 2023, 2024 and 2025.
If you’re 65 or older, by now you should have received your annual installment of the official U.S. government Medicare handbook, Medicare & You 2023. Your mailbox is also probably full of Medicare-related flyers from insurance companies trying to win your business. The annual open enrollment period for Medicare started on October 15 and goes until December 7. It is the one time every year that Medicare beneficiaries have an opportunity to modify their Medicare coverage. During the open enrollment period, you can switch or add a Medicare Advantage plan, switch, or add a Part D prescription drug plan and, in some states, like Massachusetts, switch or add a Medigap plan. Any changes you make take effect January 1 of next year.
On September 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released the 2023 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2023 Medicare Part D income-related monthly adjustment amounts.
An obscure law in Massachusetts called Chapter 62F, enacted by voters in 1986 and only used once since then, allows for taxpayers to receive a credit if total tax revenues in a given year exceed an annual cap tied to wage and salary growth in Massachusetts. For tax year 2021, this amount was $2.941 billion, and this entire sum will be returned to Massachusetts taxpayers. Massachusetts estimates that more than three million Massachusetts taxpayers will be eligible for this special refund.
The Inflation Reduction Act of 2022 (IRA), signed into law on August 16, 2022 by President Biden, includes a number of important health, tax and climate change provisions. In this article, we’ll give you a high-level overview of the provisions that impact individuals.
Series I bonds (the I stands for inflation) are all the rage right now because of their currently high yields in an otherwise low-yielding savings environment. But before you tap into your home equity line of credit to max out your I bond purchases, you need to understand the mechanics of how I bonds work. What is an I bond? An I bond is a bond issued by the US government on which you earn interest at a rate tied to inflation and guaranteed by the federal government. If you buy an I bond today (June 2022), you will earn 9.62% interest, which is tied to the Consumer Price Index (CPI-U). The bond earns interest for up to 30 years. You can also defer paying federal tax on the interest until you redeem (cash in) the bond, and there is no state or local tax on the interest.
It is common for individuals to make excess contributions to health savings accounts, Roth IRAs, 401(k)s, 403(b)s and 457(b)s. So common, in fact, that the IRS has a lenient policy for removing these excess contributions to avoid most penalties. So, if you discover that you’ve made an excess contribution to any of these account types, don’t worry, because there is a way to fix it. Note: For purposes of this article the tax filing deadlines are noted as April 15th and October 15th even though the exact days in these two months may vary from year to year.
Imagine that you are a sole proprietor with a high income, and you’re looking for a way to maximize your retirement savings while reducing your taxable income. You’ve heard about SIMPLE IRAs and SEP IRAs, and you used to contribute to a 401(k) when you had a corporate job. Did you know that it is simple to set up your own 401(k) and you can contribute up to $61,000 a year to it ($67,500 if over age 50)? Introducing the Individual 401(k)! Individual 401(k)s are also known as Solo 401(k)s, Solo-ks, Single-ks, Self-Employed 401(k)s, Uni-ks and One-participant ks. This type of plan is like a traditional 401(k) covering business owners with no other employees. The plan can also cover the business owner’s spouse. It is also possible for the business to have employees, but they cannot be full time, as defined by the plan document.
Do you work for a public school, college or university run by a state or local government that offers a 457(b) plan in addition to a 403(b) plan? If so, you may be able to double your retirement plan contributions and start socking away some serious cash for retirement.
Social Security numbers are the gateway to identity theft, and fraudsters and scammers try to use scare tactics on unwitting individuals to get them to disclose their Social Security numbers or pay money for a Social Security-related scam. The Federal Trade Commission received reports of more than $174 million lost to government imposter scams in 2020. The bottom line is that the Social Security Administration (SSA) will never contact you by phone, text, or email with any problems related to your Social Security account. Do not give scammers money or personal information. Just ignore them!
The annual open enrollment period for Medicare started on October 15 and goes until December 7. It is the one time every year that Medicare beneficiaries have an opportunity to modify their Medicare coverage. During the open enrollment period, you can switch or add a Medicare Advantage plan, switch or add a Part D prescription drug plan and, in some states, like Massachusetts, switch or add a Medigap plan. Any changes that you make take effect on January 1 of next year. We’ll try and cover the basics to give you a general understanding of Medicare and your options during the open enrollment period.