IRA, Social Security, income tax, and all things financial. After my post last week Higher Education Expenses Paid From an IRA I received a question from a reader: These two types of account will help you prepare for the twin future requirements of retirement and college expenses.

As covered in the prior post, an IRA plan can be used in part to pay for college expenses. So why would you choose to place funds in an IRA or plan? Specifically, why would the plan ever be superior to an IRA for this saving activity? One reason a plan might make sense is to specifically segregate your education saving activities from your retirement saving activities. The plan is tax-advantaged only when you use the funds in it to pay for higher education expenses.

So when you withdraw money from a plan to pay for higher education expenses, there is no tax at all on the withdrawal. This is also one of the drawbacks to the plan: If you withdraw your funds for non-education purposes, you will owe tax on the growth that has occurred in the account. The contributions are never taxed, regardless of whether they are withdrawn for education purposes. But each withdrawal is pro-rated between contribution and growth. In addition to the IRS taxation, there are likely penalties from your state if you took advantage of the available state tax benefits discussed below.

Many, but not all, states have a tax benefit available for contributions to a state-sponsored plan, as a way to encourage participation. Plus, if you take your money out for a purpose other than for education, states often require that the previous tax credit or deduction is repaid.

On the other hand, depending on your state law, IRAs may have limited or no deductibility on your current state tax return as in Illinios. However, regarding distributions, many states like Illinois do not include IRA distributions as taxable income, no matter when the distribution is made, for whatever reason.

But the also allows withdrawals for some unique circumstances. The downside is that you will owe tax on every single penny — contributions if deducted plus the growth on the account, will be taxed. IRA accounts generally have much more flexibility in your investments. You can choose a custodian that offers anything under the sun within reason as investment for your IRA. Above we covered the state deductibility of contributions.

From the IRS perspective, there is no deduction for contributions. In that fashion, the plan is similar to a Roth IRA — no deduction on contribution, but no tax on qualified withdrawals.

The IRA traditional, not Roth provides for deduction from your taxable income, within your overall income limits and annual contribution limits. In the end result, my emailing friend poses a very good question — why would you choose between an IRA or ?

The primary arguments in favor of plans are the contribution limit along with state tax benefits and segregation. Depending on your circumstances, these factors may be important enough to choose the For most other circumstances, an IRA may be the better choice.

My professional advice is to consider the importance of segregation. Too often the short-term need of paying for education expenses is considered paramount against the long-term requirement for retirement education. I wanted to write a brief note on the difference between being frugal and frugal spending.

I think it really boils down to the mindset of the individual. Frugality, in my opinion, is making smart purchases when necessary, and forgoing purchasing altogether if not. I also believe that frugality is making purchases that reduce the need to spend more in the future i.

It can be easy to fall into this trap of buying these items and leaving the store feeling good about having saved money. Sometimes we may even think that because we bought two items and one was half priced, that we saved money. This only makes sense if we needed the two items to begin with. This may make sense frugally if you truly need two of the items.

Otherwise, if you only need one, purchasing the other for half price is still wasting money. The other argument is buying something simply because it was on sale. The fact that it was on sale is irrelevant. It simply makes you feel better for spending less. As items get more expensive, this concept only grows larger.

This applies to housing, cars, and even buying in bulk at the warehouse store. The good news is that we can start on the smaller items and build our self-discipline from there. So, you may ask, what is a QHEE? Essentially, this includes tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Also included are expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance.

In addition, with the passage of the ARRAcomputing equipment and services including internet service can be included as QHEE. Who is the student? For the purpose of this provision, the student can be the IRA account owner, her spouse, eligible children generally dependentsand grandchildren.

Amounts withdrawn must be no more than the QHEE for the tax year, reduced by any additional tax benefits applied: Throughout our lives we acquire things. This can start at an early age when we were given things as gifts and of course, the childhood tendency to collect and save many of the items that we came across. As we mature into adults, the desire or habit to continue to hold onto things may still linger.

This leads to garages, basements, closets, bedrooms, and even storage facilities full of stuff. It can also creep into our financial lives — as we acquire different savings accounts, retirement accounts, or purchase things that continue to be automatically deducted from our bank account a monthly subscription to a gym, perhaps. Decluttering can have a profound effect on our behavior. It can help lower the stress of trying to keep track of so many things. It can also free up time to enjoy the things in life that are important to us.

Finally, it can make a big difference financially when we focus on things we need, and allocate our money to priorities that will benefit ourselves and others. The IRS has several methods you can use to arrange a plan to pay the IRS taxes that you owe over time. The most important part is to not ignore the situation, you need to take action and make arrangements.

If you ignore it, like most things, your situation will only get worse, costing you more in interest and penalties. Recently the IRS published a Special Edition Tax Tip which details what you can do in this situation. The IRS offers a variety of payment options where taxpayers can pay immediately or arrange to pay in installments.

Those who receive a bill from the IRS should not ignore it. A delay may cost more in the end. As more time passes, the more interest and penalties accumulate. Those wishing to use a mobile devise can access the IRS2Go app to pay with either Direct Pay or debit or credit card.

IRS2Go is the official mobile app of the IRS. Download IRS2Go from Google Play, the Apple App Store or the Amazon App Store. Those who owe taxes are reminded to pay as much as they can as soon as possible to minimize interest and penalties. You probably know a little bit about this subject — like one IRA is deductible on your income taxes, and the other one has some kind of tax benefit… but the differences are hard to understand, and can be even harder to explain!

Below are the major differences between the two, followed by the similarities. This discussion is liable to be useful as you consider which kind of IRA is best for you and both could be best for you, at different times in your life.

Deductibility is a feature of the Traditional IRA Trad that is not available in the Roth IRA Roth. What this means is that, subject to the limits we discussed hereyou may be able to deduct the amount of your contribution to your Trad from your Gross Income in the year of the contribution.

When the Traditional IRA was originally introduced inthe deductibility feature was not included. This was added inand is one of the primary reasons that Trads have remained as popular as they are to this day. At the time of the introduction of the deductibility feature, very few companies offered k plans so the Trad offered one of the only tax shelters available to nearly every taxpayer. Tax treament is another major difference between the two kinds of IRA.

What is also very different about the two is that your contributions to a Roth are always available for withdrawal at any time for any reason — tax free. The growth in the Roth interest, dividends, capital gains would be taxed and subject to penalty if withdrawn for an ineligible reason, though. The Trad does not have such a provision. Required distributions are the final major difference covered here.

The income must be at least equal to the total of all IRA contributions for the year. This includes two additional types of contributions: Spousal contributions are allowed for both the Trad and the Roth, and they essentially allow a spouse with income to contribute to the IRA either variety of the spouse who either does not have income, or whose income is below the maximum available contribution for the tax year.

Earned incomefor the purposes of IRA contributions, includes wages, salaries, tips, commissions, self-employment income, or alimony or separate maintenance payments. Not included as earned income are earnings and profits from property rental or royaltyinterest income, dividends, pensions, annuities, deferred compensation such as k distributionscertain non-participatory partnership income, and capital gains.

Non-deductible contributions to a Traditional IRA are allowable when your MAGI is above the limits described here. In essence, if your income is too high to make either a Roth contribution or a deductible Trad contribution, you are allowed to make a non-deductible contribution of up to the maximum amount allowable for the year into your Trad IRA.

These contributions are after taxand so when distributed there will be tax only on the growth that has occurred on that contribution. Non-deductible contributions are a way to defer tax on the growth of funds in an account, and are also available as a spousal contribution.

Trad and Roth contributions must be made for a specific tax year. That is, since there are strict limits on the amounts that can be contributed, you must specify the tax year of the contribution to your IRA.

You are generally allowed to contribute for a tax year beginning on January 1 and ending on the tax due date for the year generally April 15 of the following year.

Just make sure that you do go ahead and make the contribution… the IRS has very little sense of humor about things like that!

Penalty for withdrawal applies to ineligible distributions from either type of account. However, an audit does not necessarily have to be a bad thing — especially when it can save you some money. What an energy audit can do is let you know how much energy and utilities your home is using as well as let you know how much energy and utilities your home may be wasting.

Of course, wasted utilities means wasted money. Let me give you an example from my perspective. About 5 years ago my wife and I decided to have an energy audit done. We called our local utility provider and inquired about the specific programs that were available. Our utility company was more than willing to point us in the right direction and they recommended a third-party contractor that was qualified to do an energy audit.

The good news is that if we had the audit done and made the suggested improvements to our home, the utility company had a program where there would cover some of the costs of the improvements. We decided to have the audit done. A few weeks later, the audit company came and did the audit.

They ran an analysis of our home energy use, water use, etc. They also provided some free tips as well as some free items to help right away. These included sink aerators to reduce the water flow from our faucets and showers. I also went around and replaced all of the light bulbs with energy efficient bulbs. Next came an estimate of the work that needed to be done. While the bill was a bit high, we did remember that our utility company would help with some of the costs.

We agreed to have the improvements made.

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The improvements included insulating our basement and crawl space as well as blowing insulation into our attic. This increased the R-value substantially and we could feel the difference almost immediately this was done during one of the hottest weeks on record. When we did the break-even on the costs, it would take just over 3 years for the cost of the improvements to be paid for by the annual savings in utilities.

Now, the improvements have not only paid for themselves, but the difference in savings allows us to allocate that money elsewhere to retirement or college savings. This is, in my opinion, quite possibly the dumbest rule that we have in the whole Social Security system.

If you remarried even one day before reaching age 60 and remain married you are not eligible for survivor benefits. Joan and Richard were married for 27 years when Richard died. Joan met David when she was 59 years old, and the two plan to marry soon.

The timing of this marriage is critical to Joan, as explained above. If she waits until some time after her 60th birthday, Joan will retain eligibility for the survivor benefit.

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What exactly are we trying to resolve with this rule? I doubt seriously if this particular rule results in much benefit to the bottom line for Social Security as a system. But what it does is to cause much confusion for individuals who could be affected by it. This could be done, restoring eligibility, and then after at least 12 months has passed the two could be remarried again as long as the widow er is over age What do you think?

Social Securitysocial security survivor benefits. As the spring semester comes to end for high school and college graduates, I wanted to perhaps give some unsolicited advice as these newly christened adults start out on their own and begin making life choices and financial decisions that will impact their future. Settle your debt with the IRS for pennies on the dollar! Our staff of former IRS employees will work with you and make your problems go away! You need to prove to the IRS that you have no or severely diminished capacity to pay, either from your wages or assets such as your retirement plans, best way to make money in fallout 3 accounts, or other assets.

This review of your wherewithal is rigorous. The IRS will impose its will on how you budget — no paying off other debts in advance of the IRS debt, for example. And you may have to give up certain lifestyle items that you have become accustomed to as part of this budgeting process. Recently the IRS issued a Special Edition Tax Tip that details some information you need to know about how the Offer in Compromise works, in addition to several resources to help you decide if this is something that can help in your situation.

The text of the Tip follows:. Taxpayers who have a tax debt they cannot pay may have heard that they can settle their tax debt for less than the full amount owed. Kathryn comes from a blue collar family herself. This book is an outgrowth of that passion. These careers have transitioned in the past several decades, however. These careers range from carpenters, ironworkers and pipefitters to police officers, other safety workers and enlisted military personnel.

Kathryn Hauer wrote this gm ticker symbol stock market in response to the opportunities that folks in blue collar careers have these days.

The problem with the traditional delivery of financial advice is that many most? Without this upbringing seasoning earn money for college students philippines experience, many financial advisors have difficulties relating to this group in a meaningful way.

Hauer demonstrates her deep understanding of the issues facing blue collar workers throughout her book. She has blue collar experience in her own personal background, having served in the military, as well as a stint building concrete nuclear waste storage facilities prior to her current work as a financial advisor.

Examples fit in with the common financial wants and needs of the blue collar worker. The advice given is a good place for anyone, in any career, to start, but the context really makes it come to life for someone in a blue collar job. The appendices provide a wealth of useful references to continue the educational experience. This is an important component of our society that has been left to fend for themselves largely by the traditional financial planning community.

I hope I can help — as I know Kathryn does, every day. Book reviewfinancial planning. Over the last few years exchange-traded funds ETFs have greatly increased in popularity. Because of their growing popularity with financial advisers and individual investors alike, understanding the nuances of ETFs is critical in order for advisers to be better equipped to meet the ever-changing needs of their customers. ETFs are comprised of a portfolio securities designed to replicate a particular index.

Like many stocks, bonds, and mutual funds, ETFs can also be tracked daily in many financial publications and online. Due to the lack of trading in the portfolio there are very little capital gains distributions in which investors must pay taxes.

Because of this low turnover, investors rarely need to worry about the tax implications of security fluctuations in the portfolio. Although there are some similarities between index mutual funds and ETFs, there are some subtle differences to be noted.

The discussion that follows as well as the link to the calculator illustrates the procedure for calculating Required Minimum Distributions RMDs for an IRA, k, or other qualified retirement plan that you own. Determine your age in years at the end of the previous year. For example, if you were born on July 10,your age in years on December 31, was Next, get the balance of your IRA account or accounts as of the same date, December 31 of the previous year.

With your age in years from the first stepgo to IRS Table IIIand look up the distribution period for your age in years. This number is an actuarially-calculated expected distribution period for your age.

IRS Table III is specifically for IRA owners who are either single, are married and their spouse is less than 10 years younger, or are married and their spouse who is more than 10 years younger is not the sole beneficiary of the IRA. If your spouse is more than 10 years younger and not the sole beneficiary of the IRA, you must use IRS Table II find this at www. IRAqrpqualified retirement planrequired minimum distributionrmd.

As I was reading the paper the other day I came across an ad for a pretty prominent mutual fund broker-dealer. The ad was touting the investment acumen and performance of its mutual funds and fund managers.

It mentioned how many of its funds had outperformed category medians over a certain span of years. Let me summarize what these fine print statements mean. First, sales charges reduce returns. This would inevitably lower performance and I would argue, drop their rankings considerably. In other words, a typical investor has little chance of getting them. Third, past performance is not a guarantee of future results.

This statement I can agree with — and kudos to the company for mentioning it. However, the company also said most of their funds beat the category median — the midpoint of all fund returns in that category.

Notice the company did not say their funds beat the benchmark — which is generally an index. Fourth — their comment on not being fiduciaries is self-explanatory. Their words, not mine. What is interesting about this ad is that it was simply an ad. There is other, more nuanced fine print in company prospectuses. Read carefully, and do your due diligence when investing.

If that seems too daunting, work with a fiduciary that will be comfortable explaining things simply, and in bold print. Even if you get paid in cash without any record of the transaction, you still may be liable for income tax on the earnings. This is true whether this is a one-time thing or if you treat it like a side-gig. Recently the Make money on ebay without selling anything issued a Tax Tip which addresses the sharing economy and taxes.

There may be deductions allowable depending on what is provided, which would potentially reduce the taxable income on the transaction. Deductibility of expenses related to renting your personal home can be complicated, so you might want to bone up on those rules. See below for the actual text of the Tip from the IRS on taxes in the sharing economy:.

If taxpayers use one of the many online platforms to rent a spare bedroom, provide car rides or weizmann forex egmore number of other goods or services, they may be involved in the sharing economy. The IRS now offers a Sharing Economy Tax Center.

This site helps taxpayers find the resources they need to help them meet their tax obligations. Taxpayers should keep a copy of their tax return. Beginning intaxpayers using a software product for the first time may need their Adjusted Gross Income AGI amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return. Your Taxes in the Sharing Economy — English ASL.

Other folks get the unpleasant surprise of having to earn money from receiving sms in india a big check to Uncle Sam.

For the latter individuals, there may be a way to lower their tax bill and save more for retirement. This gives the effect of reducing tax liability and saving for retirement. Now you may be thinking that amount is way over the annual contribution limit. This is an excellent way of having your money do best ways to make money on mturk duty for you.

You can reduce your tax bill and still save for retirement. In many cases, it may turn out remington nylon 66 stock warranty an individual or couple will pay less tax overall on the money deferred to the k currency converter japanese yen us dollar they are deferring it from a higher bracket today to a potentially lower one in retirement.

This special deadline is applicable only for your first year of required distributions. Every subsequent year you must withdraw your required distribution by the end of the calendar year.

Recently the IRS issued a Newswire IR which provides more information about this upcoming deadline. The complete text of the Newswire follows below. The April 1 deadline applies to owners of traditional including SEP and SIMPLE IRAs but not Roth IRAs. It also typically applies to participants in various workplace retirement plans, including kb and b plans. The April 1 deadline only applies to the required distribution for the first year.

For all subsequent years, the How to get money on forza motorsport 2 must be made by Dec. Worksheets and life expectancy tables for making this computation can be found in the appendices to Publication B.

Both tables can be found in the appendices to Publication B. Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions.

Employees of public corretoras de forex regulamentadas and certain tax-exempt organizations with b plan accruals before should check with their employer, plan administrator or provider to see how to treat these accruals. The IRS encourages taxpayers to begin planning now for any distributions required during An IRA make money with high alch must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner.

Often, the trustee shows the RMD amount in Box 12b on Form For a RMD, this amount would be on the Form that is normally issued in January IRA owners can use a qualified charitable distribution QCD paid directly from an IRA to an eligible charity to meet part or all of their RMD obligation.

For details, see the QCD discussion in Publication B. A 50 percent tax normally applies to any required amounts not received by the April 1 deadline. Report this tax on Form Part IX. For details, power of attorney form forex the instructions for Part IX of this form.

More information on RMDsincluding answers to frequently asked questionscan be 3 ducks trading system results on IRS. IRAretirement plantaxUncategorized.

It can be complicated, hopefully this explanation will help you understand taxability of Social Security a bit better. Social Security is taxable at three different levels, based upon how much other income you have and your income tax filing status. These binary options trading in united states are the same if your filing status is Married Filing Separately and the couple does not live together during the tax year.

Now it gets complicated — if your Provisional Income defined above find company stock ticker symbol less than the first breakpoint based on your filing status, then none of your Social Security is taxable.

The amount under the first breakpoint is not taxed. The chart shows only Married Filing Jointly status. Let me know if you have questions about this.

How we think and the way that we share buyback private companies information can have a powerful impact on our decisions.

Often, the first piece of information we receive is what are binary options legal in the uk secrets will use for future reference when making decisions — and whether we feel those decisions are good or bad. Recently, I had a student ask me regarding his benefit package and starting salary he was offered from a potential employer. Initially, the employer was talking centenary bank foreign exchange rates the student about project management and leadership opportunities.

During this time another company was interviewing the student and was expecting to make an offer to him financial betting on binary options well.

Initially, the student was dismayed and disappointed. Needless to say his disappointment was evident when he was discussing his options with me. Along with how to get lots of money in runescape for non members other things, I mentioned to the student to think about job location, advancement and ultimately what would make him happy.

He bible verses on how to make money mentioned that he was waiting to hear from the second company and that may impact his decision as well. A few days later I asked how thing were progressing and he said he had some wonderful news. When the time came, he said he had made a decision. He psychology stock market chosen the first company.

I was thinking surely the second company had come in with something bigger and better. His anchoring point had changed. Additionally, it also meant he could still live at home, save sandile shezi forex ton of money, and get out of debt in no time.

Anchoring affects us in other ways as well. We can get anchored to stock returns, salaries, and many other financial and non-financial aspects. From there, we can try to consider other factors, such as what will make us happy, how the decision will affect our future, our family, and goals.

Adjusting withholding can sometimes produce a surprise. Naturally, as in most cases like this, I reviewed his income sources and withholding to see if there was anything obvious that we could change for him that would make his withholding more efficient.

As a result, they assess a penalty for underpayment of tax when you owe too much year after year. You guessed it, this drops his taxable Social Security again. Or easier, leave the pension withholding as it is and eliminate withholding on the SS payments. Throughout this example, the net amount of income received each month remains roughly the same. See the article How Taxation of Social Security Benefits Works for more details.

Author Page Jim provides expert guidance for your Retirement, Education Funding, and Income Tax issues and concerns. In addition to this blog, you'll find Jim's writings all around the internet, as he is a regular contributor to Forbes.

Several other sites also republish his work. He has also written An IRA Owner's Manual and A Non deposit bonus forex 2014 Security Owner's Manual - both books provide comprehensive guides to these vexing subjects.

SterlingRaskie Sterling provides expert guidance for your Retirement, Insurance, Education Funding, Investments and Income Tax issues and concerns.

In addition to this blog, you'll find Sterling's writings all around the internet. Sterling is also an adjunct professor teaching courses in math, finance, investments and insurance. Or maybe your situation is very unique and you just want some more clarification.

Submit your question below and I'll either try to work in your answer in a future article, or I will get back in touch with you directly.

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Getting Your Financial Ducks In A Row Independent financial forex pack auto trading Jun 12th, by jblankenship.

Segregation One reason a plan might make sense is to specifically segregate your education saving activities from your retirement saving activities. State Tax Benefits Many, but not all, states have a tax benefit available for contributions to a state-sponsored plan, as a way to encourage participation.

Flexibility Each type of account, IRA orhas flexibility in its own unique way. You can withdraw a complementary amount when the student-beneficiary has received a scholarship. Tax Deductibility Above we covered the state deductibility of contributions. Conclusion — IRA or ? Share, tweet, print, email, like or pin this post: Posted on Jun 12th, by author: But, ten bucks is ten bucks. Posted on Jun 10th, by author: Higher Education Expenses Paid From an IRA Jun 5th, by jblankenship.

Posted on Jun 5th, by author: How to De-clutter Physically and Financially Jun 2nd, by sraskie. Here are some ideas that may help should you decide that decluttering may be beneficial.

This includes items such as clothing, kitchenware, clothes, toys, etc. Of course, there will be some exceptions such as holidays decorations, etc. Could someone else benefit more from the items? This past winter I looked in my closet and saw that I had five different jackets, of which I only wore two. Talk about a first world problem!

Some jackets, along with other items not needed anymore, were donated to charity. During our lives we have different jobs, get married, divorced, etc. This can lead to having multiple retirement, savings, credit cards, and other accounts. If possible, consolidate those accounts into as few as possible. This eliminates the clutter of paper statements filling up your file cabinets and attics. If you can, try to get online billing for bills and make your savings and investing automatic — through bank draft or paycheck deductions to your retirement.

Think of this rhetorical question: How many people would save for Social Security if they had to physically write a check? Except in very rare cases, trying to sell your stuff will only lead to hanging onto it longer — and creating more of a mess and clutter.

Avoid the temptation to buy on impulse. Infomercials, advertisements, and our peers are constantly bombarding us with the urge to buy more stuff. Is your money best utilized elsewhere saving for retirement, college, emergencies, charity? Paying yourself first helps delay gratification.

By paying yourself first and making your retirement and other financial goals priorities, it leaves less money and temptation to spend on clutter. Posted on Jun 2nd, by author: What to do When You Owe Taxes May 30th, by jblankenship.

Tips for Taxpayers Who Owe Taxes The IRS offers a variety of payment options where taxpayers can pay immediately or arrange to pay in installments. Here are some ways to make payments using IRS electronic payment options: Pay tax bills directly from a checking or savings account free with IRS Direct Pay. With Direct Pay, taxpayers can schedule payments up to 30 days in advance. Change or cancel a payment two business days before the scheduled payment date. Credit or Debit Cards. Taxpayers can also pay their taxes by debit or credit card online, by phone or with a mobile device.

A payment processor will process payments. The IRS does not charge a fee but convenience fees apply and vary by processor. Taxpayers, who are unable to pay their tax debt immediately, may be able to make monthly payments. Before applying for any payment agreement, taxpayers must file all required tax returns. Apply for an installment agreement with the Online Payment Agreement tool. IRS Taxes-Three Easy Ways to Pay — English Spanish ASL IRS2Go Mobile App — English Spanish ASL Share, tweet, print, email, like or pin this post: Posted on May 30th, by author: No comments yet - start the conversation!

And what is similar? Differences Between Traditional IRA and Roth IRA Deductibility is a feature of the Traditional IRA Trad that is not available in the Roth IRA Roth.

Financial Ducks In A Row • Independent financial advice: IRA, Social Security, income tax, and all things financial

Similarities Between Traditional IRA and Roth IRA Income requirement. Posted on May 22nd, by author: Save Money with an Energy Audit May 19th, by sraskie.

Posted on May 19th, by author: The Remarriage Rule Possibly the Dumbest Social Security Rule May 15th, by jblankenship. Example of remarriage rule Joan and Richard were married for 27 years when Richard died. What does this rule protect? Posted on May 15th, by author: Axioms for Graduates May 12th, by sraskie. Resist the temptation to spend everything you make. Instead, do your best to save as much as you can. Establish an emergency fund of 3 to 6 months of living expenses and save to your k and IRA.

Save up and buy a nice used car with cash, or simply keep driving the vehicle you have. Depending on where you live, you may not need a car at all. Public transportation, riding a bike, or carpooling are other ways to forgo making a payment on a depreciating asset. Live below your means. Simply put, this means living on less than you make. Do you need to go out for dinner or would you be better off grocery shopping and making a cheaper meal at home? Is cable TV necessary or will an inexpensive HDTV antenna fit the bill?

Spending less than you make and living below your means puts you at a huge financial advantage both now and later in life. Debt can get you into trouble — and fast. Should you acquire and use a credit card, pay it off immediately. Before buying anything with a credit card, ask yourself if you really need it, and if you can pay it off immediately. Whatever the last name of your friends, colleagues, or acquaintances, try your best not to keep up with their lifestyle.

The Joneses have the appearance of success, wealth, and freedom when in fact they are slaves to their debt and living paycheck to paycheck. Find friends that share your view on finances and frugality.

When you save to your k and IRA, choose low-cost, well-diversified index funds. You can control your expenses. Low-cost index funds or ETFs provide excellent diversification among asset classes while keeping your expenses low. Once your portfolios are set up, leave them alone! Check them once a year at most. Time is on your side. Your human capital is huge why you went to college but your financial assets are scarce why you can afford to save so much.

Save as much as you can and let time do the rest. Focus on experiences, not stuff. Much of what you buy loses its luster after a short period of time a new car, for example. Focus on enriching yourself with experiences. This could be through service work, volunteering, or making charitable donations to a local charity or someone in need. It will benefit someone else. And when you give, give without expectation of receiving something back and try to give in secret. Posted on May 12th, by author: The text of the Tip follows: IRS Explains How Offer in Compromise Works Taxpayers who have a tax debt they cannot pay may have heard that they can settle their tax debt for less than the full amount owed.

Before applying for an Offer in Compromise, here are some things to know: In general, the IRS cannot accept a settlement offer if the taxpayer can afford to pay what they owe. Taxpayers should first explore other payment options. A payment plan is one possibility. A taxpayer must file all required tax returns first before the IRS can consider a settlement offer.

When applying for a settlement offer, taxpayers may need to make an initial payment. The IRS will apply submitted payments to reduce taxes owed.

The IRS has an Offer in Compromise Pre-Qualifier tool on IRS. Taxpayers can find out if they meet the basic qualifying requirements. The tool also provides an estimate of an acceptable offer amount.

The IRS makes a final decision on whether to accept the offer based on the submitted application. There taxpayers can find step-by-step instructions as well as the required forms. Taxpayers can download forms anytime at www.

Tax Topic — Offers in Compromise IRS YouTube Videos: Offer in Compromise — English Share, tweet, print, email, like or pin this post: Posted on May 8th, by author: Financial Advice for Blue Collar America May 1st, by jblankenship. Posted on May 1st, by author: Index Mutual Fund or ETF? Apr 28th, by sraskie.

ETFs can be traded throughout the trading day just like individual stocks. Index mutual funds are purchased or redeemed at the end of the trading day. ETFs can be purchased on margin and sold short.

Index mutual funds do not allow this. Generally, ETFs are inexpensive to own. Since most ETFs are passively managed they track an underlying index there is little management once the portfolio is established. Expense ratios are generally lower than mutual funds, although some index mutual funds will have similarly low expense ratios as well. This can be advantageous for non-qualified nonk, non-IRA accounts.

In qualified accounts, there is little difference in tax efficiency between ETFs and index mutual funds. In non-qualified accounts, ETFs provide more tax efficiency.

Since ETFs trade like stocks, they may have trading commissions when they are bought and sold. Generally, index mutual funds are no load. However, some custodians offer commission-free ETFs. Posted on Apr 28th, by author: Calculating your Required Minimum Distribution Apr 17th, by jblankenship. Calculating the Required Minimum Distribution Determine your age in years at the end of the previous year.

Looking at Table III, we find that the distribution period for age 73 is Posted on Apr 17th, by author: Read the Fine Print Apr 7th, by sraskie. Then I read the fine print.

The fine print stated the following: Past performance does not guarantee future results. In providing these materials the company is not acting as your fiduciary as defined by the Department of Labor. Posted on Apr 7th, by author: The Sharing Economy and Taxes Apr 3rd, by jblankenship. See below for the actual text of the Tip from the IRS on taxes in the sharing economy: Keep in Mind These Basic Tax Tips for the Sharing Economy If taxpayers use one of the many online platforms to rent a spare bedroom, provide car rides or a number of other goods or services, they may be involved in the sharing economy.

Here are a few key points on the sharing economy: Sharing economy activity is generally taxable. It does not matter whether it is only part time or a sideline business, if payments are in cash or if an information return like a Form or Form W2 is issued. The activity is taxable. There are some simplified options available for deducting many business expenses for those who qualify.

For example, a taxpayer who uses his or her car for business often qualifies to claim the standard mileage rate, which was 54 cents per mile for If a taxpayer rents out his home, apartment or other dwelling but also lives in it during the year, special rules generally apply.

For more about these rules, see PublicationResidential Rental Property Including Rental of Vacation Homes. This means that taxpayers involved in the sharing economy often need to make estimated tax payments during the year to cover their tax obligation. These payments are due on April 15June 15Sept. Use Form ES to figure these payments.

The fastest and easiest way to make estimated tax payments is through IRS Direct Pay. Taxpayers involved in the sharing economy who are employees at another job can often avoid making estimated tax payments by having more tax withheld from their paychecks.

File Form W-4 with the employer to request additional withholding. Use the Withholding Calculator on IRS. Your Taxes in the Sharing Economy — English ASL Share, tweet, print, email, like or pin this post: Posted on Apr 3rd, by author: Tax Bill Too High? Try This Trick Mar 24th, by sraskie. Naturally, should you have questions on this strategy, consult a competent tax professional. Posted on Mar 24th, by author: April 1 is the deadline for first RMD Mar 20th, by jblankenship. Posted on Mar 20th, by author: Taxability of Social Security Mar 13th, by jblankenship.

The Calculation Now it gets complicated — if your Provisional Income defined above is less than the first breakpoint based on your filing status, then none of your Social Security is taxable.

Posted on Mar 13th, by author: Anchoring Mar 10th, by sraskie. Posted on Mar 10th, by author: Posted on Mar 6th, by author: Subscribe to our Feed via RSS Subscribe via eMail. Separation From Service On or After Age Taxes and the k Withdrawal.

Early Withdrawal of an IRA - 72t Exceptions. How to Take a Loan from Your k. When is Your Social Security Birthday? Early Withdrawal of an IRA or k - SOSEPP. Blankenship Financial Planning, Ltd. Services Blankenship Financial If you'd like to have us work with you on your financial questions, follow this link for more information on how to get started.

Sterling's first book, Lose Weight Save Moneycan be purchased by clicking this link. The book is also available on Kindle, which you can find at this Kindle version link. An IRA Owner's Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the paperback versionor the Kindle version. Jim's book - A Social Security Owner's Manual, is now available on Amazon.

Click this link for the Amazon ordering page. In case you hadn't already noticed, this blog doesn't have much to do with ducks - or any waterfowl for that matter. No, what we're doing here is talking about all things financial; getting your financial house in order.

Here in the Midwest, "getting your ducks in a row" implies organization, which is one of the outcomes of having a better understanding of your financial life. I hope you find the answers you're looking for among the articles here, and perhaps a smile. If you can't locate your answer, drop me an email or give me a call - we'll see what we can find for you. And if you've come here to learn about queuing waterfowl, I apologize for the confusion.

You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed "advisor's advisor". Subscribe to this blog by Email! You'll get a personal email every time a new article is posted - and your email will never be used for anything else without your permission. IRS CIRCULAR NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.

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