A two-earner family with the same income as a one-earner family receives lower Social Security benefits. The difference gets much larger when one spouse dies.
Pre-Tax Spending Accounts Are No Cure for Tax Increases
New York Times Your Money columnist Ron Lieber got into some hot waters with readers after he wrote his column A Tax Plan That Might Not Be So Painful. I guess that’s because he used Dodging the Proposed 2013 Tax Increase as the headline for his blog post. I feel really sorry for him. Ron […]
Taxes Will Go Up Does Not Mean Tax Rates Will Have to Go Up
Ever since I wrote The Case Against Roth 401(k), I have people telling me I’m out of my mind. They say taxes have to be higher in the future because of deficits, baby boomers retiring, higher health care costs, etc., etc. I don’t necessarily disagree that taxes will be higher in the future. After all, […]
In-Plan Roth Rollover: Practically Useless
A new law passed last year, Small Business Jobs Act of 2010, added a provision to allow participants in 401k or 403b plans to move their money from a traditional 401k or 403b account to a Roth 401k or 403b account within the same plan. This is called an “in-plan Roth rollover.” As a practical […]
Inherited IRA and Roth Conversion Pro-Rata Rule
An inherited IRA isn’t yours. It isn’t included in the pro-rata calculation unless you are the spouse of the deceased and you make the inherited IRA your own IRA.
Sell Your RSUs As Soon As They Vest
I heard in a casual conversation that some of my co-workers are holding their RSU shares after the shares are vested. They thought there are some tax advantages in holding the RSU shares. There is no tax advantage whatsoever in holding the RSUs after they vest. RSU stands for Restricted Stock Unit. It’s a form […]
1099 Requirement in Health Care Law Repealed
Small businesses can breathe a sigh of relief. The dreaded 1099 filing requirement added in last year’s health care law is repealed before it has a chance to take effect. Under the health care law, a business is required to issue a 1099 form to all vendors starting in 2012 if the business purchases $600 […]
Free File Fillable Forms: Not Directly With IRS
Am I the only holdout who refuses to use online tax software or e-file through a third party? I refuse to give my tax data to anyone except the IRS. Putting my tax data online with a third party is out of the question. I use tax software but only software I install on my […]
Retirement Income: OAS and CPP in Canada vs Social Security in US
Canada’s retirement programs OAS and CPP have a much better setup than Social Security in the US.
Social Security Family Benefits Mess
Most of people think of Social Security as a government managed savings program similar to a 401k plan: you pay into the system when you are working; you draw from the system when you retire. More informed people will point out it isn’t so. It’s a pay-as-you-go inter-generation transfer program. The money you (and your […]
Claiming Parent As Dependent On Tax Return
Reader Bill asked me if it’s possible to list his parents as dependents on his tax return. Bill’s parents are foreign citizens. They came to visit him and lived with him for eight months last year. We are all familiar with children as dependents. Can parents also be dependents for tax purposes? I consulted my […]
How To Donate Or Gift Shares to Charity Or Family Member
You probably heard donating appreciated stocks or mutual fund shares to a charity is more cost effective than donating cash. The charity gets the shares. You get a tax deduction for the full value (if you itemize) and you avoid paying capital gains tax. You can also gift appreciated shares to a family member who […]