As some of you may know from a recent cancellation letter from your health insurance provider, the time for open enrollment for the 2016 year is quickly coming to an end. There are only 10 more days to meet the open enrollment guidelines.
Like many people I know, I saw my premiums increase by about 25%. This resulted in me shopping for a few different plans (still all at least 21% higher than this year’s premiums), but I am happy to say that I am back in a plan that allows me to at least save a little taxes throughout the year.
How, you may ask?
My new plan has an HSA (Health Savings Account) option. I (and you, for that matter) can put tax deductible amounts into a qualified savings or investment account and then use the savings to pay qualified medical expenses, such as your deductible.
As I have not been to a doctor or taken any type of prescription medications in at least three years, I hope to continue the trend. With the availability to put up to $3,350 in it next year, it will continue to grow until I need to use my otherwise catastrophic coverage.
Have you reviewed your plan? Are you taking the proper steps to include your estate plan and trust in your health and family planning? Is it time to contact the right professional for both?
Under new regulations by the Social Security Administration, a married couple can no longer do the “file and suspend” procedure to benefit the non-working spouse.
The way this previously worked was a working spouse could file for collection of his or her Social Security. The non-working spouse would then elect to collect a spousal benefit from the working spouse’s benefit. The working spouse would then suspend his or her own benefits, continue working (and thus increasing their future payments), but the non-working spouse would still be able to collect the spousal benefit.
This is still available if you are over 62 at the end of 2015. Under the new law, workers under 62 may only apply for benefits on their own record, or if the working spouse is also receiving benefits.This is a part of the budget cuts that resulted from the last threatened shutdown. While I haven’t seen the numbers, I expect there will be significant savings for the Social Security “trust fund”.
If you are concerned about planning for retirement, then you should consult with a financial advisor or a great estate planning lawyer or elderlaw attorney. I would like to keep my name out there for to review your last will and testament or other estate plan as well.
We here at the law office of Brent S. Howard would like to thank our veterans and current armed forces members, and their families, for their sacrifices and service in their calls to duty.
As a part of estate planning, I can help to ensure that veterans are aware of the benefits available to them from the VA. If you have questions yourself, or if you know of a veteran with estate planning or medical needs, then do not hesitate to learn your rights for your service.
Thanks again for protecting our freedoms.
Per an email received today from the IRS that I thought I should share:
If you are a farmer or rancher forced to sell your livestock because of the drought that affects much of the nation, special IRS tax relief may help you. The IRS has extended the time to replace livestock that their owners were forced to sell due to drought. If you’re eligible, this may help you defer tax on any gains you got from the forced sales. The relief applies to all or part of 48 states and Puerto Rico affected by the drought. Here are several points you should know about this relief:
- Defer Tax on Drought Sales. If the drought caused you to sell more livestock than usual, you may be able to defer tax on the extra gains from those sales.
- Replacement Period. You generally must replace the livestock within a four-year period to postpone the tax. The IRS can extend that period if the drought continues.
- IRS Grants More Time. The IRS has added one more year to the replacement period for eligible farmers and ranchers. The one-year extension of time generally applies to certain sales due to drought.
- Livestock Sales that Apply. If you are eligible, your gains on sales of livestock that you held for draft, dairy or breeding purposes apply.
- Livestock Sales that Do Not Apply. Sales of other livestock, such as those you raised for slaughter or held for sporting purposes and poultry, are not eligible.
- Areas Eligible for Relief. The IRS relief applies to any farm in areas suffering exceptional, extreme or severe drought conditions during any weekly period between Sept. 1, 2014, and Aug. 31, 2015. The National Drought Mitigation Center has listed all or parts of 48 states and Puerto Rico that qualify for relief. Any county that borders a county on the NDMC’s list also qualifies.
- 2011 Drought Sales. This extension immediately impacts drought sales that occurred during 2011.
- Prior Drought Sales. However, the IRS has granted previous extensions that affect some of these localities. This means that some drought sales before 2011 are also affected. The IRS will grant additional extensions if severe drought conditions persist.”
This is a tax-deferral, meaning that if you do not buy the replacement animals, you will still have to pay the tax. The concern I have for some of my estate and tax planning clients is that the price has skyrocketed since their initial sales in 2011-2012. This means that they sold an older cow/bull for about $800-$1,100 then and are now tasked with buying back a replacement at easily double that price. While the regulations and rules state that only the money value is what is taxed (and not the animal count), there is still little incentive to buy back half of what you sold.
The other problem that I see from this deferral is the fact that if you do not buy back the replacement animals when the “drought” ends, then you are supposed to report all deferred income back to the year of the initial deferral. This would mean amended returns for the first year and, most likely, amended returns for all years in between because of adjustments of losses, deductions, or self-employment taxes.
Keep in mind that the IRS doesn’t give away any “free lunches” and that this program is a deferment. Also, you should consult with your tax advisor or attorney on the long-term effects of any sale or deferral.
There are many things going on in our local community of Altus, Oklahoma, that I hope you are a part of. Just a short list are the fall carnivals, preparing for some of the Christmas celebrations, the Altus Bulldogs setting all kinds of school records in football, and may others.
If you are new to town, or if you have been here for a while, but have not found much to do, then I encourage you to start with a local church. (And I might recommend my own, the First United Methodist Church here in Altus.) A church will have regular services, so you can get these on your own schedule. Also, a church should have a welcoming family or congregation to get you involved. This may be the first step in finding some fulfillment in your life.
If you don’t want to seek religious institutions, then I would suggest some of our local fitness centers. While we don’t have YMCA or public rec center, Stand Strong Fitness and Evolved Fitness offer classes for people wanting activity. I have found both classes to be very friendly, encouraging, and exhausting, but always felt great at the support the group gives.
Being involved has helped me to find my path in this community. Without my family, my faith and my fiancée, I would have trouble defining who I am other than being a lawyer. I hope that this post will encourage a few others to take the steps to get involved and we can all make our community more welcoming to others.