Financial Security for All Archives - Page 3 of 65

May 30, 2019May 13, 2020

How is the Five-Year Look-Back Period for Medicaid for Long-Term Care Calculated?

Regulations exist to prevent people from transferring assets that could be used to pay their long-term care expenses. This eliminates, or at least postpones, the possibility of the government having to finance their long-term care through the Medicaid program. The look-back period for asset transfers with respect to an application for Medicaid is currently five years. Government officials can look at any gifts made as long as five years before the date that an application for assistance is made.

If …

May 30, 2019May 30, 2019

If I Work While Receiving Social Security, Will my Benefit be Reduced?

If you are under full retirement age, there is a $1 loss in benefits for every $2 earned in excess of a threshold ($16,920 in 2017) that is adjusted for inflation every year. A modified test applies for the year an individual reaches full retirement age.

If earnings for the months prior to reaching full retirement age are $44,880 or more (2017 figure), one dollar in benefits will be withheld for every $3 in earnings above the limit. Starting with …

May 30, 2019May 30, 2019

What are Health Savings Accounts?

Health Savings Accounts (HSAs) were designed by Congress to provide tax advantages to individuals enrolled in high deductible health care plans. Deposits to an HSA are used to pay qualified medical expenses.

The 2017 maximums for annual contributions to HSAs are $3,400 for individuals and $6,750 for a family. Money in the account grows tax deferred, so an HSA serves as a type of savings account to pay future health care expenses.

For more information, see http://njaes.rutgers.edu/healthfinance/health-savings-accounts.asp.

We would like …

May 30, 2019March 23, 2021

Why Should I File an Income Tax Return if I Don’t Owe Any Money?

Even if you don’t owe any taxes, you may qualify for tax credits that would result in a refund.

For example, the Earned Income Tax Credit (EITC) and Child Tax Credit both provide refundable tax credits. This means that, if the amount of a refundable tax credit is more than the amount of taxes due, the difference will be given back to you as a tax refund.

By not filing a tax return, an individual is missing out on the …

May 30, 2019May 30, 2019

What is the Standard Deduction for Income Taxes?

The standard deduction is the amount that taxpayers can subtract from their adjusted gross income if they choose not to itemize deductions. The amount of the standard deduction is indexed annually for inflation. In 2017, the standard deduction is $6,350 for single tax filers and $12,700 for married couples filing jointly.

We would like your feedback on this Personal Finance Frequently Asked Question.…

May 30, 2019May 30, 2019

What is a Person’s Marginal Tax Rate?

A marginal tax rate (also known as marginal tax bracket) refers to the percentage of the last dollar that someone earns (from their total annual income) that goes to taxes. There are currently seven federal marginal tax rates: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% in 2017.

For further information on marginal tax rates, based on taxable income and tax filing status, visit http://njaes.rutgers.edu/money/taxinfo/.

We would like your feedback on this Personal Finance Frequently Asked Question.…

May 30, 2019May 13, 2020

What is the Federal Estate Tax Exemption and Federal Estate Tax Rate?

The top estate tax rate for 2017 is 40% and there is a $5,490,000 exemption amount. Individuals can transfer up to $5,490,000 (indexed for inflation in the future) to heirs free from estate tax.

In addition, for married couples, if one spouse dies without using the full exclusion, the remainder can be added to the surviving spouse’s own exclusion. This provision provides a way for couples to take advantage of each other’s exemption, without having to create complicated trusts or …

May 30, 2019March 23, 2021

When Can Someone Withdraw Money from a Roth IRA Without Owing Income Taxes?

You can withdraw money that you have contributed to a Roth IRA (i.e., your own money) at any time because the account was funded with after-tax dollars on which income taxes were already paid.

You can withdraw the earnings from a Roth IRA tax free in the following situations:

1. You have reached the age of 59½, and at least five years have passed since your Roth IRA account was opened. Earnings can be withdrawn tax-free beginning on the first …

May 30, 2019May 30, 2019

What is a Refund Anticipation Loan (RAL)?

A refund antipation loan or RAL is a method of receiving a Federal income tax refund sooner than it would come to the taxpayer from the IRS. Other common names for this type of transaction are: Fast Cash Refunds, Rapid Refunds, Express Money, and Instant Refunds.

All of these common names are misleading because they are not refunds; they are actually high interest loans.Taxpayers are paying high fees to borrow their own refund money. The IRS has become quite efficient …