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Will My Spouse and Children Receive Social Security Benefits if I Die?
Spouses and children can and do receive social security benefits upon the death of a person who paid into the system. A spouse who is older than 60 will always be able to receive either a majority of the benefit that was (or would have been) paid to you, using their own age against the full benefit amount that was part of your benefit equation. Children, including dependent grandchildren, can receive a payment equal to 75% of your full benefit amount until they are about 18. Continue reading...
What is IRS Publication 524, Credit for the Elderly and the Disabled?
IRS Link to Publication — Found Here Individuals over 65 years old or are disabled may be eligible for a tax credit. Publication 524 describes this credit in detail. The credit is only available to those whose adjusted gross income (AGI) is relatively low, and the income limits are described in Pub. 524. Individuals over the age of 65 or younger than 65 but permanently disabled may be eligible to receive a federal income tax credit. Continue reading...
How Does Social Security Work?
Social Security uses mandatory payroll taxes to grow trust funds that are used to pay income to retirees and other qualifying persons. Any surplus that is collected in a given year and not paid out is used to purchase Treasury Bonds, which pay a guaranteed rate of interest to the trusts and allows the government to use this surplus money in the meantime. When you receive your paycheck, you’ll see a deduction for FICA (Federal Insurance Contributions Act), which is a “combined payroll tax” for both Social Security and Medicare. Continue reading...
What are Medicare Benefits?
Medicare is a medical insurance benefit for Americans 65 years of age or older, but it also provides coverage for those with severe disabilities, ALS (Lou Gehrig’s disease), and ESRD (end-stage kidney disease) at any age. The premiums for what is known as Part A are paid throughout the insured’s working career, with Part B available as a supplement at low cost. Once you’re over 65, this becomes your medical insurance unless you’re still on an employer’s plan. Medicare provides coverage for in-patient procedures and short stays in the hospital, as well as hospice care and a few other small benefits for home health care. That is just for Part A—the “free” portion of Medicare people pay into over their working lives as part of their FICA taxes. Continue reading...
When Will Social Security Go Bankrupt?
Most estimates project that the Social Security Trust Funds will be depleted by 2037. The system could still function at 70% of their full obligations by transferring cash flow directly from social security taxes to the retired beneficiaries, which most people don’t realize when they spread the news that the system is tanking. Adjustments to the system and interest rates could change how this plays out and keep it operating closer to full capacity. Continue reading...
What is Publication 15-b on Fringe Benefits?
IRS Link to Publication — Found Here IRS Publication 15-b outlines the different types of fringe benefits available to employees and describes which ones are taxable to the employee and which ones are not. Fringe benefits might include anything from the use of a company car to an employee life insurance policy paid for by the employer. Fringe benefits may be provided to regular employees or independent contractors (1099 employees). Some examples of fringe benefits include tuition reduction, group disability and cafeteria plans, and childcare benefits. Continue reading...
Am I Eligible for Social Security Benefits?
Social Security will pay benefits to those who have paid into the system, their beneficiaries in many cases, and also to some disabled individuals who have not paid into the system. In general, Social Security Benefits will only be paid in cases where individuals paid into the system. The exception is Supplemental Security Income (SSI), which is actually paid from the general tax revenue of the government, and not the actual Social Security trust funds, though it is administered by the Social Security Administration. Continue reading...
What Kinds of Social Security Benefits Exist?
Social Security benefits are streams of income available for retired workers, their spouses, children and dependents, and survivors. It provides insurance against longevity, disability, and, to some extent, the death of the primary contributor. Social Security benefits are available to a worker and their dependents if the worker has triggered eligibility, which usually calculated as earning over $5,040 for 10 years, but is modified if the worker dies or is disabled at a young age. Benefits can be paid to multiple people within a household (and an ex-spouse) based on one worker’s contributions to the system, up to a Maximum Family Limit, which is somewhere between 150-180% of a worker’s full benefit amount. Continue reading...
What Is the Earned Income Tax Credit (EITC)?
In a country where the tax code can often be complex and intimidating, the Earned Income Tax Credit (EITC) stands out as a beacon of simplicity and direct financial assistance for low to moderate-income earners. This refundable tax credit has been instrumental in alleviating the financial burden on hardworking Americans. In this article, we will delve into what the EITC is, who qualifies for it, and how it can provide much-needed relief to eligible taxpayers. Continue reading...
What Is the Social Security Act?
The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, is a cornerstone of the U.S. social safety net. This landmark legislation created a system of benefits for retired individuals, the jobless, and those with disabilities, while also providing aid to dependent mothers and children, victims of work-related accidents, and people with visual or physical impairments. Prior to this groundbreaking act, the federal government's involvement in such social welfare programs was minimal, primarily limited to pensions for veterans. Continue reading...
Costs to avoid as you approach retirement
Discover key strategies to cut costs and boost your retirement savings. From smart home decisions to savvy financial planning, learn how to avoid common pitfalls and secure your financial future Continue reading...
What if I Need the Money in My IRA Before Retirement?
It is possible to withdraw money from an Individual Retirement Account without incurring a penalty, but it should be used as a last resort. If you withdraw the money before age 59½, you will pay both a 10% penalty and regular income taxes on the amount you withdraw from a Traditional IRA. However, there are special circumstances that allow you to make withdrawals without being charged the 10% penalty. These circumstances might include: paying for college expenses (whether for you, your grandchildren, etc.), paying for costs associated with a disability, medical expenses (must be greater than 7.5% of your adjusted gross income), and first-time home purchase. Continue reading...
What is Medicare and Medicaid?
Medicare and Medicaid are two very substantial government-run healthcare programs which you have no doubt heard of before. Medicare website — Found Here | Medicaid website — Found Here Medicare is the federal program available to people over age 65, while Medicaid is a federally subsidized state program that provides care to lower-income families. Medicare is a government insurance program created to help retirees and the disabled. Continue reading...
What Does Medicaid Cover?
Medicaid will cover many things, but it is reserved for those without enough assets to get such care on their own or to pay for other coverage. Some examples of covered services include checkups and childbirth for low income pregnant women, and nursing home care for low-income elderly people with long term care needs. Medicaid covers a very wide range of medical costs, including hospital expenses, visits to the doctor, nursing home expenses, and so on. Continue reading...
What is the difference between Medicare and Medicaid?
Demystifying Medicare & Medicaid: Dive into the key differences between these essential U.S. healthcare programs. Learn eligibility criteria, coverage specifics, and how they interact. A must-read for navigating American healthcare! 🔍🩺 #Medicare #Medicaid #USHealthcare Continue reading...
What if I Cannot Get Individual Coverage?
Under current law (the Affordable Care Act), everyone is eligible to receive health insurance coverage. However, not everyone may be able to afford health insurance. There are subsidies provided by the federal government for those who cannot afford it, but cost may still be an issue for many. How Much Will Individual Health Coverage Cost? Can I Purchase Individual Health Insurance? What Health Insurance Do I Need if I Don't Have a Job? Continue reading...
What Is a Beneficiary?
In the realm of finance and estate planning, the term "beneficiary" holds significant importance. It's a concept that transcends the mere distribution of assets; it's about ensuring your wishes are respected, protecting your loved ones' financial future, and navigating the intricate web of financial regulations. In this article, we'll delve into the nuances of beneficiaries, exploring how they work, the types available, and providing examples to shed light on this vital aspect of financial planning. Continue reading...
What is Publication 503, Child and Dependent Care Expenses?
IRS Link to Publication — Found Here Publication 503 covers tax deductions and filing guides for individuals who pay for childcare. It does not address the employer side of things, for those who provide childcare as a fringe benefit, which is covered in IRS 15-b. Tax deductions are available for parents who have to pay for child-care so that they can work at a job and earn income. Publication 503 describes the circumstances under which this type of deduction is allowed and the filing requirements for it. Continue reading...
What is Second-To-Die Life Insurance?
Second-to-die policies are also known as survivorship policies, and are primarily used by married couples to provide a guaranteed legacy to their children after they have both passed away. These come in handy for estate planning, when an estate tax bill might be looming for the heirs. To be clear, this insurance covers the lives of two individuals and provides a death benefit to a listed beneficiary only after the last surviving insured individual dies. Continue reading...
What is FICA?
FICA (Federal Insurance Contributions Act) taxes are handled by the Social Security Administration, as they are payroll withholdings that go toward Social Security and Medicare funds. Most people will have half of their FICA paid by their employer, but self-employed people must pay it all on their own, which is called the “Self-Employment Tax.” FICA is a tax on employees and employers that funds the Social Security and Medicare programs of the United States. Continue reading...