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Will You Have to Pay Back Health Insurance Credits?

February 23rd, 2015 | Comments Off on Will You Have to Pay Back Health Insurance Credits? | Posted in Financial News

Millions of taxpayers may end up doing so in 2015.

shutterstock_227501218If you received a 2014 health insurance subsidy, you may get an unpleasant surprise. When the Health Insurance Marketplace (HIM) went online in late 2013, Americans shopping for coverage were asked to see if they qualified for a subsidy called the Premium Tax Credit. Millions of Americans did receive this federal assistance, which made it easier for them to pay health insurance premiums. PTCs were awarded based on household size and estimated 2014 household income.1

Of course, estimates don’t always match reality. Some households earned more than they thought they would in 2014. Others experienced life events like divorces, births or deaths. Because of these developments, certain households ended up receiving PTCs that were too large for their incomes and family size.

Is yours among them? If it turns out that way, you may have to pay a percentage of that federal credit back.

How will you know if the 2014 health insurance credit you received was too large? Two new federal forms will help you find out.

Form 1095-A, akin to a health insurance W-2, is being sent out to you from the health exchange where you purchased your coverage. Form 1095-A shows you the total Premium Tax Credit that was paid to the insurer by the government on your behalf in 2014. Form 1095-A will help you (or your tax professional) fill out Form 8962, which is used to calculate the proper size of your 2014 Premium Tax Credit in light of your family size and actual 2014 modified adjusted gross income (MAGI).2

If you ended up receiving a smaller PTC than you should have in 2014, then the IRS will send you a refund representing the difference. If you received a PTC that was disproportionately large, then you are looking at repayment of a percentage of that credit.2

How much could a taxpayer have to pay back? Fortunately, the IRS has capped the repayment amount. The most an individual taxpayer has to pay back is $1,250. The cap for households is $2,500.3

The IRS also just issued Notice 2015-09, which offers taxpayers facing financial hardships another break related to this issue. Under federal standard tax law, a taxpayer would owe a penalty for failing to repay the excess advance premium tax credits back to the federal government by April 15. A penalty would also be assessed for a taxpayer whose estimated tax payments fall short of the amount due. Well, Notice 2015-09 suspends these late-payment penalties for the 2014 tax year, provided you pay your 2014 federal taxes by April 15 (or October 15 with an extension). So if the IRS notifies you of the overpayment of credits, you can claim relief from the late payment penalty by responding by letter and relief from the estimated tax underpayment penalty via submitting Form 2210 along with your 1040.1,4

Did you buy your own health insurance even though your employer offered it? If you worked for a big employer that offered a health plan but opted to buy your own health coverage instead, you might be eligible to claim a Premium Tax Credit for 2014 (and get the resulting tax refund). Your employer may or may not send you Form 1095-C, which indicates the employee share of the health insurance premium for the most inexpensive plan that the employer sponsored. If that employee share exceeds 9.5% of your 2014 income and you went out and self-insured last year, you can claim a PTC for 2014. If your employer doesn’t send you Form 1095-C, request it.2

Since household income estimates are used to determine advance Premium Tax Credits, it looks like low-income and moderate-income taxpayers who self-insure may have to continually reconcile health insurance subsidies received versus health insurance subsidies warranted.

As a last note, there is an outside chance that the Premium Tax Credit may disappear altogether. The Supreme Court will rule later this year (but probably not prior to April 15) on whether it should be offered in the 36 states that didn’t set up their own health care marketplaces. If the SCOTUS decides that it shouldn’t be offered (and therefore, shouldn’t have been offered) in those 36 states, you will see a lot of amended 2014 returns and repayment of health insurance credits.5

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [1/27/15]
2 – [10/15/14]
3 – [1/6/15]
4 – [1/27/15]
5 – [1/10/15]

Avoiding the Common 1040 Mistakes

February 23rd, 2015 | Comments Off on Avoiding the Common 1040 Mistakes | Posted in Financial News

Don’t let these slip-ups creep into your federal tax return.

shutterstock_157769453No one wants to delay their federal tax refund. As you certainly don’t, filling out your 1040 form correctly is essential. To that end, it is worth noting some of the common 1040 mistakes – the little slip-ups that aggravate both the IRS and the taxpayer.

Not signing your return. If you file online (and who doesn’t), you have to type your name on the “Your Signature” line in the “Sign Here” section, along with your spouse’s name if you file jointly. If you still file a hard-copy return, you’ve got to sign your name on the “Your Signature” line, and the same goes for your spouse on the “Spouse’s signature” line. No valid signature equals an invalid return.1

Not getting your name right. Believe or not, some people mistype their names as they e-file. More commonly, they enter an old name – a maiden name, for example – that doesn’t match the name linked to this taxpayer identification number. If you’ve changed your name, the Social Security Administration (and other federal agencies, as applicable) need to know that.1

Missing the filing deadline(s) applicable to you or your business. Is your company an S corp? That means you will probably need to file a Form 1120S by March 15. Is it a sole proprietorship? That means you have until April 15 to file a Form 1040C. If you are new to making estimated tax payments, you have hopefully pored over Form 1040-ES with a tax professional to figure out how much tax is due by each quarterly payment period.2

Turning in Form 4868 (the “extension”) gives you until October 15 to file, although any federal taxes owed must still be paid by April 15. If you are a servicemember on duty outside the U.S. and Puerto Rico, you have until June 15 to file your return and pay taxes, and you can also use Form 4868 to file as late as October 15.3

If you file late (that is, you submit your return after April 15 without using Form 4868 to request an extension), you face a penalty – a 5% penalty per month following the return’s due date, capping out at a 25% maximum penalty after five months. The penalty for unpaid taxes is .5% per month after the April 15 deadline, and 6% interest a year. If you have taxes a year overdue, you will be assessed both the monthly and yearly penalties.2

Making numerical errors. Even with some of the great tax prep software now available, math errors still happen. In fact, they happen largely because people don’t use the software: the taxpayers who insist on filing paper returns are 20 times more likely to commit math mistakes than those who e-file, the IRS reports.1

If an electronically filed return contains a math mistake, it gets sent back to the taxpayer or tax professional for correction and resubmission. If a paper return has a math mistake, the IRS has to refigure it on the taxpayer’s behalf. That takes time.1

Additionally, some taxpayers get Social Security numbers wrong – not necessarily their own, but those of their spouses. Also, a smooth direct deposit of a federal tax refund won’t happen if a taxpayer types in an inaccurate bank account number.1

Selecting the wrong filing status. This happens a lot with divorced moms and dads. To determine if they should check the “head of household” box or the “single” box, they should take the online interview at

Claiming a credit or deduction you shouldn’t. Again, tax prep software tends to ward off this mistake. Credits often inappropriately claimed (or ignored): the Child and Dependent Care Credit, the Earned Income Tax Credit and even the standard deduction.1

Many business owners overlook deductions or claim them in error. Sometimes this can be traced back to slipshod recordkeeping; other times, it stems from faulty assumptions. According to a survey from small business accounting software maker Xero, the most common merited deductions that aren’t claimed by SBOs are those for depreciation (30%), out-of-pocket capital expenses (29%) and car and truck expenses (16%).2

Claiming employees as independent contractors. Some small business owners try to save money by doing this, but the IRS may disagree with such claims. If so, the business can end up on the hook for employment taxes related to that employee.2

So what steps can you take to try and reduce the risk of errors on your 1040 form? You can file electronically, you can use some of the terrific tax prep software available, and you can turn to a skilled tax professional to help you prepare and file your return. No one is perfect, but those are all good moves to make this tax season.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [4/8/15]
2 – [10/15/14]
3 – [1/16/15]
4 – [1/12/15]

Personal Umbrella Liability Basics

February 23rd, 2015 | Comments Off on Personal Umbrella Liability Basics | Posted in Financial News

shutterstock_163491665It’s an unfortunate fact that accidents happen – and it’s not uncommon for jury awards and out-of-court settlements to run into the millions. While it’s difficult to pinpoint the monetary consequences of the risks you and your family take each day, are you certain your current liability insurance offers you enough protection?

If you are found to be legally responsible for injuring someone or damaging their property without a personal umbrella liability insurance policy, anything beyond the limits of your standard liability insurance coverage will come out of your pocket. Standard liability insurance generally includes homeowners, renters, auto and watercraft policies.

So, how much coverage does one need? You’ll want to take into consideration not only your personal assets but also your potential personal risks. The amount of excess liability coverage that is right for you depends on your personal financial situation. Lawsuits may evolve into much more costly disputes than originally anticipated. Your assets could be targeted if you do not have adequate liability coverage for legal damages. To determine an appropriate limit, work with your insurance agent to review all your assets such as your house, other properties, automobiles, personal belongings and valuable collections, 401(k) investments, and college funds for your children.

©2008, 2013 Zywave, Inc. All rights reserved.

Monthly Economic Update – February 2015

February 23rd, 2015 | Comments Off on Monthly Economic Update – February 2015 | Posted in Monthly Economic Update


How much should I really be saving?

February 23rd, 2015 | Comments Off on How much should I really be saving? | Posted in Lifestyle

We all know we should be saving. The tricky part is figuring how much! I’ll tell you how in this week’s Money Minute.

Pick a goal, any goal: It’s impossible to figure how much you should save if you don’t know what you’re saving for. Retirement? A new laptop? Your dream vacation? The more concrete your goal is, the easier it will be to come up with a savings strategy. For example, for an emergency fund, most experts recommend saving 3 to 6 months of living expenses (that includes rent, utilities, transportation, food — whatever you can’t live without).

But let”s say you’re looking at a long-term savings goal, like retirement. This all about continuity — coming up with a fixed amount you need to save in order to hit your goal later. The general rule is to save 10% to 15% of each paycheck to have enough for retirement. The age at which you’re aiming to retire, risk tolerance, and income can all influence your ideal savings rate. We love this chart from Boston College’s Center for Retirement Research, which shows just how different savings goals can be depending on age and desired retirement year:

If we’re talking about a short-term goal, like a new car or vacation, things get a bit more straightforward. Research the cost of your desired goal, figure out how much time you have to save and come up with a monthly (or weekly or daily — whatever works!) allocation you can afford to keep up with.

Think of paying off debt as a way to save, too. Most people stress themselves out trying to balance debt payments with savings goals. But you actually are saving if you’re paying off debt. The faster you pay off your debts, the less money you’re blowing on interest, especially given the fact that most credit cards charge double-digit rates today.

When you have a goal, come up with a plan: “Hope is not an investment strategy.” I love this quote from financial expert Jean Chatzky. However you’re saving, your savings goal is just a goal — an intangible, invisible, pie in the sky dream — unless you come up with a plan to achieve it. Take a good look at your monthly income and your expenses and figure out if you’ve even got wiggle room to set cash aside for a future savings goal. If the answer is no, then you’ve got two options: cutting back on day-to-day expenses, or looking for ways to get extra income.

Some people swear by the envelope system or good old-fashioned spreadsheets. Don’t expect your best friend’s budget to work for your needs. Because I tend to overspend, I use Learnvest’s 50/30/20 method to keep myself in line. I figure out how much I bring home after taxes. Then I set aside half of that amount for costs I can’t really control like rent and utilities. Thirty percent goes toward the fun stuff I can control like groceries and entertainment, and the remaining 20% goes to my retirement fund and short-term goals like vacations and buying a new car.


4 Mistakes Parents Make at the Pediatrician’s Office

February 23rd, 2015 | Comments Off on 4 Mistakes Parents Make at the Pediatrician’s Office | Posted in Lifestyle

r-SCREENING-FOR-LAZY-EYE-large570I love being a pediatrician; there’s nothing I would rather do. But sometimes I get frustrated by things that parents do — or don’t do.

I’m not talking about things like being late (hey, I run late, it would be unfair to complain), or getting upset with the staff about waiting (hey, I’m going as fast as I can and what if it were your kid who needed more time?), or not holding their kid still while I examine him (I understand that some parents are better at that than others), or stuff like that. That comes with the territory.

I’m talking about stuff that makes it harder for me to give good care.

Here are the four mistakes many parents make that I wish they wouldn’t:

1. They don’t come prepared.
I love it when parents come to check-ups with their list of things to talk about, or when they come to sick visits knowing which medicines have been given, how many times the child has thrown up or when, exactly, the headaches started. You have no idea how helpful this is — and how much it helps me zero in on exactly what I need to ask, say and do to help the child and the family.

Too often, parents just, well, show up with their kid and wing it. Which I get, actually. You have a check-up, or your kid is sick, so you come to the doctor because that’s what you do in those situations. However, we aren’t mind readers and we have a limited amount of time. It’s frustrating when people don’t have the information I need, or to be heading out the door of the exam room when the parent remembers the three things they really want to talk about.

So… keep a list somewhere of things you want to talk about at a check-up, and then bring it with you (lots of parents keep a list on their phone). if your child is sick, please be ready with all the details (especially important if someone else cares for your child while you work), including temperatures and medications (I love it when people bring medications with them). If you are planning to bring your child to the doctor for something that has been going on for a while, like headaches or stomachaches, start keeping a diary of symptoms. You may think you’ll remember everything, but most parents don’t (most people don’t).

And, if you send your child with a babysitter or with a relative who doesn’t live with you, please make sure they are fully informed (in my experience, they rarely are). If you can be available by phone to answer questions, even better.

2. They are less than honest.
I totally get that it’s embarrassing to tell the doctor that your kid eats vegetables once a week (or never), watches TV all day or is the bully of the classroom. It’s also no fun to admit that you often forget to give the asthma medicine or that you’ve waved the white flag in the tooth-brushing battle — or that you are guessing on the temperature because you lost your thermometer, or didn’t actually look at the poop when your child’s stomach hurt so you don’t know if it was hard or diarrhea (because, after all, poop is gross). But if I don’t know this stuff, I may miss not just an opportunity to help you in all these struggles, but I might make the wrong diagnosis. That could be bad.

We aren’t here to judge — and we have seen and heard worse, I promise. Please, tell the truth. I can’t take care of your child (or you) if you don’t.

3. They don’t say anything when the doctor screws up.
If I don’t make sense, if I didn’t ask something important, if I’ve misunderstood something, if I’ve given an instruction that is unworkable or if I’ve made someone feel upset or bad in any way, I want to know. Pediatricians are human and can screw up like anyone else. But when we screw up, it can lead to the wrong diagnosis or treatment, to families not knowing what to do or not getting what they need. That’s why we need people to let us know when we’ve got it wrong. And we need you to let us know in real time, so we can fix it.

So speak up. Say, “I didn’t understand that.” Or, “He’s had a fever for five days, not one day.” Or, “You don’t understand, he’s never complained of a pain like this before.” Or, “I actually need to talk more about what’s going on at school, it’s really not going well.” Or, “I can’t give a medicine three times a day because of my job.” Or, “When you said that, it made me feel like you thought I was a bad mother.”

Now, I can’t guarantee that every doctor will take it well. Saying it nicely helps, obviously. But here’s something I think is important: if your doctor can’t take some constructive criticism, then you should get a different doctor.

4. They forget that they and the doctor are a team.
I may be the doctor, the one with the medical training, but you are the parent — the one who knows and cares for the child.

This one kind of sums up the others, really. The visit and ongoing relationship with the pediatrician work best when parents and doctors understand that they need each other — and when they work together to make the most of the visit. So remember: you are as important as the doctor. If you take an active role, things work out so much better.

We want the same thing — your child to be healthy and happy. If you help me help you, we can make it happen.


‘But my juice cleanse WORKED.’ No, it really didn’t.

February 23rd, 2015 | Comments Off on ‘But my juice cleanse WORKED.’ No, it really didn’t. | Posted in Lifestyle

Health fads are nothing new to modern civilization. Collectively, we want so badly to look our best and live forever that we do things that make absolutely no sense (like drink bottles of radioactive water). Thankfully, as medical science advances, we have better and better means to test whether the newest health craze is healthy or just crazy.

1. They are really (really) expensive.

A quick search for cleanse or detox on Google shopping will present you with pages and pages of expensive pills, powders, juices, sprays, patches, creams, and even machines that purport to somehow make you much healthier in a very short period of time.

If they cost all that and actually did all the things they claim to do, maybe there would be no cause for complaint. However…

2. They promise vague benefits and are even more vague about how those benefits are produced.

These products often talk about the dangerous “toxins,” “metals,” or “chemicals” being stored in the human body. But the particular compound that the product is supposed to fight is almost never specified. Scientific studies of detox products do them no favors, which is why you won’t be hearing them cite any peer-reviewed studies.

3. They’re often advocated by people who have no expertise in the mechanics of the human body.

It’s almost shocking how much money these ordinary-person-turned-health-entrepreneurs can make by starting a food trend — even if that trend has no basis in medical science. They advocate plausible-ish solutions for issues like pain, unwanted weight (especially this one), or fatigue. But the lightest scrutiny often shows them to be largely ineffective.

4. They can be really dangerous.

When it comes to nutrition, juice cleanses are bad news. By restricting your diet to juices, you’re flooding your system with fructose (the type of sugar in fruits that makes them taste sweet) while virtually eliminating your protein intake. There’s nothing healthy about a high sugar/no protein diet.

Doctors have been waving red flags about colon cleanses and colonics for years. But people are still doing them despite warnings of potential cramping, bloating, bowel perforation, and kidney problems, among other issues.

And because so few of the people who advocate for these regimens are trained medical professionals, they might be advocating for routines that could cause irreparable damage (like this woman in the UK whose “nutritionist” told her to drink so much water that she suffered brain damage from hyponatremia).

5. They have no science to back them up. Like, none.

Eight questions to ask before starting a “detox” or “cleanse”:

  1. Have I talked to my doctor about the health issue I’m trying to address?
  2. Have I talked to my doctor about the regimen I’m considering, including its efficacy and side effects?
  3. What specific health benefit am I supposed to get from this regimen?
  4. By what specific method does this regimen deliver this benefit?
  5. Is the person or persons responsible for developing this regimen qualified to do so?
  6. What body of evidence supports this method of health improvement?
  7. Has this regimen’s health effects been independently studied and replicated?
  8. Has this regimen’s claims been debunked by a credible source?


Your Kids Are About to Get Their Own Version of YouTube

February 23rd, 2015 | Comments Off on Your Kids Are About to Get Their Own Version of YouTube | Posted in Lifestyle

yahooutubeYouTube is set to roll out a kid-friendly version of its service today.

Google, which owns the video-streaming giant, revealed last year it was planning to launch child-focused versions of its products. Its plan for YouTube comprises a “fun and safe” Android app offering a mix of original and existing content.

According to USA Today, which recently viewed a demo version of the app, YouTube Kids sports a clutter-free interface and includes a number of unique features, among them a timer function that lets parents control how long the app can be used for before a password is required to continue watching.

Reportedly built by in-house engineers “with parenting credentials,” the app’s home screen features eight large tiles, each one showing images from popular children’s shows.

Icons above each tile indicate the type of video to expect, so, for example, a TV set indicates an entertainment show, while a lightbulb represents something educational.

Voice search

With toddlers’ typing skills not quite fully formed, the app wisely offers a voice-based search option, though the feature will need to be pretty smart if it’s to accurately capture some of the baffling babble that emanates from the lips of littl’uns.

And if a kid types or says a search word that’d make their parents blush, or possibly faint in shock, the app has been programmed to respond with a “try something else” message.

According to the Wall Street Journal, which also carried news of the app’s imminent release, YouTube is paying some creators to produce original content for its new service. However, it’s not currently known how YouTube Kids will generate revenue for the company.

The inclusion of ads is said to be “under discussion,” though the existence of the Children’s Online Privacy Protection Act (COPPA), which imposes strict limitations on how data is collected for advertising purposes from those under 13 years of age, means the company will have to proceed with caution if it decides to go down that road.

The law has been used by the Federal Trade Commission to land 20 firms with fines over the last 15 years after it was discovered they’d mined information from children without their parents’ agreement.

YouTube Kids will be announced during a keynote at the Kidscreen Summit in Miami on Monday, the Wall Street Journal said in its report.


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