Cory Burnell

The federal government is an equal-opportunity tax assessor. Even the dead can’t escape taxes. The final accounting required of the deceased is not limited to an estate tax filing, but a federal income tax return must also be filed for the year in which the taxpayer passes. Please consult a professional with tax expertise if you find yourself in this situation.¹ Filing for the Deceased Of course, the deceased can’t file his or her own return, so that responsibility usually falls to the estate’s executor or administrator. Here are the highlights of how a tax return is filed in the name of a deceased individual. The form used is the same as the one that would have been used if the taxpayer were still alive, but "deceased" is written after the taxpayer's name. The filing deadline is April 15 of the year following the taxpayer's death. Some income that might appear to belong on the decedent's final return may in fact be taxable to the estate or to the benef...

Tip:   Average Benefit. In March 2018, the average monthly Social Security benefit for a retired worker was about $1,410. Source: Social Security Administration, 2018 Most children stop being “and-a-half” somewhere around age 12. Kids add “and-a-half“ to make sure everyone knows they’re closer to the next age than the last. When you are older, “and-a-half” birthdays start making a comeback. In fact, starting at age 50, several birthdays and “half-birthdays” are critical to understand because they have implications regarding your retirement income. Age 50 At age 50, workers in certain qualified retirement plans are able to begin making annual catch-up contributions in addition to their normal contributions. Those who participate in 401(k), 403(b), and 457 plans can contribute an additional $6,000 per year in 2018.¹ Those who participate in Simple IRA or Simple 401(k) plans can make a catch-up contribution of up to $3,000 in 2018. And those who participate in traditional IRA...

This modern twist on the Ben Franklin maxim reflects the multiplicity of taxes to which earnings are subject in today’s world.¹ Finding ways to manage expenses is one of the cornerstones of a sound financial strategy. Here are some simple and inexpensive energy-saving tips that may help you save money. Audit First… To better understand where opportunities may exist for improving energy efficiency, consider an energy audit. Perform one yourself by purchasing a home energy monitor, which tracks your energy use, and a handheld air leak detector to identify windows, doors, and other areas of the home that are drafty. Also, your local power utility may offer in-home energy audits or related services that can help identify remediation opportunities. …Then Act Consider these do-it-yourself ideas that may offer immediate savings at very little cost. Install a programmable thermostat to automatically lower the heat or air conditioning because—let’s face it—you forget to do it. ...

Traveling. Some of us travel a lot, and some of us travel a little. For some of us, traveling is a job. Nearly 63 million people are employed, worldwide, in air travel and related industries.¹ There’s bound to be travel wisdom among their ranks. Let’s find out. Think About Fast-Dry Clothing Think about grabbing fast-dry clothing from stores like REI and Travelsmith. It’s not high fashion, but it is lightweight and, most importantly, washable in a hotel room sink. As an added bonus, it doesn’t take up much room in your luggage. Even if you just can’t stand the style of fast-dry apparel, the concept is good to remember: lightweight, easy to wash fabrics that don’t take up much room. Sleeping in Coach is Easier than You Think Wear comfortable clothes, use the blanket they hand out as lumbar support, and wear that u-shaped pillow backwards. It may look ridiculous, but the reasoning is actually genius: If you wear it backwards, your neck stays in place. No longer will you be woken ...

Traditional IRAs, which were created in 1974, are owned by roughly 35.1 million U.S. households. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 24.9 million households. 1 Both are IRAs. And yet each is quite different. Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into the account. Distributions from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. 2 For individuals covered by a retirement plan at work the deduction for a traditional IRA in 2018 is phased out for incomes between $101,000 and $121,000 for married couples filing jointly, and between $63,000 and $73,000 for single filers. Also within certain limits, individuals can make contributions to a Roth IRA with after-tax dollars. To qualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requ...

If you're like many small business owners, running your own business is an all-consuming endeavor. In the face of everyday demands, choosing a retirement plan for your business can become a casualty. The idea of establishing a plan could evoke worries about complicated reporting and administration. If this sounds familiar, then you may want to consider whether a Simplified Employee Pension (SEP) may be right for you. A SEP can be established by sole proprietors, partnerships, and corporations, including S corporations. The advantages of the SEP begin with the flexibility to vary employer contributions each year from 0% up to a maximum of 25% of compensation, with a maximum dollar contribution of $55,000 in 2018. Employees Vested The percentage you contribute must be the same for all eligible employees. Eligible employees are those age 21 or older who have worked for you in three of the last five years and have earned at least $600 (in 2018). Employees are immediately 1...

No one wants to see an Internal Revenue Service (IRS) auditor show up at his or her door. The IRS can’t audit every American’s tax return, so it relies on guidelines to select the ones most deserving of its attention. Here are six flags that may make your tax return prime for an IRS audit.¹ The Chance of an Audit Rises with Income According to the IRS, less than 1% of all individual taxpayer returns are audited. However, the percent of audits rises to over 2% for those with incomes between $500,000 and $1 million, and is over 4% for those making between $1 million and $5 million.² Deviations from the Mean The IRS has a scoring system it calls the Discriminant Information Function that is based on the deduction, credit, and exemption norms for taxpayers in each of the income brackets. The IRS does not disclose its formula for identifying aberrations that trigger an audit, but it helps if your return is within the range of others with similar income. When a Business is R...