Social Security and Retirement changes announced for 2018


The Social Security Administration (SSA) announced last week that the maximum amount of wages in subject to the 6.2% Social Security tax will rise from $127,200 in 2017 to $128,700 in 2018. The SSA also announced that Social Security beneficiaries will get a 2% increase in benefits in 2018. The average retiree will receive an increase of $27 a month.

  2017 2018
Social Security Wage Maximum $127,200 $128,700
Maximum Social Security tax $7,886.40 $7,979.40
401(k) elective deferral $18,000 $18,500
401(k) catch up $6,000 $6,000

President Trump claims tax cuts will benefit the Middle Class Americans

09-28-2017Tax Information

Is President Donald Trump’s statement earlier this month that “the rich will not be gaining at all with this (proposed tax) plan” true?  Will the middle class benefit?


President Trump is looking to overhaul the tax code.  He made remarks prior to a September 13 meeting with members from both parties of Congress.  The president said he wanted to cut the corporate tax rate from 35 percent to 15 percent and lower individual income taxes.


IRS complies with President Trump’s Executive Order -- will not reject tax returns without health care disclosure

02-20-2017Tax Information

After President Donald Trump issued an Executive Order, the IRS announced that it will not reject tax returns just because a taxpayer has not indicated on the return whether the taxpayer had health insurance, was exempt, or made a shared-responsibility payment under Sec. 5000A of the Patient Protection and Affordable Care Act (PPACA).

  • The PPACA requires taxpayers who do not maintain minimum essential health coverage for each month of the year and who do not qualify for an exemption to pay a shared-responsibility payment with the filing of their Form 1040, U.S. Individual Income Tax Return.
  • Although the health insurance information requirement has been in effect for a few years, the IRS accepted returns that did not contain the information

Myths on Trust Taxation

02-11-2017Tax Information

I periodically get inquiries from individuals who think they can avoid income taxes because they have a trust.  Trusts are often very good tools to protect your assets; but not always a good tool for simple tax planning strategies.  Trusts generally have much lower deductions, compressed marginal tax rates, and a much lower threshold for the net investment income tax.  Thus, a trust may incur higher income taxes than an individual may pay.


Some Tax Forms Arizona Department of Revenue are Incorrect

01-31-2017Tax Information

The Arizona Department of Revenue announced on January 30, 2017 that it sent out some incorrect 1099-G forms for 2015 taxpayers that received refunds.

The erroneous forms included information from the 2014 tax year, and did not include the correct information from the 2015 tax year.

You can still file your 2016 income tax return – Please use your actual 2015 tax return if your 1099-G document is different.

The Basics of Medicare

11-29-2016Health Care

Medicare is a federal system of health insurance for people over 65 years of age and for certain younger people with disabilities.  Medicare pays for much of the cost of hospital stays and doctor’s office visits for people age 65 and older.  But what does that mean and what do you need to know?

  • There are different parts to Medicare:
    • Medicare Part A is hospital care.  Most people don't pay a premium for Medicare Part A.  Medicare Part A has a $1,316 deductible if you are hospitalized, and additional costs apply if your hospital stay exceeds 60 days.
    • Medicare Part B is medical insurance that covers doctor's visits and outpatient services.  The standard Medicare Part B premium is $134 per month in 2017, but it is primarily new enrollees and those who haven’t yet claimed Social Security who will pay this amount.  Most Social Security recipients will pay $109 per month for Medicare Part B in 2017 because Medicare premiums are prevented by law from increasing faster than Social Security payments for existing recipients. Premium costs are also higher for retirees with a modified adjusted gross income above $85,000 for individuals and $170,000 for couples.  There is a $183 Medicare Part B deductible in 2017, after which you will be charged 20 percent of the Medicare-approved amount for most services. There’s no annual limit on out-of-pocket expenses.

Proposed Revisions to Tuition Tax Credits and Deductions

08-03-2016Tax Information

The Internal Revenue Service has proposed revisions to tuition tax credits and deductions for individual tax payers.  The changes are meant to be in alignment with the Protecting Americans from Tax Hikes (PATH).

Key things to know:

  • No deduction or credit will be allowed unless there is a 1098-T, Tuition Statement, received from the eligible educational institution.
  • An exception will be made for items not included on the form (e.g. required course materials that qualify for the American Opportunity Tax Credit)
  • Form 0198-T should be received by January 31 of the following year
  • Reporting will be more specific for qualified tuition and related expenses paid in one year that relate to the academic period beginning in the first three months of the next calendar year.  The prepaid amount would be explicitly stated

The 7 Habits of Highly Effective Investors


In The 7 Habits of Highly Effective People, Dr. Stephen Covey identifies key habits successful people share to achieve their goals.  Here is my attempt to drill these habits down for investors.

Habit 1: Be Proactive (Be Ready for Financial Emergencies)
About 47 percent of respondents in the Federal Reserve’s 2014 household survey said they wouldn’t be able to cover an emergency $400 expense without selling something or borrowing money.  So start by setting aside money for an emergency fund before saving for retirement.  In a financial emergency, too many people tap into their retirement fund early and pay a penalty.  (And your credit card is not your emergency savings fund!)


Identity Theft

06-22-2016Debt & Credit

Approximately 13 million Americans were identity fraud victims in 2015— and identity thieves have stolen $112 billion during that same time.  This is according to Javelin Strategy and Research.

How can you avoid identity theft?

  1. Check your credit report three times per year. The only free site is, so if you get a report from each credit bureau—TransUnion, Equifax and Experian—you can get one every four months, then start over the next year.