Despite tax overhaul, marriage penalty still hits many couples

“The Tax Cuts and Jobs Act attempted to eliminate the marriage penalty but it only pushed it out farther,” Savage said. Under the new rules, which took effect last year, the marriage penalty kicks in for married couples with combined income of about $600,000 or more. At that point, married couples hit the top 37% federal income tax bracket. There are other tax implications for married couples, as well, including a Medicare surtax of 0.9% and a net investment income tax of 3.8%. Similarly, the ne


“The Tax Cuts and Jobs Act attempted to eliminate the marriage penalty but it only pushed it out farther,” Savage said. Under the new rules, which took effect last year, the marriage penalty kicks in for married couples with combined income of about $600,000 or more. At that point, married couples hit the top 37% federal income tax bracket. There are other tax implications for married couples, as well, including a Medicare surtax of 0.9% and a net investment income tax of 3.8%. Similarly, the ne
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Despite tax overhaul, marriage penalty still hits many couples

Two can live as cheaply as one, the old saying goes. Except for some high-income taxpayers.

Although the Tax Cuts and Jobs Act mostly eliminated the so-called — and hated — marriage penalty, some taxpayers, particularly high-income couples, could still end up paying more in taxes as a married pair than they would if they were each single.

The penalty typically kicks in when two individuals with equal incomes marry, bumping them into a higher tax bracket than they would be otherwise, said Mike Savage, a certified public accountant and CEO of 1-800Accountant.

“The Tax Cuts and Jobs Act attempted to eliminate the marriage penalty but it only pushed it out farther,” Savage said.

Under the new rules, which took effect last year, the marriage penalty kicks in for married couples with combined income of about $600,000 or more. At that point, married couples hit the top 37% federal income tax bracket. In contrast, a single filer reaches the 37% bracket at around $500,000, meaning an unmarried couple could enjoy income of $1 million before reaching the top bracket.

There are other tax implications for married couples, as well, including a Medicare surtax of 0.9% and a net investment income tax of 3.8%.

For example, an individual can have up to $200,000 in income before the Medicare surtax kicks in, but the limit for married couples is only $250,000.

Similarly, the net investment income tax also starts at $200,000 for single taxpayers, and $250,000 for married couples who file jointly.

In addition, long-term capital gains rates are 15% for single individuals up to $434,550 of taxable income and then rise to 20%. But for married couples, the 15% rate goes up to $488,850 of taxable income and jumps to 20% from there.

In every case, the penalty is not a specific tax, but rather the result of reaching a certain threshold sooner as a couple filing their taxes jointly. As the percentage of women in the workforce increases, along with their earnings in relation to men, more couples experience that tax hit.

More from Personal Finance:

The IRS will waive this tax penalty for more than 400,000 filers

Here’s why Jeffrey Epstein likely paid little in the way of taxes

These people don’t mind overpaying the IRS

No matter when you get married during the year, come April, you’ll need to file your 2019 tax return as a married couple.

On the flipside, if you get divorced at any time, you’ll file as single in the spring.

“Your marital status for tax purposes is whatever your status is on Dec. 31 of each year,” said Robert Rehm, a vice president of tax services at Mariner Wealth Advisors. “If you get divorced on the last day of the year, for tax purposes, you are treated as being unmarried for the entire year.”

However, splitting up to avoid the penalties rarely makes sense, since there are other tax advantages that come with filing jointly.

“If you were going to get unmarried, you are throwing away other benefits” said Dave Stolz, a CPA and member of the American Institute of CPAs’ personal financial specialist committee. These include spousal individual retirement accounts, which let couples double up on retirement savings even if only one spouse works, and tax exemptions on estate transfers, also known as the “unlimited marital deduction.”

“It’s a step over a dollar to pick up a dime kind of thing,” Stolz said.

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Most Americans say you need $1.7 million to retire—here’s how much money to save each month to get there

Many financial experts recommend saving at least $1 million in order to live comfortably in retirement. But the average American believes that they need even more than that: $1.7 million, according to a recent survey from Charles Schwab, which looked at 1,000 participants in 401(k) plans nationwide. Here’s how much you need to put away to save $1.7 million by age 65. Instead, invest those dollars in a tax-advantaged retirement plan, such as a 401(k) or Roth IRA. “Figure out how much you need to


Many financial experts recommend saving at least $1 million in order to live comfortably in retirement. But the average American believes that they need even more than that: $1.7 million, according to a recent survey from Charles Schwab, which looked at 1,000 participants in 401(k) plans nationwide. Here’s how much you need to put away to save $1.7 million by age 65. Instead, invest those dollars in a tax-advantaged retirement plan, such as a 401(k) or Roth IRA. “Figure out how much you need to
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Most Americans say you need $1.7 million to retire—here's how much money to save each month to get there

Many financial experts recommend saving at least $1 million in order to live comfortably in retirement. But the average American believes that they need even more than that: $1.7 million, according to a recent survey from Charles Schwab, which looked at 1,000 participants in 401(k) plans nationwide. However, many people fall short of that goal. To get an idea of what it actually takes to build up a $1.7 million retirement portfolio, CNBC calculated how much you’d need to save and invest each month in order to reach that milestone by 65, depending on when you start. Most financial planners suggest putting away anywhere between 10% and 15% of your gross salary for retirement, so CNBC also calculated the salary you’d need to earn in order to save $1.7 million — without putting away more than 15% of your income. Keep in mind that although these calculations can help you get a sense of what you should be saving to build a substantial retirement fund, they don’t take into account the many ups and downs people experience over their lives, such as pay increases, periods of unemployment or sudden financial windfalls or losses. Here’s how much you need to put away to save $1.7 million by age 65.

If you start at age 25:

With a 4% rate of return: $1,433.51 per month Annual salary needed if you save 10% of your income: $172,021

Annual salary needed if you save 15% of your income: $114,686 With a 6% rate of return: $853.63 per month Annual salary needed if you save 10% of your income: $102,436

Annual salary needed if you save 15% of your income: $68,294 With an 8% rate of return: $486.97 per month Annual salary needed if you save 10% of your income: $58,436

Annual salary needed if you save 15% of your income: $38,959

If you start at age 30:

With a 4% rate of return: $1,860.50 per month Annual salary needed if you save 10% of your income: $223,260

Annual salary needed if you save 15% of your income: $148,848 With a 6% rate of return: $1,193 per month Annual salary needed if you save 10% of your income: $143,187

Annual salary needed if you save 15% of your income: $95,463 With an 8% rate of return: $741.10 per month Annual salary needed if you save 10% of your income: $88,932

Annual salary needed if you save 15% of your income: $59,291

If you start at age 40:

With a 4% rate of return: $3,306.56 per month Annual salary needed if you save 10% of your income: $396,787

Annual salary needed if you save 15% of your income: $264,538 With a 6% rate of return: $2,453.12 per month Annual salary needed if you save 10% of your income: $294,375

Annual salary needed if you save 15% of your income: $196,260 With an 8% rate of return: $1,787.54 per month Annual salary needed if you save 10% of your income: $214,505

Annual salary needed if you save 15% of your income: $143,011

Your retirement fund shouldn’t be languishing in a traditional savings account. Instead, invest those dollars in a tax-advantaged retirement plan, such as a 401(k) or Roth IRA. As the numbers show, investing your savings early can be powerful thanks to compound interest, which is when any interest earned then accrues interest on itself. The simplest way to get started is to contribute to your employer-sponsored 401(k) plan. Even if you aren’t able to save much, you should still aim to put enough into your 401(k) that you earn any match your company offers, which is essentially “free money.” When companies offer a 401(k) match, they agree to kick in whatever contribution you make up to a certain amount, so if your employer offers a 5% match, and you contribute 5% of your salary, the equivalent of 10% of your salary goes into the tax-advantaged account. But it’s worth noting that 401(k) plans come with contribution limits: In 2019, you can invest up to $19,000 in your account, up from $18,500 in 2018.

What to do if you exceed the 401(k) limit

If you’re planning to put away more than the $19,000 401(k) limit, you’ll need to find additional ways to invest your money. Here are three steps to follow to get the most out of your investment dollars: 1. Figure out which retirement savings account makes the most sense for you Determine which tax-advantaged retirement savings accounts are the best options for you, depending on your income and tax status, Nick Holeman, a certified financial planner and senior financial planner at Betterment, tells CNBC Make It. These can include a 401(k), Roth IRA, traditional IRA and/or a health savings account. Traditional 401(k) plans, for example, offer tax savings up front, while Roth-style accounts offer tax-free withdrawals in retirement. (You can find a breakdown of how different types of plans work here.) 2. Max out your retirement accounts Once you’ve determined the best account for you, contribute as much as you can. “Most people should start with their 401(k) if there’s a match,” Holeman says. But, “if your 401(k) has really high fees or really bad investment options, you might be better off starting with a traditional or Roth IRA and then going to your 401(k) after you’ve maxed that out.” Once you’ve maxed that out, “waterfall your way down” through other tax-advantaged accounts, Holeman says. “Figure out how much you need to save, then rank the accounts from best to worst and fill up the buckets as you go until you’re unable to save anymore.” Keep in mind account limits. In addition to the $19,000 you can put in your 401(k), you can also contribute $6,000 total into your traditional and/or Roth IRA. Individuals can put $3,500 per year into an HSA and families can contribute up to $7,000. 3. Branch out to other investments Once you hit the limits, you’ll want to consider more traditional brokerage accounts, like ETFs or mutual funds. For retirement savings, Berkshire Hathaway CEO Warren Buffett recommends low-cost index funds. “Consistently buy an S&P 500 low-cost index fund,” he told CNBC’s On The Money in 2017. “I think it’s the thing that makes the most sense practically all of the time.” He’s not just talk: Buffett has even said he’s instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500 for his wife after he dies. Like this story? Subscribe to CNBC Make It on YouTube! Don’t miss: The No. 1 mistake Americans make when saving for retirement


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Elon Musk and Andrew Yang support Universal Basic Income — here’s what it could mean for Americans

Elon Musk and Andrew Yang support Universal Basic Income — here’s what it could mean for Americans2 Hours AgoTo view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Imagine a sum of cash deposited in your bank account every month, for doing absolutely nothing. That’s the gist of universal basic income, or UBI. UBI is making its way from the fringes to a serious topic of debate thanks to a growing number of high profil


Elon Musk and Andrew Yang support Universal Basic Income — here’s what it could mean for Americans2 Hours AgoTo view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Imagine a sum of cash deposited in your bank account every month, for doing absolutely nothing. That’s the gist of universal basic income, or UBI. UBI is making its way from the fringes to a serious topic of debate thanks to a growing number of high profil
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Elon Musk and Andrew Yang support Universal Basic Income — here's what it could mean for Americans

Elon Musk and Andrew Yang support Universal Basic Income — here’s what it could mean for Americans

2 Hours Ago

To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again.

Imagine a sum of cash deposited in your bank account every month, for doing absolutely nothing. That’s the gist of universal basic income, or UBI. UBI is making its way from the fringes to a serious topic of debate thanks to a growing number of high profile advocates, including Elon Musk, Mark Zuckerberg and Richard Branson, and 2020 Democratic presidential candidate Andrew Yang. So far, the results of some UBI experiments have been controversial. Is America ready for universal basic income?


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Here’s when unpaid debt can reduce your Social Security payments

For older Americans, Social Security promises guaranteed monthly income. While most creditors — i.e., credit-card companies or other lenders — can’t touch your Social Security payments, some types of delinquent debt can reduce those monthly checks. “While the person might know that they owe debt, it might come as a surprise that it can reach their Social Security,” Sherman said. Other federal debtThe Treasury Department also can garnish Social Security checks for debt that originated with other


For older Americans, Social Security promises guaranteed monthly income. While most creditors — i.e., credit-card companies or other lenders — can’t touch your Social Security payments, some types of delinquent debt can reduce those monthly checks. “While the person might know that they owe debt, it might come as a surprise that it can reach their Social Security,” Sherman said. Other federal debtThe Treasury Department also can garnish Social Security checks for debt that originated with other
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Here's when unpaid debt can reduce your Social Security payments

For older Americans, Social Security promises guaranteed monthly income. Except when you have certain kinds of unpaid debt. While most creditors — i.e., credit-card companies or other lenders — can’t touch your Social Security payments, some types of delinquent debt can reduce those monthly checks. And when they do, look out. “If you’re actively paying on the debt, there shouldn’t be an issue,” said certified financial planner Peggy Sherman, lead advisor at Briaud Financial Advisors in College Station, Texas. “It’s when you default and the debt gets to be too delinquent that it becomes a problem.”

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As a group, older Americans’ debt burden continues climbing. In the 60-to-69 age group, total consumer debt — i.e., mortgages, loans, credit cards — is nearly $2.2 trillion, compared with $380 billion in 1999, according to the latest data from the Federal Reserve Bank of New York. Among those age 70 and older, it’s close to $1.2 trillion, up from $180 billion in 1999. At the same time, people in their 60s are typically transitioning to retirement and going on Social Security — the most popular age to start those benefits is 62, according to the government. About 48% of married couples, and 69% of singles age 65 and older, get at least half of their income from those monthly checks. Another 21% of married couples and 44% of unmarried individuals rely on them for 90% or more of their income. The average monthly benefit today is $1,461. While delinquency rates remain relatively low (below 1.5%) across most types of consumer debt for people age 60 and older, those who are in danger of defaulting should know whether it could affect their Social Security income. Same goes for other types of financial obligations, like back taxes or unpaid child support. “While the person might know that they owe debt, it might come as a surprise that it can reach their Social Security,” Sherman said.

Federal taxes

For delinquent federal income taxes, the Treasury Department can either levy up to 15% of your benefit until the debt is repaid, or, less frequently, garnish everything but living expenses until you’ve paid it off. “That could last for however many months it takes for the tax to be repaid,” Sherman said. People who owe back taxes should reach out to the IRS instead of ignoring the debt. Depending on your situation, you could qualify for a payment plan to tackle it over time, or you might be able to negotiate a lower bill. In some cases of extreme economic hardship, you could have the debt erased altogether.

Other federal debt

The Treasury Department also can garnish Social Security checks for debt that originated with other federal agencies, such as the Education Department — i.e., federal student loans. In this situation, up to 15% also can be withheld, but that garnishment cannot reduce your monthly benefit below $750. The share of consumers age 60 and older with outstanding student loan debt quadrupled from 2005 to 2015, to 2.8 million from about 700,000 people, according to a 2017 report from the Consumer Financial Protection Bureau. The share of all student loan borrowers who are age 60 and older went to 6.4% from 2.7% in that time, while the average amount owed grew to $23,500 from $12,100. Moreover, the number of Social Security recipients 65 and older who had their check reduced due to defaulted student loans increased by more than 500% between 2002 and 2015, according to a report from the Government Accountability Office.

Joshua Cohen, a consumer rights attorney who focuses on student loan law, said he counts older Americans among his clients who are seeking help for loans they’ve taken out both for themselves and others such as children or grandchildren. Some already are dealing with garnishments from their Social Security checks, while others fear they are in danger of reaching that point. “If you’re not experiencing it yet, you should look at how to maneuver yourself into an income-driven plan,” said Cohen, who is based in West Dover, Vermont. “If you’re already getting the [reduction], you should research how to get out of default and into a plan.” Income-driven repayment plans cap your monthly bill at a percentage of your income. Sometimes, that could mean a payment as low as $0. For any garnishment related to federal debt, you should receive notices that it’s going to happen. However, Cohen said, those notices may end not getting opened, or get delivered to an old address, or, perhaps, misunderstood by the recipient. In the end, though, you’re supposed to get at least a 30-day notice that the levy to your Social Security is going to start.

Other obligations

If you’ve fallen behind on child support or alimony (also known as spousal support), a judicial order could result in your Social Security benefits being garnished. Exactly how much could be withheld depends on the state you live in. It could be up to federal limit, which is 50% of your benefits if you are supporting another spouse or child. If you’re not in that situation, it’s 60%. And if you’re behind more than 12 weeks, up to 65% can be taken, Sherman said. It’s not an automatic event, though. “The parent of the child would have to go to the court and seek payment,” Sherman said. “Same thing for an ex-spouse and alimony.” Additionally, your payments could be reduced, by up to 25%, due to court-ordered restitution to a victim of a crime you were convicted of.

Once your benefits hit your account


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Seeing red? Why a falling stock market can help you save on taxes

wundervisuals | E+ | Getty ImagesIf you’re panicking over Wednesday’s market declines, here’s your silver lining: You might have a great opportunity to save on taxes. That’s because when you convert to a Roth, you pay income taxes in the present based on the amount converted from the traditional IRA. Second, there are the lower income tax rates that are now in effect due to the Tax Cuts and Jobs Act. This tax overhaul trimmed the individual income tax rates, so if you’re converting in 2018, you’


wundervisuals | E+ | Getty ImagesIf you’re panicking over Wednesday’s market declines, here’s your silver lining: You might have a great opportunity to save on taxes. That’s because when you convert to a Roth, you pay income taxes in the present based on the amount converted from the traditional IRA. Second, there are the lower income tax rates that are now in effect due to the Tax Cuts and Jobs Act. This tax overhaul trimmed the individual income tax rates, so if you’re converting in 2018, you’
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Seeing red? Why a falling stock market can help you save on taxes

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If you’re panicking over Wednesday’s market declines, here’s your silver lining: You might have a great opportunity to save on taxes. The Dow Jones Industrial Average plummeted by more than 600 points on Wednesday morning, amid news that the yield curve has inverted. In particular, yields are now higher on 2-year Treasury bonds compared to the 10-year Treasury. The development has stoked fears of an impending recession. There may be a bright spot for retirement savers, though — provided they don’t obsess over their shifting balances: If your traditional individual retirement account fell in value, it might be time to think about converting to a Roth IRA.

“The optimal time to convert is when valuations in your traditional accounts are lower,” said Suzanne Shier, chief tax strategist at Northern Trust. That’s because when you convert to a Roth, you pay income taxes in the present based on the amount converted from the traditional IRA. The tax bill will be lower if the value of the portfolio is down. Further, your Roth IRA will benefit from future tax-free growth and withdrawals in retirement. “If the market is tanking and you think it’s going to go back up, right now is the time to do it,” said Ed Slott, CPA and founder of Ed Slott and Co. “You have low tax rates and lower values.”

Two factors

There are two factors that might make a Roth conversion a good deal in the near term. First, there are the declining share values. This means you can transfer a greater portion of your IRA portfolio — more shares — to the Roth for potential tax-free growth and withdrawals in retirement. “Let’s say we were going to convert $50,000, now we can do it with a greater number of shares,” said David Oransky, a CPA and member of the American Institute of CPAs’ Personal Financial Planning Executive Committee. More from Personal Finance:

The IRS may seize your passport if you owe taxes

4 essential documents that could save your financial life

Why these people don’t mind overpaying the IRS “This is the CPA getting excited about the market dip,” he said. Second, there are the lower income tax rates that are now in effect due to the Tax Cuts and Jobs Act. This tax overhaul trimmed the individual income tax rates, so if you’re converting in 2018, you’re likely paying a lower income tax rate than you would have in previous years. See below for your 2019 bracket.

A permanent decision

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Before you break out the bubbly, know that this strategy isn’t necessarily for everyone. For instance, prior to the tax overhaul, financial planners and CPAs used to recommend Roth conversions early in the year. Investors would then see how their Roth accounts performed over subsequent months. If any of the converted accounts didn’t perform well, they might undo — or recharacterize — the transaction. The Tax Cuts and Jobs Act took that tool away, so any Roth conversions you do now are permanent. It’s something to bear in mind in the event you convert some of your savings now and the market tanks in 2019. “You can’t play both ends like you used to do,” Slott said. “There are no do-overs anymore.”

Income planning


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Here’s why Jeffrey Epstein likely paid little in the way of taxes

Jeffrey Epstein was worth an estimated $559 million, yet he may have paid little in the way of personal income taxes. According to reports, Epstein changed his residence to his Virgin Islands estate nearly a decade ago. Little St. James Island, one of the properties of financier Jeffrey Epstein, is seen in an aerial view near Charlotte Amalie, St. Thomas, U.S. Virgin Islands July 21, 2019. By comparison, New Yorkers are paying some of the heftiest state income taxes nationwide. The top income ta


Jeffrey Epstein was worth an estimated $559 million, yet he may have paid little in the way of personal income taxes. According to reports, Epstein changed his residence to his Virgin Islands estate nearly a decade ago. Little St. James Island, one of the properties of financier Jeffrey Epstein, is seen in an aerial view near Charlotte Amalie, St. Thomas, U.S. Virgin Islands July 21, 2019. By comparison, New Yorkers are paying some of the heftiest state income taxes nationwide. The top income ta
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Here's why Jeffrey Epstein likely paid little in the way of taxes

Jeffrey Epstein was worth an estimated $559 million, yet he may have paid little in the way of personal income taxes. The late financier, accused of sexually assaulting and trafficking girls as young as 14, had more than $179 million in assets from real estate, including a New Mexico ranch, a home in Palm Beach, Florida, a residence in Paris and a private island in the U.S. Virgin Islands — Little St. James. The Virgin Islands has its own system based on the tax laws and rates that apply in the U.S., according to the IRS, yet some tax-incentive programs there also make it possible for residents to reduce their federal income tax liability by as much as 90%. “Epstein, if he didn’t spend more than 183 days in the U.S., could take advantage of being a resident in the Virgin Islands and possibly reduced his tax liability,” said Timothy Speiss, a CPA and partner in the personal wealth advisors practice of EisnerAmper LLP. Claiming residency in a low- or no-tax jurisdiction typically means spending 183 days a year there for starters. According to reports, Epstein changed his residence to his Virgin Islands estate nearly a decade ago.

Little St. James Island, one of the properties of financier Jeffrey Epstein, is seen in an aerial view near Charlotte Amalie, St. Thomas, U.S. Virgin Islands July 21, 2019. Marco Bello | Reuters

If there’s one thing rich people like, it’s saving on taxes. More often, high-income residents in tax-heavy states such as New York and New Jersey consider moving to an income tax-free haven such as Florida for just that reason. Similarly, it takes six months and one day to establish residency in Florida, where there are also zero taxes on Social Security and retirement income. By comparison, New Yorkers are paying some of the heftiest state income taxes nationwide. The top income tax rate in New York is 8.82% and combined New York City and state taxes are about 12.7%. Over the last decade, the Sunshine State has been the most desirable destination by far for older Americans, as measured by average annual net migration for the 55-plus set, according to an analysis of Census Bureau data by William Frey, a demographer at the Brookings Institution. Tack on the new $10,000 cap on the state and local tax deduction on federal taxes, a feature of the Tax Cuts and Jobs Act, and it becomes only more attractive. For those at the very high end of the income spectrum, the tax savings can be in the millions, according to Mike Savage, a certified public accountant and chief executive officer of 1-800Accountant, which offers financial services to small business owners. However, New York is getting more aggressive about going after people it considers taxpaying residents, so skirting that tax bill is no easy feat. For one thing, income taxes make a significant contribution to states’ coffers. Nearly 40% of state tax collections come from levies on wages, according to the Tax Foundation. More from Personal Finance:

Five reasons why your high-tax state won’t let you move out

Retirees are flocking to these ‘hot’ spots

4 tips to prepare your finances for retirement abroad New York conducted about 3,000 “nonresidency” audits a year between 2010 and 2017, collecting around $1 billion, according to Monaeo, a company that sells an app for tracking and proving tax residency. To that end, state tax agents will look at all available records such as credit card charges, utility bills, property taxes, DMV records, voter registration and doctors visits. The onus is on the taxpayer to account for their whereabouts outside of New York, Savage said. “It’s guilty until proven innocent.” “You literally have to be outside of New York state for 183 days and prove it by taking a picture of yourself with a newspaper every day.”

In fact, states generally have two tests to determine your domicile, according to a member of the American Institute of CPAs’ personal financial planning executive committee. The first is an objective test, which is the number of days spent in one location. The second is a subjective test, which is how the facts line up: “Where is your daily life?” Cherill said. “If you have a golf club in the Hamptons, that says you are there a lot in the summer.” For those who want to legitimately relocate to Florida, or any tax-preferred state, Cherill advises clients to plan the move at least a year in advance. “The first thing is to come up with a proactive plan, map this out,” Cherill said. “Assess what you are willing to part with in the high-tax state,” he said — you don’t have to sell your home in your original home state but it helps to show you’ve made a commitment to leave. “Then keep records of where you are that line up with your credit card statement.” Also, systematically change everything over, from your driver’s license to your doctor, to reflect your new residence, he said. Subscribe to CNBC on YouTube.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: jessica dickler
Keywords: news, cnbc, companies, islands, jeffrey, according, paid, epstein, way, taxes, likely, state, york, personal, tax, virgin, little, income, heres, florida


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The IRS will waive this 2018 tax penalty for more than 400,000 filers

If you faced a surprise penalty for coming up short on your 2018 taxes, the IRS might be giving you some relief. On Wednesday, the IRS said it would automatically waive the tax underpayment penalty for more than 400,000 taxpayers who have already submitted their 2018 federal income tax return and failed to claim a special penalty waiver this spring. The waiver is only of the penalty; if you owed taxes, you must pay them. Normally, you must pay at least 90% of the income taxes you owe for a given


If you faced a surprise penalty for coming up short on your 2018 taxes, the IRS might be giving you some relief. On Wednesday, the IRS said it would automatically waive the tax underpayment penalty for more than 400,000 taxpayers who have already submitted their 2018 federal income tax return and failed to claim a special penalty waiver this spring. The waiver is only of the penalty; if you owed taxes, you must pay them. Normally, you must pay at least 90% of the income taxes you owe for a given
The IRS will waive this 2018 tax penalty for more than 400,000 filers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: darla mercado
Keywords: news, cnbc, companies, filers, 400000, waiver, taxpayers, income, underpayment, irs, waive, 2018, taxes, penalty, return, tax


The IRS will waive this 2018 tax penalty for more than 400,000 filers

If you faced a surprise penalty for coming up short on your 2018 taxes, the IRS might be giving you some relief.

On Wednesday, the IRS said it would automatically waive the tax underpayment penalty for more than 400,000 taxpayers who have already submitted their 2018 federal income tax return and failed to claim a special penalty waiver this spring.

The waiver is only of the penalty; if you owed taxes, you must pay them.

Normally, you must pay at least 90% of the income taxes you owe for a given year, or 100% of the tax liability from the prior year before you actually file, to avoid an underpayment penalty on your tax return. The threshold is 110% if your adjusted gross income on that year’s return exceeded $150,000.

More from Personal Finance:

Why women are less prepared for retirement than men

Consider this investment if you’re worried about losing money

These wealthy investors are trimming their stock holdings

The Tax Cuts and Jobs Act overhauled the tax code, slashing individual income tax rates, eliminating personal exemptions and roughly doubling the standard deduction. As a result, not all taxpayers were properly withheld for 2018.

To help taxpayers contend with these changes amid the 2018 filing season, the IRS lowered its 90% threshold to 85% in January and to 80% in March.

This change was only applicable for the 2018 tax year.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: darla mercado
Keywords: news, cnbc, companies, filers, 400000, waiver, taxpayers, income, underpayment, irs, waive, 2018, taxes, penalty, return, tax


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Saudi Aramco’s first-half net income falls 12% to $47 billion

An Aramco oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter, Saudi Arabia. Saudi Aramco, the world’s top oil producer, reported first-half net income of $46.9 billion on Monday, down from $53.02 billion a year earlier. By comparison, Apple Inc, the world’s most profitable listed company, made $31.5 billion in the first six months of its financial year. In its earnings report, Aramco partly attributed the decline in net income to a 4% fall in the


An Aramco oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter, Saudi Arabia. Saudi Aramco, the world’s top oil producer, reported first-half net income of $46.9 billion on Monday, down from $53.02 billion a year earlier. By comparison, Apple Inc, the world’s most profitable listed company, made $31.5 billion in the first six months of its financial year. In its earnings report, Aramco partly attributed the decline in net income to a 4% fall in the
Saudi Aramco’s first-half net income falls 12% to $47 billion Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: reuters with cnbccom
Keywords: news, cnbc, companies, saudi, income, company, 47, worlds, billion, 12, nasser, net, aramcos, firsthalf, aramco, crude, falls, oil


Saudi Aramco's first-half net income falls 12% to $47 billion

An Aramco oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter, Saudi Arabia.

Saudi Aramco, the world’s top oil producer, reported first-half net income of $46.9 billion on Monday, down from $53.02 billion a year earlier.

By comparison, Apple Inc, the world’s most profitable listed company, made $31.5 billion in the first six months of its financial year.

Aramco said total revenues including other income related to sales were at $163.88 billion in the first half of this year, down from $167.68 billion a year earlier, on lower oil prices and reduced production.

In its earnings report, Aramco partly attributed the decline in net income to a 4% fall in the average realized price of crude oil compared to the same period in 2018, from $69 to $66 per barrel.

Aramco President and CEO Amin Nasser said the company had continued to deliver on its “downstream growth strategy” through acquisitions both domestically and in international markets.

“These acquisitions are expected to enhance dedicated crude placement, increase refining and chemicals capacity, capture value from integration and diversify our operations,” Nasser said.


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: reuters with cnbccom
Keywords: news, cnbc, companies, saudi, income, company, 47, worlds, billion, 12, nasser, net, aramcos, firsthalf, aramco, crude, falls, oil


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Stanford analyzed 292 retirement strategies to determine the best one—here’s how it works

In 2017, the Stanford Center on Longevity analyzed 292 different retirement income strategies and determined the best way for most people to withdraw their savings. It’s called the “spend safely in retirement strategy” (SSiRS) and involves two basic components: delaying Social Security benefits and creating an “automatic retirement paycheck.” “No other retirement income generator has all of those positive features, so maximizing Social Security is a key part of this strategy.” The IRS requires y


In 2017, the Stanford Center on Longevity analyzed 292 different retirement income strategies and determined the best way for most people to withdraw their savings. It’s called the “spend safely in retirement strategy” (SSiRS) and involves two basic components: delaying Social Security benefits and creating an “automatic retirement paycheck.” “No other retirement income generator has all of those positive features, so maximizing Social Security is a key part of this strategy.” The IRS requires y
Stanford analyzed 292 retirement strategies to determine the best one—here’s how it works Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: kathleen elkins
Keywords: news, cnbc, companies, oneheres, stanford, analyzed, workers, 292, savings, retirement, security, works, fund, withdraw, strategies, income, report, social, determine, ssirs, best


Stanford analyzed 292 retirement strategies to determine the best one—here's how it works

In 2017, the Stanford Center on Longevity analyzed 292 different retirement income strategies and determined the best way for most people to withdraw their savings. It’s called the “spend safely in retirement strategy” (SSiRS) and involves two basic components: delaying Social Security benefits and creating an “automatic retirement paycheck.” In a new 2019 report, “Viability of the Spend Safely in Retirement Strategy,” the research team took a deeper dive into the SSiRS and explored different ways to implement it. The strategy is designed to be used by middle-income workers and retirees, which the report defines as those having $1 million or less in retirement savings. Here’s a closer look at how the two key components of the SSiRS work.

1. Delay Social Security payments until age 70

“Social Security will deliver the majority of retirement income for middle-income workers, even for workers currently in their 20s and 30s,” Steve Vernon, co-author of the report, tells CNBC Make It. It’ll be anywhere from 60-80% of their total income, he says. Social Security is “a nearly perfect retirement income generator,” he continues, because it protects against inflation, doesn’t go down if the stock market crashes, is paid automatically into your checking account and some of it isn’t subject to income taxes. “No other retirement income generator has all of those positive features, so maximizing Social Security is a key part of this strategy.” For younger workers, it’s likely that the benefits may be reduced by around 20% to 25% of where they are today. But it should still be a part of their retirement planning strategy.

The best way to optimize Social Security’s benefits is to delay receiving them until you turn 70, Vernon says, which means working longer in some way. If you want to retire before then, one option is to work part-time and make just enough to cover living expenses until 70, he suggests. If working part- or full-time until 70 is out of the question for you, the next best thing to do is to fund what’s called a “Social Security bridge payment,” which acts as a “retirement transition fund,” according to the report. To create this payment, withdraw the same amount you would have received from Social Security from your other retirement savings, such as a 401(k) or IRA, and keep it in a separate account. If your Social Security payment is $20,000 per year and you’re delaying it for five years, you’d set aside $100,000 to withdraw over those five years. However, the amount you decide to set aside in this fund is up to you: “Some workers might decide it should be a large enough amount to cover their estimated living expenses for a specified period, say two to five years,” the report says. “Another use for a retirement transition fund is to set aside enough savings to cover the amount of the Social Security benefit they plan to delay for as long as needed.” No matter the amount you choose to put in it, the purpose of the bridge payment is to delay Social Security payments for as long as possible. As for where to keep this money, “the retirement transition fund can be set up as a separate account in a worker’s IRA or 401(k) plan,” says Vernon. “Alternatively, retirees can use other investment accounts for this purpose. Since the investment horizon for the retirement transition fund is short, they could invest in stable, liquid investments, such as a short-term bond fund, money market fund or the 401(k) plan’s stable value fund, if it has such a fund.”

2. Create an “automatic retirement paycheck”

To supplement Social Security income, you want to generate consistent “paychecks” from your 401(k) and IRA accounts that will last the rest of your life. You’ll use these paychecks to pay for basic living expenses, such as housing, food and transportation. To do so, it’s important to withdraw the right amount from your savings each year so that you don’t run out. The IRS requires you to make minimum withdrawals from your retirement savings starting at age 70 ½, known as the required minimum distribution, or RMD. The SSiRS recommends simply withdrawing this amount. At 70 ½, the minimum is 3.65% of your savings, and the percentage increases every year. Many IRA and 401(k) administrators can calculate your RMD and pay it automatically in the frequency you want, so you will essentially be creating an automatic, and reliable, retirement paycheck. You don’t have to spend the money that you withdraw, the report adds: You “have the option to pay income taxes on these withdrawals and invest part or all of the after-tax proceeds.” That means if your RMD is more than you need to live on, you can put the extra money back into the market, ideally in a low-cost target date fund, balanced fund or stock index fund. While “there is no perfect retirement income strategy,” Vernon says, the SSiRS can “help virtually anybody generate a stream of income in retirement.” Read the full report, which also outlines possible refinements to the baseline SSiRS, here. Don’t miss: Sallie Krawcheck: Use this simple formula to figure out how much money you should save and spend Like this story? Subscribe to CNBC Make It on YouTube!


Company: cnbc, Activity: cnbc, Date: 2019-08-06  Authors: kathleen elkins
Keywords: news, cnbc, companies, oneheres, stanford, analyzed, workers, 292, savings, retirement, security, works, fund, withdraw, strategies, income, report, social, determine, ssirs, best


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Here’s how to get more college financial aid, without breaking the rules

As college costs explode, families are turning more desperate for financial aid. It was recently revealed that some parents took the extraordinary step of giving up legal guardianship of their children to someone else — often, a friend or relative— so their income and assets wouldn’t be calculated in their children’s need-based financial aid packages. The good news: There are plenty of above-board strategies to pick up more federal, state and university aid, Kantrowitz said. To start, financial


As college costs explode, families are turning more desperate for financial aid. It was recently revealed that some parents took the extraordinary step of giving up legal guardianship of their children to someone else — often, a friend or relative— so their income and assets wouldn’t be calculated in their children’s need-based financial aid packages. The good news: There are plenty of above-board strategies to pick up more federal, state and university aid, Kantrowitz said. To start, financial
Here’s how to get more college financial aid, without breaking the rules Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-02  Authors: annie nova
Keywords: news, cnbc, companies, college, income, kantrowitz, calculated, aid, federal, breaking, heres, try, assets, financial, rules, fafsa


Here's how to get more college financial aid, without breaking the rules

As college costs explode, families are turning more desperate for financial aid.

It was recently revealed that some parents took the extraordinary step of giving up legal guardianship of their children to someone else — often, a friend or relative— so their income and assets wouldn’t be calculated in their children’s need-based financial aid packages.

You shouldn’t do that.

“At best, this is unethical,” said Mark Kantrowitz, publisher of SavingForCollege.com. “At worst, these cases may involve fraud and perjury.”

The good news: There are plenty of above-board strategies to pick up more federal, state and university aid, Kantrowitz said.

To start, financial aid is calculated based on a family’s income for the year before last. So if you’re filling out the Fafsa, or Free Application for Federal Student Aid, for the 2020-2021 academic year this October — when the Fafsa season starts — it’s your income in 2018 that’s considered.

You should try to reduce your income while your child is applying for and attending college, Kantrowitz said.

“Avoid artificially increasing income, such as by realizing capital gains or by taking distributions from retirement plans,” he said.

Expecting a bonus at work? Try to defer it, he added.

You can also decrease your reportable assets by using any cash in the bank to pay down debt, such as auto loans and mortgages.


Company: cnbc, Activity: cnbc, Date: 2019-08-02  Authors: annie nova
Keywords: news, cnbc, companies, college, income, kantrowitz, calculated, aid, federal, breaking, heres, try, assets, financial, rules, fafsa


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