Life Insurance for More Than Just Cash Flow

  Many people think of life insurance as a product for family protection. The life of one or two breadwinners is insured; in case of an untimely death, the insurance payout can help with raising children and maintaining the current lifestyle. Once the children are able to live independently and a surviving spouse is financially secure, insurance coverage may be dropped. Such a strategy uses life insurance as a hedge against the risk of lost income when that cash flow is vital. This type of…

High-Tax States Consider SALT Countermoves

Taxpayers who itemize deductions on Schedule A of their tax return have been able to deduct outlays for state and local income tax, as well as property tax with no upper limit. (State and local sales tax may be deducted instead of income tax.) However, as of 2018, the Tax Cuts and Jobs Act of 2017 provides that no more than $10,000 of these state and local tax (SALT) expenses can be deducted on single or joint tax returns ($5,000 for married individuals filing separately).…

Work: Educational Fringe Benefits Are Still Possible

As reported previously, the Tax Cuts and Jobs Act of 2017 dramatically reduced taxpayers’ ability to itemize deductions. Among the tax deduction opportunities that have vanished, from 2018–2025, are miscellaneous itemized deductions that exceed two percent of the taxpayer’s gross income. Such deductions included unreimbursed employee business expenses. Drilling down, those no-longer-deductible employee expenses included education outlays that were related to someone’s work at your company. Example 1: Heidi Larson is a supervisor at ABC Corp., where she is responsible for a small group of…

Forever G.I. Bill Extends Benefits to Family Members

When you think of the G.I. Bill, you probably recall reading about a program designed to help military veterans receive college educations after they left the armed forces following World War II. Somewhat less known is that the G.I. Bill has endured, in various forms, until present times. Last year, the Harry W. Colmery Veterans Education Assistance Act of 2017 became law, named for the American Legion member who wrote the initial G.I. Bill. The latest version is known as the “Forever G.I. Bill” because…

529 Plans for Elementary and Secondary Education

For many years, 529 college savings plans have offered a tax-favored way to save for higher education. These plans, officially qualified tuition programs, are named for the IRC section that provides their advantages. In brief, 529 plans are funded with after-tax dollars. In college savings plans, account owners choose from a menu of investments, and any earnings are untaxed. Distributions are also tax-free if they do not exceed the qualifying educational expenses of the account beneficiary: payments of tuition, fees, supplies, and certain housing expenses…