See today's press release here:
For more details on the law, click on the link below:
Single Point of View is our way to occasionally share planning ideas relating to personal finance. Our goal is to pass along concepts that you may not be exposed to on a daily basis.
May 18, 2015
Earned Sick Time Safe Harbor for Employers
July 1 is fast approaching for businesses impacted by the new Earned Sick Time Law. However, the Attorney General is issuing a safe harbor to afford some businesses until January 1, 2016 to come into full compliance. If you already provide employees with paid time off, this may be of use to you. If you have specific questions, we recommend speaking directly to legal counsel or professional human resource consultants.
May 14, 2015
Medicare Premiums to Increase for High Income Beneficiaries
New legislation that was recently passed, known as the "Doc Fix" also has provisions that will change the income tiers for Medicare premiums beginning in 2018 (based on your income from the 2016 tax year). While this is not the focus of the new law (Medicare Access and CHIP Reauthorization Act of 2015) it is one component of it that will impact higher income individuals and couples with Medicare Part B & D.
Last year we wrote a series of blog entries outlining Medicare. See the link below to the one highlighting Medicare premiums:
http://singlepointpartners.blogspot.com/2014/11/medicare-part-b-d-premiums-other-costs.html
If you are single and have a Modified Adjusted Gross Income (MAGI) of $107,000 or less, or, if married and your MAGI is $214,000 or less these changes will not effect you.
There are 5 income tiers for Medicare premiums (Part B & D). Each income tier comes with it a higher premium, with the base premium in Tier 1 being $104.90/mo.
Part B Premiums by Tier 2015
Tier 1 = $104.90
Tier 2 = $146.90
Tier 3 = $209.80
Tier 4 = $272.70
Tier 5 = $335.70
Tiers 4 and 5 are where the changes appear. Essentially, lowering the top end of these tiers which will push people into the higher premium tier faster.
As you can see, the highest tier of income pays $2,769.60 per year more in Medicare Part B premiums than Tier 1 ($335.70 vs. $104.90/mo).
Beginning in 2018, married couples will reach Tier 4 at $267,000 of MAGI, instead of $320,000 MAGI. So, if your MAGI is between $267k-$320k expect your Medicare premiums to be going up. For single filers it occurs at $133,500 instead of the current $160,000 mark.
Tier 5 is reached for married couples at $320,000 instead of the current level of $428,000. For single filers it occurs at $160,000 instead of $214,000 currently.
To us, the important take away is that these Medicare tiers are another factor to monitor in your cash flow and tax planning for those with Medicare. If you are right on the cusp of one of these tiers, it may be worth looking at some year end tax strategies that can help keep you in the lower premium income tier.
Last year we wrote a series of blog entries outlining Medicare. See the link below to the one highlighting Medicare premiums:
http://singlepointpartners.blogspot.com/2014/11/medicare-part-b-d-premiums-other-costs.html
If you are single and have a Modified Adjusted Gross Income (MAGI) of $107,000 or less, or, if married and your MAGI is $214,000 or less these changes will not effect you.
There are 5 income tiers for Medicare premiums (Part B & D). Each income tier comes with it a higher premium, with the base premium in Tier 1 being $104.90/mo.
Part B Premiums by Tier 2015
Tier 1 = $104.90
Tier 2 = $146.90
Tier 3 = $209.80
Tier 4 = $272.70
Tier 5 = $335.70
Tiers 4 and 5 are where the changes appear. Essentially, lowering the top end of these tiers which will push people into the higher premium tier faster.
As you can see, the highest tier of income pays $2,769.60 per year more in Medicare Part B premiums than Tier 1 ($335.70 vs. $104.90/mo).
Beginning in 2018, married couples will reach Tier 4 at $267,000 of MAGI, instead of $320,000 MAGI. So, if your MAGI is between $267k-$320k expect your Medicare premiums to be going up. For single filers it occurs at $133,500 instead of the current $160,000 mark.
Tier 5 is reached for married couples at $320,000 instead of the current level of $428,000. For single filers it occurs at $160,000 instead of $214,000 currently.
To us, the important take away is that these Medicare tiers are another factor to monitor in your cash flow and tax planning for those with Medicare. If you are right on the cusp of one of these tiers, it may be worth looking at some year end tax strategies that can help keep you in the lower premium income tier.
March 25, 2015
How Budget Proposals Could Impact Your Estate Planning
President Obama’s recently published FY2016 budget includes several tax proposals which, if enacted, would significantly affect the estate planning landscape.
Our friends at Pabian & Russell, LLC, a respected Boston law firm practicing in the areas of Elder Law, Corporate Law, Estate Planning and Taxation, have written a great overview of these proposed changes and the impact they could have on your estate planning. Instead of trying to recreate this, we thought it would be best to share the link to the blog post directly from the experts.
http://www.pabianrussell.com/Estate-Planning-Blog/obama-tax-proposals
Our friends at Pabian & Russell, LLC, a respected Boston law firm practicing in the areas of Elder Law, Corporate Law, Estate Planning and Taxation, have written a great overview of these proposed changes and the impact they could have on your estate planning. Instead of trying to recreate this, we thought it would be best to share the link to the blog post directly from the experts.
http://www.pabianrussell.com/Estate-Planning-Blog/obama-tax-proposals
February 15, 2015
Save On Your Electric Bill
It's Sunday, which means another snow storm in Eastern Massachusetts. As I listen to our apartment's forced hot air fan turn on again, I can't help but think about my electric bill. Last month, we were victims of, "yes I know rates are going up, but really, how much could it impact us?" Well, it did. Combine the winter weather we have had in Boston with increases in electricity costs and you can get shockingly high electric bills.
Since the major electric distributor in our area is Nstar (now Eversource) and much of our experience is in dealing with Nstar, we will focus on working with them.
In November, NStar released new rates, up almost 30%. (see the Boston Globe article below)
http://www.bostonglobe.com/business/2014/11/07/nstar-raise-electric-rates-percent/pAFfYV5SjYJQHr1ISJPQkN/story.html
Besides cutting back on your use or putting solar panels on your roof, you have another option to change your supplier. By default, your distributor also becomes your supplier, but you have choices. You can go online or call the suppliers directly to get price options. At home we changed to ConEdison and at the office we switched to Think Energy. This is translating into significant savings.
For those of you with Eversource (NStar), here is a link of suppliers to get you started.
https://www.eversource.com/NSTAR/CustomerCare/residential/CompetitiveSupplierAdmin/CompetitiveSuppliersDisplay
To find out if this is relevent to you, your recent electric bill can serve as a good starting point. Your charges are broken down into 2 main components: delivery services and supplier services. Under your supplier services, it shows your cost per kwh. If this number is above .10, it may be worth looking into this further.
January 29, 2015
Medicare & HSAs
A quick note about the impact of filing for Medicare on HSA plans. If you are still working past 65, and are enrolled in an HSA plan through your health insurance plan, you want to be careful about your selections for Medicare.
Enrolling in any part of Medicare, including enrolling only in Part A, makes you ineligible to contribute to an HSA plan going forward. If the HSA is a big part of your health insurance strategy during these years, you want to be careful about the impact of applying for Medicare.
Remember, when you apply for Social Security Retirement benefits you are automatically enrolled in Part A of Medicare. So, if you are still working past 65, and have an HSA plan, it is another reason to consider delaying your application for social security retirement benefits.
Enrolling in any part of Medicare, including enrolling only in Part A, makes you ineligible to contribute to an HSA plan going forward. If the HSA is a big part of your health insurance strategy during these years, you want to be careful about the impact of applying for Medicare.
Remember, when you apply for Social Security Retirement benefits you are automatically enrolled in Part A of Medicare. So, if you are still working past 65, and have an HSA plan, it is another reason to consider delaying your application for social security retirement benefits.
December 24, 2014
Retirement Plan and HSA Limit Increases for 2015
The numbers were released back in October, but the first week of January is the time where many folks increase their automatic deferrals into 401k plans and other tax favorable accounts. With that said,we thought it would be timely to remind everyone of the increase in limits for 2015. Below is a brief summary of the most common accounts we see. You can visit the IRS for more details (links at the bottom of this post).
401K
Annual deferral limit increases from $17,500 to $18,000. The catch-up increases from $5,500 to $6,000
IRA
The limits went unchanged at $5,500 and $1,000 for catch-up contributions
SIMPLE IRA
The maximum contributions increased from $12,000 t0 $12,500 and the catch-up contribution increased from $2,500 to $3,000
SEP IRA
The maximum contribution increased from $52,000 to $53,000
HSA (Health Savings Account)
For self only coverage, the contribution limit is $3,350 and for families it is $6,650. This is up from $3,300 and $6,550 respectively. For those over age 55, there is an additional allowance of $1,000
Click here for a link directly to the IRS publication regarding qualified plan contributions.
Click here for a link directly to the IRS publication regarding HSA contributions.
401K
Annual deferral limit increases from $17,500 to $18,000. The catch-up increases from $5,500 to $6,000
IRA
The limits went unchanged at $5,500 and $1,000 for catch-up contributions
SIMPLE IRA
The maximum contributions increased from $12,000 t0 $12,500 and the catch-up contribution increased from $2,500 to $3,000
SEP IRA
The maximum contribution increased from $52,000 to $53,000
HSA (Health Savings Account)
For self only coverage, the contribution limit is $3,350 and for families it is $6,650. This is up from $3,300 and $6,550 respectively. For those over age 55, there is an additional allowance of $1,000
Click here for a link directly to the IRS publication regarding qualified plan contributions.
Click here for a link directly to the IRS publication regarding HSA contributions.
December 19, 2014
Year End Tax Planning
Looking for some opportunities to do some year end tax planning? Below is a link to 2 great lists from Samet & Co., a CPA firm in the Boston area. This is one of the best lists we've seen this year outlining strategies for actions you can take before year end. One for individuals and one for businesses.
Considering a Roth Conversion in lower income years.
Making gifts to charity - specifically gifts of low basis stock.
Realizing gains or losses on investments
Considering a Roth Conversion in lower income years.
Making gifts to charity - specifically gifts of low basis stock.
Realizing gains or losses on investments
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