Archive - February 2016

1
New Deemed Filing Rules
2
How Roth Conversions Are Reported to the IRS
3
Managing Your Financial Life Well: Things to Do and Things to Avoid
4
Investing Mistake: Forgetting About Inflation
5
Thrift Savings Plan Highlights

New Deemed Filing Rules

When the Bipartisan Budget Act of 2015 was passed, there were a few changes made to Social Security rules. One of the rules that changed significantly is the deemed filing rule.

The old deemed filing rule

The current or old deemed filing rule works as follows:

When an individual who is under Full Retirement Age (FRA) is eligible for a spousal benefit in addition to a benefit based upon his or her own record files for either benefit, he or she is deemed to have filed for all benefits that he or she is eligible for at that time.

At …

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How Roth Conversions Are Reported to the IRS

The Internal Revenue Service (IRS) is notorious for misunderstanding the recharacterizations of Roth conversions. After misunderstanding, they send a scary CP2000 form called “IRS Notice of Proposed Adjustment for Underpayment / Overpayment” and require the taxpayer to either send justification of their filing or pay significantly more in taxes and interest.

Their misunderstanding largely comes from the lack of a good means of reporting Roth conversions and recharacterizations. The two forms the IRS has created – 1099R and 5498 – are neither sufficient to file your taxes correctly nor adequate for the IRS to follow what has happened.…

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Managing Your Financial Life Well: Things to Do and Things to Avoid

by Eve Kaplan, CFP(R) Professional

It’s easy to feel overwhelmed by all the things you need to do to manage your life well – be it exercise, meditation, diet or making smart financial decisions. When confusion reigns, you may end up focusing on the trees instead of the “big-picture” forest.  How can you manage your financial life well?

To shed light on this subject, I’ll be giving a free talk on Monday April 25  (7:30-8:45 pm) at the Bernards Township Library, 32 South Maple Avenue, Basking Ridge NJ. (For RSVP info, see the bottom of this article).

Here’s a sneak …

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Investing Mistake: Forgetting About Inflation

One of the most common financial mistakes is to forget about inflation.

My grandmother, Florence Mortlock, was born in 1904. At the time, you could buy a dozen eggs for a quarter and a week’s worth of groceries for a few dollars.

Had you told her that she would need hundreds of thousands of dollars in order to fund her retirement, she would not have believed you. She would have thought that if she managed to save $5,000 it would be a princely sum of money.

Price of milk

And yet, by the time she died in 2004 at age ninety nine …

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Thrift Savings Plan Highlights

Normally, I write all of my blog posts, based upon research that I’ve personally done.  However, last week I received a letter from TSP’s Executive Director, Greg Long.  It accompanied the TSP year-end statement, and is normally the type of document most people throw away with junk mail.  However, I actually read it.  Moreover, I liked what I read, specifically the Myth/Answer section.  In case you missed the letter (or threw it away, like I used to do), I’ve recapped the Myth/Answers below for your benefit.  Keep in mind, this isn’t the entire letter, and I’m not sure where you …

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