Personal Finance and Tax Tips

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Designating Term Life Insurance Beneficiaries ?

by Donn J. Sinclair  – Charlotte NC – April 5, 2018

You select beneficiaries to receive the insurance proceeds of your term life insurance policy should you die during the term period. Normally you designate beneficiaries on your insurance application, and you also normally retain the right to update that designation as you desire. Designating and keeping current your term life insurance beneficiary designations provides you the final say in whom receives your insurance proceeds. Please note that your insurance carrier and state may have limitations on your beneficiary designations with special considerations for spouses and minors.

Choosing your term life insurance beneficiaries is a very personal decision that provides for and protects your loved ones in the event of your death. Will your family need the proceeds to cover the monthly mortgage payments; and other ongoing bills that must still be made even without your ongoing income ? If you and your spouse will or are collecting Social Security, then might that be lost future income the surviving spouse might need ? Might there be extra final expenses and unpaid medical bills ? These are just several personal questions to keep in mind when choosing your term life insurance beneficiaries.

You may also designate beneficiaries as part of a financial transaction; such as, covering risks for surviving business partners in the event of a partners’ death. Also covering a business loan in the event of your death.

Regardless of whether for personal or business reasons you designate beneficiaries; you may designate one, two, or more people as those beneficiaries. You may also establish and designate a trust as your beneficiary. The named trustees will administer the proceeds as instructed by the trust. Plus you may name charities, and or your estate as beneficiaries of your term life insurance policy.

Next you should consider whom should be your primary, secondary, or successive beneficiaries. Primary beneficiaries are the first in line to receive your term life insurance beneficial proceeds. Should one more of your primary beneficiaries predecease you, then secondary or contingent beneficiaries would be next in line to receive the insurance proceeds. Should your designated primary and secondary beneficiaries predecease you, then your successive or tertiary beneficiaries may be in line to receive your term life insurance proceeds.

Several final items to keep in mind that there may be state insurance and or insurance carrier restrictions on your beneficiary designations. Review and update if necessary your term life insurance beneficiary designations. You may be required to have your spouse sign a waiver if your spouse is not named as a or the primary beneficiary. Also you might want to name a final beneficiary for you insurance proceeds. While one cannot foresee all future outcomes, some thoughtful planning will help insure that your term life insurance proceeds are received in the amount and by those you intended.

 

Donn J. Sinclair, MBA (803)329-0609
Charlotte NC, Rock Hill SC, and Charleston SC
April 5, 2018

 

Donn J. Sinclair, MBA is SC insurance licensed in CT, GA, IL, NC, SC, and VA (NIPR #125783). SC Real Estate License #76530, and NRDS #554027312.. @Sinclair Financial Solutions is independently owned and operated. Securities offered through Fortune Financial Services, Inc, Member FINRA/SIPC.

 

 

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Considerations for Charitable Deductions

by Kristin P. Sinclair – A Accu Tax – March 22, 2018

If you donated money or items to a charity in 2017, then you may be able to claim a deduction on your federal tax return. You should consider the following about charitable deductions.

A.) Qualified Charities: You must donate to a qualified charity. Gifts to individuals, political organizations or candidates are not deductible.

B.) Itemize Deductions: To deduct charitable contributions normally you must itemize deductions on Schedule A of your form 1040.

C.) Return Value: When you receive a thank you gift or most any item of value in return for your donation, then you must reduce your charitable deduction by the return value you received. Examples of return value include merchandise, meals, tickets to
events or other goods and services.

D.) Donation Type: When you donate property instead of cash, then your tax deduction amount is normally limited to the item’s fair market value. Fair market value is generally the price you should expect if the property is sold by the charity. When you donate used clothing and household items, those items generally must be in good or better condition. Special rules apply to cars, boats and other types of property donations.

E.) Noncash Charitable Contributions: Use form 8283 for all noncash gifts totaling more than $500 for the year. Complete section-A for noncash property contributions worth $5,000 or less. Complete section-B for noncash property contributions more than $5,000 and include a qualified appraisal to the return. See IRS publication 526 for more details.

F.) Donations of $250 or More: When you donate cash or goods of $250 or more, then you must have a written statement from the charity. The statement must show the amount of the donation and a description of any property given. It must also say whether you received any goods or services in exchange for the gift.

Cash contributions are by cash, check EFT, debit card, credit card, and payroll deduction.

G.) Records: You should normally plan to keep a copy of your tax return and the supporting documents for at least 7 years. More details at www.IRS.gov.

H.) Tax Year 2018: Please note that Tax Year 2018 brings significant changes to the charitable deductions. With the higher standard deduction, many of us may no longer benefit by itemizing on Schedule A. Thus many of us may lose the tax benefits of charitable contributions.

A charitable contribution option that remains is to direct transfer an IRA up to $100,000 per year to a qualified charity. This contribution never hits your Adjusted Gross Income and you should not pay taxes on this gift. This IRA strategy is available to most that reach age 70.5 in 2018.

A second option is to group or bunch your charitable contributions every second or third year; as opposed to making smaller contributions every year. In the years you make charitable contributions you benefit from itemizing; and in the intervening years when you take the standard deduction.

 

Updated by Kristin P. Sinclair: A Accu Tax

in Charlotte NC and Rock Hill SC

March 22, 2018   (803)329-0609

KPS: More information is available at IRS.gov.

See Publication 590-A and Publication 590-B.

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What are Home Health Care and Long-Term Care?

By Donn J. Sinclair, MBA  –  February 15, 2018

Long-term care is the type of assistance people need to perform activities of daily living which include eating, bathing, continence, dressing, toileting and transferring. Long-term care needs typically arise as part of the normal aging process, but can also be due to an injury or illness, such as multiple sclerosis, stroke, rheumatoid arthritis, or due to a cognitive impairment, such as Alzheimer’s disease.

What is home Health Care ?

Home Health Care is a wide range of health care services that can be given in your home for an illness or injury. Home Health Care is can be less expensive, more convenient, and just as effective as care you get in a hospital or skilled nursing facility (SNF).

Examples of skilled home health services include:

  • Wound care for pressure sores or a surgical wound
  • Patient and care giver education
  • Intravenous or nutrition therapy
  • Injections
  • Monitoring serious illness and unstable health status

The goal of Home Health Care is to treat an illness or injury. Home Health Care helps you get better, regain your independence, and become as self-sufficient as possible.

Who Needs Long-Term Care ?

The U.S. Department of Health and Human Services (HHS) estimates that 70% of people turning 65 can expect to need some form of Long-Term Care in their lifetime. On average, women outlive men by five years. If you outlive your spouse and live alone you are far more likely to need paid care. That helps explain why over 60% of Home Health Care users are women, and over 75% of assisted living residents are women !

Where Can You Receive Long-Term Care ?

Settings include adult daycares, assisted living centers, board and care homes, continuing care retirement communities, and skilled nursing facilities. However, most Long-Term Care is provided at home where we feel most safe and close to those we love. Home Health Care promotes the individuals’ independence and ability to continue with their normal daily routine. The goal of Home Health Care is to provide high level care at a cost considerably less than other settings. More information on Long-Term Care settings and costs is available at www.LongTermCare.gov.

Home Health Care Insurance and/or Long Term Care Insurance

Can give you added peace of mind today, by helping you pay for expenses that you may incur tomorrow. For more information phone Donn or Kristin at (803)329-0609. 

Updated by Donn J. Sinclair, Winthrop MBA
in Charlotte NC and Rock Hill SC
February 15, 2018     (803)329-0615
DJS: More information is available at Medicare.gov.
See Publication 590-A and Publication 590-B.

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Capital Gains and Losses – Things to Know !

by Kristin P. Sinclair  – A Accu Tax  – February 15, 2018

Normally when you sell a capital asset it results in a capital gain or capital loss. A capital asset includes most property you own for personal use, or that you own as an investment. The following are a few things the IRS suggests you know so that you can better understand your capital gains and losses:

• Capital Assets include property such as your home or car; as well as investment property, which might include real estate precious jewelry, mutual funds, or stocks and bonds.

• Gains and Losses are the difference between your cost basis and the amount you receive when you sell an asset. Normally your cost basis is what you paid for your capital asset plus any improvement costs.

• Net Investment Income Tax Applies to certain net investment income for individuals, estates, and trusts at a rate of 3.8% for those with income above the statutory thresholds.

• Deductible Losses may apply to capital losses on the sale of investment property. You cannot deduct losses on the sale of capital assets that you hold for personal use.

• Limit on Losses apply to your capital losses if the losses are more than your capital gains for that same tax year. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

• Carryover Losses are normally permitted for those losses that exceed your total net capital loss in any one tax year. You should be able to carry that excess loss over to the next year’s tax return.

• Long and Short Term capital gains and losses are treated as either long-term or short-term. Your length of ownership of the capital asset determines long or short. If you held the capital asset for one year or less, the gain or loss is short-term. Otherwise, it is a long-term capital gain or loss.

• Net Capital Gain occurs when your long-term gains are more than your long-term losses. That difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.

• Tax Rate on a net capital gain usually depends on your income. Your maximum tax rate on a net capital gain is 20 percent. Please note that for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gains.

There’s still may be time to review your 2017 and 2018 capital gain or loss scenario. Please phone Kristin today at (803)329-0615 and see how she might help you with your 2017 tax return.

Updated by Kristin P. Sinclair: A Accu Tax
in Charlotte NC and Rock Hill SC
February 15, 2018   (803)329-0609

KPS: More information is available at IRS.gov.
See Publication 590-A and Publication 590-B.

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What is a Fixed Annuity ?

by Donn J. Sinclair, MBA – February 1, 2018

Insurance Professional Donn SinclairFixed annuities are essentially fixed rate accounts issued by insurance companies. These accounts pay a guaranteed rate of interest for one or more specified term periods.

Fixed annuities can be deferred or immediate. The deferred variety accumulate regular rates of interest and the immediate kind make fixed payments – determined by your age and size of your annuity – often during retirement.

The convenience and predictability of a set payout makes a fixed annuity a popular option for retirees who want a known income stream to supplement their other retirement income.

What are It’s Advantages ?

Fixed annuities pay guaranteed rates of interest, which makes them appealing to investors wary of the stock market’s ups and downs. What also makes them appealing are their low investment minimums – usually $1,000 to $10,000 – and the fact that the interest they pay defers taxation until withdrawn from the fixed annuity. Also note that fixed deferred annuities are not necessarily a lifetime commitment. Some are available that can be redeemed in as little as one year !

What are its Disadvantages ?

Their rates can also be fixed for a limited period, and then drop say, after the first year. If you don’t like the new rates and want to withdraw your money early, heavy surrender charges could kick in and cut into your returns.

Plus, if you decide to opt for fixed lifetime payments, those payments most likely will not rise to keep pace with inflation. As a result, the value of the money you receive will decline over time as inflation erodes the purchasing power of each dollar. So for example, if you retire young and plan to keep collecting annuity payments for a longer period of time, the purchasing power of your money could be a big concern.

How do I Know if a Fixed Annuity is Right for Me ?

If you’re worried about coming up short, a fixed annuity can help you sleep at night. Because of their stability, fixed annuities might be well suited to those who want to make sure their money will be enough to carry them through retirement, and at least cover the bare minimum of fixed expenses. Please phone Donn today so we can review current rates and see if a fixed rate annuity may be right for you.

 

Updated by Donn J. Sinclair, MBA

in Charlotte NC and Rock Hill SC

January 25, 2018   (803)329-0609

DJS: More information is available at IRS.gov.

See Publication 590-A and Publication 590-B.

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Showcasing Your Home to Sell

by Donn J. Sinclair, MBA – January 4, 2018

Curb to Door Appeal:

Your home’s first impression should entice and appeal to buyers as they pull up to your home. The roof and gutters should be free of any visible leaves and debris. You might hose down the outside and use a soft brush or sponge mop to clean hard to reach windows and frames. Thoroughly clean the front entryway: including windows, the door, and door frame. Do your window and door frames need a quick coat of paint ? Fertilize your lawn early and trim back shrubs and trees to make your home appear larger. Accentuate the grounds with colorful plants and flowers in freshly mulched areas.

ira finance house

Set the Stage in Your Rooms:

Buyers want and need to imagine that your home should be their home. Start in your home’s main living area and thoroughly clean and de-clutter. This is the best time to pack up your family photos, trophies, posters, etcetera. Maximize your floor and visual space when you clear high traffic areas of excess furnishings. These steps visually expand and brighten your home to allow prospects more space and light to visualize their furnishings in your home. Now clean and clear your way through the rest of your home to make it all sparkle and shine.

Repair and Maintenance:

Most buyers are not looking for a fixer-upper. Rather buyers want to close on their loan and move in with their stuff. From light bulbs to the sink disposal everything that should work – must work. Your buyer should be visualizing enjoying themselves in your home – not making a to do list. Send a positive message that your home has been well maintained. First tackle the least expensive and easiest repairs to whittle down your list. Know your limits and acquire or hire help for those projects beyond your abilities. Remember this is repair and maintenance – not remodel and renovate.

Trash or Treasure:

Cabinets, closets, drawers, built-in shelves, attics, basements, and garages all feel larger and sell faster with less stuff. The fastest, easiest, and nearly painless way to de-clutter is to sort to four areas: move, maybe move, donate, and trash. Trash the trash and don’t look back. Place the donated items in your vehicle and immediately donate these items. Pack both the move and maybe move items and make your final decisions at your new home. Keep your garage, basement, or attic large and open – store your packed items off site with a family member, trusted friend, or at a self-storage facility.

Updated in Rock Hill SC and Charlotte NC

by Donn J. Sinclair, MBA (803)329-0609

January 4, 2018

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Social Security Retirement Estimator

by Kristin P. Sinclair – A Accu Tax – April 4, 2018

The Social Security Retirement Estimator provides you estimates based upon your Social Security earnings record. Please note that these are estimates and not a guarantee of benefits to be paid. The Social Security Administration will provide you with your actual benefit amount when you apply for benefits.

That amount may differ from the estimates for several reasons:

• Your future earnings may increase or decrease from today’s estimate.
• Benefits most likely will be adjusted for cost-of-living increases.
• Today’s estimated benefits are based on current law, and do not account for any future changes in the law. There are concerns about benefits to be paid after 2034. • Military service, railroad employment, or pensions earned through work on which you did not pay Social Security tax may affect your future benefits.

When Can Use the Retirement Estimator

retirement how to retire

When you have enough Social Security credits to qualify for benefits, and when you are not currently receiving benefits on your own Social Security record. You must also not be waiting for a decision about your Social Security benefits application for benefits or Medicare benefits. Also you should not use the Social Security Estimator if you are age 62 or older and receiving benefits on another Social Security record; or if you are eligible for a pension based on employment not covered by Social Security.

Please note that when you are receiving only Medicare benefits, then you can still get an estimate. For more information please read: Retirement Information For Medicare Beneficiaries at SSA.gov.

The Social Security Retirement Estimator Link is: https://secure.ssa.gov/acu/ACU_KBA/main.jsp?URL=/apps8z/ARPI/main.jsp?locale=en&LVL=4

Updated in Rock Hill SC and Charlotte NC
by Kristin P. Sinclair December 10, 2017
(803)329-0615

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What is Term Life Insurance?

by Donn J. Sinclair, MBA – February 9, 2018

This is the most basic form of life insurance, and term life insurance is normally the best value for your life insurance dollar. Term life insurance provides life insurance coverage for a specific period of time or term.   This term period can be a 1-year term, 5-year term, and as long as a 30-year term.
term life insurance

The policy owner pays a premium normally monthly, quarterly, semi-annually, or annually. As long as the premium is paid on time, then the life insurance policy is in effect until at least the end of the term.

The term life insurance period selected should be long enough to provide life insurance coverage for the years when the insurance proceeds would be needed to replace money or income lost due to the insured’s death. If the insured(s) dies during the term life insurance period, then the insurance amount or beneficial proceeds are paid to the beneficiaries. After the term period expires, if the term life insurance was not extended, then there is no longer any insurance, and no beneficial proceeds to be paid. Most term life insurance policies have maximum issue ages. If you are in your sixties or early seventies, then plan ahead with a term life insurance period to match or exceed your insurance needs.

There are three basic types of term life insurance. Annual renewable term insurance premium rise as you age; however, these policies normally have the lowest early year premiums. These policies are best suited to provide a large amount of insurance coverage at low premiums in the early years; with the expectation that you will have increased income or lower other expenses in the years ahead. Another consideration is that you purchase a 20-year annual renewable term life insurance policy, expecting to need the coverage for less than the full term. Should the insurance need continue longer than expected, then you still have coverage years remaining.

The second type is level premium term life insurance. Here both the insurance amount and the premium are locked in for the life of the term life insurance period. You have the peace of mind of the term life insurance and guaranteed not to rise premiums.

The third type is decreasing term life insurance. This type is quite popular for providing mortgage protection for a surviving spouse. The premiums stay level, and the insurance amount decreases to reflect a decreasing mortgage balance. If the insured dies during the term life insurance period, then the beneficiary receives insurance proceeds which should be sufficient to payoff the mortgage balance.

Decreasing term life insurance may also be beneficial for those with no mortgage, yet child(ren) responsibilities. As children grow and the accompanying financial responsibility decreases, the term life insurance coverage decreases to reflect lower financial responsibilities.

Donn J. Sinclair, MBA (803)329-0609
Charlotte NC/Rock Hill SC and Charleston SC
April 26, 2018


Donn J. Sinclair, MBA is SC insurance licensed in CT, GA, IL, NC, SC, and VA (NIPR #125783). SC Real Estate License #76530, and NRDS #554027312.. @Sinclair Financial Solutions is independently owned and operated. Securities offered through Fortune Financial Services, Inc, Member FINRA/SIPC.

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11 Questions for Home Health Care Providers

by Donn J. Sinclair, MBA – March 15, 2018

When recovering from an injury or illness, your Medicare coverage and your Medigap or Medicare Supplement may pay some of the Home Health Care costs that you incur. When selecting a home care agency for you or a loved one, there are important questions to ask when interviewing home health care agencies.

  1. Private duty home care – what year did the agency first offer that service ?
  2. State licenses – are the agency staff and home health care agency properly licensed in your state ? More specifically, properly licensed to provide care level your physician ordered ?
  3. Which home health care agency staff member coordinates with the patient’s physician to implement the physician developed plan of care ? The plan is evaluated and updated by the agency on what schedule ?
  4. What daily notes are maintained to monitor the progress of the patient ?
  5. Who and how is quality of care supervised and updated ? How frequent are unscheduled agency supervisory visits on the agency staff ?
  6. What are the home health care agency ongoing training mandates for their caregivers ? Who supervises the training ?
  7. How and by whom are after normal business hour emergencies handled ?
  8. Does the home health care agency have on staff nurses, social workers, physical therapists, and other qualified professionals available to provide needed in home care ? If not, with which providers does the home health care agency have an established working relationship ?
  9. How do you obtain a written copy of the home health care agency’s privacy policy, ethics code, and mission statement ?
  10. What screening techniques are used to screen caregivers ? Do these include reference checks, driving records, credit checks, and criminal background investigations ?
  11. Are the home health care agency caregivers W-2 employees or W-9 subcontractors ? Are there any home health care agency incidents of failure to file payroll tax reports, or incidents where the agency failed to pay taxes on a timely basis ?

When it comes to selecting a home health care agency, you should follow the Boy Scouts motto “Be Prepared”. Make certain that you and your loved ones get the care they require and deserve. Also make certain that Medicare and your Medicare Supplement pay as they should for the care received.

 

Donn J. Sinclair, Winthrop MBA

in Charlotte NC and Charleston SC

December 5, 2017   (803)329-0609

DJS: More information is available at Medicare.gov

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