In Announcement 2014-15, the IRS stated that it will not change its historical stance that the one 60-day rollover per year rule applies on an IRA-by-IRA basis (instead of on a taxpayer basis) until January 1, 2015. Recently, in Bobrow v. Commissioner, T.C. Memo. 2014-21, the U.S. Tax Court ruled that the rule applies on a taxpayer basis, such that only one 60-day rollover can be completed by ...
28
Apr 2014
IRS Position on One IRA Rollover Per Year Rule
April 28, 2014 By
18
Apr 2014
Average Retiree Health Care Costs Consumed by Social Security
April 18, 2014 By
I read an Investment News article dated April 17, 2014 that provides: "Retirement health care costs will increase from 69% of Social Security benefits for a couple retiring next year to 98% of Social Security benefits for a healthy couple retiring 10 years from now, according to the [Retirement Health Care Cost] index." So, the entitlements/health care plot gets even more murky. Clearly, ...
11
Apr 2014
Along with Jonathan Godbey, I recently self-published “Why Work? How the Federal Entitlements and Tax Systems Equalize Income and Wealth.” It can be purchased on Amazon for $7.99. The jacket is provided below. The book explains all of the major federal entitlements and also explains how making more money can reduce a person’s standard of living (because of loss of entitlements and ...
23
Dec 2013
U.S. Supreme Court Permits Three Year Statute of Limitations in ERISA Plan
December 23, 2013 By
Recently, the U.S. Supreme Court ruled in Heimeshoff v. Hartford Life & Accident Insurance Co. that a disability plan's three year statute of limitations was lawful. The plan's statute of limitations began to run when a proof of loss was due. Thus, the administrative review would take place after the proof of loss was due, meaning a claim that took a long time to consider might foreclose ...
25
Nov 2013
Tax Court Rules on ROBS Transaction
November 25, 2013 By
In late October, the U.S. Tax Court decided an important case with respect to self-directed IRAs. In Ellis v. Commissioner, T.C. Memo. 2013-245, the U.S. Tax Court ruled that a “ROBS” transaction (i.e., rollover as business start-up) resulted in a prohibited transaction (PT) when the newly formed business (an LLC that elected to be treated as a C corporation for income tax purposes) paid ...
19
Nov 2013
Does the U.S. Constitution Permit Gay Couples to File Joint Income Tax Returns?
November 19, 2013 By
Earlier this year (2013), in United States v. Windsor, the U.S. Supreme Court ruled that the Defense of Marriage Act (DOMA) was unconstitutional to the extent that it defined marriage as being only between a man and a woman for federal law purposes. The Court ruled that marriage is a topic for governance by the States. Later, the Internal Revenue Service issued Revenue Ruling 2013-17, ...
15
Nov 2013
Comparison of Social Security and Medicare Benefits to Taxes
November 15, 2013 By
In November of 2013, C. Eugene Steuerle and Caleb Quakenbush of the Urban Institute issued a comparison of the expected present value of lifetime benefits and taxes for Social Security and Medicare for 2013. Values were presented in 2013 dollars and assumed a 2 percent real discount rate. The analysis shows that older people received the greatest ratio of benefits to taxes, while ...
07
Nov 2013
The Social Security Wage Base, the amount of income to which individuals are subject to Social Security tax (or, for self-employed persons, self-employment tax), will increase from $113,700 in 2013 to $117,000 in 2014. In percentage terms, the increase is 2.9 percent. Meanwhile, Social Security benefits will increase only 1.5 percent from 2013 to 2014. Also, the limits on individual contributions ...
01
Nov 2013
IRS gives in a little on the use-it-or-lose it rule
November 1, 2013 By
After years of making people go through angst, the IRS recently issued Notice 2013-71, permitting up to $500 of unused flexible spending account (FSA) funds to be carried forward to the following year for utilization to pay health expenses. Cafeteria plans often include FSA provisions so employees can pay for health care deductibles, etc. on a tax-free basis. The employer has the option to ...
29
Oct 2013
IRA Bankruptcy Case Could Help Clear Up Some Issues
October 29, 2013 By
On September 30, 2013, I was in U.S. Bankruptcy Court for a hearing regarding, among other things, an IRA prohibited transaction issue. The plan was for me to be called as an expert witness with respect to the debtor’s case. The other side objected because of late notice (given on Friday, September 27th) and the fact that I would testify as to legal issues (which the judge can decide). The ...
