by Ruckertax | May 9, 2014 | Parenting |
If you have a household employee, you may need to pay state and federal employment taxes. Which forms do you need to file for your household employees? Is your maid, housekeeper, or babysitter covered by the rules? This Financial Guide provides the answers to these and other questions. TABLE OF CONTENTS Who is a Household Employee? How Do You Verify That an Employee Can Legally Work in the United States? Do You Need to Pay Employment Taxes? State Unemployment Taxes Social Security And Medicare Taxes Federal Unemployment (FUTA) Tax Do You Need to Withhold Federal Income Tax? How Do You Handle The Earned Income Credit? How Do You Make Tax Payments? What Forms Must You File? What Records Must You Keep? State Unemployment Tax Agencies Household Employers Checklist This Financial Guide will help you decide whether you have a “household employee,” as defined by the IRS, and, if you do, whether you need to pay federal employment taxes. It explains the rules for determining, paying, and reporting Social Security tax, Medicare tax, federal unemployment tax, federal income tax withholding, and state unemployment tax for your household employee. It also explains what records you need to keep. In addition, it provides you with the information you need to find out whether you need to pay state unemployment tax for your household employee. While many people disregard the need to pay taxes on household employees, they do so at the risk of stiff tax penalties. As you will see below, these rules are quite complex and professional tax guidance is highly recommended. A basic familiarity with these rules will make it...
by Ruckertax | May 9, 2014 | Marriage |
What are the financial implications of marriage (and of divorce and re-marriage)? Those who have recently changed their marital status or who are planning such a change may have important financial and legal decisions to make. These decisions might deal with property ownership, providing for children’s welfare, post-mortem planning, and day-to-day finances. TABLE OF CONTENTS How To Prepare Financially For A First Marriage How To Prepare Financially For A Divorce How To Prepare Financially For Re-Marriage Government and Non-Profit Agencies This Financial Guide discusses financial considerations related to a change in marital status. And, because divorce is sometimes the flip side of a marriage–and often the bridge between marriage and remarriage–it is covered here as well. This guide will also briefly touch on legal issues involved; however, variations in state law make it nearly impossible to discuss in any detail the legal ramifications that a change in marital status presents. Related Guide: For a discussion of the impact of the death of a spouse, please see the Financial Guide: DEATH OF A SPOUSE: Financial Steps You Should Take HOW TO PREPARE FINANCIALLY FOR A FIRST MARRIAGE For the young, newly married couple, areas of financial concern primarily include: (1) life insurance, (2) form of property ownership, and (3) money management. LIFE INSURANCE When it comes to insurance needs, the basic rule is that you need enough coverage to sustain your family’s present income level should you die. If you are the only breadwinner, or if you plan on starting a family soon, then you should purchase life insurance. Related Guide: Please see the Financial Guide: LIFE INSURANCE: How Much And What Kind To...
by Ruckertax | May 9, 2014 | Frequently Asked Questions, Life Insurance |
TABLE OF CONTENTS How do insurance companies classify individuals for rate purposes? What questions should I ask my life insurance agent? What should I watch out for when buying life insurance? How do I compare the cost of several insurance policies? Do I really need life insurance? How much life insurance should I buy? What type of life insurance should I buy? Should kids have life insurance? How do I balance life insurance with my other investments? HOW DO INSURANCE COMPANIES CLASSIFY INDIVIDUALS FOR RATE PURPOSES? Premiums vary among insurance companies so it’s a good idea to comparison shop in order to get the best premium. It’s also helpful to understand how premiums are calculated by insurers. Here’s a quick look at how this works. Insurance companies place individuals into four risk groups: preferred, standard, substandard, or uninsurable. A terminal illness at the time you apply for insurance will render you uninsurable. Having some type of chronic illness will place you in the substandard category. People with conditions such as diabetes or heart disease can be insured, but will pay higher premiums. If you have a high risk job or hobby, you will be considered substandard, a high risk. The premiums charged will be commensurate with the category you are placed in. Thus, a standard risk will pay an average premium for similarly situated insurers. Tip: One company’s category for you may not be the same as another company’s category, so it still pays to shop for insurance with other companies even though one may have labeled you “substandard.” Tip: Once an insurance company approves you for coverage, you cannot be...
by Ruckertax | May 9, 2014 | Frequently Asked Questions, Marriage |
TABLE OF CONTENTS Legal Rights: What are the major differences between married and unmarried couples? What estate and financial planning steps are particularly important for unmarried couples? Do married couples need life insurance? If you change your name after marriage, who should be notified? Do I need to update my will when I get married? What are the tax implications of marriage? How can married couples hold property? LEGAL RIGHTS: WHAT ARE THE MAJOR DIFFERENCES BETWEEN MARRIED AND UNMARRIED COUPLES? When it comes to legal rights and being married vs. unmarried, there are several major issues to consider. Specifically, unmarried couples do not: Automatically inherit each others’ property. Married couples who do not have a will have their state intestacy laws to back them up; the surviving spouse will inherit at least a fraction of the deceased spouse’s property under the law. Have the right to speak for each other in a medical crisis. If your life partner loses consciousness or capacity, someone will have to make the decision whether to go ahead with a medical procedure. That person should be you. But unless you have taken care of some legal paperwork, you may not have the right to do so. Have the right to manage each others’ finances in a crisis. A husband and wife who have jointly owned assets will generally be affected less by this problem than an unmarried couple. WHAT ESTATE AND FINANCIAL PLANNING STEPS ARE PARTICULARLY IMPORTANT FOR UNMARRIED COUPLES? The following steps are particularly important for couples who are not married: Prepare a will. If both partners make out wills, the chances are that...
by Ruckertax | May 9, 2014 | Parenting |
Once you have a child, financial planning for the future becomes even more essential. How will you finance child care, medical bills, food, education, clothing, toys, and education savings? What will you need to spend money on and how much will each item cost? Here is some of the information you will need. TABLE OF CONTENTS What Will It Cost You Birth Through Infancy Ages One Through Six Ages Six Through Twelve Ages Thirteen Through Eighteen Teaching Your Kids How to Handle Money Savings and Investment Taxes and Credit How much the U.S. Government Estimates It Costs To Raise A Child This Financial Guide provides you with guidelines on handling the expenses a child brings. Obviously, we cannot offer precise costs because the costs hinge on variables such as family size, family income, and geographic location. However, we can suggest some rough (often very rough) estimates for the average sized family of two adults and two children and to at least provide a starting point for your planning. Obviously, the costs for later years will go up as inflation takes its toll. Knowing what to expect will allow you to plan for the future, thereby increasing your chances that you will not fall short of your financial goals. Indeed, this is the time to review and update, if necessary, your financial plan. Related Guide: Please see the Financial Guide: YOUR FINANCIAL PLAN: Getting Started On A Secure Future. WHAT WILL IT COST YOU Here is a breakdown of the items you’ll need and an estimate of their cost. The costs are categorized chronologically, according to the child’s age. Note:...
