How the New Tax Law Affects Seniors

Tax Day is around the corner and time is of the essence when it comes to preparing your 2018 tax return.How Is the New Tax Law Affecting Seniors?

See what retirees can expect from the new tax law changes and how your tax return strategy may be different this year.

How the New Tax Law Affects Seniors

In late 2017, Congress passed a massive tax overhaul to take effect for 2018 taxes and while change brings uncertainty, the good news is that seniors may benefit from the new Trump tax plan.

If you are a caregiver for a parent or senior loved one whose finances you manage or a senior yourself, here are some of the biggest changes to expect this tax season:

1. Higher standard deduction.

Many seniors have fewer expenses to itemize, if any, as they don’t have dependents or a mortgage. In this situation, families choose the standard deduction. The new tax plan doubles the standard deduction, meaning the majority of retirees will greatly benefit as the standard deduction is more valuable.

Also, the standard deduction is generally easier and less costly if you’re getting your taxes professionally done, depending on your family’s unique situation. An expert certified public accountant (CPA) or financial advisor can help you decide what may make the most sense for you.

2. Increased deduction for medical expenses.

Healthcare is a big expense for retirees and under the new tax laws, you’re allowed to deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). This means if your AGI is $60,000 and you spend $16,000 of it on healthcare, you’ll have an $11,500 deduction on your hands, which could be enough to make itemizing worth it when it comes to taxes.

When the average 65-year-old couple today is expected to spend $400,000 on medical costs in retirement, this can be substantial savings.

3. IRA charitable distribution as law.

The new laws lowered tax rates for filers in almost every income category, which can be a big benefit for seniors and their families – especially those subject to required minimum distributions (RMDs). You’re required to start taking withdrawals once you turn 70 and 1/2, when you hold funds in a traditional IRA or 401k as those withdrawals are taxed as ordinary income.

However, with the new tax brackets being a bit more favorable across the board, retirees may not lose quite as much of their savings to taxes with their RMDs.

4. Lower income tax rates.

Social Security benefits are a key source of income for many retirees and for many, a portion of this income is taxable. The new tax rules lowered most of the marginal income tax rates so that more income is included in the lower tax brackets. This means many seniors can benefit from a lower taxable income.

For example, the 15% tax rate dropped to 12% and the 25% tax rate dropped to 22%. It’s important to note that the new Trump tax plan did not change the amount of Social Security included in taxable income.

Don’t wait until the last minute to file your, a parent’s or senior loved one’s taxes. Filing early can help give you peace of mind and time to make sure you are informed about the new tax laws.

An expert CPA or financial advisor can help you strategize what makes the most sense for your family under the new tax plan.

Reprinted from A Place for Mom

 

4 Medicare Myths Around Long-Term Care

Maybe you’re looking forward to freeing yourself from private health insurance premiums when eligibility for Medicare, the federal health insurance program, kicks in at age 65. Or, perhaps you already have Medicare and assume that all your healthcare costs are covered, even in-home care and long-term care costs.4 Medicare Myths Around Long-Term Care

Unfortunately, both of these misconceptions could cost you big money in expenses, medical bills and prescriptions because you lack adequate coverage, even if you’re enrolled in Medicare.

4 Medicare Myths Debunked

“The biggest myth out there is that all people need is Medicare,” says Adam Hyers, a Medicare insurance broker in Columbus, Ohio. “Many people think that the government will take care of them, not only in the short run but in the long run too. Then they miss other items they might need, like a Medicare supplement or prescription drug plan, which help provide a good foundation but aren’t designed to pay for long-term care expenses.”

Are you up to speed on what Medicare covers, additional insurance you might need and under which circumstances Medicare pays — or won’t pay — for in-home care? If not, don’t wait to learn about Medicare coverage during a medical crisis.

The average U.S. national median cost for long-term care is around $50,000 annually for a home health aide, $48,000 for an assisted living community and $89,000 for a skilled nursing semi-private room, according to the Genworth 2018 Cost of Care Survey.

Many people purchase long-term care insurance to cover long-term care expenses. Others think they can rely on Medicare for long-term health needs. However, that incorrect assumption can be a costly mistake.

Here are four common Medicare myths debunked to help you make healthcare and insurance choices:

1. Medicare covers all health expenses.

You probably need more than Medicare Part A, which is free for most people at age 65 if they or a spouse paid into Medicare long enough while working. Did you know, however, that there are four parts to this federal health insurance, and they’re not all premium-free?

  • Part A, which is free for most people, offers basic hospital coverage with a deductible of 1,364 (2019 cost) per benefit period for inpatient care in hospice, a hospital or skilled nursing residence. Part A also pays for home health services but only under specific conditions.
  • Part B has a standard premium of $135 (2019 cost) a month and offers medical insurance for medically necessary services such as ambulance services, doctors, some medical equipment and outpatient procedures. Part B also covers preventative services like annual checkups, certain screenings and lab tests. The deductible for Part B is $185 (2019 cost) per year. After you meet your deductible, Medicare pays 80% of the Medicare-approved amount, and you must pay 20%.
  • Part C (Advantage) combines Parts A, B and sometimes D into one plan offered by private insurance companies that charge their own premium rates.
  • Part D is optional and offers coverage for prescription costs not covered by Parts A and B.

Many people think that Medicare Part A covers nearly everything regarding a hospitalization. That’s not true, says Steven Tibbits, a Medicare insurance agent with Medicare Health Plans in Salt Lake City, Utah.

“Part A comes with a deductible of more than $1,000 and mostly just covers your room,” says Tibbits. “Doctors, surgeons, testing and many other fees are covered under Part B and accompanied by coinsurance.”

2. Medicare covers most in-home long-term services.

Don’t count on Medicare when it comes to long-term in-home care, says Hyers. Medicare doesn’t cover non-medical, personal services and covers only in-home care ordered by a doctor such as skilled care from a nurse, occupational therapist, physical therapist, speech therapist or social worker. However, Medicare covers skilled in-home care ordered by a doctor for up to only 21 days.

Medicare typically pays 100% of the approved amount for covered in-home skilled nursing and therapy services and 80% of the approved amount for covered medical equipment.

3. Medicare will pay all my residential skilled nursing costs.

Not so. Medicare pays the first 20 days at a skilled nursing residence with zero copays in 2019. For days 21-100, Medicare pays a portion, and the beneficiary is responsible for the leftover amount of $170.50 per day. However, you can purchase a Medigap insurance policy through a private insurance broker to cover that difference. Don’t wait until you need a Medigap policy, though.

“We get people who call wanting to sign up for Medigap because they’re going to be responsible for that amount,” says Garrett Ball, a Medicare insurance broker and owner of 65Medicare.org, a private Medicare resource. “Unfortunately, that’s often not possible. There’s a Medigap enrollment period to sign up for a plan but if you don’t, it’s difficult to get later.”

4. I don’t need long-term care insurance because I have (or will have) Medicare.

Many people believe that long-term care is always covered by Medicare with just a daily copay. However, “Long-term care is not a covered benefit by Medicare,” says Tibbits. “Long-term insurance plans can be incredibly expensive but can also be very useful.” Read more about long-term care insurance here.

Find out more information about Medicare at Medicare.gov and A Place for Mom’s “Public Pay Resource Guide: Medicaid and Medicare Government Funding for Senior Housing and Care.”

Reprinted from A Place for Mom.

 

Free tax help

There is free tax aide for people of all ages with low to moderate income levels at the Carrabassett Valley Public Library every Friday 11:30 am to 3:30 pm.  Call for an appointment at 246-2157.  Taxes are prepared and electronically filed by IRS Certified Volunteer Tax Preparers.

Both Federal and State of Maine Tax Returns will be prepared from February 15- April, 2019.

Older Americans Lose Billions to Scams

Despite progress, law enforcement still struggles in its fight against elder fraud

Senior Woman Giving Credit Card Details On The Phone

Older adults lose an estimated $2.9 billion each year to financial scams, according to a Senate committee report released this week.

Law enforcement struggles to fight these scams because it’s “like playing a game of whack-a-mole,” said Sen. Susan Collins (R-Maine), who chairs the Special Committee on Aging, before a Wednesday hearing on fighting elder fraud. “Many scams are perpetrated by criminals operating from foreign call centers, beyond the reach of state and local law enforcement and thousands of miles from the seniors whom they victimize,” she said.

As part of the hearing, the committee released its 2019 report on the top 10 scams targeting seniors in 2018. The most prevalent scam, out of more than 1,500 complaints to the panel’s hotline, involved Internal Revenue Service (IRS) impersonators who conned people into coughing up tens of millions of dollars. In descending order of frequency, the report lists: unsolicited calls, including robocalls; sweepstakes and Jamaican lottery scams; computer tech-support scams; elder financial abuse; grandparent scams; romance scams; Social Security impersonation scams; impending lawsuit scams; and identity theft.


Call AARP’s free Fraud Watch helpline at 877-908-3360 to speak with volunteers trained in spotting scams. 


Although criminals continue to invent new ways to separate older people from their money, law enforcement has had some success in its anti-fraud efforts. According to Collins, the largest sweep of elder fraud cases in U.S. history last February led to criminal charges against more than 200 defendants whose victims had lost more than a half billion dollars. And in 2016, five call centers in India were taken down; as a result, 24 coconspirators in the United States were sentenced to prison and ordered to repay millions of dollars in restitution.

According to the committee, scams persist because fraudsters gain the trust and cooperation of victims by harassing or seducing them. The Senate committee urges people to hang up if they receive a suspicious call and then call its toll-free Fraud Hotline, 855-303-9470.

To identify and avoid scams, the committee suggests remembering these tips:

  • Con artists force you to make decisions fast and may threaten you.
  • Scammers disguise their real phone numbers, using fake caller IDs.
  • Fraudsters sometimes pretend to be a government agency, such as the IRS.
  • Con artists try to get you to give them personal information, like your Social Security number or account numbers.
  • Before giving out your credit card number or money, ask a friend or family member for advice about the situation.
  • Beware of offers of free travel.

Reprinted from AARP.ORG

What the Shutdown Means for Filing Taxes

IRS says it will recall staff to process returns on time

IRS 1040 tax form with the words The IRS said Monday it will begin processing tax returns on Jan. 28 and pay refunds as scheduled, despite a partial government shutdown now in its third week.

Financial experts have said that taxpayers should prepare to file returns even during the shutdown, knowing that refunds could be affected. But the IRS said Monday it will recall a significant portion of its workforce, currently furloughed as part of the government shutdown, and will process refunds as it normally does.

During previous federal government shutdowns, refunds were not processed.

“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown,” said IRS Commissioner Chuck Rettig. “I appreciate the hard work of the employees and their commitment to the taxpayers during this period.”

Taxpayers who usually file early in the year should file as soon as they have all of the necessary documentation for a complete and accurate return, the IRS said.

For most taxpayers, Monday, April 15, 2019, is the filing deadline to submit 2018 tax returns. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts taxpayers who live in those states have until April 17, 2019, to file their returns, the IRS said.

Software companies and tax professionals will accept and prepare tax returns before Jan. 28, then will submit the returns when the IRS systems open later this month. To minimize errors and for faster refunds, the IRS “strongly encourages people to file their tax returns electronically,” the IRS said.

Tax preparers have been concerned about this tax season even without the government shutdown because it is the first tax season that changes resulting from the Tax Cuts and Jobs Act of 2017 will be in effect.

“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” Rettig said. Passage of the tax overhaul caused changes in 400 IRS forms, and the agency has revised its tax withholding tables and changed tax rates and brackets.

How to Better Advocate for Your Parent or Senior Loved One

As your parents age, you will likely experience a subtle yet significant change in the dynamics of your family and relationship. Stepping into the role of caregiver for your senior loved one may not be what you had envisioned when you were younger, however, for many adult children, this shift in the parent-child relationship is part of their reality.How to Better Advocate for Your Parent or Senior Loved One

The role of a caregiver can look very different depending on the needs of your loved one, but acting as an advocate is often a primary responsibility. Read more about how to become a better advocate for your parent during this time.

How to Advocate for Your Parent or Senior Loved One

The role of caregiver for a parent or senior loved one can vary greatly depending on their health and needs, from accompanying them to medical appointments to providing hands-on, personal care – all while striking a balance between supporting their best interests and empowering them to remain the primary decision-maker.

The American Association of Retired Persons (AARP) describes the role of an advocate as an individual who will “ensure the best life possible for our family and friends when they are vulnerable.”

This includes several importance factors, such as:

  • Ensuring they receive appropriate, high-quality and timely services and support
  • Helping manage personal affairs, such as financial, health and legal matters
  • Representing their best interest when they are unable to represent themselves
  • Understanding wishes for care and quality of life – and ensuring these wishes are followed

Family Communication Is Key

An area that families tend to struggle with is striking the balance between assisting a parent or senior loved one to make the best choices for themselves and taking over the decision-making process entirely.

It is important to remember that although the responsibilities of giving and receiving care may have reversed, the child does not become the parent and the parent does not become the child. Rather, the senior parent is an adult, capable of choice, who simply needs assistance and support.

Communicating with your senior loved one in a compassionate and respectful manner will set a positive tone and encourage them to be receptive of your help. Keep in mind that “listening is just as important as speaking” when communicating with a loved one and will allow you to better understand their desires, feelings and thoughts.

Ways to Advocate From a Distance

If you live at a distance from your senior loved one, you can still be an informed and supportive advocate.

There are ways that you can play an active role in their life, even if you live far away:

1. Check in regularly.

Set a specific time each day or week to check in with your parent or senior loved one to ensure that they are being well cared for and that nothing significant has changed with their health. Keeping conversations enjoyable and light will allow you to garner key information about how they are doing and feeling, without coming across as an interrogation.

2. Have a plan.

Try to have two plans in place: one for day-to-day matters, such as medication management and meal preparation and another in case of an emergency. An emergency action plan should outline important details about who will be the first to respond in the event of an emergency, as well as important medical wishes.

3. Know where to access important information.

PBS suggests keeping a “care notebook” that contains your parent or senior loved one’s important health information in a central location. Hard copies (or information on where to locate originals) of contact information, financial records and personal documents are important items to consider including in this notebook.

4. Learn what help is available.

PBS also suggests educating yourself on the care and services that are available to your loved one in their specific area. This can include home support, nutritious meal programs, transportation assistance or volunteer services – to name a few options.

5. Stay connected.

Communicating with the people who make up your parent or senior loved ones’ circle of care is the most important aspect of staying connected and being informed of their health status when you live at a distance. Connecting with local family members and friends, formal caregivers and neighbors regularly will allow you to hear multiple perspectives about your loved one’s overall well-being.

Advocating for your loved one does not need to be an additional burden or responsibility if you follow the above steps.

Reprinted from A Place for Mom

 

Social Security Scams

Social Security Scams

Social Security numbers are the skeleton key to identity theft. And what better way to get someone’s Social Security number than by pretending to be from Social Security?

The Social Security Administration (SSA) estimates that scammers call thousands of Americans every day, looking to wangle personal information, steal benefits or both. It’s a common form of government impostor scam, in which fraudsters pose as government officials to get you to send money or give up personal and financial data for use in identity theft.

The Federal Trade Commission (FTC) reported a surge in late 2018 in scams involving fake SSA employees calling people with warnings that their Social Security numbers had been linked to criminal activity and suspended. The caller asks you to confirm your number so he or she can reactivate it or issue you a new one, for a fee. This is no emergency but a ploy to get money and personal data: Social Security does not block or suspend numbers, ever.

This con is sometimes executed via robocall — the recording provides a number for you to call to remedy the problem. In another version, the caller says your bank account is at risk due to the illicit activity and offers to help you keep it safe.

On the other hand, you might get a call from a supposed SSA representative bearing good news — say, a cost-of-living increase in your benefits. To get the extra money, you just have to verify your name, date of birth and Social Security number. Armed with those identifiers, scammers can effectively hijack your account, asking SSA to change the address, phone number and direct deposit information on your record and thus diverting your benefits.

Consumer Reports warns of another trick with an ironic twist: Fraudsters send out emails that appear to be from SSA and instruct you to click a link to register for a free service that protects you from Social Security fraud. It’s actually a garden-variety phishing scam, designed to guide you to a fake government website that will steal your information.

With a little vigilance, Social Security scams are not difficult to identify and avoid.

Warning Signs

  • You get an unsolicited call from someone claiming to work for SSA. Except in rare circumstances, you will not get a call from Social Security unless you have already been in contact with the agency.
  • The caller asks for your Social Security number — again, something an actual SSA employee wouldn’t do.
  • A call or email threatens consequences, such as arrest, loss of benefits or suspension of your Social Security number, if you do not provide a payment or personal information.

Do’s

  • Do hang up if someone calls you out of the blue and claims to be from SSA.
  • Do be skeptical if a caller claims to be an “officer with the Inspector General of Social Security.” Scammers appropriate official-sounding and often actual government titles to make a ruse seem authentic.
  • Do set up a My Social Security accountonline and check it on a monthly basis for signs of anything unusual, even if you have not yet started collecting benefits.
  • Do install a robocall-blocking app on your smartphone, or sign up for a robocall-blocking service from your mobile network provider.

Don’ts

  • Don’t call a phone number left on your voice mail by a robocaller. If you want to contact SSA, call the customer-service line at 800-772-1213.
  • Don’t assume a call is legitimate because it appears to come from 800-772-1213. Scammers use “spoofing” technology to trick caller ID.
  • Don’t give your Social Security number or other personal information to someone who contacts you by email. SSA never requests information that way.
  • Don’t click links in purported SSA emails without checking them. Mouse over the link to reveal the actual destination address. The main part of the address should end with “.gov/” — including the forward slash. If there’s anything between .gov and the slash, it’s fake.

Medicare Scams

Five tips to help you avoid being taken advantage of as you shop for medical coverage

Buttons on a keyboard that read scam alert

As Medicare’s 60 million beneficiaries pore over their choices for coverage for everything from medical services to prescription drugs, government officials warn that this is prime time for fraudsters to try to scam older consumers.

“Do your research and use trusted sources,” advises Jason Adler, assistant director of the Federal Trade Commission’s Midwest regional office. The FTC monitors the latest ploys that criminals use to get people’s Social Security or credit card numbers and other personal information that can help them cheat Americans. Adler says the best place to get information about your Medicare coverage or enrollment is either Medicare.gov or by calling the Medicare hotline at 800-MEDICARE (800-633-4227).


Navigate coverage options, prescription rules and more at our Medicare Resource Center.


Here are some common scams and Adler’s tips on how to thwart them.

Scam 1 

Someone calls claiming to be from Medicare and says your Medicare number and credit card information are needed to sign you up for health coverage.

Solution: Hang up the phone. “Anyone calling saying they’re an official Medicare agent selling you insurance is a scammer,” Adler says. Medicare does not call beneficiaries to sign them up.

Scam 2

Someone calls saying you have to sign up for a Part D Prescription Drug plan or you’ll lose your Medicare coverage.

Solution: That pitch is “just not true,” Adler assures. So hang up the phone. Buying a Part D plan is completely voluntary, he says, and has nothing to do with the rest of your Medicare coverage.

Scam 3

Someone calls claiming to be a Medicare representative and says your billing information must be confirmed to keep your coverage active.

Solution: Again, hang up. Medicare employees will not cold-call you and are not allowed to ask for payment information on the phone or online.

Scam 4

An alleged insurance agent or broker calls to offer you a great deal on a Medicare supplemental insurance (or Medigap plan) or a Medicare Advantage private insurance plan.

Solution: This one is a little trickier. Listen to the person’s pitch and ask for information in writing. If the agent is sending you an email, Adler says to make sure you have a virus scanner on your computer and don’t click on a link that sends you to an unfamiliar website. You can also call your state insurance department to make sure that the company the caller says he represents is legitimate.

Chances are, if the caller is a scammer, once you start asking questions and refuse to turn over any personal or credit card information, the individual will hang up.

Scam 5

Someone calls asking for your new Medicare number to update your account and to send you the latest open enrollment information.

Solution: Stop. Do not give out your new Medicare number over the phone. Earlier this year, Medicare began mailing out updated cards that have an 11-character identifier that replaces Social Security numbers.

“We’ve seen scammers calling consumers saying that they need their information so they can get their new Medicare card or that they have to pay a fee to get their new card,” Adler says. “Those things are false.”

Medicare cards are free. New cards have been mailed to enrollees in 33 states and the District of Columbia and are in the mail to consumers in the other 17 states. If you haven’t received your card, you can go to the Centers for Medicare and Medicaid Services’ new Medicare card website to check on the status of the mailing to your state as well as to sign up for an email alert when your card is mailed.

Scams related to Veterans

Veterans Day was this past weekend, and we want veterans to know that scammers go to great lengths to target their money, their benefits, and their commitment to current and former soldiers.

How It Works:

Targeting veterans can take many forms:

  • The Update Your Military File Scam: A caller claims to be from the Department of Veterans Affairs and asks to “update” your information, but really is hoping to get personal information to steal your credit.
  • Veterans Choice Program (VCP) Scam: Scammers set up a phone number nearly identical to the number veterans dial to find out if they are eligible to use approved health care providers outside of the VA system. A recorded message or a person answering the phone tells the caller of a rebate he can get by supplying credit card information. Make sure to dial the correct number for the VCP: 1-866-606-8198.
  • Charity Scams: A caller claims to be raising money for disabled veterans or veterans with cancer. They play on sympathy to try to evoke an immediate response. But often, the so-called charity is not registered with the government and/or uses most of the money to raise more funds and pay their salaries.
  • The Cash for Benefits Scheme: Predatory lenders target veterans in need of money by offering cash in exchange for future disability or pension payments. These buyouts are typically a fraction of the value of the benefit.
  • Employment Scams: Con artists post bogus job offers to recruit veterans on various online job boards. The scammer may use or sell your personal information provided in the job application. It’s likely a scam if you have to pay to get the job, you need to supply credit card or banking information, or the ad is for “previously undisclosed” federal government jobs.

What You Should Know:

  • If you are a veteran, you are unfortunately a target, so be mindful of this reality in your day-to-day transactions.
  • The Veterans Administration will never call you, e-mail or text you to verify or update your information.
  • The old adage applies here – if it’s too good to be true, it usually is.

What You Should Do:

  • Check out charities at  www.charitynavigator.org before giving any money. Make donations directly to the veterans’ organizations you know.
  • Only work with VA-accredited representatives when dealing with VA benefits; you can search for them online at the VA Office of General Counsel website.
  • Visit aarp.org/veterans to download your copy of the AARP Watchdog Alert Handbook: 9 Ways Con Artists Target Veterans. 

Nomorobo

Many people have registered with the FTC National Do Not Call Registry, however it will not stop all unwanted calls.  The “Do Not Call” registry prohibits sales calls so you may still receive political, charitable, debt collection and informational calls, as well as telephone survey calls.  In addition, companies may still call if you have recently done business with them or if you have given written permission to call you.  If you ask a company not to call you again, it must honor your request. ( record the date of your request).

There is also a website, www.nomorobo.com where you can register your landline phone for free that will stop most robocalls that you still might get after registering with the FTC.  If a robocaller dials your number, your phone will ring once and Nomorobo will intercept the call.

A mobile application for your cell phone is available for $1.99 a month, but there is no charge to register a regular landline phone.

P.S. I have used Nomorobo on my own landline and it works like a charm.  One ring and Nomorobo intercepts the call.