Articles

It might come as a surprise to learn that you’re technically an employer if you pay someone to watch your kids or to clean your home.  If a household worker is classified as your employee, you will owe tax, often referred to as the “nanny” tax. IRS guidelines for what makes a household worker an employee are pretty simple - if you control what work is performed and how they do it, they are employees. However, if the worker is an employee of an agency, the agency pays the tax, and if the worker is classified as an independent contractor, he/she is responsible for the tax. Keep reading to find out what is involved if you have a household employee and need to pay the nanny tax.

Read more

It is that time of year to consider making an IRA Contribution. You have until April 15, 2022 to make a contribution for 2021. You can also make your 2022 contribution at the same time.

Read more

The Criminal Investigation unit of the Internal Revenue Service has 20 field offices located across the U.S. and 11 attaché posts abroad. According to IRS-CI chief Jim Lee, the top 10 cases of 2021 have all the makings of a made for TV movie — embezzlement of funds from a nonprofit, a family fraud ring that stole millions in COVID-relief funds and a $1 billion Ponzi scheme used to buy sports teams and luxury vehicles.

Read more

The IRS closed 452,515 individual audits during its fiscal 2020. This represents less than 1% of individual income tax returns filed, so the chances of an audit are slim. However, there are several reasons why your return may get flagged, triggering an IRS notice, tax experts say. Red flags may include excessive write-offs compared with income, unreported earnings, refundable tax credits and more. Crypto trades may also draw scrutiny.

Read more

You might need to take a little extra time in 2022 to plan your required minimum distributions (RMDs) from IRAs, 401(k)s, and other qualified retirement plans. The starting age was changed from 70 1/2 to 72 and how RMDs get calculated for inherited IRAs changed for year 2020. This year, the life expectancy tables were changed. The new tables have slightly longer life expectancies than the old tables, making RMDs a little bit lower under the new tables than the old ones. This change is easy enough for IRA owners over age 72, but for those who inherited an IRA prior to 2020 (and have been calculating RMDs under the old rules), it is more complicated. Click the link to learn more:

Read more

I was named a Five Star Wealth Manager in NJ again in 2022! Less than 7% of advisors were named this year and this marks my eighth time winning this award. As in prior years, Five Star Professional partnered with New Jersey Monthly magazine and all award-winners were listed in a special section of the January issue. For more information on the Five Star award and the research/selection methodology, please visit my spotlight page:

Read more

Charitable giving can make good financial sense for retirees, both wealthy ones and those of more modest means. As retirees think about their charitable-giving strategies for 2021 and beyond, here are some key considerations. For Smaller Givers: Take Advantage of the Deduction Available for Nonitemizers. for Midsize Givers: Use Qualified Charitable Distributions. For Larger Givers: Donate Highly Appreciated Assets From Taxable Accounts. Click below for the full article.

Read more

Nearly a decade ago, the State of California, under then-Attorney General Kamala Harris, began requiring nonprofits incorporated and/or registered in the state to submit Schedule B of IRS Form 990 along with its other required annual filings.  Schedule B is a listing of donors giving more than $5,000 per year to a nonprofit.  Under federal law, Schedule B is not subject to public disclosure, but the State of California’s law made the information contained in it public anyway. In a 6-3 vote, the US Supreme Court handed California a loss in what is considered a landmark case of lasting reach. The majority found that California’s donor disclosure requirement was unconstitutional, and violated First Amendment guarantees of free speech and free association. States will no longer have the ability to go on fishing expeditions, casting a wide net over donor activity in search of a violation. It's a victory for individual liberty and donor privacy. Click below for the full article.

Read more

Millions of employees are sifting through their workplace benefits before their employer’s open enrollment deadline. One of the biggest questions they will settle is whether to join their partner’s benefits plan or keep benefits separate. With rising inflation and pandemic-related health costs, couples should take a strategic approach to open enrollment this year to make sure their benefits square with their money goals, say financial planners. Some may find it pays to keep their benefits relatively separate from their partner’s, while others could save significantly by analyzing costs.

Read more

The idea of making money on the side from owning a rental property can be very appealing, especially if you view the venture as a possible way to quit your day job eventually or subsidize your income when you retire. But becoming a landlord is not for the faint of heart. Nor is it guaranteed to be profitable right away. A lot goes into making it so over time. To see if you're cut out for the challenge, here are four questions to ask yourself before getting into the business (and it is a business) of being a landlord.

Read more

While matrimony is traditionally a joyous time, marriage and domestic partnership can affect taxes, retirement savings and financial planning goals. Remarriage situations present even more complex challenges, especially if a blended family is involved. Click below for a slide show of 10 important tax and financial planning questions related to marriage, divorce, remarriage and blended families according to ALM’s Tax Facts Online.

Read more

Despite surging covid cases and climbing inflation, Americans’ retirement account balances continue to rise to record levels. Others, though, are fighting to pay rent — unable even to think about investing for the future. Let’s look at the "haves" who are saving for retirement in workplace plans. Workers who continue to contribute to their plans were rewarded with significant increases in their account balances, according to Fidelity, the largest administrator of workplace retirement accounts. The average 401(k) balance increased to a high of $129,300 in the second quarter of 2021, up 24 percent from the same period a year ago. The number of workers with accounts of $1 million or more also increased to record levels.

Read more

As you save for retirement, it’s beneficial to know how much to save and whether you’re on the right track. Everyone’s situation is different, of course, but there are some useful retirement benchmarks that can give you a sense of how you’re doing to reach your goals. What is a good retirement savings goal? Many financial institutions and experts have a few guidelines to help answer that question. Keep reading to learn a few of these guidelines and don't forget that hiring a good financial adviser could be useful, too!

Read more

Governor Phil Murphy recently signed the Fiscal Year 2022 Appropriations Act into law, which included several provisions that will make college more affordable for some NJ taxpayers. The Act creates new tax deductions for households with income below $200,000, who will be able to deduct their first $10,000 in contributions to an NJBEST 529 savings plan, $10,000 in in-state tuition payments and $2,500 in NJCLASS student loan payments. Additionally, NJ taxpayers with annual income under $75,000 will get a matching contribution up to $750 for contributions into the NJ 529 plan. NJ is now among 35 states to offer a tax deduction for 529 contributions and among 15 states to offer a matching contribution. Also, NJ's Community College Opportunity Grant (CCOG) currently offers residents with income under $65,000 free tuition for two years at an in-state community college and the Act extends this benefit to a student’s 3rd and 4th year at a 4-yr in-state college.

Read more

A scholarship available to students who attend New Jersey colleges and contribute to the NJ 529 (NJBEST) was recently doubled from $1,500 to $3,000. To be eligible for the full scholarship, the NJBEST account must be open for at least 12 years and received at least $3,600 in contributions according to the new regulations approved by the state Higher Education Student Assistance Authority board. The scholarship is not available to students who attend an out-of-state college. Unlike other state scholarships, the NJBEST scholarship is not funded by taxpayers. - it is funded by the fees investors pay to maintain the NJBEST accounts. Under a law Gov. Phil Murphy signed last year, the scholarship is available in any term that a student enrolls at a NJ higher education institution — not just during a student’s freshman year.

Read more

In mid-April I picked my 15-year-old daughter and her friend up from school and took them to Barnes & Noble. The friend found out that I “do stocks” for a living and immediately asked me about crypto. What cryptocurrency should I buy, she asked. I’ll tell you about the advice I gave her in a bit. But not long after I got three calls in one day from my wife’s side of the family—from my sister-in-law (a pharmacist) and my wife’s cousins (both are barbers). They were all asking me about crypto. Click below to keep reading.

Read more

When you think back on this spring, you may fondly recall a substantial deposit made to your bank account by the federal government (if you were eligible). Economic Impact Payments were a focal point of the American Rescue Plan Act (ARPA), signed into law in March, and the payments were even larger for parents with dependent children. Keep reading to find out 2 other ARPA provisions that can really benefit parents.

Read more

We usually associate spring cleaning with clearing out old items in your house that are unnecessary to make room for the new. This is also an amazing time to take care of your financial house and clean out unnecessary expenses in your budget. Keep reading for a few tips to get started putting some expenses in the trash.

Read more

New Jersey has implemented a new law mandating both for-profit and non-profit employers with 25+ employees provide a retirement plan for their employees. Instead of establishing a 401k, Simple IRA, or SEP IRA, employers can comply by participating in the new state-run plan, called The New Jersey Secure Choice program. The law was originally passed into law in 2019 with an effective date of March 2021 and an implementation deadline of Dec. 2021. Whether these dates gets extended due to the Covid-19 pandemic is uncertain so employers need to be prepared. Click below for more details.

Read more

The $1.9 trillion Covid relief measure tweaked the child tax credit, earned income credit, and child and dependent care credit. The changes are mostly aimed at lower earners and only apply to tax season next year (for 2021 income). The pandemic aid law also lets households claim a Recovery Rebate Credit to collect any outstanding funds from stimulus checks. Here’s what taxpayers need to know.

Read more

Shutdowns, layoffs and salary cuts brought on by the coronavirus pandemic have left millions of Americans searching for new sources of income. Those who’ve recently turned to gig work may be weeks away from a financial surprise in the form of unexpected tax bills and insurance coverage fine print.

Read more

It is that time of year to consider making an IRA Contribution. You have until April 15, 2021 to make a contribution for 2020. You can also make your 2021 contribution at the same time.

Read more

Traditional IRAs and Roth IRAs both offer tax-advantaged growth of money. The contribution for both account types for 2021 is $6,000, or $7,000 if over age 50. Which is better depends on a few factors. Some people are simply not eligible to make a Roth IRA contribution. Other people may not be able to deduct a Traditional IRA contribution, making it a less attractive option. For those who have a choice, it mostly comes down to when you pay taxes on the money.

Read more

Many taxpayers expect charitable donations will be tax deductible, but this is only true for those who itemize deductions. The 2017 Tax Cuts and Jobs Act doubled the standard deduction and capped state and local tax deductions, so most taxpayers no longer itemize. In 2020, even taxpayers who claim the standard deduction may deduct up to $300 of charitable donations pursuant to the Cares Act.

Read more

Andrew Novick, The Investment Connection, has been chosen as one of New Jersey’s Five Star Wealth Managers for 2021. Five Star Professional partners with New Jersey Monthly magazine to recognize a select group of New Jersey-area wealth managers who provide quality services to their clients. Andrew Novick will be featured, along with other award winners, in a special section of the January issue.

Read more

Due to changes in the the tax code a few years ago, most taxpayers can no longer deduct charitable contributions. Making a Qualified Charitable Distribution (QCD) is a great way to make a charitable contribution and still get a tax benefit. A QCD is a direct transfer of funds from your IRA custodian to a qualified charity and counts toward satisfying your annual IRA required minimum distribution (RMD). IRA distributions are generally considered taxable income, but QCDs are excluded. RMDs were waived in 2020, but those over age 72 will be required to take them again in the coming year. Read more about QCDs by clicking the link below:

Read more

Few budgetary concepts generate as much confusion as the Social Security trust fund. In 2021, working Americans will pay 6.2% of their wages up to $142,800 to the government and employers match that amount. The self-employed have to pay both amounts. This payroll tax is deposited into the Social Security Trust Fund and retiree benefits and administrative expenses are paid out of this fund. The following article is the best I've read explaining whether the federal government really raids the trust fund and whether Social Security will run out of money.

Read more

Mortgage rates dropped to a new low for the 13th time this year, allowing a record number of homeowners to refinance, according to Freddie Mac, a government-sponsored agency that backs millions of mortgages. The rate on the 30-year fixed mortgage fell to 2.72% and the rate on the 15-yr fixed mortgage is even lower. Should you refinance now?

Read more

According to the latest Bureau of Labor Statistics study, people have an average of 12 jobs over the course of their lives. There is more turnover than usual due to Covid-19. When starting a new job, you may worry about getting along with your boss and co-workers as well as whether you'll find the work fulfilling. You also need to review your new employer's benefits and here are some important things to consider.

Read more

Halloween may be a shell of its usual self this year, but it is still a good time to eradicate the monsters who may be hiding in your company’s closet. Some monsters are much less frightening once they’re brought into the daylight. Keep reading for some advice how to deal with 5 typical ghouls and goblins sucking the revenue out your business.

Read more

The 2020 Medicare Open Enrollment season runs from October 15 through December 7. Don't be lazy and just let your existing options renew. You may be able to reduce costs, improve your coverage, or both by making some changes.

Read more

Clients are often misguided as to their rights and obligations in a divorce and, because of this, their expectations are often unrealistic. Often, clients will tell me what they believe the law to be; only for me to have to tell them otherwise. Below are 6 of the the most common misperceptions that I hear.

Read more

When you were getting married, you did not plan on getting divorced. You wanted the relationship to last, but now you are worried that it won’t. Before you begin the divorce process, you could seek marital counseling, both as individuals and as a couple. If you ultimately decide to seek a divorce, the following financial planning tips can help you achieve a reasonable financial settlement to establish a strong foundation for your new life:

Read more

Back in the spring there was considerable interest in viral and antibody testing among employers developing worksite return protocols. But survey results show that testing as a requirement for return to work has been largely set aside. Mercer, a leading human resources consulting firm, said that only 5% of respondents to a July survey required (or planned to require) employees to provide a negative COVID-19 test result before returning to the worksite, and just 2% required or planned to require a positive test for antibodies. Beyond the basics of asking employees about COVID-19 exposure or symptoms,facilitating physical distancing and hand hygiene, and requiring (or encouraging) mask-wearing, contact tracing has emerged as a leading strategy in efforts to keep employees safe at the worksite. Well over half of employers in Mercer’s current survey say they now conduct contact tracing.

Read more

Without schools or caregivers to rely on, some employees, particularly women, are making the difficult choice to leave the workforce or cut back their hours, despite the long-term damage to their finances and careers. Mercer, a leading human resources consulting firm, surveyed over 750 employers and said the great majority are allowing parents to change their schedules or offering other forms of flexibility to help them cope during the pandemic. So far only 8% have added or expanded direct childcare assistance, such as onsite, nearsite, or back-up childcare, but we expect to see this number increase. Childcare support is becoming a new essential employer benefit.

Read more

Before the COVID-19 changed the way we do business, working remotely was something many people imagined as sort of a future-work utopia. Having your home to yourself during the day while your partner or kids are out, sending work emails with your dog cuddled up beside you, having access to your specific brand of coffee — it all sounded like a dream. That’s probably not how working from home looks for you right now. In reality, you’re likely juggling how to make space in your home for calls and video meetings, keep yourself productive, keep your children occupied and oh yeah — stay sane in the midst of it all. Read on if you need help improving efficiency while working from home.

Read more

Mutual funds are nearly 100 hundred years old! The “pooled funds” investment model enabled investors to purchase a diversified portfolio of financial instruments that would steer money, depending on the fund’s investment goals, into different asset classes. The idea started slowly but eventually took hold, as fund accounts grew and more and more mutual funds popped up on the investment landscape. The first – and oldest – mutual fund in the U.S. was the MFS Massachusetts Investors Trust, which rolled out in 1924 under the management of MFS Investments, out of Boston, Mass. Click the link for additional historical detail and to see a list of 8 other original mutual funds. Note that all still exist today (except for one, but it was merged into another fund, so it's legacy still lives on too).

Read more

Due to COVID-19, many businesses are closed and employees have been laid off. According to recent studies, one in four Americans do not have enough money saved to cover more than two months of expenses and one out of every four people doesn’t have any savings. This means that going without work for a few weeks to a month will leave people in dire situations. Keep reading if you are in financial hardship and think bankruptcy might be right for you.

Read more

If you pay for education expenses, you may be able to save money on your taxes by claiming the American opportunity credit or lifetime learning credit, or opting for the the tuition and fees deduction. Keep reading to see if you qualify.

Read more

Unlike the federal government, New Jersey is barred from operating at a deficit by its state constitution. That effectively forces spending cuts in the event of unanticipated financial downturns. As such, NJ has frozen $920 million in state government spending for the rest of the fiscal year as it grapples with a “significant” slowdown in tax collections in response to COVID-19. The "freeze" doesn't mean the payments won't be made - just that that they will be delayed. The biggest item on the list is $142 million for property tax credits paid through the homestead benefit program.

Read more

The coronavirus stimulus package, known as the CARES Act, waives required minimum distributions (RMDs) from retirement savings accounts for 2020. Since RMDs are taxable, the waiver gives retirees who can afford to skip their 2020 distribution some amount of tax relief. Also, if you qualify, distributions prior to age 59 1/2 of up to $100,000 are not subject to the 10% excise tax in 2020, and distributions of up to $100,000 this year can be reported as income over three years and/or repaid.

Read more

"As we emerge out of the shortest but deepest economic recession in modern history sparked by the coronavirus pandemic, we enter 2021 with investor optimism running high," said Bob Doll, CFA, senior portfolio manager and chief equity strategist at Nuveen. "The reopening of the economy combined with increasing consumer and business confidence should create a positive backdrop for equity markets in 2021, but the key question is how much of this good news has already been priced into the markets." For over 30 years, Bob Doll has published an annual set of 10 predictions for the equity markets, monetary policy, and global economy. Click below to see his predictions for the coming year.

Read more

If you are uninsured, or are losing your insurance due to recent unemployment, you do have options to regain health coverage. Depending on your financial situation, only certain options may be affordable. But any level of coverage will help protect you and your wallet down the line. Options include securing coverage through your spouse's insurance plan, COBRA, the Affordable Care Act marketplace, or Medicaid.

Read more

The IRS is giving Americans an extra three months to file their taxes for year 2019 as the country largely remains on lockdown due to the coronavirus pandemic. Instead of an April 15th due date, tax returns are now due on July 15th. Taxpayers that owe money can also defer federal tax payments, interest free and penalty free until July 15. Additionally, the deadline for making contributions to IRAs and Health Savings Accounts was similarly extended to July 15th. Note that you can still request an automatic extension to file your tax return to October 15th, but the extension does NOT change the deadline to pay any taxes or make IRA or HSA contributions.

Read more

COVID-19 continues to wreak havoc on the world’s peoples and economies. In the United States, as businesses shut down or pare back, millions of workers have already been laid off, leaving many to wonder how they’ll pay their bills. The federal government just enacted the biggest economic rescue package in modern American history. The package grants households relief in the form of stimulus checks sent directly to most Americans, expanded unemployment benefits, paid sick leave, temporary student debt relief and more. Click the following link for a great guide to the federal stimulus package:

Read more

A suite of new programs designed to support NJ businesses and workers facing economic hardship due to the outbreak of the novel coronavirus COVID-19 was recently approved by the New Jersey Economic Development Authority (NJEDA) Board. The package of initiatives includes a grant program for small businesses, a zero-interest loan program for mid-size companies, support for private-sector lenders and Community Development Financial Institutions (CDFIs), funding for entrepreneurs, and a variety of resources providing technical support and marketplace information. Keep reading for more detail on these new programs:

Read more

A record 3.3 million Americans just applied for unemployment benefits according to the US Labor Department. as restaurants, hotels, barber shops, gyms and other non-essential business shut down in a nationwide effort to slow the spread of the deadly coronavirus. If you are a NJ resident in need of guidance with unemployment benefits or how to handle your bills, such as mortgage payments, utilities, or other debts, keep reading...

Read more

HSAs are the only type of account that offer a “triple tax benefit” for federal taxes - pre-tax savings, tax-deferred growth, and tax-free withdrawals. The account is intended to be used for current out-of-pocket health expenses, but investing and waiting to use the account later is even better!

Read more

It is that time of year to consider making an IRA Contribution. You have until April 15, 2020 to make a contribution for 2019. You can also make your 2020 contribution at the same time.

Read more

At this point, you’ve probably heard about the SECURE Act, which took effect on January 1, 2020. It makes several changes to retirement savings law. In my opinion, the most important change is the elimination of the "Stretch IRA" for most non-spouse beneficiaries. Here are the six key changes you need to know about:

Read more