The Federal annual gift exclusion is the amount a person is allowed to give to another person without incurring the Federal gift tax. The annual gift exclusion remains at $14,000. To qualify, a gift must be of a “present interest,” meaning that the recipient, or donee, can make use of the gift immediately, and the donor must not have any control over the asset after it is given. Annual gift exclusions are a great way to remove assets from your estate tax-free.
Beginning in 2010 taxpayers with modified adjusted gross income in excess of $100,000 are able to convert funds in regular IRAs to Roth IRAs. SIMPLE-IRAs and SEP-IRAs are also covered. Married taxpayers, who file separate tax returns, will be able to convert traditional IRAs into Roth IRAs as well. This change in the tax code applies to all years beyond 2010. Any income taxes owed will be due in full during the tax year in which the conversion is completed. Individuals considering a conversion should consult a tax professional as to whether this kind of conversion is worthwhile for his/her particular situation.
The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certificate of deposit at Bank A and has a certificate of deposit at Bank B, the accounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured. The FDIC provides separate insurance coverage for funds depositors may have in different categories of legal ownership. The FDIC refers to these different categories as “ownership categories.” This means that a bank customer who has multiple accounts may qualify for more than $250,000 in insurance coverage if the customer’s funds are deposited in different ownership categories and the requirements for each ownership category are met. Some examples of different ownership categories are (1) single accounts; (2) joint accounts; (3) revocable trust accounts; (4) certain retirement accounts; (5) government accounts; (6) irrevocable trust accounts, etc.
The Securities Investor Protection Corporation (SIPC) covers a maximum of $500,000 per “separate customer” including up to $250,000 in cash, at a given institution. It covers notes, bonds, stock, mutual funds, IRAs and other shares in investment companies. Coverage can be higher for multiple accounts at one institution. More information can be found at www.sipc.org.
The Internal Revenue Service recently announced new limitations on the deductibility of long-term care insurance premiums from taxes for 2016. What follows are the new limits based upon the policy owner’s age:
Attained age before the close of the taxable year / Maximum Deduction for the year
40 or less / $410
More than 40 but not more than 50 / $770
More than 50 but nor more than 60 / $1,530
More than 60 but nor more than 70 / $4,090
More than 70 / $5,110
Every July, the Virginia Department of Medical Assistance Services publishes the figures to be used when determining Medicaid eligibility for a married couple, and the limits on income that can be kept by an individual or the well spouse remaining in the home. These figures are for informational purposes only, and not for the purposes of providing legal advice.
Minimum Community Spouse Resource Allowance– $24,180
Maximum Community Spouse Resource Allowance– $120,900
Resource Allowance for an Individual– $2,000
Minimum Monthly Maintenance Needs Allowance– $2,002.50
Maximum Monthly Maintenance Needs Allowance– $3,022.50
Monthly Personal Needs Allowance– $40
Divestment Penalty Divisor Northern Virginia– $8,367
Balance of the State– $5,933
Shelter Standard– $600.75
Standard Utility Allowance– $287