Thursday, September 2, 2021

Protect yourself

 The Federal Trade Commission's Consumer Information Blog is a good regular source of information about scams that people are reporting. Recent posts include: 

WARNING: Email from FTC Chair Lina M. Khan about Coronavirus money is fake

Phishing scheme targets unemployment insurance benefits and PII

Hot rental car market = scams

Saturday, April 24, 2021

Resources newly available online

 In July 2018, after nearly 40 years of active, full-time practice, I scaled back to part-time practice. I continue to work about half-time. 

I have spent some time updating and, in some cases, annotating some of the tools that I had been using in my practice, and they have now been posted online at With one exception, all are free for anyone to use. They include: 

2021 Tax Calculator (Excel) - There are times that you want to have a projection of what the overall tax burden will be, assuming a certain level of earned income. This calculator will give you that projection. 

IRA Calculator (Excel) - Assuming a specified value for an IRA, 401(k) plan, or other similar retirement plan, this will give you a projection of what the required distributions (RMDs) will be when they begin at age 72, and how the increases in value and drawdowns over the next three decades will affect its overall value. There are two versions included, one that begins at age 72 and another that begins as early as age 60 and tracks increases with or without distributions until the age 72. (Free for personal use, but subject to a $50 licensing fee when used by a planner to advise a client.) 

SECURE distribution calculator (Excel) - For IRAs (etc.) inherited by a designated beneficiary who is not subject to one of four specified exceptions, the amount in the account can no longer be distributed over the beneficiary’s life expectancy, but rather must be distributed over the ten years following the death of the IRA owner (or her surviving spouse in many cases). This calculator again plots out increases in value and drawdowns with yearly or occasional distributions. 

Digital and Online Inventory (Word) - A place to record email accounts, online accounts, web pages, domains, electronic access to bank accounts, investment accounts, credit cards, software registration, etc. with contact information and passwords.  

US LawNet - A directory of the sites and resources most useful to practicing lawyers in the states that it covers. This site had its origin in a personal web page that I developed for my own use in the mid-1990s, and later posted online as a “publicly-accessible private site” as It has now been expanded to include ten states - five Great Lakes states and the five most populous states - and is publicly available for free use.  

Thursday, April 22, 2021

Quick IRS reference

On this single page, the IRS provides the tax inflation adjustments for a large number of items, including tax brackets, tax rates, standard deduction, as well as several items of interest for estate planning purposes: annual gift exemption ($15,000), lifetime basic exclusion amount ($11.7 million per person), etc. 

Tuesday, March 16, 2021

Preparing for the future

 How to Practice - Clearing out memories after a death leads the author to get ready in advance. 

"Tavia and I swore a quiet oath: we would not do this to anyone. We would not leave the contents of our lives for someone else to sort through, because who would that mythical sorter be, anyway? My stepchildren? Her niece? Neither of us had children of our own."

Saturday, January 2, 2021

Help for impending or recent death

 A Beginners Guide to the End is a book published in 2019 by Shoshana Berger and Dr. B.J. Miller which, the authors say, offers "Practical advice for facing death and living life." It has separate US and UK editions. The authors have a web site where you can read a preview excerpt from the book. The site's Resources page, by itself, is well worth perusing, and it includes links to sites that we have mentioned before.  

From the description: 

A Beginner's Guide to the End covers everything from will-making to making peace with your dysfunctional family. You’ll be walked through how to break the news to your employer, whether or not to share old secrets, how to hack the hospital for a better stay, what questions to ask your doctor (even uncomfortable ones, like whether or not sex is still ok), what to put in your "When I Die" file, and how to leave a letter that leaves a mark. There are also lessons for survivors, like how shut down a loved one’s social media accounts, clean out the house, and write a great eulogy. 

Dr. Miller is described as a palliative care and hospice physician, and in 2015 gave a TED talk called What Really Matters at the End of Life. 

This is useful for those facing an impending death and for survivors alike. 

Wednesday, December 16, 2020

Dancing with IRMAA and MAGI

Jane is a widow. Her 76-year-old husband died in late 2019. She has assets and income for 2020 that look like this: 

  • Widow’s social security benefits, based on 100% of her husband’s benefit - $2,700 per month, $32,400 per year  
  • An IRA with a balance that generates RMDs of $35,000 this year
  • Investments that generate income of $27,000 

Jane is 72. She has been on Medicare for seven years. This year, she is paying $144 per month as the premium for Part B coverage, and another $20 per month for Part D (prescription drugs), subject to a $435 per year deductible. 

Jane and her husband never had to worry about possible increases to their Part B and Part D premiums in past years. The threshold for those increases for a married couple is about $176,000, and their annual income was well within those limits. But now Jane has to dance with IRMAA. 

IRMAA is the awkward acronym that stands for “Income-Related Monthly Adjustment Amount.” The Social Security Administration, which manages Medicare payments and premiums, will increase the Part B and Part D premiums for beneficiaries who have more than a threshold income. Jane is now a single woman, and her income threshold is now $88,000. Jane now has to be concerned about that threshold. She has to dance with IRMAA. 

Trying to figure out how to know where the line is can be pretty complicated. The total of all of her sources of income is $92,400 per year. Her Adjusted Gross Income (AGI) is $4,860 less than that because only 85% of her social security income is taxed. But the technical rule requires that the income that is considered be calculated based on Modified Adjusted Gross Income, or MAGI. Without getting into too much detail, we can note that, for most people, MAGI will be the same as or pretty close to AGI. The untaxed portion of social security benefits is not included in MAGI for this purpose, either, but there are other items that, after being removed to calculate AGI, are put back in to calculate MAGI. 

The important thing for Jane and those in her situation to know is: If her MAGI gets into the mid-$80,000s or higher, she should keep IRMAA and MAGI in mind, and seek advice to avoid running over the line if possible, or be prepared to accept the higher Medicare premiums. Interestingly, her 2020 income will affect the calculation of her Medicare premiums for 2022. 

In truth, IRMAA will be a problem for Jane only if her total MAGI for 2020 is right at the $88,000 level. If it is less than that figure, there will no increase in premiums. If it is higher than $89,000, she will have enough money from the additional income to pay the increased premiums, which will be about $750 for Medicare Part B and $240 for Part D. If her 2020 income is $95,000, for example, she will have more than enough to pay that additional $990. If she happens to hit just over $88,000, she can always take out additional distributions from the IRA to bump up both AGI and MAGI for that year. 

Jane does have options, then, and at any rate having to pay a little more because she has more income is not a bad tradeoff. 

Saturday, December 12, 2020

Updates to RMD tables

 The IRS has issued its Final Rule updating the tables used for the calculation of required minimum distributions from IRAs and other retirement accounts. These control the distributions to the participant (the worker whose earnings funded the account) and to his/her spouse if the election to convert the account is made. They do not apply to accounts inherited by a nonspouse designated beneficiary. 

Due to increase life expectancies, the divisors are a bit higher and hence the annual required distributions will be a bit lower.  

The new tables will go into effect for required distributions for 2022 and after. They are included as an appendix to IRS Publication 590b. 

Protect yourself

 The Federal Trade Commission's Consumer Information Blog is a good regular source of information about scams that people are reporting...