Do I Need a Durable Power of Attorney

IF I BECOME ILL OR INCAPACITATED, WILL I NEED A DURABLE
POWER OF ATTORNEY IF I ALREADY HAVE A LIVING TRUST?

Question: I have a living trust that designates a successor trustee to manage the trust in case I become incapacitated. Do I also need a durable power of attorney?

Answer: You should still have a durable power of attorney for finances. Think of your successor trustee as reigning over a limited kingdom - your living trust, with whatever property you have put into it. If you become incapacitated, your trustee will have power over all this property and be able to use it for your needs - but that's where the power ends. Your successor trustee has no power over property outside the kingdom walls. And most people transfer into a living trust only assets that are too expensive to put through probate, such as real estate and valuable securities; few transfer all their property to a living trust.

Personal checking accounts, for example, are rarely transferred to a living trust - and most people want someone to be able to make deposits and pay bills from these accounts. You can grant this power to an "attorney-in-fact," or agent, using a durable power of attorney for finances. Also, under a durable power of attorney, you can give your attorney-in-fact the authority to handle tasks such as collecting government benefits, filing tax returns, handling legal actions, and dealing with many other matters that are also outside the boundaries of your living trust.

You may even want to empower your attorney-in-fact to transfer into your living trust any property that becomes yours after you become incapacitated. Only a durable power of attorney for finances can grant that authority.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Are Living Trusts Law Suit Proof?

IS PROPERTY IN A LIVING TRUST AT RISK IN A LAWSUIT?


Question: My grandparents are being sued over a car accident. The other party found out my grandparents' net worth, started seeing dollar signs, and asked for $125,000. Can the money that my grandparents put in a living trust be taken if the other party wins?

Answer: A standard, revocable living trust - in which your grandparents are both the grantors (the people who set up the trust) and the trustees (the people in charge of the trust assets until their death) - doesn't offer any protection if your grandparents lose a lawsuit. Trust property is treated just like any other asset. No wonder some people hide their money under the mattress

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Next Year's Taxes Will Be Higher For Seniors

As you race to get your 2009 federal income tax return in the mail, take a moment to consider the tax landscape. It's changing, especially for senior citizens, and it's not too early to start planning for it.

No matter how you slice it, taxes are probably headed higher, if not this year then next year for certain. The income tax reductions enacted in 2001, often referred to as the "Bush tax cuts," are set to expire at the end of this year. It's possible Congress could vote to extend them for a year or two, but unless the economy slides back into a recession, few analysts expect that.

That means starting next January chances are you will move into a higher tax bracket, even if you're not making any more money. In most cases, you can expect more money to be withheld from each paycheck.

Currently, the top tax brackets are 35 percent and 33 percent. These are the rates paid on income by the wealthiest Americans. When the tax cuts expire, the top tax rate will rise to 39.6 percent.

There are bigger changes farther down the tax table. The tax cut law added two extra tax brackets; a 25 percent bracket and a 10 percent bracket. When the law expires, the 25 percent bracket reverts to 28 percent while the 10 percent bracket moves up to 15 percent - the largest increase of all.

Also set to expire are some reductions in taxes on investment income.

Deduction limits?
In addition, President Obama has floated the idea of limiting some deductions claimed by upper income tax payers. For example, the administration has suggested limiting the value of top earners' itemized deductions to 28 percent.

Even though they would be paying 39.6 cents of every taxable dollar in taxes, deductions would only save 28 percent of every taxable dollar. At the same time the Administration has also suggested limiting the value of the current mortgage interest deduction.

Should you be worried about that? Probably not, at least not right away. Those changes would require action by Congress, which is unlikely in an election year, if at all. Also, the impact falls only on those in the top tax bracket.

Are there any taxes you should plan for in the short term? Yes, if you're a high wage earner. The just-passed health-care bill contained a couple of increases in Medicare payroll taxes for higher-income taxpayers. Analysts at Deloitte say those provisions would cost about $2,250 for a family with income of $500,000.

For retirees, the Medicare Part B premium, which is deducted from Social Security checks, has gone up. The cost this year is $2,652 for a married couple, up almost 17 percent from the $2,270 cost last year. Those in the upper income brackets will pay even more.

If you retired this year, don't forget you'll be taxed on 85 percent of your Social Security benefits. You will likely need to make quarterly estimated payments to avoid owing additional taxes, and possibly penalties, at the end of the year.

Roth conversions
One of the biggest tax changes of 2010 is the ability of all income groups to have a Roth Individual Retirement Account. In the past, upper income groups could not participate.

The difference in a Roth and traditional IRA is simple. In a traditional IRA, contributions are tax deductible each year, the money grows without a yearly tax event, and the account holder then pays taxes as she withdrawals the money.

With a Roth account, the contributions are not tax deductible but withdrawals are. This is a significant advantage if you expect to remain in a high tax bracket during much of your retirement years. However, to convert a traditional IRA to a Roth, the account holder must pay taxes on the current value of the account, which can be a significant hit.

The Estate Tax was repealed for 2010, meaning there is no tax this year on any sized estate. However, the tax is scheduled to return next year, taxing any estate over $1 million in value. The tax rate would also go up significantly. Congress is expected to take action before that happens and may set the limit a bit higher.

In 2007, federal, state and local taxes claimed about $3.8 trillion, or 27 percent of U.S. gross domestic product, according to the non-partisan Tax Policy Center. That's nearly $13,000 for every American. Two-thirds of tax revenues went to the federal government.

It may sound like a lot, but taxpayers in other developed countries pay even more. In 2006, taxes in 30 of the world's richest countries averaged 36 percent of GDP; only Mexico, Turkey, South Korea and Japan had tax rates lower than the US. And taxes in many European countries exceeded 40 percent of GDP because these nations offer more extensive government services than the US does.

Americans do pay far more in individual income taxes than residents of other wealthy nations. Nearly 37 percent of U.S. tax revenue came from personal income taxes in 2006, about 10 percentage points more, on average, than in other industrialized countries. But Americans pay much less in sales taxes; 17 percent of 2006 U.S. tax receipts were from taxes on goods and services, or about half the 32 percent average for rich countries.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Retirement ~ Can You Say MEXICO

Boomers May Soon Overcome Top Objection to Retirement in Mexico

As retirees and 12 year residents of Puerto Vallarta, Mexico, it’s quite easy to extol the benefits of living in Mexico. Of course, not every part of Mexico is the same (as is true in the US or Canada); however, we can certainly vouch for Puerto Vallarta. With its beautiful climate and landscape of the Sierra Madres cascading down into Banderas Bay, its kind and friendly local citizenry, its proximity to the US and Canada, and its lower cost of living, what’s there not to like in this wonderland south of the border?

English, as a second language, is widely spoken throughout the city, the safety of expats is of highest priority for the authorities with the rate of violent crime at a fraction of that back home, corruption significantly reduced, poverty virtually eradicated, and the cleanliness of this city make it a favorite resort destination for millions of visitors from throughout the world. All of the “Big box” stores such as Sam’s Club, Costco, Wal-Mart, Builders Square, Office Depot, nine beautiful signature golf courses, world class deep sea fishing, high speed internet, satellite TV, VOIP telephone service, etc. are all available in this beautiful city in the center of the Mexican Riviera.

The face of Vallarta has been dramatically altered during the past decade with well maintained city parks, esplanades, a new malecon walkway along the beach, new water treatment facilities and miles of new water distribution lines, new or upgraded power distribution system throughout the city, new downtown above ground and underground parking garages, a new University of Guadalajara branch, a new Convention Center, the tripling in size of the Maritime Terminal, the quadrupling in size of the International Airport, and the addition of four new hospitals with modern and sophisticated diagnostic and surgical equipment, staffed with highly trained and experienced English speaking doctors.

Now that we’ve established the fact that Vallarta is a fine place to live or retire, let’s take a closer look at the last item above related to medical care.

With high quality medical care readily available in Vallarta, the cost of it, even though at a fraction of the cost in the US, can be a deciding factor when considering Mexico as a retirement location. Assuming that most retirees have reached or are fast approaching their 65th birthday, the availability, quality, and cost of medical care are of high importance. The quality of medical care in Vallarta is generally equal to or better than that received in the US and the cost varies from one third to one half of that in the States (speaking from experience and with authority!).

Having high quality medical care available in Mexico is one thing but paying for it is another since US provided Medicare for seniors fails to cross the border at this time. Various supplements to Medicare cover seniors traveling abroad for a limited period of time (for example, supplement F covers the holder for the first 60 days of international travel), however, they are inadequate for full time residents living abroad.

Although Mexican Social Security (IMSS) is available to expats, most under the age of 65 have their own private international health insurance which is somewhat costly as discussed in numerous articles and covered on websites such as MedToGo. For many years, we have used IHI/BUPA and can state emphatically; their coverage and service is absolutely great for expats living in Mexico and traveling worldwide.

Now, let’s assume you’ve reached the age of 65 and are considering Mexico as your retirement destination. It’s very difficult to abandon your free Medicare that you’ve contributed to for a lifetime, the cost of private insurance is almost prohibitive, and you can’t afford to take the risk of being uninsured. This is the main dilemma for seniors considering retirement abroad. Even so, there are more than five million (some reports indicate six million) Americans living abroad, of which more than a million reside in Mexico per the Association of Americans Resident Overseas (AARO). In fact, there are more US expats living abroad than reside in 24 of the states in the US as reported by Republicans Abroad!

Well, perhaps we’re on the verge of overcoming this top objection to retiring in Mexico! The US government has been approached by numerous expat groups such as the Puerto Vallarta based chapter of Democrats Abroad and the bipartisan group of American Citizens Abroad (ACA) with the intent of promoting the advancement of Medicare for expats living abroad.

Before Congress can enact such a law change, they must conduct demonstration projects in order to determine the feasibility and cost effectiveness of such law changes. The Americans for Medicare in Mexico, A.C. (AMMAC) have put forth a tremendous effort in promoting this benefit to eligible retirees and have encouraged many members of Congress to initiate such a demonstration project. They argue that not only have these eligible Medicare recipients paid into the fund over a lifetime, but the cost to the US taxpayers will be significantly reduced because rather than returning to the US for expensive and long term medical care, the majority of these expats will merely elect to have their medical care provided near their foreign residence at a fraction of the cost.

Proponents of the law change such as Professor David C. Warner of the Lyndon B. Johnson School of Public Affairs at the University of Texas have written books and papers on the subject of “Getting What You Paid For: Extending Medicare to Eligible Beneficiaries in Mexico” and the newly appointed US Ambassador to Mexico, Carlos Pascual, has been following the current efforts to establish a demonstration project for the initiation of Medicare in Mexico as a pilot program. In fact, Ambassador Pascual recently accompanied President Obama to a North American Summit in Guadalajara where one of the topics covered was Medicare in Mexico as reported by the Guadalajara Reporter.

In summarizing, we are anticipating the availability of Medicare for eligible retirees residing in Mexico in the not too distant future. Once this obstacle to retiring abroad has been eliminated, not only will millions of baby boomers in search for a less expensive and better quality of life be heading south of the border, but so too will millions of retiring Mexican Americans desiring to return to their homeland. Combined with all of the other obvious benefits of living in Paradise, free and high quality medical care for boomers will just be the icing on the cake!

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

OPINION: Obama Not Helping Seniors

Seniors get disrespect from Obama
By Letters to the Editor/Gloucester County ...

It appears that senior citizens are having a harsh awakening about what the government is inflicting upon them.

The value of Social Security benefits is shrinking. About 50 million retired and disabled Americans receive Social Security.

The government claims there was no need for a 2010 cost-of-living increase in these benefits. Where do they obtain this misguided information? Everything is skyrocketing.

Medicare Part B premiums that most Social Security recipients pay are expected to rise, yet there was no cost-of-living increase.

Did you know the retirement nest egg of an entire generation is stashed away in Parkersburg, W. Va., where the Social Security Administration is expected to start cashing in $2.5 trillion worth of IOUs from the federal government?

Social Security previously collected more from payroll taxes each year than it paid out in benefits. But this year, there is a projected $29 billion shortfall.

The federal government has already spent the IOU money over the years on other programs. This money should belong to the people who invested into the system. Wouldn’t you call such stealing a federal offense?

Our country is overwhelmed. We took a bad slide when we allowed millions of illegal immigrants to invade and stay in this country. Our schools are overloaded. Who is paying the taxes if these immigrants are not?

I’m sure there are many seniors without health care or who could use more help to survive.

We need to rid this country of these illegal immigrants. Let them wait their turn to enter this country, as our ancestors did.

We are entirely too lenient with our laws. Our systems are drying up. That’s why all the states are going broke.

Our seniors don’t deserve the disrespect they have sustained from President Barack Obama. He can print trillions of dollars to bail out the banks and other corporations, but he can’t find the funds to give seniors a modest cost-of-living raise.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

The Sandwich Generation: Baby Boomers

The challenges of caring for aging parents can be taxing for the in-between generation.

IT IS one of the most difficult problems any of us will ever face. Mom and Dad are getting on in years, and they aren't quite as sharp as they once were. Mom broke her hip last year and has a hard time with the stairs. Dad probably shouldn't be driving anymore. Or maybe Dad has passed away and Mom has started to let her once-immaculate house go a bit. You would love to help out more, but you live 2,000 miles away and you've got about all you can handle taking care of your own kids.

Situations like this are becoming increasingly common. In fact, there is even a name for people being squeezed between the demands of their children and the responsibility they feel to assist their aging parents--the Sandwich Generation.

For as long as there have been families, people have had to find ways to care for aging relatives. In days gone by, multi-generational families often lived in the same town, and sometimes even in the same house. Everyone could pitch in to help their grandparents. It was almost expected that, after a long life, they would be taken care of by their children and grandchildren.

It is important to remember that, when you are trying to help your aging parents from a distance, you don't have to do it alone. There are many resources available, including:

Senior centers. Not to be confused with nursing homes or retirement facilities, these are places where seniors can go during the day to socialize, exercise, and have a good time. Many offer extensive programs of activities, including guest speakers, dances and parties, organized book/discussion groups, and outings to museums, shows, sporting events, etc.

Dependent care counseling. Some employee health benefit plans come with telephone access to counselors who can assist you with issues involving caring for your aging parents. These counselors can often provide referrals to experts who can help you with needs as diverse as finding an accountant to do their taxes to helping you locate information on diet and exercise for seniors. Some services can be a big help in performing the costly and time-consuming legwork associated with finding care for your parents. Ask your employer or health plan if your benefits include such a service.

Warning signs

One of the hardest parts of trying to assist your aging parents from a distance is monitoring their health. Since many parents don't want to complain, their children may never know that a health problem is developing. It is not uncommon for parents not even to tell their children if they are hospitalized.

While senior health conditions can be subtle and hard to detect, there are several warning signs. Any of the following could signal the start of a situation that needs attention:

Sometimes, the health concerns brought on by aging necessitate more formalized, regular care, such as in-home custodial care or moving to a nursing home. It is often difficult for adult children to come to terms with the fact that their parents may need this kind of care, especially when their mother or father vigorously protests the idea. There are, however, a few things you can do to make such a transition easier:

Involve your parents in choosing their care. A large part of the anxiety seniors feel when they are placed in the care of others comes from relinquishing control and autonomy over their own lives. To help alleviate this fear, make sure that Mom or Dad has as large a role as possible in interviewing candidates for in-home nursing or visiting prospective retirement communities and nursing homes. This will help them retain their dignity and sense of independence.

Choose a nursing home carefully. All facilities are not alike. Try to find one with as low a ratio of residents to staff as possible. Be sure that it offers plenty of activities and programs to keep residents engaged and vital. Check out the buildings and grounds to see if they are clean, safe, and in good repair. Ask for references so you can talk to current residents and their families. Above all, meet and talk with as many of the staff as possible and have your parent(s) do the same. If you and your mother or father both get a good feeling about the place and the impression that it is staffed by caring, experienced professionals, chances are it will be a good fit.

Investigate long-term care insurance. Nursing homes and in-home nurses aren't cheap. Visits by in-home nurses run about $20 per hour, and nursing homes average around $35,000 per year. Medicare doesn't always provide enough to cover these expenses, so it may be a good idea to look into long-term care insurance. Such policies are designed to cover care associated with aging, and some allow the policyholder to use the benefits either for themselves or their parents.

As members of the baby boom generation approach their golden years, seniors' issues may dominate the national agenda like never before. How will the sandwich generation of today manage their own care? Will they expect their children to take care of them or will they somehow manage to retain their independence?

Advances in medical science have lengthened life, but in many cases a longer life doesn't mean one free from health concerns and the need for ever-higher levels of care. Indeed, it could be argued that medical advances have exacerbated the problem of looking after the growing ranks of older seniors in this country. Meanwhile, the responsibilities facing the sandwich generation today continue to be a challenge. While caring for aging parents is difficult, there are ways to make it easier--on your parents and yourself.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Retirement Planning ~ Embrace Downsizing

Downsizing in Retirement:

One of the quickest ways to stretch your retirement budget is to shrink your housing costs. Moving into a smaller house, condo, or apartment can also reduce your taxes, utility bills, and home maintenance costs. Here are other reasons to consider downsizing in retirement:

Boost your nest egg. Cutting your housing costs is a quick way to increase your retirement savings. "Having less money locked up in your housing frees up more money to invest or just for your lifestyle," says Kathy Hankard, a certified financial planner for Fiscal Fitness in Verona, Wisc. "If you're deciding just by the numbers, it's pretty much a no-brainer to downsize." For example, if you moved from a $300,000home with a paid-off mortgage into a $150,000 condo , you could add $100,000 or more to your nest egg, after transaction costs.

Lower your cost of living. For retirees who still have a mortgage or pay rent, moving into more compact quarters in your current town or relocating to a low-cost locale can lower one of your biggest monthly expenses. Ideally the smaller space would also cost less to heat, furnish, and maintain. Slimming housing costs will produce far greater results than skipping coffee and clipping coupons. Aim for a town that balances a low cost of living with amenities such as high-quality health care and plenty of fun, affordable activities.

Reduce taxes. Inexpensive housing has the added bonus of smaller property tax bills. "I have clients who have saved a couple of thousand dollars per year because they have moved from an urban area with a high property tax to an area with a lower property tax and that doesn't assess seniors for school taxes," says Micah Porter, a certified financial planner and president of Minerva Planning Group in Atlanta, Ga. Taxes can vary considerably by location. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax. New Hampshire and Tennessee tax dividend and interest income only. "If you anticipate earning income in retirement, being able to forgo that state income tax could save you thousands of dollars as well," says Porter. Five states levy no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Also look for state and local tax breaks specifically for seniors who reach certain ages.

Less upkeep. Ron and Jean Mirabile, both 67, traded in a three-story townhouse with a basement in Cromwell, Conn., for a three-bedroom apartment with a lake view in Port Charlotte, Fla. The couple was looking for a change of scenery and housing that required less upkeep when they retired in 2008. "If something breaks, I call the office and the maintenance man comes and fixes it," says Jean, a former proofreader. Ron, a retired dentist who makes wooden fishing lures as a hobby, no longer needs to travel to fish. "I can take one pole and lure and go out in the backyard and fish for bass," he says. "The best things in Florida are free: The weather, the beach, and the scenery."

Slash utility bills. Cozier quarters may also result in lower heating and cooling expenses and a smaller homeowner's insurance bill. "A smaller space should save you money on utilities," says Porter. Ask for copies of the previous owner or tenant's utility bills to determine approximate monthly expenses.

Increase flexibility. Some retirees go back to renting in retirement. "Renting makes a lot of sense because there is more flexibility," says Hankard. "Most people would rather do other things with their time and money, unless they are really in love with their home." Renters can try out a few retirement locations. Sometimes priorities also shift throughout retirement. For example, immediately upon retirement, you might want to move to the Sunbelt or travel. But after a few years, you might want to move closer to your children and grandchildren.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Baby Boomers Can't Save for Retirement

By Emily Brandon

Many baby boomers are helping to financially support both their parents and their adult children. Almost a third (31 percent) of relatively wealthy Americans are supporting older and younger immediate family members at the same time, according to a new Merrill Lynch Wealth Management survey of 1,000 people with investable assets of $250,000 or more.

In order to support relatives, while at the same time planning their own retirement, many of these affluent baby boomers say they have made lifestyle sacrifices (45 percent) and cut back on personal luxuries (44 percent). A quarter of these retirees sandwiched between eldercare and childcare responsibilities have stopped saving for retirement to take care of more immediate financial needs. Another 12 percent of wealthy baby boomers have stopped saving for a child’s education.

“Many folks find themselves slipping into the sandwich generation without really understanding the scale of financial commitment involved,” says Andy Sieg, head of retirement and philanthropic services at Bank of America Merrill Lynch. “What starts as a manageable expense increases as your parents become more reliant on you as their health care needs increase.”

About one in five of those surveyed are considering inviting their adult children or parents to return home to cut living expenses for both or all three parties. Women were twice as likely as men to make financial sacrifices in order to better care for others.

The emotional challenges of caring for relatives may be even more difficult to manage than the financial costs. Some 57 percent of Americans between the ages of 18 and 90 are concerned about the emotional strain of caring for a relative, compared to 49 percent who are worried about paying for long-term care
expenses, according to a recent Age Wave and Harris Interactive survey of 2,939 people between the ages of 18 and 90. Many people are also concerned about the affects care giving would have on their lifestyle (21 percent), other family relationships (21 percent), and career (19 percent).

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Reverse Mortgages ~ Are They for You?

Those who qualify for a reverse mortgage may be able to reap more benefits from doing so than refinancing their home loan for a lower mortgage rate or mortgage payment. If you have equity in your home and are over the age of 62 you are able to get a reverse mortgage loan. However, it will depend on your personal situation as to whether it is in your best interest to do so or not.

A reverse mortgage basically gives you money based on your home’s value, your age, and how much, if any, you owe on your home, among other things. A reverse mortgage can be valuable if you owe little or no money on your home because the money from a reverse mortgage must first go toward your mortgage. If you qualify for a $200,000 reverse mortgage and owe $50,000 on your home, you only keep $150,000. Obviously, this is going to be helpful, as you have paid off your mortgage balance and have money left over.

In some cases, a reverse mortgage is going to be equal to or less than what you owe on your home, and can be helpful in this case as well. If a reverse mortgage goes toward what you owe on your home and still leaves money owed, depending on if the difference is affordable, you may be able to get rid of your mortgage payment. For instance, if the reverse mortgage pays off everything but $5,000 or $10,000 on your mortgage and you have that much saved, you can pay the rest on your mortgage and you no longer have a mortgage payment.

Keep in mind; even though a reverse mortgage can be very beneficial, it is debt. The homeowner doesn’t have to repay the reverse mortgage unless they move or the money isn’t owed as long as they are alive, but the debt could eat into the estate of the homeowner. If you are looking for money from you home later in life, do some research on reverse mortgages and look at your personal situation to see if a reverse mortgage is right for you.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Seniors & Getting Money Out of Their 401K

Getting money out of your IRA before you turn age 59 1/2 is a lot easier than getting money out of your employer's plan. With an IRA, there is nothing to prevent you from taking the money out whenever you want. But when you do take the money, you pay income tax. And if you happen to be younger than 59 1/2, you will also pay a 10 percent early distribution penalty, unless you qualify for one of the exceptions to the penalty - for example, if you die or become disabled.

Getting money out of your 401(k) plan before you reach age 59 1/2 is trickier. Most company plans will not allow you to take money out while you are still on the job.

The two big exceptions are hardship distributions and loans. To take a hardship distribution, you must satisfy the plan's definition of hardship. If you qualify, you will still have to pay income tax and an early distribution penalty on any money that comes out of the plan. The best alternative is a loan, if the plan allows one. But even if you are permitted to borrow from the plan, you must pay the money back with interest within five years, usually in installments. The 403(b) plan rules are similar. And your best option with a 403(b) plan is also a loan.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

How long do I Have to Keep My Tax Records?

Question: My file cabinet is bursting at its seams because I have receipts and records from the last ten years! I need to toss all old records but the essentials. How long are you required to maintain personal records in the event of an audit? I was told three years. Is this correct?

Answer: Most people find it annoying to hang onto reams of paper over the years in case of an audit or tax question. But there is something frightening about throwing these old records away.

What to do? Three years is the minimum period of time to hold records after you file a tax return. Six years is even better because, in certain cases, the IRS has that long to audit you.
And, for some types of records - primarily long held assets like real estate or stocks - the records should be kept from the date of acquisition until three or six years after the date of disposition of the item, which could mean a decade or longer

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

The AARP Helps Seniors with their Tax Returns !!

Senior Solutions presents Tax Aide a free, volunteer-run tax assistance and preparation service. It is available to taxpayers with low and moderate incomes and gives special attention to people age 60 and older. Trained in cooperation with the Internal Revenue Service, volunteers help more than 2.6 million taxpayers file federal, state and local tax returns each year. The program is offered nationwide in senior centers, libraries, community centers and other convenient locations.

Volunteers are trained to assist with filing the 1040 Form and standard schedules, including Schedules A and B. Taxpayers with complex tax returns are advised to seek paid tax assistance. Electronic filing (e-filing) is offered at most sites, with no charge to the taxpayer. E-filing ensures more accurate tax returns and faster processing of tax refunds.

Tax Aide also allows taxpayers to pose questions online, year-round, 24 hours a day, seven days aweek, from the comfort of home. To learn more, just click HERE or visit the general AARP site HERE

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524