Exchanges and Subsidies
AATABS has moved to its new home at 69 Freedom Park, Building 19-4, in Hermon, right behind DISH Network. We are easier to find and on the first floor! Hopefully this new space will offer everyone something they have been seeking as there is more privacy and it is ground level.
Early Retirement
I found a Web site that will be of interest for those heading into retirement and it seems fairly good. It calculates your estimated Social Security benefit as well as a life-expectancy calculation so that you can see the cost of early retirement versus waiting. I believe most will find what I have been preaching for years: that early retirement at the reduced benefits is still a better deal than waiting. The site is a government site so no salesman will be bugging you for testing it out:
https://www.consumerfinance.gov/consumer-tools/retirement/before-you-claim/
Health Insurance
Note: AATABS does not endorse any health-care provider or insurer.
On the health-insurance front it appears there is yet another change. For those without health insurance, unless your income is below 133% of poverty level the automatic waiver in place for those people who live in states that did not expand Medicaid might not exist for 2015. Hopefully as the year ends Congress will address this. Besides regular health insurance or the exchanges, members of Christian churches can join Christian health-care exchanges with Medi-Share, Samaritan, and Christian Health Care Ministries being the largest and most accepted. These groups are typically much more affordable for those who cannot get a subsidy or who are in great health. They are not insurance and you are putting your faith into your fellow members to pay if your medical bills exceed their limits and the coverage is typically not as extensive as insurance. However, it is a viable alternative available to you.
Penalties for 2016 greatly increase, and for most people getting subsidized health insurance will become cheaper than the penalty. If there is any chance that you may need services, the Silver plan, because it has cost-sharing provisions, might be the best deal especially if your income is below 200% of the poverty level—which eliminates most of my clients, but you might know someone who needs help.
Special Depreciation
Special depreciation to date has ended meaning businesses can only take $25,000 as an elected expense for 2015. The House of Representatives passed a bill increasing the limit to $500,000 but the Senate to date has not passed that bill and the White House has promised to veto the legislation if passed. I must admit I would like to see the limit increase since it has not increased in over 20 years on a permanent basis—but only for those that have paid for the equipment. The increased deduction that has existed for the past few years has caused far more problems for the small businesses that took loans and took the deduction, since the equipment and the mismatch of taxable income to cash flow is starting to show up. I expect that, over the next three years, many small businesses will have huge tax burdens because of this mismatch.
Investments
Every year, people ask me about investments and my thoughts on them. This has definitely been an interesting year for the market, since so many variables have been in play. As the year ends, I expect this to even be more of an issue—especially as mutual funds try to book gains in order to get higher rankings. This of course passes a tax burden onto you. Also, many funds have increased fees—especially on government bond funds—making the funds pretty much guaranteed to lose money. This is a good time to rethink your objectives and be sure that your investments are targeted towards your goals—not someone else’s. I am curious how many people would like to form an investment club. Let me know if this is something that you’d like to talk about.
Have a great Christmas season and I look forward to serving you at our new location.