A Health Savings Account (HSA) is an account that you can fund for medical expenses when you are enrolled in a high deductible health plan. This can be a great tool to pay for medical expenses tax free. A high deductible health plan has certain parameters to meet in order to qualify. If you are a healthy individual and rarely go to the doctor, this is a great savings tool for you.
Long Term Care Insurance provides a benefit for your long-term care as you age. Long term care is the care you need when you cannot perform your activities of daily living (ADL’s). There are six ADLs associated with long term care. They are bathing, dressing, eating, transferring, toileting and continence. Usually, your long-term care insurance kicks in after you cannot perform two ADL’s or memory care issues.
Do you need disability insurance? Would you want to protect your largest asset? If so, then I would say yes, you need disability insurance. Your largest asset during your working years is your ability to make money. According to the Council for Disability Awareness, more than one in four of today’s 20-year old’s will be out of work for at least a year due to a disability before they reach full retirement age. That is an alarming statistic.
Why do you need Life Insurance? Not everyone does need life insurance. You need to think about your current situation. For example, if you own a home with your spouse and you pass away tomorrow, would you want to make sure your spouse has enough money to not worry about the mortgage payment? What if you have kids—would you want to make sure there are some assets available for childcare while your spouse works in addition to having funds for the mortgage payment?
Your Emergency Fund is your savings account that has no risk to principal—so it’s in cash. The purpose of your Emergency Fund is just as it sounds-for emergencies! Emergencies can be losing a job, unexpected home repair, illness, major car repair or your pet needs surgery—really anything that is completely unexpected.
If you have kids and saving for their college is on your mind, I am sure you have heard of a 529 College Savings Plan. A 529 plan (named from the Internal Revenue Code Section 529) can be a great tool to help you save for those college years. Do you know there are 2 types of 529 plans? The 2 different types are a Pre-paid plan and a Savings Plan.
Whether you are preparing your income taxes yourself or you have hired someone to do them for you, you will most likely be seeing the question asking if you contributed to an IRA or ROTH IRA for the previous tax year. By the way, you have until April 15th to make that contribution for the …
I get this question a lot: “Can’t I just deduct that expense on my taxes?” My answer to this question, 9 times out of 10, is that it depends. Let us look at some basic concepts on your personal income taxes and your self-employed income below. Standard vs. Itemized Deductions You have your standard deduction …