Feeling charitable this holiday season? According to a reminder issued just before Thanksgiving, it appears the IRS is, too. Lucky for a lot of generous people this year, one of the components of the CARES Act you may no be aware of is a provision that allows for an “above the line” cash deduction for some charitable contributions.
It’s not life-changing money, but for people who could use some incentive to support their favorite charity this year, the IRS is making an allowance for cash donations up to $300—even if you claim the standard deduction rather than itemizing.
The standard rules apply, of course. For instance, it must be a legitimately recognized charitable organization, and you’ll need to to provide proof of your contribution if asked. So as long as you keep your receipts handy, your generosity during this particularly difficult year can be rewarded.
You can read the IRS press release and access additional resource links on their website here.
For everyone who has ever said “I would never fall for that,” there are numerous stories of people who lost money, time and credit ratings to cyber criminals. We all want to believe that the holiday season is a time that brings out the best in people. Thankfully, that’s true in most cases. Still, there are astonishing numbers of scammers who continue to find ways to trick people out of their hard-earned money, often without you knowing until it’s too late. And worse, the incidence of “ransomware” attacks—where foreign scammers literally kidnap sensitive information from companies online until they pay—are increasing.
That’s why it’s so important to pay attention to recommendations for keeping your information secure and not becoming an easy target for identity theft.
As part of the 5th Annual National Tax Security Awareness Week, the IRS has issued new warnings, noting that a combination of factors have presented more opportunities than usual for scammers to gain access to your personal information this year. For instance, more people working from home, increased online shopping, and the backlog of unemployment claims.Whether you are using a desktop computer, a laptop, or your smartphone(!) there are a number of basic steps we can all take to help protect ourselves from identity theft and cyber scams.
The list below from the IRS outlines a number of things you should do:
Don’t forget to use security software for computers and mobile phones – and keep it updated.
Make sure purchased anti-virus software has a feature to stop malware, and there is a firewall that can prevent intrusions.
Phishing scams – like imposter emails, calls and texts – are the No. 1 way thieves steal personal data. Don’t open links or attachments on suspicious emails. This year, fraud scams related to COVID-19 and the Economic Impact Payment are common.
Use strong and unique passwords for online accounts. Use a phrase or series of words that can be easily remembered or use a password manager.
Use multi-factor authentication whenever possible. Many email providers and social media sites offer this feature. It helps prevents thieves from easily hacking accounts.
Shop at sites where the web address begins with “https” – the “s” is for secure communications over the computer network. Also, look for the “padlock” icon in the browser window.
Don’t shop on unsecured public Wi-Fi in places like a mall. Remember, thieves can eavesdrop.
At home, secure home Wi-Fis with a password. With more homes connected to the web, secured systems become more important, from wireless printers, wireless door locks to wireless thermometers. These can be access points for identity thieves.
Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones – providing an important place to recover financial or tax data.
Working from home? Consider creating a virtual private network (VPN) to securely connect to your workplace.
You can find additional information and resource links on the IRS website here.
The Centers for Medicare & Medicaid Services (CMS) posted a “Fact Sheet” in November detailing the changes we can expect in the New Year. As anticipated, Medicare premiums are going up next year. Unfortunately if you pay Part B premiums through Social Security and experienced a significant drop in income this year, you might be surprised by an increase in 2021. This is because the calculations for 2021 are actually based on your income from last year (2019) rather than your 2020 income.
In general, most people’s income tends to increase from one year to the next. COVID-19 reversed that trend for millions of people this year, and for those collecting Social Security, it may work against you in 2021.
For example:
Mary is single.
She made $103K in 2019, but only $62K in 2020.
The first-tier threshold for a single filer to see an increase in 2021 is $88,000.
Even though Mary was well below the threshold in 2020, her premiums will go up in 2021 because she was above it in 2019.
The chart below shows how to calculate the upcoming premium increases for Part B taxpayers.
Beneficiaries who file individual tax returns with income:
Beneficiaries who filejoint tax returns with income:
Income-related monthly adjustment amount
Total monthly premium amount
Less than or equal to $88,000
Less than or equal to $176,000
$0.00
$148.50
Greater than $88,000 and less than or equal to $111,000
Greater than $176,000 and less than or equal to $222,000
59.40
207.90
Greater than $111,000 and less than or equal to $138,000
Greater than $222,000 and less than or equal to $276,000
148.50
297.00
Greater than $138,000 and less than or equal to $165,000
Greater than $276,000 and less than or equal to $330,000
237.60
386.10
Greater than $165,000 and less than $500,000
Greater than $330,000 and less than $750,000
326.70
475.20
Greater than or equal to $500,000
Greater than or equal to $750,000
356.40
504.90
According to CMS, the income-related monthly adjustments will affect roughly 7% of taxpayers with Medicare Part B. And while 7% may not sound like a lot, it is still a significant number of people,amny of whom are still trying to recover from this year’s loss of income.
If you are interested in learning more, you can access the CMS Fact Sheet on their official site here.
Any rate lower than what you are currently paying can save significant interest over time.
Refinancing can lower your monthly payment and/or reduce the years left on the loan as well!
We are always looking for ways to help you save money and plan for a comfortable retirement, and depending on the terms of your current mortgage, taking advantage of historically low interest rates can be a great way to reduce your long-term debt.
Whenever interest rates are low, there is an opportunity for homeowners to save money which can add up to tens or even hundreds of thousands of dollars over the life of your loan. Getting the information you need to decide is easy these days. Typically, all you’ll need to do is send a copy of your current mortgage statement via text or e-mail, and you’ll get back a number of different terms and rates to consider.
If you are interested in finding out the refinancing options that are available to you, I’d like to recommend Rob Matthews at PrimeRate Mortgage. I have known Rob for more than 20 years, and he has consulted for and handled mortgage loans for many mutual clients. Even if you currently have a good rate, it might be worth your time to contact Rob to see if you could save some money by refinancing.
As a reminder, in the interest of data privacy and security, we will be removing all files from the portal on Monday, December 7, 2020. As with any personal information, you should maintain and store your financial and tax records in a secure and accessible location, whether digitally, in hard copy, or both. If you wish to retrieve any of the information that is currently in your folder(s) on the client portal, you will need to download it to your home computer before Monday, December 7th.
As we mentioned in our previous newsletter, the company that hosts our client portal made some software updates that affected our login link. We corrected the link on our website, but if you try to login through a bookmark that was created before the update you will land on the following site error message:
The resource cannot be found.
Description: HTTP 404. The resource you are looking for (or one of its dependencies) could have been removed, had its name changed, or is temporarily unavailable. Please review the following URL and make sure that it is spelled correctly.
Requested URL: /portal/login.aspx
To correct this you just need to delete any information that appears after “.com” in the website address and re-save the bookmark. For example:
