Misunderstood Facts about Social Security

Throughout 2014, the government will pay almost $863 billion of Social Security benefits to over 59 million Americans. According to the Social Security website (SSA.gov), “Among elderly beneficiaries, 52% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.” Social Security benefits can provide a substantial amount of your retirement funds. However, many individuals struggle to grasp the basic details about this program. Some of the most commonly misconstrued facts are listed below.
First, Americans fail to understand that official retirement does not begin at age 65. Retirement ages vary slightly based on the year in which you were born. If you were born between 1934 and 1954 you can retire at age 66. If you were born after 1960, the full retirement age increases to 67.
Second, people do not realize that there is no requirement for you to be a citizen … Read More

Withdrawals: Traditional IRA’s vs Roth IRA’s

If you have been growing a nest egg in an IRA account, it is best to never withdraw for reasons other than retirement. However, it is possible that you will be faced with unforeseen expenses and a withdrawal will be unavoidable.

If you withdraw from your traditional IRA before age 59½, the IRS normally labels your withdrawal “premature”. This means that you will face a 10% penalty on the amount which you take out of the account. Furthermore, you will be taxed on the money that you withdraw. However, there are two common situations in which the IRS allows you to use your retirement savings early without facing penalties.

The first exemption from IRS penalties is for school expenses. You can use your IRA dollars to cover the cost of tuition, books or supplies for you, your spouse, your children or your grandchildren. If the student enrolls more than half time, … Read More

Consider Filing for an Audit Reconsideration

Simply hearing the word “audit” can often make taxpayers shudder. But these situations are not hopeless. If you were surprised by an unexpected audit and were unprepared, you may be able to file for reconsideration. There is usually no form required. Simply mail your request to the office which issued your examination report. The IRS generally responds with a decision within 30 days

Before you submit a request for reconsideration you should carefully review the previous examination report and identify which items you believe are incorrect. You can file a reconsideration request if you meet any of the following criteria.

  • You did not appear for your audit.
  • You moved and did not receive correspondence from the IRS.
  • You have additional information to present that you did not provide during your original audit.
  • You disagree with the assessment from the original audit.

If you meet one of the listed requirements, you should … Read More