How do you deal with a $45,000 hospital bill? - The Help Desk - CNN

A 61-year-old neighbor of mine in Oregon recently incurred a $45,000 hospital bill. She is unemployed and uninsured. The hospital gave her some financial assistance, but because she has some savings, including an IRA worth $220,000, the hospital argues that she has the resources to pay the balance. What should she do? Should she withdraw funds from her IRA, resort to a reverse mortgage or risk defaulting and being turned over to a collection agency? ? L. Wilson

Your neighbor should negotiate the terms of a payment plan with the hospital, spreading the payments over as many years as possible to make them easier to fit into her budget. "Don't let this go to a collection agency," warns Anna Sergunina, with Mainstreet Financial Planning in San Mateo, Calif. "It's a lot easier to negotiate with the hospital than with the collection agency."

Your neighbor doesn't have many other options. If she drew on her IRA assets, she'd have to pay income tax on the withdrawal, which likely would add between $6,750 and $11,250 to her cost, depending on her tax bracket. A reverse mortgage is out: They are only for people age 62 or older. One possibility she could consider is a home equity line of credit. "Interest rates are low," says Sergunina. "But she might have difficulty qualifying because she's unemployed and has very little income."

If collection agencies do get involved, she should know that her Social Security benefits and IRA assets are safe. Social Security payments can't be garnished, except by the federal government, and in Oregon, IRA assets are protected from creditors (the rules vary from state to state).

? Austin Kilham

Got a question for the Help Desk? Send it to?helpdesk@cnnmoney.com.

Source: http://helpdesk.blogs.money.cnn.com/2012/08/27/deal-with-hospital-bill/

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Passing on Your Home as Part of Your Estate Plan ? Rodgers ...

For many people, their home is the single largest asset that will be passed on to their heirs. Housing values have come down over the past couple years but even today it is possible for your home value to push your total estate over the annual estate-tax exemption limit ($5.12 million for 2012). The disposition of your home in your estate plan presents some unique issues that retirement accounts and assets such as stocks or bonds do not.

Let?s consider some possible options for dealing with your home that you should discuss with your spouse for possible consideration in your estate plan.

Keep the home in your estate ? If you have owned your home for many years, chances are good that you have a large capital gain in the property. Leaving the home in your name and passing it to your heirs through your will erases the gain. Your heirs will receive the home on a stepped-up basis to its current fair-market value. In other words, their cost becomes today?s market value and will not generate capital gains tax on the appreciation of your home since the time you bought it.

The other expense to consider is federal estate tax and/or state death taxes. The federal exemption is high this year and may not affect your estate. You will need to check your current state laws to see if they have a death tax and how it applies to your situation. In Pennsylvania, the inheritance tax is 4 ?% for property left to lineal decedents. It becomes an easy math calculation to determine if avoiding a 15% capital gain on part of the property?s value is more cost effective than paying 4 ?% on the entire market value.

Gifting the home to an heir ? Giving your home to an heir may seem like a sensible solution, however, gifting comes with some pretty strict rules. Signing over the deed or just adding their name as a joint owner constitutes a completed gift. If the value of the property is more than $13,000, you will have to dip into your gift tax exemptions. A federal gift tax return will need to be filed using IRS Form 709 to declare the gift. In some circumstances, you and your spouse may have to pay a gift tax. You won?t actually owe any federal gift tax unless the value of the gift exceeds $5.12 million which is the lifetime gift tax exemption for 2012. The deadline to file this return is the same as for regular income taxes.

When you make a gift of your home, your heir will not get the advantage of receiving the home on a stepped-up basis. This means that the capital gains taxes will likely be higher when he or she finally sells the home.

The bigger issue is the number of legal consequences involved when you gift the home to your heirs but still intend to live in it. If the heir gets divorced, their spouse could claim an interest in your home as an asset owned during the marriage. They may not be awarded the home since it was a gift from you but the court could take into consideration this asset in your heir?s name and divide their other property in the spouse?s favor.

You will also need to take into consider what happens to the heir?s ownership if they were to die before you and you are still living in the home? Most spouses leave all their assets to the surviving spouse. You could end up owning the home jointly with an in-law.

In addition you need to consider the issue of creditors. If your heir ends up in bankruptcy you may have to buy out your heir?s interest in the house to avoid having it sold to satisfy creditors. Even if your heir handles their money well they could end up on the wrong end of a lawsuit with a judgment against them.

A qualified personal residence trust (QPRT) ? Larger estates (several million dollars) should consider a QPRT for their home. A QPRT involves the transfer of a personal residence to a trust, with the grantor (you) retaining a qualified term interest and the right to live in the home for a specified period. This is a completed gift like option two above and requires filing a gift tax return. The difference is that the home is not valued at fair market value. The IRS takes into consideration the value of your right to live in your home over the period specified in the trust. This value is deducted from the current fair market value allowing you to claim a significant discount.

One sticking point is that you have to live until the end of the qualified term interest or the value of the residence is included in your estate. However, if you survive to the end of the term, the home passes to beneficiaries of the trust. You can then relocate, pay rent, or make other living arrangements.

Because a QPRT is a grantor trust, there are special valuation rules for estate and gift tax purposes. You should seek the help of an estate planner to help determine if this is a viable option in your situation.

Appreciate this article? Why not share it? Click ?forward? or share online:

Source: http://rodgers-associates.com/passing-on-your-home-as-part-of-your-estate-plan/

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Small Business Taxes | SellToAirForce.org

When planning a small business you need to decide what type of business entity you will have in order to determine what small business taxes you?ll need to pay.

A small business can be:

• A sole proprietorship is when one person owns an unincorporated business. This type of business keeps the personal and business expenses tied together and you report business income as part of your personal tax return.
• A limited liability corporation has members. The membership isn?t limited and can include family members, other individuals, corporations, and foreign entities. There are even LLCs of just one person. Like corporations the members of an LLC have very limited personal liability for the small business debts or actions. Yet like a partnership an LLC has lots of flexibility when it comes to management and tax benefits.
• A partnership is a legal arrangement where two or more people join together in a small business. The legal arrangement details what money, labor, skills, or money, are put into the business by each partner and how profits and losses are shared.
• A corporation allows shareholders to exchange their property and money for capital stock in the corporation. Generally a corporation can take the same type of deductions as a sole proprietorship along with special corporate deductions. There are several types of corporations.

The type of a small business you have will determine which taxes you need to pay and the type of tax form you have to fill out. There are basically four types of business taxes for small business. You may need to pay some or all of these taxes. The four types of taxes for small business include income tax on any profit or income made, self-employment tax which is Medicare and social security for those who work for themselves, excise tax on specific products like motor fuels, and if you pay employees you will have to pay employer taxes.

Once you?ve decided what type of small business to have you may need to get a tax identification number for the business. This is called an Employer Identification Number or EIN. If you are self-employed or have a small business this identification number allows you to keep your business and personal expenses separate. It is also one of the steps that you need to complete if you want to establish credit for your small business without using a personal guarantee.

Employer Identification Number

An Employer Identification Number is a number for your business that works much like a social security number does for individuals. The EIN is a federal tax identifier. This number will identify your business to the state and federal government when you file taxes. You will need the number keep your business expenses, bank accounts, and taxes separate from your personal finances. An Employer Identification Number is also known as an Employer Tax ID.

State Taxes for Small Businesses

Depending on the state where you have your small business you may need to pay business or corporate income tax, and if you sell products you may also have to collect and pay sales tax. The type of taxes that you have to pay and the forms you have to fill out for the state will depend on the legal structure of your business, just as it does with federal taxes.

The state you live in may also require you to get a state tax ID number. You will need this number to account for any state income tax withholding, state specific sales and use taxes, and any unemployment insurance tax if you have employees.

Small Business Tax Returns

If you have a sole-proprietorship your small business and personal finances are tied together and you report them on a 1040, then the federal income tax laws in 2010 require you to file an income tax return if your net earnings from self-employment or a small business are $400. If you didn?t make $400 you may still have to file an income tax return if you meet some of the other Form 1040 requirements that are in the instructions. This may be how you file small business taxes if you are a sole proprietorship and don?t have a separate EIN number for the business.

A Schedule C is used to compute any profit or loss for the business. If you have several different businesses you would need to do a different Schedule C for each business. There is a Schedule C-EZ form for those small business owners who have only one sole proprietorship business. You can use this form if you didn?t have a net loss and can meet the requirements in the Schedule?s Part I.

There are different forms required if you are a partnership, corporation, or LLC. You will need to file the correct forms to report income or loss, any sales or excise taxes due, as well as any employer taxes if you have paid employees working for the small business. You should speak with an accountant and make sure that you are filing your small business taxes correctly based on the type of business that you have.

Source: http://selltoairforce.org/small-business-taxes/

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Want to Buy Rental Property? Consider The ... - AOL Real Estate

By Leonard Baron

If you are considering buying rental properties, you should already know how to analyze an investment by penciling out your real estate deal. Within that analysis, one of the critical tasks is accurately estimating how much your operating expenses -- property taxes, HOA fees, lawn care, property management fees, insurance, maintenance expenses and all costs other than the mortgage -- will be on the property.

Properly estimating your operating expenses will give you confidence that your analysis is on the mark. So to help you better estimate those amounts, let's talk about some percentages in a broad range and then specific items and costs.

Operating Expenses Percentage

When people pro-forma, or estimate the projected financials of a real estate deal, the operating expenses are typically 35 to 80 percent of the gross operating income, depending on the type of rental property.

So let's say your GOI is $1,200 per month in rent, and your expenses are $450 per month. Your operating expense percentage would be 450/1,200 or 37.5 percent. For a bread-and-butter house, duplex or triplex building, 37.5 to 45 percent is probably a good estimate. Generally, the fancier the building, the higher the ratio of operating expenses to GOI. Some types of properties -- such as vacation rentals -- could have a 70 to 80 percent expense ratio.

Beware: If your calculation is below 35 percent, there is a high probability that something is wrong in your estimation. Make sure to independently verify your projected costs with a few other experienced property owners.

While using an expense ratio is a fair general guide to penciling out your deal, you really need to get into the nitty gritty numbers to be as accurate as possible. Here are the typical expense categories for a normal rental property and how to calculate the costs.

Maintenance and Miscellaneous

This is typically the hardest category to estimate, and often people underestimate the amount. A general rule is 1 percent of the property value per year. So a property valued at $180,000 would have $1,800 per year, or $150 per month, in these costs. Many things can impact this, such as the condition, age, size and type of property. Also, in a single family home, the owner pays for the roof, painting and other costs that typically are covered by HOA fees in a common interest development, so take that into account. Either way, don't forget about those big capital repairs and replacements. It's highly likely that maintenance and repairs will be more than you anticipate.

Insurance

You can contact your insurance agent, run over the property specifics and get an exact estimate of the cost for the coverage you need. Don't forget to consider earthquake, flood, umbrella liability, HO-6 interior condominium unit policies or any other special insurance you may want or need.

Property taxes

You should contact the county assessor to get the exact amount for the current property taxes. Make sure - especially you Californians under Proposition 13 - that you know how much you will be paying in property taxes after you close escrow. It could be significantly different from what the seller is currently paying.

HOA fees

You should be able to look at the for-sale listing and/or call the property manager to confirm the current HOA fees. Make sure to investigate beyond the current fees to determine whether the fees are scheduled to rise quickly, if they have risen often and if any special assessments are coming.

Management

If you plan to have an outside manager, call around the see what the cost is for that service. Typically it's 6 to 8 percent of the rent, and that may or may not include re-leasing costs, which could be half to a full month's rent in addition to the monthly fee percentage.

Other costs

Gardening, pest control and utilities paid by the landlord also need to be considered. It's smart to make the tenants cover water (even if pro-rated between units), electricity and gas. I've learned when a tenant pays the bills it costs X per month, but when the landlord pays those same bills, they're 3X or 4X per month. People generally only conserve when they have the pain of paying the bills.

That's some general guidance on how you can estimate the costs of operating an income property. Talk to other real estate investor-owners, real estate agents and property managers, too. And remember, don't underestimate your expenses. It likely will cost more than you think!

See more on Zillow:
Tips for Designing a Green Home Office
How Much House Can You Get for $500,000?
5 Ways to Beat Out the Competition

Source: http://realestate.aol.com/blog/2012/08/27/buying-rental-property-operating-expenses/

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Miguel Cabrera and Albert Pujols sit with injuries

Los Angeles Angels' Albert Pujols (5) rubs his leg as he stands on third base next to third base coach Dino Ebel during the fourth inning against the Boston Red Sox in a baseball game at Fenway Park in Boston on Wednesday, Aug. 22, 2012. Pujols was replaced in the bottom of the inning. (AP Photo/Jim Davis, Boston Globe) NO SALES, MAGS OUT, INTERNET OUT BOSTON HERALD OUT QUINCY OUT

Los Angeles Angels' Albert Pujols (5) rubs his leg as he stands on third base next to third base coach Dino Ebel during the fourth inning against the Boston Red Sox in a baseball game at Fenway Park in Boston on Wednesday, Aug. 22, 2012. Pujols was replaced in the bottom of the inning. (AP Photo/Jim Davis, Boston Globe) NO SALES, MAGS OUT, INTERNET OUT BOSTON HERALD OUT QUINCY OUT

Detroit Tigers third baseman Miguel Cabrera talks with manager Jim Leyland and athletic trainer Steve Carter during the second inning of a baseball game against the Toronto Blue Jays, Thursday, Aug. 23, 2012, in Detroit. Cabrera left the game. (AP Photo/Paul Sancya)

DETROIT (AP) ? The Detroit Tigers and Los Angeles Angels each sat a star in the hopes of keeping them healthy for rest of the season.

Miguel Cabrera and Albert Pujols were not in the lineup because of injuries Sunday in the Angels-Tigers series finale, giving them two days off because both teams are off Monday.

Cabrera played in Detroit's first 126 games this season. The third baseman has a sore right ankle that limited him to being a designated hitter on Friday and Saturday.

"What's best for Miguel is best for the Tigers," Detroit manager Jim Leyland said.

Pujols hasn't played since Wednesday when he left a game against Boston in the fourth inning with tightness in his right calf.

"I'm feeling better," he said. "But they want to give me another day off ? whatever they want to do."

The Tigers and Angels are both potentially vying for an AL wild card with 30-plus games left in the regular season. They need Cabrera and Pujols to avoid going from having day-to-day soreness to a long-term injury.

Cabrera ranks among the AL's best with a .324 batting average, 32 homers and 106 RBIs. Pujols is hitting .283 and has 28 homers and 86 RBIs.

"When Albert is ready to play, he's going to play," Los Angeles manager Mike Scioscia said. "We're not holding him out to get him ready for the stretch. If he was available and could play, he would be playing."

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/347875155d53465d95cec892aeb06419/Article_2012-08-26-Angels-Tigers%20Injuries/id-14b282b52dc44ee99db1283936872c93

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Video: Killer whale gives birth to newborn in Spain

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Source: http://www.msnbc.msn.com/id/21134540/vp/48766641#48766641

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On Economic Deceivers And Propagandists | ZeroHedge

Submitted by Prometheus

Economic Deceivers And Propagandists

• Bernanke, Ben???
• Obama, Barack (plus economic team)
• Bush, George W. (plus economic team)???
• Romney, Mitt (plus economic team)
• Clinton, Bill (plus economic team)???
• Rubin, Robert
• Cuomo, Andrew (plus economic team)???
• Rubio, Marco (plus economic team)
• Dimon, Jamie (as rep of TBTF banks)???
• Ryan, Paul
• Dudley, Bill???
• Schumer, Chuck (as rep of TBTF banks)
• Geithner, Tim???
• Sulzberger Jr., Arthur
• Greenspan, Alan???
• Summers, Larry
• Hubbard, Glenn???
• Volcker, Paul
• Krugman, Paul???
• Wolf, Martin
• Murdoch, Rupert???
• Zoellick, Bob

(and many others)

Accusations of intentional deception by the representative list above (US only) are made consistent with the presumption that each on the list explicitly or implicitly holds one or more of the following views:

• Fractionally-reserved banking systems, in which banks may legally issue unreserved credit to private sector borrowers and central banks may legally create new unreserved currency with which to purchase newly-issued public sector debt, is sustainable without ultimately destroying the purchasing power of that currency (through the necessary future administration of monetary inflation)
• Nominal output expansion, even if engineered through further unreserved credit expansion, is always in the public interest
• The spectrum of current public fiscal, monetary and bank regulatory policy debates are all-inclusive and comprehensive with regard to the potential structuring and execution of US economic policies, and are in the best interest of the majority of the US?s factors of production
• Public monetary and bank regulatory policy debates should not be determined solely by considering long-term domestic economic issues, but should also include broader matters of state including shorter-term trade, fiscal and military considerations.

Endorsing or enacting policy assuming any of the above to be true strongly suggests the sponsorship of centrally managed economies and markets.

The purpose of the list is to expose current partisan debate as corrupt and off-point.

Economic policy makers across the political spectrum, including some commonly labeled ?extreme? by more centrist politicians, are unwilling to acknowledge that fractionally reserved banking systems are the true source of the past generation?s credit build-up, the economic malaise it necessitated, the growing economic hardship it is creating, and the inescapability from deteriorating economic conditions through conventional policy means. The list challenges American policy makers to publicly identify and make illegal fractional-reserve banking, and further challenges them to lead the world in adopting sound money and credit practices that returns economic power to global economic actors following commercial rather than financial incentives.

To qualify for the representative list above, individuals must: 1) have a public profile; 2) have demonstrated explicit past or potential future influence over fiscal, monetary or bank regulatory policies; and 3) have the intellectual capacity to internalize and willingly choose to execute or endorse economic policies framed improperly to the public without attempting to correct public perception.

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Source: http://www.zerohedge.com/news/economic-deceivers-and-propagandists

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