Year: 2014

Some days you may feel alone, but you aren’t. There are literally millions more single parents like you.  That’s not exactly comforting information, but it’s evidence that there are other people like you–probably just down the street.

Still, we realize that your situation is unique. You may be divorced, separated or widowed, or you simply may have chosen not to marry. You may be just starting out in life or you may be well on your way to retirement. You may have lots of financial resources or you may have few, if any. The circumstances differ widely, but you all have one thing in common: You have yourself to rely on financially.

It’s not always easy – sometimes it can be pretty hard – especially if you’ve been recently widowed or divorced. The first piece of advice we’ll offer is to give yourself time to get past the tidal wave of emotions you may be feeling now like grief, shock, sadness, anger, guilt, denial and depression. You may be feeling none of these emotions, but it’s likely that you’re feeling some. Be very cautious about making dramatic financial decisions in the heat of the moment. Give time a chance to work in your favor.

This is not to say you should ignore necessary decisions. Keep paying your bills and be sure your insurance policies are up to date. If you haven’t done so already, you’ll also want to close your joint bank and credit card accounts and open new ones in your name only. For some, staying busy is therapeutic.

If you have a large sum of money to deal with (an insurance settlement, for example), don’t be too hasty. Consider investing it in an account where your money will earn interest but also be available if you want or need it, such as a Treasury bill or a short-term CD. When you’re ready, you can make other plans for your money with the certainty that you’re thinking straight.

What You Should And Shouldn’t Discuss With Your Kids
You say you have money problems? So do lots of people. What should you tell your kids when they ask about those problems? Tell them the truth. Not down to dollars and cents. They don’t want to know those kinds of details, and they won’t understand them. Communicating with your kids honestly about your money can be a good way to start teaching them about money.

One thing kids often wonder about is their (and your) financial future. They may have a deep-seated fear of what will happen if you’re gone. Talk to them in detail about the way you’ve planned for the future – your insurance, your will, your investments. This kind of information is reassuring, and it teaches your kids that planning for the future is essential. Of course, it’s hard to explain coulda, shoulda and woulda, so you’ll need to act on what you learn here.

Too many Americans prolong their tax agony by waiting until April 15 to settle up with the IRS. Experts advise, instead, that you take responsible steps all year long to keep the bite and anxiety of taxes to a minimum. Here are ten ways to increase your tax savvy:

1. Take advantage of generous retirement plan tax breaks. Make the maximum contribution to your IRA and 401(k), 403(b), 457 or Keogh plan to substantially lower your taxable income. Moreover, the earnings grow tax-deferred until you retire.
   
2. Make full use of allowable business-related deductions. If you must move more than 50 miles due to a job change, you can deduct transportation expenses. A deduction of 30 cents per mile is allowed for business-related auto travel. If you’re self employed, you can deduct 30% of health insurance expenses. Credit card interest on equipment purchases is also deductible.
   
3. Select the most advantageous filing status. Many taxpayers, notably newlyweds, overpay substantially because they don’t know whether to file jointly or separately. Consult an accountant or tax preparer for advice.
   
4. Itemize, itemize, itemize! It requires painstaking recordkeeping, but itemizing can often reduce tax liability measurably. Medical expenses, including travel to and from medical facilities, are deductible if they surpass 7.5% of your Average Gross Income (AGI).
   
5. Develop a tax-planning strategy. Estimate how much income you expect to receive during the coming year. Whether you expect to earn more, less or roughly the same amount as in the current year will determine whether you defer income (for example, by making investments that won’t mature until the following year), or increase your deductions (for example, by making charitable contributions before year’s end).
   
6. Save by giving to your children. Youngsters are generally taxed at a lower rate than parents, so putting funds in a child’s name can result in big savings. The exemption for children under the age of 14 was raised by $100 to $1,300 for 1995. You can also reduce the tax burden on your heirs. Under current law, you and your spouse are permitted to give up to $10,000 a year to as many recipients as you wish without gift tax consequences.
   
7. “Shelter” lump sums from higher tax bites. What happens if you are fortunate enough to come into a large sum of money, such as a pension fund distribution or inheritance? Rolling over such funds into a retirement plan, such as an IRA or Keogh plan, is the single best way to keep a major chunk of your windfall out of the hands of the tax man.
   
8. Adjust withholding to reflect your salary. If you’ve been bumped to a higher tax bracket, don’t forget to adjust your withholding so you won’t be hit with an underpayment penalty. Conversely, if you’ve moved down a bracket or two, adjust withholding so you won’t be paying Uncle Sam too much.
   
9. Get your “nanny tax” refund. You have to withhold Social Security and Medicare taxes for domestic help if you pay them more than $1,000 a year. The old standard required withholding and payment to the federal government for anyone being paid more than $50 per quarter. The new provision is retroactive to 1994, so you may be entitled to a refund for any domestic help paid less than $1,000 that year and for whom you withheld and remitted Social Security and Medicare taxes.
   
10. Be generous! Your charitable deductions remain fully deductible if you itemize. But there’s one catch: new tax rules require written documentation for all donations of $250 or more.