Tax & Money questions answered
With tax season underway our Answer Desk panel of Certified Financial Planners was very busy on the phones Monday evening. Here's a summary of answers on most-asked about concerns:
>Disability Insurance: yes, it's deductible if you're paying the premiums, but not if someone else is.
>Workmen's Comp: Payments are NOT tax deductible if they're for medical consts, but are for lost wages.
>Social Security: Somethimes it's taxable, sometimes not. If you are filing singly, compute half your Social Security 'income' (you'll get a form) and add that number to all your other income. If it totals more than $25,000 then your SS is taxable. Same drill for filing jointly, though the total goes up to $32,000. (thanks to Sue Hansen of Hansen's Advisory for the explanation)
Something that's taxable, that many don't realize: If a debt, or part of it, is 'forgiven' by a credit card company or lending institution (if your debt is reduced) you will have to pay taxes on the amount forgiven---you'll get a form to that effect, according to Grace Ghezzi of Grace Ghezzi Consulting, LLC.
And, it's not only tax refunds that can give you extra cash: 'lost' money can be reclaimed through New York State. Dennis Hebert, of Blue Ocean Strategic Capital, says in January alone, NY paid out over 31.5 MILLION dollars, from dormant accounts in banks, insurance companies, and more. Utilities may have forgotten security deposits, and if you close a brokerage account, there may be dividends that were deposited that were never forwarded. Check the website www.osc.state.ny.us/ouf and follow the prompts.