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For those of you that read signature blocks closely (I know, that isn't that may of you) I've added a new designation after my name. You'll note the letters AIF®. The letters stand for Accredited Investment Fiduciary®. The AIF Designation certifies specialized knowledge of fiduciary standards of care and their application to the investment management process.
For those of you who are clients, you will see some small changes to how we do investment management.
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Financial Strategies Planning Techniques, Procedures and Guidance for Military Professionals |
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Greetings!
I can't believe the summer is almost over. In just a matter of weeks the kids will be going back to school. I hope your summer was good for you.
This edition of Financial Strategies revisits the Strickland Decision and how to preserve your rights to file a claim for a refund. While the article talks about the Strickland Decision, the process of filing a protective claim could preserve the rights anyone who may have a retroactive change to their taxes in more than 3 years in the future (a lawsuit concerning a disputed contract could be one).
My quick comment reminds you about the changes coming to TRICARE for military retirees that live more than 40 miles from a base.
Estate Planning gets a lot of press for those of us who are married. But, estate planning can be just as important, if not more so, for singles. The third article covers some Estate Planning tips for singles (which includes our kids for a lot of us).
Like all issues, I wrap this one up with a couple of articles I found interesting. The first talks about state tax loads and whether you might want to consider moving there...an issue for a lot of military retirees. The second article talks about investing and for those who are my clients something they've heard from me..."Control the things we can control, like taxes."
Enjoy your August and I'll talk to you after Labor Day!
Curt
Curtis L. Sheldon, EA, AIF®
C.L. Sheldon & Company, LLC
(703)542-400 or (800) 928-1820
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Stake Your Claim
During the Gold Rush era, miners (or 49ers) would protect their claim to an area for gold mining (or panning) by Staking a Claim....literally with a stake. If you have a complicated VA Disability Claim, or are going through an appeal process with the VA you may want to Stake your Claim too.
Here is the issue, as mentioned in these spaces before, Disabled Veterans will most likely have the right to file an amended tax return (1040X) to claim an increased refund (or decreased amount owed) based on the Strickland Decision or IRR 78-161. Under this ruling, a Veteran has the right to reduce his/her income by the amount of the VA offset that should have been taken. You can read more about the basics of the Strickland Decision/IRR 78-161 Here and Here. But your time to claim the refund is limited.
Generally, you have three years from the time you filed your return or two years from when you paid the tax, whichever is later to file a claim for refund. In some cases this may be too long. I haven't heard of any "normal" VA claims taking more than one to two years, but if your claim is complicated or if you appeal the decision, you could hit the 3-year limit. So, if you anticipate a problem with the VA (or if you have any other reason to expect you'll need to file an amended return beyond three years) you need to protect your claim. Fortunately, the IRS does allow you to do this.
You can file a protective claim for refund. You can do this, "if your right to a refund is contingent on future events and may not be determinable until after the time for filing a claim for refund expires." The protective claim preserves your right to claim a refund when the contingency is resolved.
To be valid a protective claim must:
- Be in writing and be signed
- Include your name, address, social security number and other contact information
- Identify and describe the contingencies affecting the claim
- Clearly alert the IRS to the essential nature of the claim, and
- Identify the specific year(s) for which a refund is sought
Mail your protective claim for refund to the address listed in the instructions for Form 1040X, under Where to File.
The law is on your side, you've earned the right to reduce your taxes. Don't lose the opportunity to do so if you have to wait for someone else.
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Do you live more than 40 miles from a Military Treatment Facility (MTF)? If you are a retiree, you may lose your access to TRICARE Prime. You'll still be eligible for TRICARE Standard though. Waivers are available. Check with TRICARE for more information.
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Estate Planning Tips for Singles
Estate planning isn't just for rich, elderly people. Everyone needs to have a will and estate plan in place to provide for contingencies that may occur, and in the event of the individual's death, to dispose of his or her property, minimize estate taxes, and provide for loved ones.
Estate planning is also just as important for single individuals as it is for married couples. Unless appropriate arrangements have been implemented, state law controls. If an individual becomes unable to manage, the courts may appoint a guardian for the individual's person or property to make personal or financial decisions for the individual.
To avoid keeping your assets out of probate and out of the control of a court-appointed guardian, you need to ensure you've made your wishes clear. Here are some tips for singles when it comes to estate planning.
- Create a will. A will is a legal document that provides instructions for disposing of an individual's property on his or her death. By writing a will, you can ensure that your estate will be distributed as you would want.
- Create a revocable living trust. Unlike a will, a living trust lets your "Successor Trustee" distribute your assets to the beneficiaries named in the document without going through probate. A revocable living trust covers three phases of your life: while you are alive and well, if you become mentally incapacitated, and after you die. While you are alive, the trust agreement will have specific provisions allowing you to manage, invest, and spend the trust assets for your own benefit. If you are determined to be mentally incompetent and can no longer properly serve as Trustee, then the trust agreement will name a successor "Disability Trustee" to take over and manage all of your finances. When you die, your Successor Trustee will be able to step in and pay your final bills, debts, and taxes. The trust agreement will then contain instructions about who will receive the balance of the trust funds after all of the bills have been paid.
- Draw up powers of attorney. Unmarried partners or friends generally can't make medical and financial decisions for each other without signed authorization. Singles should select a person they want to act for them and sign legal documents that give him or her that power. It is possible to have different attorneys for different situations. For example, you could sign a durable power of attorney to allow someone to manage your finances and set up another durable power of attorney for health care decisions.
- Set up a living will. A living will (sometimes called a health care declaration or physician's declaration) is a legal document that a person uses to make known his or her wishes regarding life-prolonging medical treatments. Depending on the state you live in, you may be able to combine this declaration with a durable power of attorney to create an advance health care directive.
- Make sure your beneficiary designations are correct. Your named beneficiary on life insurance policies and investment accounts will inherit those assets no matter what your will or living trust says. Remember to review and update documents related to those accounts every few years or after a life event such as a divorce or birth of a child.
Source/Disclaimer:
The information in this communication is not intended to be legal or tax advice and should not be treated as such. Each individual's situation is different. You should contact your legal and/or tax professionals to discuss your personal situation.
Required Attribution
Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.
© 2013 S&P Capital IQ Financial Communications. All rights reserved. |
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From the Financial Presses
The Best States To Move To For Tax Purposes
Federal income taxes can take a big bite out of your income, but they aren't your only tax concern, particularly if you're about to retire. Don't forget to take state and local income taxes into account. For instance, if you'll be relying less on Social Security and more on investment income during retirement, you might move to a state that doesn't have an income tax or that has relatively low tax rates. Conversely, if you expect to depend heavily on Social Security, consider moving to a state that doesn't tax these benefits. Here are a few key areas to ponder...(Read More Here)
Expenses And Behavior Are Key To Investment Success
John Bogle, 84, is a hero to investors. His common sense message about controlling investment expenses helped him build The Vanguard Group into one of the world's largest mutual fund companies...(Read More Here) |
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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC 's current written disclosure statement discussing our advisory services and fees is available for review upon request. IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).
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