Proposed Revisions to Tuition Tax Credits and Deductions

08-03-2016Tax Information

The Internal Revenue Service has proposed revisions to tuition tax credits and deductions for individual tax payers.  The changes are meant to be in alignment with the Protecting Americans from Tax Hikes (PATH).

Key things to know:

  • No deduction or credit will be allowed unless there is a 1098-T, Tuition Statement, received from the eligible educational institution.
  • An exception will be made for items not included on the form (e.g. required course materials that qualify for the American Opportunity Tax Credit)
  • Form 0198-T should be received by January 31 of the following year
  • Reporting will be more specific for qualified tuition and related expenses paid in one year that relate to the academic period beginning in the first three months of the next calendar year.  The prepaid amount would be explicitly stated

The 7 Habits of Highly Effective Investors


In The 7 Habits of Highly Effective People, Dr. Stephen Covey identifies key habits successful people share to achieve their goals.  Here is my attempt to drill these habits down for investors.

Habit 1: Be Proactive (Be Ready for Financial Emergencies)
About 47 percent of respondents in the Federal Reserve’s 2014 household survey said they wouldn’t be able to cover an emergency $400 expense without selling something or borrowing money.  So start by setting aside money for an emergency fund before saving for retirement.  In a financial emergency, too many people tap into their retirement fund early and pay a penalty.  (And your credit card is not your emergency savings fund!)


Identity Theft

06-22-2016Debt & Credit

Approximately 13 million Americans were identity fraud victims in 2015— and identity thieves have stolen $112 billion during that same time.  This is according to Javelin Strategy and Research.

How can you avoid identity theft?

  1. Check your credit report three times per year. The only free site is, so if you get a report from each credit bureau—TransUnion, Equifax and Experian—you can get one every four months, then start over the next year.

Maximize Your HSA in 2016

02-16-2016Tax Information

With individual income tax season under way, I am seeing a number of clients with a high-deductible health insurance plan and a Health Savings Account (HSA).  Here are some ways to make the most of your money this year.
In 2016, those with individual high-deductible plans can deposit $3,350 into an HSA, while those with a family plan can contribute a maximum of $6,750. In either case, an extra $1,000 catch-up contribution is allowed for those age 55 or older.

  • Open and fund your HSA today.  High-deductible health plans can require policyholders to pay thousands out of pocket before insurance coverage kicks in. To soften the blow, the federal government allows those with qualified plans to open HSAs and pay their out-of-pocket expenses with tax-free money.  However, the tax savings only applies to expenses paid after the HSA was opened. You don’t need to fully fund it immediately -- or ever.  Pay into it what you can.
  • Your HSA can be an investment tool.  Some HSA accounts work as simple savings accounts and offer a minimal interest. Others let you invest money in mutual funds, just as you would in a 401(k) or IRA. 

IRS E-file system temporarily shut down

02-04-2016Tax Information

The Internal Revenue Service reported it suffered a "hardware failure" on Wednesday afternoon, which left many of its tax processing systems unavailable Wednesday night, the agency announced in a statement.

The agency stopped accepting electronically filed tax returns because of the problem. The outage could affect refunds, but the agency said it doesn't anticipate "major disruptions."

The IRS is still assessing the scope of the outage and indicates nine out of 10 taxpayers will receive their refunds within 21 days.  The website remains available, but "Where's My Refund" and other services are not working.


Trusts for Creative Spenders

02-01-2016Children & Students

Trusts can be quite useful for protecting children. However, for some children, the trust serves an additional function: It protects the principal from being rapidly spent by a child. These trusts have a specific name—they are called "spendthrift" trusts.

A spendthrift trust allows a parent to protect a certain amount of inheritance. If you have a circumstance like this, it may be appropriate to transfer inheritance outright to some of your children and the same amount of property into a spendthrift trust for the "creative spender" child.


How To Avoid The 10% Penalty On IRA Distributions


If you take money out of a retirement account (IRA, 401(k), 403(b), etc.) before reaching the age of 59½, you typically must pay income taxes on the withdrawal plus an additional 10% early withdrawal tax unless an exception applies.

If they apply, these exceptions may save you the 10% penalty if you have to tap into your retirement accounts early.

  1. Death or Disability- If someone in your family becomes permanently disabled, your retirement may be the last place that you want to draw funds.  There are options to get money out of your IRA penalty free should disability or death happen in your family.

Retirement Plan Changes for 2016


Here are some of the important ways retirement benefits will change in 2016.

IRA and 401(k) Limits – The 2016 contribution limits for 2016 for IRAs (Traditional pre-tax of after-tax Roth IRAs) increases to $18,000 with a $6,000 catch-up contribution for individuals aged 50 and over.

Saver’s credit.  The adjusted gross income (AGI) limit increases to $30,750 for individuals and to $61,500 for married couples. This tax credit is available to low and moderate income families that save for retirement.  It can be worth 10%-50% of your retirement contribution up to $2,000 for individuals and $4,000 for couples. 



10-28-2015Tax Information

Mark your calendars for Saturday, November 14, 2015 to attend FINANCIAL FEST –presented by Money Radio (KFNN 1510AM & 99.3FM) – a day of free seminars specialized to grow your wealth and help you retire comfortably.

Boudreau Consulting’s Kevin Boudreau will be presenting TAX BACKETOLOGY -- a review different ways of minimizing your personal & business income taxes --regardless of your tax bracket.

Boudreau Consulting is the only CPA firm presenting at this event. You will have a chance to meet the Boudreau Consulting tax professionals that can help you save money. TAX BRACKETOLOGY is scheduled to start at 11 am.


Your Health Insurance Company May Ask for Your Social Security Number

08-27-2015Tax Information

On the surface, this may seem like another scam, but your health insurance company may request that you provide them with the social security numbers for you, your spouse and your children covered by your policy.

This is because the Affordable Care Act requires every provider of minimal essential coverage to report that coverage by filing an information return with the IRS and furnishing a statement to covered individuals. The information is used by the IRS to administer – and individuals to show compliance with – the health care law.

Health coverage providers will file an information return, Form 1095-B, Health Coverage, with the IRS and will furnish statements to you in 2016, to report coverage information from calendar year 2015.


Nine Steps if you receive a Notice from the IRS

07-13-2015Tax Information

Opening the mail and seeing a notice from the Internal Revenue Service generally raises our blood pressure.  Here are some tips of how to address and resolve any issues when you receive a notice.

  1. Watch out for Scams - The IRS only will initially notify you by mail – not phone or email.  The IRS does not contact people via email, text or social media. 
  2. Don’t Ignore It. You can respond to most IRS notices quickly and easily. It is important that you reply right away.
  3. Focus on the Issue. IRS notices usually deal with a specific issue about your tax return or tax account.  Understand the reason for the notice.