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Introducing Zoom: An Easy Remote Conference Solution

Zoom logoThe past week or two I have been looking for a user-friendly video conferencing app. I settled on ZOOM after trying it out on a number of family, friends, and clients. I have been very happy with how easy it is to install and use.

Zoom works on just about any sort of machine: Windows, Mac, IOS. You’ll want a decent screen (to see my lovely face) and good sound (to hear my dulcet tones).

You may want to go to www.zoom.us and download a free version. It’s a great way to stay in touch with friends and family (especially in these rather difficult times).

Mason on Computer Screen

Talk to me!

When we schedule an appointment, we will send you an email invitation. The email will have a number of links to walk you through installation if you don’t have it installed already. It wouldn’t hurt to install Zoom ahead of time and test the audio and video (it will walk you through each of those steps).

In fact, here’s a one minute video showing how easy it is.

Filed Under: Miscellaneous, Reader Favorites, Uncategorized

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We’re Still Here!

Sensible Precautions

We hope you and your family are taking care and following recommended precautions and guidelines during these unprecedented times.

We have had a number of calls from concerned clients (and potential clients) that we might not be available. Nothing could be further from the facts. Unfortunately, trying times like these force people to think about many of the issues we deal with routinely (Medicaid nursing home qualification, wills, trusts, powers of attorney, health care powers of attorney). We will be here for you.

We are, however, altering some of our practices to make sure that both you and we stay safe. Some of these alterations you may actually enjoy.

Working Remotely

Fortunately, we at Mason Law, PC, are quite experienced at working remotely. One of our paralegals lives in Memphis. We have a benefits specialist in both Lexington (as in barbecue) and Annapolis (as in Maryland). Our trust funding specialist moves back and forth regularly between Randolph County and Virginia. As you know, I split my time between Asheboro and Charlotte. Therefore, we have been “prewired” to work remotely and most of our clients have no idea whether we are physically in our offices or elsewhere.

The only inconvenience is you may get a request to leave a message. Please, please leave that message. Just a short name and number will do, and one of us will get back to you promptly.

Video Conferencing

Immediately we will offer you the opportunity to meet with us via a video conferencing service (see my article below). I looked high and low for a user-friendly service and have tried it out on a few friends and clients. The service is called Zoom. In fact, you may find it quicker and easier because we will not have to worry about my physical location (Charlotte or Asheboro) and we can easily loop in other family members in other parts of the country.

No Handshaking. I Smell Like a Can of Pledge!

Hand sanitzer and Sanitary wipesFor those meeting us in the Charlotte or Asheboro offices, be assured we have developed an office protocol. Social distancing is in effect. No hand shaking (that one was very strange for me). Plenty of hand sanitizer. Slightly rearranged conference rooms. And every morning and after every client meeting all surfaces (tables, chairs, doorknobs) are wiped down with disinfectant wipes.

We’re working on ways to do will signings and other documents requiring notaries. Obviously difficult in a ‘social-distancing’ sense and impossible if someone is quarantined (either at home or in a nursing home). I have been very much involved with the legislative committees of two bar groups working on this issue. This past weekend I was assured by a very high government official in Raleigh that discussions were underway to devise some way around these problems, at least on a temporary basis.

Finally, I am working on a few online seminars. I’ll keep you posted.

Hang in there! I have a 102 year old Mom in assisted living I haven’t been able to see in a couple of weeks. Which means this whole thing has been much more than a colossal inconvenience to me. And I can only imagine the fear and concern others are experiencing (especially in areas harder hit than North Carolina).

Take care. We’ll stay in touch.

 

Filed Under: Miscellaneous, Reader Favorites

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CAUTION: This column was first written in 2016 and has been updated for 2019. You may reader comments below from earlier years.

Butnooo

In another article we looked at whether Mom needed to file a federal income tax return. She earned $6,500 working at Burt’s FastBurgers, received $3,000 interest income, and received $19,200 in Social Security Retirement Benefits.

We concluded she did not have to file a federal income tax return. We also concluded that none of her Social Security Benefit was taxable, so her gross income for 2019 was just $9,500. But we left open the possibility that she might have to file a state income tax return.

You should check your state requirements if your state has an income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no income tax).

Because Mason Law, PC is a North Carolina elder law firm, let’s just say Mom lives in North Carolina.

North Carolina Income Tax Filing Threshold

North Carolina’s filing threshold is lower than the feds. Recall, the feds require a filed tax return if a single person under 65 receives gross income of $12,200 ($13,850 if over 65, which applied to Mom) and a married couple filing jointly if they receive gross income of $27,000 (or $25,700 if one of them is 65 or older).

In North Carolina the filing threshold is just $10,000 gross income (as determined under federal law) or $20,000 for a married couple filing jointly. As I’ll further explain in another article, this number includes any federally taxable portion of Social Security benefits, even though North Carolina never taxes Social Security benefits (the North Carolina tax form – D-400 – allows the taxpayer to deduct from federal gross income taxable portions of Social Security before calculating North Carolina income tax).

As explained above, Mom’s federal gross income was $9,500. She’s safe! She doesn’t need to file a North Carolina tax return, which also means she doesn’t have to go to the extra bother of preparing a federal tax return.

But what if Mom had earned a bit more, say she worked longer at Burt’s FastBurgers< and her federal gross income was $10,750. Dagnabit! Because of that $1,000 extra gross income, she’ll need to file a D-400 (North Carolina Individual Income Tax return), and because she has to file a North Carolina return she’ll have to file federal return (even though, alone, the feds wouldn’t require one).

The North Carolina tax won’t really hurt, but filing those returns might be a bit irritating. Oh, well.

Filed Under: Reader Favorites, Tax Issues, Uncategorized

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Working at FastBurger

CAUTION: This column was first written in 2016 and has been updated for 2019. You may reader comments below from earlier years.

Mom (who is 70) is on Social Security and worked part time at Burt’s FastBurgers to earn a little extra and socialize a bit more than she might otherwise be able to (Dad died a few years ago and she likes to get out).

Of course, sometime in January she got a W-2 from Burt’s as well as a couple of 1099s with interest income on a number of CDs.  Being the good boy/girl that you always have been, you are gathering up a 1040, the 1099-SSA, the W-2, and other forms and getting ready to figure out Mom’s taxes.  But wait! Do you REALLY need to file a federal tax return?

Keep in mind this article applies to federal income tax returns. Mom might be lucky enough to live in an income-tax free state like Florida or she may live in North Carolina (as do many of the readers of this article). Check your state! In Mom’s case, if she lives in North Carolina she may have to file a North Carolina return, which (alas) also means she’ll have to file a federal return. You can read about Mom in North Carolina HERE. But in this article we are looking at federal income taxes only.

Back to the feds. Mom may not need to file a federal income tax return. If Mom’s “gross income” is less than $13,850 ($12,200 if she was under 65 . . . but she’s not) you might be able to find something else to do other than fill out Mom’s federal tax returns (unless, of course, she must file a state return, in which case she’ll get stuck with the hassle of also filing a federal return). By the way, had Mom been married, and both she and Hubby were over 65 and they were filing jointly, the magic “file/no file” number would have been $27,000, and if just one of them was over 65, the number would have been $25,700. But back to single Mom over 65: $13,850 is the magic number. The question is: How does the Social Security she received count?

Look at the 1099’s (except from Social Security) and the W-2 from Burt’s and add them up. Let’s say the Burt’s W-2 shows $6,500 gross income paid, and the 1099-INT forms from the banks show interest income on the CDs of $3,000. Mom’s total gross income from sources other than Social Security is $9,500.

How Will Social Security Count?

Now take a look at Mom’s 1099-SSA. Let’s say Social Security paid Mom total benefits of $19,200 during the year. Divide that by half. That equals $9,600.

Add half the Social Security paid to the total of other income received by Mom. $9,600 + $9,500 = $19,100.

If half the Social Security benefits and the total of all other income (including tax exempt interest) is $25,000 or less ($32,000 for a married couple filing jointly), then none of the Social Security counts. In Mom’s case the number was $19,100 . . . which we all realize is less than $25,000. Therefore, Social Security will not enter the tax picture.

That Leaves Us With . . .

Mom had non-Social Security earnings of $9,500. You are able immediately to surmise that Mom’s “gross income” is less than $13,600. Stuff the W-2 and the 1099s back in the envelope to give back to Mom. Sweep the blank tax return forms into the trash. Go watch something fun on Netflix . . . you’re off the hook! Unless, of course, she has to file a state tax return.

What if Mom’s income from Burt’s and the CDs is $15,000, but when added to half her Social Security benefits is less than $25,000?  To be precise, her gross income would be $24,600 ($15,000 + $9,600). She’ll need to file a federal tax return because her gross income edged up over $13,600 ($15,000), but her Social Security Income will not be taxed because half her Social security Income ($9,600) and her total other income ($15,000) still do not exceed $25,000.

But what if half of Mom’s Social Security and all other income exceeds $25,000? Turn off Netflix, and read the next article. We have a little work to do.

Filed Under: Reader Favorites, Social Security, Tax Issues Tagged With: , , ,

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I have to pay HOW much tax on my Social Security?
CAUTION: This column was written in 2016 and has been updated for 2019. You may reader comments below from earlier years.

In another post I discussed how much someone can earn without having to file a federal tax return. I suggest you go back and look at that post first. Then I looked at North Carolina income tax filing requirements. They’re short posts!

You now realize Mom has to file a tax return because her gross income exceeds $13,850 (Mom’s income from Burt’s and the CDs is $15,000). Recall, if her income exceeds $10,000 she’ll need to file a North Carolina return, but North Carolina does not tax Social Security benefits, so we’re focusing on the feds.

Here’s how the feds tax (or not) Social Security benefits:

  • If her non-Social Security income from all sources is more than $13,850, then she will have to file a tax return HOWEVER if ½ her Social Security benefits PLUS her income from all other sources is LESS than $25,000 (call it her “Combined Income”), her Social Security benefits will not be taxed at all.
  • However, if her Combined Income (½ her Social Security benefits PLUS her income from all other sources) is greater than $25,000, then her Social Security benefits are going to be taxed to some extent.

The question is:  If her Social Security is going to be taxed, just how much?

As a rule of thumb, if her Combined Income is between $25,000 and $34,000, then as much as 50% of the Social Security benefits will be considered taxable.  If her Combined Income is more than $34,000, then as much as 85% of her Social Security benefits will be considered taxable.

NO! That does not mean that she must pay 50% or 85% of her benefits as taxes . . . it means that up to 50% or 85% of her benefits will be treated like taxable income from other sources (after having pushed through a worksheet, which I’ll discuss below).

To figure out the amount of benefits taxable, fill out the Social Security Benefits Worksheet that comes in the instruction package for Form 1040.

Example:  Let’s say Mom worked constantly at Burt’s FastBurger and her W-2 shows gross income of $23,000. Her 1099-INTs show interest income of $3,000.  Her 1099-SSA shows Social Security benefits of $19,200.  Half her Social Security benefits is $9,600.  When added to her other income ($26,000) the sum is $35,600 . . . which is, of course, more than $25,000 in fact, it’s more than $34,000).  All that means is some of her Social Security will be taxed.

In fact, just for giggles I filled out a worksheet for Mom and you can download it here. (NOTE: The form says 2018, but the same form is in use for 2019) As you can see, $5,860 of Mom’s Social Security benefits are taxable.

That means that Mom’s gross income for the year will be:  $23,000 (Burt’s) + $3,000 (Interest on the CDs) + $5,860 (Taxable part of Social Security)  =  $31,860.

What If You Are Drawing On An IRA?

Many people are drawing money out of IRAs. In fact, occasionally it may be necessary to cash in an IRA in order to qualify for Medicaid. How will IRA funds affect the taxation of Social Security benefits?

Let’s change the facts a bit.

Mom is not working. Mom and Dad have combined Social Security benefits of $25,000. Dad has an IRA, but because he is going into a nursing home they cashed in his $100,000 IRA. All of the IRA funds will be taxable on Mom’s and Dad’s joint tax return. The question is: How much of their Social Security will be taxable?

Their Combined Income is $112,500 (1/2 of $25,000 + $100,000). Clearly 85% of their Social Security ($21,250) will be considered gross income when calculating taxes.

Without any adjustments, their gross income is $121,250. Just for fun, I have completed a Social Security worksheet for this example for your viewing pleasure. (NOTE AGAIN: The form says 2018, but the same form is in use for 2019) By the way, this may not be a happy tax result, but Mom’s alternative was to start paying $9,500 a month to the nursing home on their, perhaps, meager savings.

Filed Under: General, Reader Favorites, Social Security, Tax Issues Tagged With: ,