Utah’s Approach to Aging with Care and Connection

Yes, certain costs associated with assisted living may be tax-deductible, but it depends on your specific situation.If the assisted living costs are for medical care, they can potentially be deducted as medical expenses on your taxes. However, there are a few conditions:Medical Care Costs: The portion of the assisted living fees that are directly related to medical care (such as nursing services, personal care, and help with activities of daily living) can be considered a medical expense. These may be deductible if they are deemed necessary medical care.Eligibility: To qualify, your total medical expenses (including assisted living costs) must exceed 7.5% of your adjusted gross income (AGI) for the tax year.Non-Medical Costs: The cost of room and board (such as rent for the living space, food, and housekeeping) is generally not deductible unless it is tied to medical care.Long-Term Care Insurance: If you have long-term care insurance that covers assisted living services, the payments may also be deductible.Its a good idea to consult with a tax professional or accountant who can evaluate your specific situation and help you navigate the tax rules.For more information, contact www.seniorhousingsolutions.net 

People often ask our law firm about taxes, and we understand their concern. We appreciate they dont want to pay any more money in taxes, and we certainly dont want to give the government any more money. We are sure many people feel they would prefer to give the money to their kids. That is why its important for you to know more about the four death taxes that apply to Pennsylvania residents. Only three of the taxes apply in other states, but Pennsylvania also has inheritance tax. The four taxes I want you to know about, with regard to your estate plan, are the Federal Estate tax, the Pennsylvania Inheritance tax, the Capital Gains tax and the Secure Act. The Federal Estate TaxThe Federal Estate Tax does not apply to middle-class Americans. The current exemption allows for you to die with up to $12.9 million each. That would be $26 million for a married couple. Everybody asks about federal estate tax  because in the 1990s, the lifetime exemption was below 1 $million. As a result, many people were affected in the 90s. Fortunately since then the exemption allowance has been increased.The Pennsylvania Inheritance TaxThe Pennsylvania death tax is an inheritance tax, owed by the people inheriting the money. Your relationship to the person who passed away, determines the amount of tax you pay. When you leave money to your descendants, including your kids and grandkids, they will pay 4.5% tax. Leaving money to your ascendants such as your parents or grandparents is also 4.5% tax.If you dont have kids, and you leave money to your siblings, they will pay 12% tax. Leaving money to anyone else, including nieces, nephews, friends or neighbors, requires they pay 15% inheritance tax. This is substantial amount of tax to pay. However, to avoid your heirs paying any tax, you have to give up control of your money, which I advise my clients not to do. Pennsylvania inheritance tax rates for siblings or nieces and nephews, is discriminatory. Essentially, we are also discriminating against couples who cant have children. This is particularly relevant in families where a couple without children, who wants to leave money to their nieces or nephews. It doesnt seem fair that the inheritance tax rate is 15%.Rather Pay Inheritance Tax Than Capital Gains TaxThere is this idea among seniors, who think that putting their house in their kids name to save their kid paying 4.5% inheritance tax, is a good idea. What they dont realize is that it is preferable to pay the Pennsylvania inheritance tax, compared to paying capital gains tax. I believe that if your child is going to inherit $100,000, he can afford to pay the 4.5% inheritance tax. You should not have to be concerned about saving him 4.5%.Capital Gains TaxA capital gains tax is due upon the sale of an asset that has grown in value. If dad bought his primary residence for $100,000 and he sells it for $300,000, the gain of $200,000 is largely exempt from capital gains tax. If dad gives the house to his son, his kid owns it for $100,000. Assuming that dad has to go to the care home a few years later, his son sells the house to pay for dads care. Since the house is not the sons primary residence, he has to recognize a $200,000 capital gain. The same principle applies to rental properties if they are not the primary residence of the person selling the property. Essentially, this family made a $54,000 tax mistake, given that the rate of capital gains tax is 18%.If you leave assets in your estate until you pass away, and it is held in a trust, your kid inherits the assets at date of death. While your child will pay Pennsylvanias inheritance tax which will be $13,500, the stepped up basis is applied. This means that the house that Dad bought for $100,000, is now worth $300,000. His son has inherited the house for the date of death value, which is $300,000. He is allowed to sell it for $300,000 without having to pay the capital gains tax. The Secure ActAnother tax you need to know about is the Secure Act, which passed in October of 2019 and became law in January of 2020. This is the biggest tax hike against the middle class.Most middle class Americans have all of their money in home equity and retirement accounts. If you have a retirement account, an IRA, or a 401k, this Secure Act will affect you.Before the Secure Act was implemented, if my dad passes away, leaving me his retirement account, it becomes my retirement account, known as the inherited IRA. This meant that money could stay in the stock market with tax deferred growth for several decades. I would need to take distributions at regular intervals, but most of the money would stay in the fund. Since the Secure Act, the rules have changed significantly. Now, when you pass away and you leave your retirement account to your kid, he has to pull all the money out of the account, within 10 years. This means that one loses out on many decades of tax deferred growth. In addition, if you inherit the money when you are 55, you are likely still working and paying high income tax. Now you have to add your dads 401k which means youll be paying even more income tax.Let Us Help YouIf you want to learn more about how to protect yourself and your legacy, come to one of our Three Secrets Workshops. Call 724-564-6615 to register.

In todays rapidly evolving healthcare landscape, finding the right health insurance plan can be daunting. Fortunately, for residents of Pennsylvania, the Pennsylvania Health Exchange, commonly known as Pennie, offers a robust platform that simplifies the process and provides many benefits. In this comprehensive guide, well delve into the advantages of using Pennie for your health insurance needs and explain why reaching out to a local Pennie-certified broker is wise for securing your health and financial well-being.Understanding Pennie: A Gateway to Quality Healthcare1. **Customized Plans to Fit Your Needs**Pennie offers diverse health insurance plans, ensuring you find one tailored to your specific requirements. Whether youre a young professional seeking basic coverage or a family with specific medical needs, Pennie provides many options. These plans span from comprehensive coverage to more focused programs like dental and vision insurance.2. **Affordability and Financial Assistance**One of the most significant advantages of choosing Pennie is the potential for substantial cost savings. You can access premium subsidies and tax credits through the platform, significantly lowering your monthly premiums. Additionally, Pennie can connect you with Medicaid and CHIP programs if you qualify, further expanding your options for affordable coverage.3. **Transparency and Consumer-Friendly Interface**Pennies user-friendly interface is designed to make the enrollment process straightforward and intuitive. You can make informed decisions about your health coverage with clear explanations of plan details, costs, and benefits. The platform also allows you to compare plans side-by-side, empowering you to choose the best option for your unique situation.4. **Coverage for Pre-Existing Conditions**Thanks to the Affordable Care Act, Pennie ensures that individuals with pre-existing conditions cannot be denied coverage or charged exorbitant rates. This provides peace of mind for those with chronic health conditions, knowing they can access the care they need without financial hardship.5. **Access to a Network of Trusted Providers**Pennie works with a network of reputable insurance carriers and healthcare providers, ensuring that you have access to a wide range of doctors, specialists, and hospitals. This network spans Pennsylvania, giving you the flexibility to receive care where its most convenient.How to Get Started with Pennie: Connecting with a Local BrokerWhile Pennies platform is user-friendly, navigating the nuances of health insurance can still be complex. This is where a local Pennie-certified broker can be an invaluable resource. These brokers are experts in the Pennsylvania healthcare landscape and can provide personalized guidance to help you select the best plan for your needs.Why Choose a Pennie-Certified Broker?1. **In-Depth Knowledge**: Certified brokers are well-versed in Pennies offerings and can provide expert advice tailored to your circumstances.2. **Personalized Recommendations**: They take the time to understand your health and financial situation, ensuring you receive a recommendation that aligns with your needs.3. **Assistance with Application Process**: Navigating the application process can be confusing. A broker can streamline this process, saving you time and frustration.4. **Ongoing Support**: Even after enrollment, a certified broker can answer questions, assist with claims, and help you understand your coverage.Conclusion: Secure Your Health and Financial Future with PennieChoosing the right health insurance plan is crucial to safeguarding your well-being. With Pennie, residents of Pennsylvania have a powerful tool at their disposal, offering affordable, customizable, and transparent coverage options. By connecting with a local Pennie-certified broker, you can confidently navigate the process, knowing you have expert guidance at every turn. Dont waittake the first step towards a healthier future today.For more information or to find a certified broker near you, visit Baker Consulting Services, Inc.s web page, a family-owned agency and local broker in PA.*Disclaimer: This blog post is for informational purposes only and does not constitute professional advice. Please consult a certified broker or a licensed insurance agent for personalized recommendations.*