Archive for July, 2017

The Medicare Coverage Trap

July 25th, 2017 No comments

Do not fall into the Medicare coverage trap!

Let’s look at a hypothetical situation. You find yourself retiring and your employer has a very good medical plan. Rather than signing up for Medicare (Part B) which covers the cost of healthcare services like regular physician visits, outpatient surgeries and diagnostic procedures, you decide to go on COBRA to keep your employer’s great health care benefits.

Eventually you notice that your employer’s plan has begun to reject your medical claims.  Since you have religiously been paying your COBRA premiums in full and on time each month, you call the employer’s health care provider to inquiry why it is not paying your medical claims. You learn Read more…


PA Filial Law and Long-Term Care Insurance

July 18th, 2017 No comments

With the demographically large baby boomer generation moving into retirement, we may see an increasing number of people without the financial resources to support themselves in their golden years. What if these “retirees” do not have the financial resources to pay for the cost of health care, long-term care, or nursing care?

As we discussed in our July 2, 2012 post, YOU may be liable for your relatives’ unpaid bills.

How is this possible? You can become liable for the health care bills of your family members due to Read more…


Age Discrimination Settlement Lacked Tax Planning

July 11th, 2017 No comments

Unfortunately, it is not uncommon for a taxpayer to take actions without seeking professional advice, be disappointed with the results, and then seek professional assistance to undo the damage. Often times once the initial action has been taken, there is little or nothing that can be done to correct the ill-advised action of the taxpayer.

Let’s look at the case of Ann McKinney v. Commissioner, TC Memo 2017-6. Ann filed suit that her employer provided a hostile working environment based on age and disability. About two years later, the two parties entered into a settlement agreement whereby she withdrew her suit and the employer agreed to pay her a lump-sum payment of $40,000. The agreement stated that Ann held the responsibility to report the amount received for income tax purposes.

The employer issued Ann a Form 1099-MISC (as required by law) reporting as taxable income the $40,000 amount agreed to in the settlement. Ann did not report this income on her personal tax return. Ann later filed an amended Form 1040-X, but again failed to report the $40,000 of income received. The IRS eventually sent Ann a notice of tax deficiency for her failure to report this income.

Ann then argued Read more…

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