Student Debt Options

Bankruptcy cases do not often include student debt because of the extra filings needed and the rate at which they are discharged. According to Tara Siegel Bernard for the New York Times, a new, more streamlined process for bankruptcy is making it easier to claim student debt and actually have it forgiven. Many jurisdictions utilize the Brunner test for those claiming student debt and the new approach to filing makes it easier to pass that test:

Can you currently maintain the loans and maintain a minimal standard of living?
Is your situation likely to persist for a significant portion of the repayment period?
Have you made a good faith effort to repay the loans?

By satisfying this test, borrower’s cases may be reviewed by the Justice Department and recommendations of discharge made to a bankruptcy judge.

Read More Here: More Student Loan Borrowers Are Shedding Debts in Bankruptcy

When To Take Social Security

Financial planners will often advise waiting until age 70 to max out the potential amount of your Social Security checks. This may be a good policy but there are many variables that affect when you should claim. Amassed wealth for retirement, personal health, job security and/or burnout are some of the top reasons people may choose to apply before age 70.

Want more information and helpful tips? read, Should You Really Wait Until 70 to Take Social Security? New York Times

Credit Card Debt Assistance

This month we’re looking into specific personal finance related links that may help our customers best manage their money. As we near the holidays, it’s always tempting to spend just a little extra on credit but it pays to beware of interest rates and fees. These can make it way less fun in the future when all the bills come due. Worried about your spending or find yourself in significant credit card debt?

Sign up for Life Kit’s Credit Card Debt Newsletter and learn tips and tricks to both avoid and deal with credit card debt.

Sign up here for Life Kit’s Credit Card Debt Newsletter

Men’s Underwear is a Tell-Tale Sign of a Recession?

According to The Atlantic Daily, mens underwear may be intimately connected with recessions. How, you ask? Alan Greenspan, Fed chairman once suggested that sales of men’s underwear is, “inversely proportional to economic anxiety.” His comment has been supported by other product sales when money gets tight, such as champagne, cigarettes, and snacks. On the flip side, demand for lipstick, high heels, scary movies, and used clothing often increase during these periods. For more and to watch a video about this topic, visit: Clues That a Recession Is Coming

Nervous About Retirement?

‘Mary Dovel, CPA/PFS, managing partner at Telos Family Office in Charlotte, N.C., and a member of the AICPA Personal Financial Planning (PFP) Executive Committee advises that for the best outcomes when planning for retirement, “Clients are much happier when they have clarity and fewer decisions.”’

They recommend following these steps:
Start With an Overview
Consolidate and Automate
Talk About Worst Case Scenarios
Consider Test Runs

Calming nervous clients nearing retirement Read the full article, HERE.

Understanding Adult Dependents

Dependents fall into two categories, a qualifying child or a qualifying relative. In order to claim an adult dependent, they must pass these seven tests:

Dependent Taxpayer Test
Joint Return Test
Citizen or Resident Test
Qualifying Child Test
Member of Household or Relationship
Gross Income Test
Support Test

To find out if you can cut your tax bill by claiming an adult dependent, visit the AARP article, 6 Tax Breaks If You Have an Adult Dependent.

Retirement Mistakes to Avoid

You’ve enjoyed the celebrations and a few days of “sleeping-in,” and now you’re ready to start your retired life. Evan T. Beach from Kipplinger recommends these easy steps to help start your retirement in the right direction and keep it on track for years to come.

Avoid purchasing big ticket items or taking extravagant trips. See if you can actually plan these investments while you are still working in order to preserve retirement funds. It will also keep you from tapping into social security and retirement funds too quickly which can help with your tax rates later in life. Be sure to work with your financial planner to adjust your investment strategy, be careful not to lose touch with former co-workers and other acquaintances, and create a daily schedule for yourself. All of these things are an important part of maintaining an active life in retirement.
Read more here: Five Mistakes to Avoid in Your First Year of Retirement

Newly Wed Tax Implications

Getting married this wedding season? Be prepared from a tax standpoint and know what paperwork you will need to complete within ten days of your nuptials. Learn this and more at the IRS website where they have all kinds of tax information and a great FAQ for just about any question. Still have more tax questions? Contact Debra Newby Watkins, CPA, 512 900-8952.

Tax checklist for newlyweds

What The IRS Had Wrong

Did you know that if the IRS has your birthday incorrect and you discover this fact using an online tax preparation service, that when you call to try and get it fixed, the IRS cannot actually tell you what information they have on file? It requires an in-person meeting and then a visit to the Social Security office. Heather Schewdel for Slate learned this the year she decided to file her taxes all by herself, without the help of an accountant. Read more about her saga here and may we suggest that it’s always a good idea to use an accountant. Birthday Girl