As the New Year ushers in, many people on Long Island, New York are making a list of goals to accomplish and bad habits to eliminate. While more people are concerned about their career and health, they should also look into their financial wellness and think about bad money habits, which could result in bankruptcy.
More Americans prefer filing for Chapter 7 bankruptcy
Relying on credit cards to cover most needs is not a good decision. Many Americans, including those here in Long Island, New York, have filed for bankruptcy because of credit card debts. In fact, 32 percent of those who filed for bankruptcy cited credit card debt as the reason they did so; 13 percent said it was because of home foreclosure, and 12 percent said it was due to job loss.
IRS Offers Tips for Year-End Giving
The IRS provided guidance today for tips for year-end giving. Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:Special Tax-Free Charitable Distributions for Certain IRA Owners-This provision, currently scheduled to expire at the end of 2013, offers older owners of individual retirement arrangements (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, first available in 2006, can be used for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.
To qualify, the funds must be transferred directly by the IRA trustee to the eligible charity. Distributed amounts may be excluded from the IRA owner's income - resulting in lower taxable income for the IRA owner. However, if the IRA owner excludes the distribution from income, no deduction, such as a charitable contribution deduction on Schedule A, may be taken for the distributed amount.
Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.
Amounts transferred to a charity from an IRA are counted in determining whether the owner has met the IRA's required minimum distribution. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats amounts distributed to charities as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.
Starting fresh by filing Chapter 13 bankruptcy
Ending up in a credit mess is something no one plans for. Many New Yorkers face the everyday stress of trying to get by but end up with debts that could take years to eliminate. Relying on credit cards to pay for everything, for instance, is one sure way to end up crushed by debt.
Aaron Carter files for Chapter 7 bankruptcy
Even celebrities have their share of financial downturns, and when they do, they want the same thing as everybody else, a fresh start. New Yorkers who have followed Aaron Carter's career may be saddened to hear that he is one of the most recent celebrities to file for personal bankruptcy.
