My husband died last year, and I'm selling our home. Do I still get to exclude $500,000 of home-sale profits from taxes, or am I limited to the $250,000 exclusion for singles?
R.S., Raleigh, N.C.
Surviving spouses may exclude $500,000 of home-sale profits from taxes if they sell the house within two years after their spouse dies, as long as they owned and lived in the house for two of the five years before the death. Also note that if you and your husband jointly owned the house, at least half of the profit that accrued before he died became tax-free upon his death.
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Employer health benefits. I am signing up for next year’s company health insurance, and I’m wondering if the cost increases and coverage changes are typical. Is there anything I can do to save money?
M.C., Reston, Va.
Large employers anticipate that health care costs will rise by about 6% in 2017, and they’re making changes to manage those expenses—boosting premiums, increasing out-of-pocket costs, shrinking provider networks and adding restrictions on drug coverage (see 5 Ways to Save on Prescriptions). But they’re also introducing new programs to help you save money.
The median deductible is $1,425 for employee-only plans and $2,900 for family coverage, according to the National Business Group on Health (NBGH). More than one-third of employers will offer only a high-deductible plan in 2017. Many will contribute to health savings accounts for employees with those plans. A typical contribution would be $600 for employees with self-only coverage or $1,100 for families.
Employers are also expanding web tools to let you compare costs for drugs, procedures and tests. And you can save money with telehealth, or remotely provided health care, now offered by almost all plans. For example, a consultation with a doctor by video for an upper respiratory infection might cost $40, compared with $700 for a visit to the ER, $150 for urgent care and $100 for an office visit, says Brian Marcotte, president of the NBGH.
Low-fee stock purchases. I’d like to buy stock for my grandchildren, but I don’t want to pay high brokerage fees. Can I buy stock directly from a company such as Disney?
L.W., Harrisburg, Penn.
Yes. Disney’s direct investment plan has a minimum initial investment of $175, or $50 if you use monthly electronic deductions. You can reinvest dividends automatically. Commissions are just 2 cents per share, but you’ll pay a $20 onetime enrollment fee, plus a $1 fee for automatic investment or a $7 fee for investments made by check.
You could build a portfolio of several companies by opening a custodial account with a low-cost broker. For example, TD Ameritrade has no investing minimum and charges $9.99 per trade; it also has more than 100 commission-free exchange-traded funds.
Water line protection. I received a letter from my water company about buying water-service-line protection for $3.99 per month from a private company. Is this a good idea?
J.C., Takoma Park, Md.
Most home insurance policies don’t automatically cover damage to pipes outside of your house. Ask your plumber what the risks are for your property and how much replacing the water line might cost. If you decide you need the coverage, see if you can buy a rider from your home insurer, then compare that with the plan being offered. Review exclusions and coverage limits, and find out whether you can use your own plumber, whom you may prefer to a plan’s contractor.
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Six Missteps to Avoid as You Transition to RetirementDon't lose sight of your finances when you finally reach retirement. These six classic missteps can chip away at the nest egg you’ve worked so hard to build.
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Why Does One Claim Jack Up My Insurance After Years of No Claims?Even loyal customers can be hit with an insurance premium hike after a claim, despite going many years without any claims. There's a reason for that.
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It’s Not Too Late to Boost Retirement Savings for 2018retirement Some retirement accounts will accept contributions for 2018 up until the April tax deadline.
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How to Correct a Mistake on Your RMDs from IRAsretirement If you didn't take out the correct required minimum distribution because your brokerage firm made a mistake, the IRS may show some leniency.
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Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
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Making the Most of a Health Savings Account Once You Turn Age 65
Making Your Money Last You’ll face a stiff penalty and taxes if you tap your health savings account for non-medical expenses before the age of 65. After that, the rules change.
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Reporting Charitable IRA Distributions on Tax Returns Can Be Confusing
IRAs Taxpayers need to be careful when reporting charitable gifts from their IRA on their tax returns, or they may end up overpaying Uncle Sam.
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When You Can Expect to Receive Your Tax Refund
taxes The quickest way to receive your tax refund is to file electronically and have the money directly deposited into your bank account.
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How a Move Can Change Your 529 Plan Tax Deduction
529 Plans The tax deduction you get for contributing to your state’s 529 plan can disappear if you move to another state.
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Tap an IRA Tax-Free With an HSA Rollover
IRAs You can convert tax-deferred money in a traditional IRA into tax-free cash by rolling it over to a health savings account and using it to pay for medical bills.
