April 19, 2019

Shocked by Your Tax Refund? Next Year Could Be Worse Unless You Act Now

If a family was able to take the child tax credit or new qualified business income deduction, they might not have ended up owing anything, even if they could no longer deduct their state and local income taxes, Ms. Taylor said. But if they did not receive benefits from some of the newer tax breaks, “then they could be losing all the way around. Hence the high level of frustration and surprise among folks.”

Early this tax season, I.R.S. statistics showed that the average taxpayer refund was down nearly 17 percent. Things have evened out since then: As of April 5, the average refund was $2,833, down 1.1 percent from last year.

But that’s not the whole story: A million fewer taxpayers had received refunds.

Averages also gloss over what was happening in individual households across the country. In New Jersey, for example, HR Block found that, on average, its clients owed about 30 percent less in taxes than in 2017. But their refunds declined by about 6 percent, according to an analysis among customers who filed through the end of March.

Over all, HR Block said that its average taxpayer’s total liability dropped by $1,200, while refunds were up $43. Instead of substantially bigger refunds, those taxpayers received about $50 more in their biweekly paychecks starting in March 2018, for a total of $1,156 — which they may not have even noticed.

Whether or not you owed for 2018, now is the time to update your withholdings. The I.R.S. suggests performing a “paycheck checkup” annually to avoid surprises. Big life events like getting married or having a child are other reasons to go through this exercise again.

Using the I.R.S.’s withholding calculator makes it easier to fill out the W-4. TurboTax and HR Block offer similar tools. The calculator helps taxpayers estimate their 2019 income tax and compare that amount with their current withholding. That will show them whether they should have more or less money withheld from their paychecks.

The amount withheld is determined by the number of so-called allowances. The fewer allowances you claim, the more is set aside from each check. You can increase your withholdings further by specifying an additional flat dollar amount to be set aside each pay period.

Article source: https://www.nytimes.com/2019/04/14/your-money/tax-refund-paycheck-withholding.html?partner=rss&emc=rss

Your Money: Your Student Loan Servicer Will Call You Back in a Year. Sorry.

I started making inquiries with both the Department of Education and FedLoan about a month ago. Since then, the story that FedLoan has told borrowers has started to change a bit: from a long estimated wait time, to a refusal to render a guess. I asked readers to take careful notes about their conversations.

Nicole Skrzyniarz, a physical therapist who lives in Medford, Mass., said she had been requesting a review since March 2018. But when she asks how long it will take, she gets different answers. “Three months, six more weeks expedited, up to one year and, today, ‘a long time; nobody should have given you a time frame,’” Ms. Skrzyniarz, who works at a nonprofit hospital, wrote in an email last week.

On Wednesday night, Katherine Cejda Bailey, who counsels children and families in a Memphis hospital, pressed a FedLoan phone worker for an updated timeline. She said the representative had told her that even expedited reviews “are taking forever.”

Kyle Stefano, a Sacramento social worker for the homeless, thought FedLoan had botched her initial inquiry. Then, she said, she was told that she shouldn’t bother following up for now because FedLoan was prioritizing reviews for people who have already made 120 payments. The reason: increased media attention. The representative would not offer a timeline for her case. “It’s a mess,” Ms. Stefano told me.

FedLoan’s own phone representatives seem to be losing patience, too, according to an email from Ms. Keller, the school counselor. During a call to FedLoan this week, she asked whether her account would just stay under review until she simply gave up. She said the rep had told her: “That about sums it up. It’s not O.K. how they are treating people.”

I asked FedLoan and the Education Department about these problems. I heard back from the Education Department, which said it would speak for them both. “Any excessive delay in customer service is unacceptable,” the department said.

“We understand the time it takes for borrower accounts to be reviewed is a problem, and we are working with our loan servicers to fix it,” said the department’s press secretary, Liz Hill.

Article source: https://www.nytimes.com/2019/04/12/your-money/public-service-loan-forgiveness.html?partner=rss&emc=rss

For Stocks, the Good Times Came Back. But for How Long?

In some ways, it’s a wonderful time to be an investor. Fees on funds, especially those that track indexes, have been cut, in some cases to zero. (I recently found that fees may be about to fall below that.) Careful investors can save a great deal of money, though, as always, there’s no free lunch.


A spate of initial public offerings, and a series of crises, have given our essayist, John Schwartz, another brilliant idea on his long trek toward wealth or, at least, solvency.


As the markets ebb and flow, different investments have their moment. For several managers of top-performing funds, small-and-mid-capitalization companies bolstered returns in the first quarter. One manager, Nancy A. Zevenbergen, says she favors companies run by their founders.


An intriguing new book by an economist who writes a column for Quartz, the news website, discusses ways of reducing risk in many walks of life, our reviewer says.


Interest rates are fairly low and high-yielding shares are relatively expensive. Investors searching for income have therefore been turning to companies that steadily increase their payouts.

That makes sense, but only up to a point. For some stocks, dividends are high because their share prices have been battered in the marketplace. For others, those dividends are based on businesses that aren’t entirely solid.


Investing is often divided into two styles: value, which favors stocks that have been overlooked by the market, and growth, which emphasizes rapidly expanding companies.

Article source: https://www.nytimes.com/2019/04/12/your-money/how-to-think-about-the-stock-market-and-investing.html?partner=rss&emc=rss

Wealth Matters: Who’s at Fault? Read the Fine Print to Make Sure You’re Not at Risk

Lawyers questioned whether putting a waiver of liability on the back of a golf cart slip was even valid, let alone aboveboard. The waivers that hold up best in court are written with bold type highlighting the risks to a person, who then has to agree to them by signing, Mr. Wickert said.

“Warnings on the back of tickets aren’t so strong,” he said.

But this can be a hazy area, because Queen’s Harbour is also open to the public. At a private club, such exculpatory language does not exist — and most likely would not be tolerated by members, said Tom Walker, vice president at RPS Bollinger Sports Leisure Insurance.

“If you’re a member, you don’t have anything contractually that you’d sign off on,” he said. “Nor would your guests be involved with that.” A private club might try to mitigate risk with private contractors who work there, however.

Yet there are instances when being on a private course is not protection from liability. To protect yourself, insurers stress the need for excess liability coverage, also known as umbrella policies. Traditionally, these policies pick up coverage where automobile or homeowner policies leave off.

Ross Buchmueller, president and chief executive of Pure Insurance, said his company had settled a claim a few years ago after a client’s golf club slipped from his hands during a swing on a course in Miami and struck a cyclist on an abutting bike route.

The cyclist, of course, was not required to sign a waiver for a bike ride, Mr. Buchmueller said. “He went on a path open to the public — maybe it had signs warning about golfers — but either way, the person got hurt,” he said. His company paid a claim in excess of $100,000 because the golfer had an umbrella policy.

Mr. Mantle said ClubCorp’s waiver had not deterred him from golfing. But he and his golfing buddies make sure to cross it out and write that they do not accept it.

“So far, the people manning the cash registers let me do it,” he said. “My own preference is to take out those terms that release me from liability and indemnifies the club from liability. But as a lawyer, I’ve modified the terms, and they’ve accepted it.”

Article source: https://www.nytimes.com/2019/04/12/your-money/liability-waivers.html?partner=rss&emc=rss

Your Money Adviser: Checking on Social Security Estimates Is a Good Idea, but Many People Don’t Do It

Back in the 2010 fiscal year, the agency automatically mailed out 155 million statements, the report noted.

“That’s a huge discrepancy,” Ms. Sherry said.

Asked whether the report raised concerns, a spokesman for the Social Security Administration, Darren Lutz, said in an email that the shift to online statements was rooted in tighter agency budgets, along with an increasing preference by the public for doing business online. Currently, he said, 42 million people have “instant” access to statements through their online accounts.

The agency encourages everyone to create an online account, Mr. Lutz said, and suggests that people review their statements annually to verify that earnings posted are correct, to make sure their benefit estimates are accurate.

There’s also a reason besides retirement planning to review your Social Security statements: to check for signs of identity theft. Doing so is good “identity hygiene,” like checking your credit reports, said Charity Lacey, a spokeswoman for the Identity Theft Resource Center.

If, for instance, your reported earnings are much higher than your own records, it may be a red flag that someone is fraudulently using your Social Security number, said Paul Stephens, director of policy and advocacy with the nonprofit group Privacy Rights Clearinghouse.

Here are some questions and answers about checking your Social Security statement:

How do I create a “my Social Security” account?

You can register on the Social Security Administration website. You’ll be asked to enter your Social Security number and birth date, and you’ll also be asked a series of questions — similar to those asked when you check your credit report online — to help confirm your identity. Then you’ll receive a code by either email or text, which you enter online to complete the process. If, for some reason, you can’t set up the account online, you can visit a Social Security office. After you establish an account, you’ll get an annual email reminder to log on and review your statement.

If you have a security freeze on your credit report to help ward off fraud, you must lift it temporarily to set up your online Social Security account. Specifically, you’ll need to thaw the freeze at Equifax, the company the administration currently uses to help verify users’ identities.

Article source: https://www.nytimes.com/2019/04/12/your-money/checking-social-security-statements.html?partner=rss&emc=rss

Your Money: The New Equifax Boss Wants to Make Amends. We Have Some Questions.

Does he really, truly understand why the breach made people so mad?

“I think it’s because the data was so personal,” he said. “It was the scale of it. And I think a lot of consumers still don’t today understand the data that credit bureaus have. And we know we have to win back their trust.”

On that note, I issued him a series of challenges — opportunities, really — to make good on his word. He did not quite agree to any of them outright, though I hope to get him to yes on at least a few over time. Here’s what I asked for.

“We haven’t talked about whether it would be positive from a consumer perspective to go beyond the three you get for free each year,” he said, referring to the reports available from each company via annualcreditreport.com. “But we’ll certainly take it under advisement.”

That would be positive from a consumer perspective, but the real question is how much revenue Equifax might give up from selling those reports. I couldn’t get a clear answer in the interview or in a follow-up email.

When the bureaus’ chief executives appeared before the House Committee on Financial Services recently, Representative Sean Duffy, Republican of Wisconsin, asked them why they couldn’t just get this done over a cup of coffee.

Mr. Begor wouldn’t make any promises. “As you know, getting three people to dance is always challenging, but there is definitely a discussion going on,” he said.

Does Equifax actually want this to happen? “We want it to happen,” Mr. Begor said, without hesitation. “And it’s the right thing to do, right? Why would you have to freeze three times?”

Article source: https://www.nytimes.com/2019/04/05/your-money/mark-begor-equifax-ceo-interview.html?partner=rss&emc=rss

Your Money Adviser: Still Haven’t Filed Your Taxes? Here, Last-Minute Advice

Here are some questions and answers about tax filing season:

What if my tax refund was smaller than I expected?

A small refund is generally a good thing because it means you accurately estimated the amount of tax you were supposed to pay during the year. But if you prefer to use a refund as a sort of forced savings plan, you can have more money withheld from your paycheck during the year by filing an adjusted Form W-4 with your employer. The fewer “allowances” you claim on the form, the more tax is withheld from your paycheck, potentially leading to a bigger refund next spring.

The I.R.S. offers an online withholding calculator as part of its “paycheck checkup” tool and tax software programs like TurboTax offer free tools as well.

What if I underpaid my taxes in 2018?

Because of the change in the withholding tables, the I.R.S. is giving a break to many taxpayers who underpaid their taxes last year. Typically, you’ll owe a penalty if you paid less than 90 percent of the tax owed, either through paycheck withholding or by making quarterly estimated tax payments. But last month, the agency said it would reduce the threshold to 80 percent, down from the 85 percent announced in January. The change applies just to the 2018 tax year.

If you want to have more tax withheld to avoid writing a check next year, you should do so soon since more than three months of 2019 paychecks have already been issued, Ms. Hockenberry of the tax professionals association said.

Is there any way to reduce my 2018 taxes at this point?

There are still a few options left to help reduce your tax bill for 2018, like contributing to an individual retirement account, Ms. Hockenberry said. Contributions to traditional I.R.A.s may be deductible, depending on your income, and can be made for the 2018 tax year until the April filing deadline. Fidelity Investments said that last year, about a third of contributions to its I.R.A.s were made in the three weeks before the tax deadline.

You may also contribute for 2018 to a health savings account until the tax filing deadline. The accounts, however, are available only to people with specific high-deductible health insurance plans, so make sure your plan qualifies.

Article source: https://www.nytimes.com/2019/04/05/your-money/tax-returns-filing-last-minute.html?partner=rss&emc=rss

Wealth Matters: Dream of Owning a Plane? This Tax Break Can Help

If the plane does not continue to be used at least 50 percent of the time for business, the owner may be subject to depreciation recapture before it is sold.

Aside from benefiting business owners and family offices with the means to buy planes, the loophole offers an advantage to recreational pilots who rent by the hour by providing new, safe planes to fly.

The actor Anthony Edwards, who played Goose to Tom Cruise’s Maverick in the 1986 action movie “Top Gun,” learned to fly a plane in 2011, 25 years after the film made Navy fighter pilots cool.

“I am the guy who comes in and rents and makes it possible for others to buy planes,” said Mr. Edwards, who takes lessons at Performance Flight. “What impresses me is, there are new planes coming in, and as a pilot, you get to experience state of the art.”

Rentals start at $400 an hour, not cheap, but a far cry from the cost of buying a plane.

But as enticing the tax deduction is for some enthusiasts, others balk at the I.R.S. restrictions. Dr. Randall V. Ehrlich, an orthopedic surgeon who lives in Greenwich, Conn., and has three offices around New York, decided not to use the bonus depreciation incentive. He said he could fly to two of his offices more quickly than driving, but he did not like the constraints imposed by the deduction or the lease-back structure.

“I might get out of the office early and might want to go fly. If the plane is being used by someone else, that would make me very unhappy,” Dr. Ehrlich said. “Or spur of the moment, we might fly down to Philadelphia for the afternoon. You lose some of the fun.”

Even without the lease-back component, the tax deduction could still have allowed him to write off the full value of his plane, which cost about $800,000, if he used it just for business in the first year. But the I.R.S. rules are meant for pieces of equipment with a strict business use, not a Saturday jaunt to grab lunch.

But following the rules can provide an extra perk: rental income from the fight schools.

“I normally wouldn’t have bought a new plane,” Mr. Siegel said. “I’d buy a used plane, but now, with a new plane, there’s significant income each month.”

Article source: https://www.nytimes.com/2019/04/05/your-money/tax-break-private-plane.html?partner=rss&emc=rss

Corner Office: Thasunda Brown Duckett of Chase: ‘People Need to Know Who You Are’

How do you make the case that people should save more without making it feel judgmental?

I start with the question, “What are you saving for?” Last year I asked that of our own employees, and it went viral internally. People told me their hopes and dreams. In our branches, employees put vision boards together in the break room that said, “What are you saving for?” And people had pictures of houses, and cars, and trips, and pools, and education. It’s a question that everyone will answer.

Did managing come naturally to you as you took on more responsibility?

Early in my career I learned that the mission is to establish relationships. The fact that a client had never had someone like me covering them didn’t matter — I still had to accomplish the mission. But I could do it in a way that was authentic to me, and that was comfortable to them.

I remember one client asked me, “T, you want to go hunting?” And I was like, “I am not going hunting. Y’all do not want me to go hunting. And I’m not going fishing. You’re not getting me in the middle of some water.” Then I said, “But I love sushi, and we can do sushi every Tuesday.”

And how did you navigate all that with your colleagues?

In 2008, Chase asked me to run home lending for the whole Northeast. And I said, “You know I’m pregnant. This is not like eating bonbons.” And my boss said, “Yeah, we know.” And I’m like, “And it’s going to be a scheduled C, so I’m going to be out for three months, because it’s my first child.” And he said, “O.K. Do you plan on coming back?” I said, “Yeah, I’m totally coming back.” And he said, “O.K.” I was six months pregnant, about to run the largest PL in home lending, going to be out for three months, and he didn’t blink. He didn’t blink.

How did you learn how to manage these larger teams?

When I was named C.E.O. of Auto, within the first 90 days I went to the mail room, and I told them, “Keep doing your job with excellence. If you don’t put that payment in the right chute, and it accidentally goes to mortgage, then the customer doesn’t post on time, they’re upset, and they end up closing their account with us. But you started that process. So when you hear me talk about our customer experience having improved, brush your shoulders off.”

And they go, “You’re welcome. You know we got you.” At that moment I was able to connect them to Chase, to this bigger narrative. And now they know that T cares about everybody.

It sounds like you try to establish a really personal connection with your employees.

People need to know who you are. If they know who you are, and understand your intent, then when I am pushing the team and challenging them, they all line up and say, “Let’s go.”

Article source: https://www.nytimes.com/2019/04/04/business/thasunda-duckett-jpmorgan-corner-office.html?partner=rss&emc=rss

Your Money Adviser: With Funeral Home Rules Due for an Update, There’s a Push for Online Prices

The typical cost of a traditional funeral, including viewing of the body and burial, was about $7,400 in 2017, according to the National Funeral Directors Association, a trade group. A funeral with cremation, which is increasingly popular, was about $6,300. But costs vary widely, even within the same market.

Scott Gilligan, general counsel with the funeral directors association, said about 20 percent of its members — generally those in larger, competitive markets — posted prices online, but the association has not seen major demand for it from consumers. The group’s research, he said, shows that people choose a funeral home mainly because of factors like a relationship with a particular funeral director or a home’s location, with price a less important criterion. There are about 22,000 funeral homes in the United States, and most are family owned, he said.

The Federal Trade Commission typically strives to re-evaluate rules every 10 years, said Patti Poss, an attorney in the commission’s consumer protection bureau. The last review of the funeral rule ended in 2008, when, according to the Federal Register, the commission declined to adopt any changes.

The 10-year review timeline isn’t mandated, however, and the commission may adjust it, Ms. Poss said. The five-member commission, whose members were all appointed last year, has a full plate, including an inquiry into telecommunications privacy.

Still, a review of the funeral rule in 2019 has been scheduled for several years, Ms. Poss said, and is “supposed to happen sometime this year.” She was unable to provide a date when the assessment might start, but said it would be announced on the commission’s website and in the Federal Register.

Article source: https://www.nytimes.com/2019/03/29/your-money/funeral-homes-pricing.html?partner=rss&emc=rss