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Getting Organized: A Checklist for Filing Your 2023 Income Taxes

January 16, 2024

As tax season approaches, getting organized is key to a stress-free filing process. A comprehensive checklist can help you stay on top of things and prevent stress or a last-minute rush to get the job done correctly. Here's a guide to ensure you have all your ducks in a row for filing your 2023 income taxes:


Gather Personal Information

Begin by collecting essential personal information for yourself, your spouse, and your dependents. This includes Social Security numbers, birthdates, and, if applicable, individual taxpayer identification numbers (ITINs).


Income Documentation

Compile all income-related documents, such as W-2s for employment income, 1099s for freelance or contract work, and statements for interest, dividends, or rental income. If you received unemployment benefits or made withdrawals from retirement accounts, gather relevant documentation for those as well.


Deductions and Credits

Organize documentation related to potential deductions and credits. This could include receipts for charitable contributions, medical expenses, education expenses, and homeownership-related documents like mortgage interest statements.


Healthcare Information

Ensure you have proof of health insurance coverage, as this is crucial for avoiding potential penalties. Gather forms such as the 1095-A, 1095-B, or 1095-C that outline your coverage.


Records of Investments

If you bought or sold investments during the tax year, gather records of capital gains and losses. Brokerage statements and records of investment purchases and sales are essential for accurate reporting.


Business and Self-Employment Documents

If you're a business owner or self-employed, organize records of income, expenses, and receipts for potential deductions. This includes business-related travel, equipment purchases, and any home office expenses.


Retirement Contributions

Ensure you have documentation for any contributions made to retirement accounts. This includes traditional and Roth IRAs, 401(k)s, and other retirement savings plans.


Education Expenses

If you or your dependents pursued higher education, gather records of tuition payments, student loan interest statements, and any documentation related to educational expenses.


Remember that early preparation can alleviate stress and potentially identify opportunities for tax savings. If you encounter any complexities or uncertainties, consider consulting with a tax professional for personalized guidance. Getting organized today ensures you'll confidently navigate the tax season and hopefully avoid any mistakes that can lead to frustrating delays later.

Using Life Insurance to Protect Your Business: Key Strategies for Business Owners

February 11, 2025
As a business owner, safeguarding your enterprise against unforeseen events is crucial for long-term success. Life insurance offers several strategies to protect your business, ensure continuity, and provide financial stability during challenging times. Two primary methods are buy-sell agreements and key person insurance. Buy-Sell Agreements A buy-sell agreement is a legally binding contract that outlines the procedure for transferring ownership if an owner departs due to death, disability, or retirement. Funding this agreement with life insurance ensures a smooth transition and financial security for the remaining owners and the departing owner's beneficiaries. Types of Buy-Sell Agreements Cross-Purchase Agreement: Each owner purchases a life insurance policy on the other owners. Upon an owner's death, the surviving owners use the policy proceeds to buy the deceased owner's share. This method is often suitable for businesses with a few owners. Entity Purchase Agreement: The business itself owns life insurance policies on each owner. If an owner passes away, the business uses the proceeds to buy back the deceased owner's share, redistributing it among the remaining owners. This approach is typically preferred for businesses with multiple owners. Key Person Insurance Key person insurance is a policy that a business takes out on essential employees whose loss could significantly impact operations. The business owns the policy, pays the premiums, and is the beneficiary. If a key person dies or becomes disabled, the policy proceeds can be used to: Cover the costs of finding and training a replacement. Offset lost revenue resulting from the key person's absence. Reassure clients, creditors, and investors of the business's stability. This strategy is vital for businesses where certain individuals are integral to success, such as top executives, lead developers, or primary sales personnel. Additional Strategies Beyond buy-sell agreements and key person insurance, consider these life insurance strategies: Collateral Assignment: Use a life insurance policy as collateral for business loans. In the event of the owner's death, the lender is paid from the policy proceeds, preventing financial strain on the business. Executive Bonus Plans: Provide key employees with life insurance policies as part of their compensation package. This not only offers them personal financial protection but also serves as an incentive for retention. Deferred Compensation Plans: Promise to pay key employees a certain amount at retirement, funded through life insurance policies. This ensures the business can meet its obligations without affecting cash flow. Implementing life insurance strategies is essential for business owners aiming to protect their enterprises from unforeseen events. Work with us to explore your life insurance options and we can help your business remain resilient and continue to thrive.

What Happens If You Outlive Your Term Life Insurance?

February 1, 2025
Term life insurance provides coverage for a specified period, such as 10, 20, or 30 years. If you outlive your term policy, the coverage ends, and no death benefit is paid to your beneficiaries. As you approach the end of your term, it's essential to evaluate your current financial situation and consider options to maintain life insurance coverage if needed. Options to Consider Annual Renewable Term: Some term policies offer an option to renew annually after the initial term expires. While this allows you to extend coverage without a medical exam, premiums typically increase each year based on your age, making it a potentially costly option over time. PROGRESSIVE.COM Policy Conversion: Term-to-Permanent Conversion: Many term policies include a conversion feature, allowing you to convert your term policy into a permanent life insurance policy, such as whole or universal life, without undergoing a medical examination. This option can provide lifelong coverage and build cash value, but premiums will be higher than those of the original term policy. NEWYORKLIFE.COM Purchasing a New Policy New Term Policy: Applying for a new term life insurance policy can be an option, especially if you're still in good health. However, premiums will be higher due to increased age, and you may need to undergo a medical exam. Permanent Life Insurance: Alternatively, you might consider purchasing a permanent life insurance policy, which provides lifelong coverage and accumulates cash value. This option is generally more expensive but offers additional benefits. Exploring Alternative Coverage: Final Expense Insurance: Designed to cover end-of-life expenses, such as funeral costs and medical bills, final expense insurance offers a smaller death benefit with more affordable premiums and may not require a medical exam. Guaranteed Universal Life Insurance: This type of policy provides coverage for a specified age (e.g., up to age 90 or 100) with lower premiums compared to whole life insurance, focusing primarily on the death benefit without significant cash value accumulation. Take Action Now As your term life insurance policy nears its expiration, assess your current financial needs and health status to determine the most suitable course of action. Consulting with an insurance professional can help you navigate your options and select the best solution to ensure continued financial protection for your loved ones.
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