Pension/Health

 

 

IRS warns some retirees at risk of tax penalty: What to know

The IRS has a new warning for retirees, and while it’s not about a scam it could end up costing older taxpayers more money than they expect to pay.
The agency issued a statement urging Americans to check the amount being withheld from retirement accounts and monthly pension or annuity checks, as soon as possible, in order to avoid a penalty next year.
Since the year is almost over, the IRS said those who discover they have been paying too little, might need to make a quarterly estimated or additional tax payment directly to the agency.
The Tax Cuts and Jobs Act, which enacted a slew of changes to the U.S. tax code, altered the way dues are calculated by the IRS. As such, some retirees are at risk of having too little withheld from regular payments.
Overall, more taxpayers than normal are at risk of having to pay the agency next April.
According to a simulation conducted by the Government Accountability Office (GAO) in August, which reviewed the revised federal tax withholding tables for 2018 implemented by the IRS and the Treasury Department, 21 percent of workers are at risk of having their taxes underwithheld – 3 million more than projections based on the old tax code.
Only 6 percent of taxpayers are expected to have wages accurately withheld, while 73 percent are likely to have their taxes overwithheld. The former is three percentage points less than a simulation conducted using the same withholding structure and the old tax code. Accurate withholding was assumed to be within $100 of what is truly owed.
This year, employers are using W-4 forms already on file to calculate withholding amounts, which has posed problems for taxpayers because the sweeping tax reform changes address everything from personal exemptions to the standard deduction. The Tax Cuts and Jobs Act gave the Treasury Department authority to determine the withholding allowance structure because the old method was no longer suitable, and there was not enough time to issue a new W-4.
When asked in February about how many errors the Treasury has seen so far this year, Treasury Secretary Steven Mnuchin declined to comment directly, instead urging taxpayers to use the IRS withholding calculator.
Employees can update their withholding amounts and the administration has encouraged them to use the tax calculator, available on the IRS website. Retirees can also use the tool, entering their pension like income from a job. They can also consult a financial adviser.
For Social Security tax payments, the IRS says individuals can ask the Social Security Administration to withhold taxes at specified rates ranging from 7 percent to 22 percent. Changes can be made online.
Changes to IRA withholding amounts can also typically be made online.
The Trump administration released a proposal for the new 1040 tax document, or the U.S. individual income tax return, in June. It is expected to release a new W-4 form later this year.


MEDICARE ENTITLEMENT AND ELIGIBILITY

(Click on the following link)   Medicare entitlement and elig-2018-w SSA updates kl


HOW TO EARN SOCIAL SECURITY CREDITS

(Click on the following link)     SSA How You Earn Credits ICN 467510 Rev 01.2018 (1)   

 


TAX DEDUCTION FOR RETIRED PUBLIC SAFETY OFFICERS

By President Wray Young

The Pension Protection Act, which was signed into law in August of 2006, allows retired public safety officers to exclude from income distributions made from their eligible retirement plan that are used to pay the premiums for health insurance.  This also includes the MetLife Dental & Vision plans negotiated for Milwaukee retiree firefighters and police.  The distribution must be made directly from the pension plan to the insurance provider.  You can exclude from income the smaller of the amount of the insurance premiums up to a maximum of $3,000 but the amount excluded cannot be used to claim a medical expense deduction. The MRPA is not qualified to give you tax advice so please direct any questions you might have regarding this benefit to your tax preparer or the IRS which, in turn, might refer you to IRS Publication 575.


 

Government Pension Offset & Windfall Elimination Provisions Will Reduce your Social Security Benefits – Wray Young

Kerry Leist, VP/Operations for NATIONAL BENEFIT CONSULTANTS, INC. passes along the following: There is important information regarding the Government Pension Offset & Windfall Elimination Provisions that will reduce your social security benefits and those of your surviving spouse if you should die before her/him.
Click to view:

 

Medicare Info

Kerry Leist, VP/Operations for NATIONAL BENEFIT CONSULTANTS, INC. passes along the following important information regarding Medicare eligibility. There are populations of protective services and a few others that lack 40 quarters. Some of those think they do not ‘qualify ‘ for Medicare. If entitlement is not at 40 credits it will costs those folks more for Medicare unless they qualify on a spouse’s record.  Credits can be obtained through qualified employment or on a self-employment basis. Click on the following link to see more information on Medicare costs and benefits

If you have any questions concerning the attached Medicare information, please contact Kerry Leist at 262-327-4370


Police Relief Association – by Branko Stojsavljevic
The Police Relief Association is a non profit organization run by board members who are elected by the membership. Members are all active and retired Milwaukee PD sworn members.Some retirees opted to drop out when they were retiring, so not ALL retirees are members. I would guess a good 95% of retirees are members though. One of the board members is a representative of the retired members. Currently that board member is Patrick Doyle. I am the president, Michael Zimmermann is the vice president, Gust Petropoulos is the treasurer, Sebastian Raclaw is the secretary. Your members should see a monthly withdrawal from their pension checks for $2.08 for “PRA”. Some members might have a smaller deduction. If they have a $2.08 deduction that means that they have a $8,000.00 benefit that is payable to their beneficiary upon their death. Others who have a smaller deduction will have a smaller benefit amount. In 1998 we offered all members to pay more (2.08 monthly) for a greater benefit (8,000.00). Some members chose not to pay more, so they do not get a bigger benefit. They cannot change that now. If they dropped out, they cannot re-enroll. If they have no deduction, that means they are NOT members. The members can pick beneficiaries of their choice and can make changes to beneficiaries whenever they want. This is one of the biggest problems we encounter especially with older members. It seems that some wrote down beneficiaries when they came on the job in the fifties. Since then they have married or remarried and never bothered to change beneficiaries. I have forms for beneficiary changes if anyone needs one.We pretty much provide a death benefit. All we ask for to issue the check is a original death certificate. We then cut the check out and send it to the beneficiary. We just started a new website and it’s still under construction. It is pra-milwaukee.com. We can also be found on Facebook under Milwaukee Police Relief Association. On our Facebook site we post death notices. The money that we collect from members monthly dues is invested. We have a private investor that handles our portfolio. We currently have just over 7 million dollars in the fund.  PRA phone# as 414-649-8373.  People should leave a message because their office is not staffed full time.

From Greg Thiele

As many of you know, I have had hearing aids for about 15 years. I had to pay out of pocket each time I needed new ones. Today I was at the Avada office in Wisconsin Rapids for my annual test, which is always free. While talking to my audiologist was I was informed that United Health Insurance is now covering portions of hearing aids. He thought that Humana also might be covering some of the cost. While at the office his receptionist contacted United Health and Avada’s corporate offices. I need new hearing aids. The cost is around $5000. United Health informed the receptionist that my out of pocket cost is around $800. They pay the rest. The portion they cover also has to do with how much is left on your deductible. I  for one never knew that United health was covering any of this. From what they told me, United Health will cover up to around $5000. I was also informed that Avada was bought out by a large company that now owns almost 95% of all hearing aid companies in the world. This company put pressure on many of the insurance companies to start to cover the cost. This company also lowered the cost of hearing aids to make them more affordable. The hearing aids that I am getting for $5000 were almost $9000 last year.   I hope this information helps some of you in the future.   Greg