good evening and welcome to PBS here in Fort Wayne .

>> I'm Sandy Thomson, the host of the show LIFE Ahead.

But you're the audience and you're really what it's all about this show if it's the first time you've ever watched it.

We have different topics each week and guests that are professionals in the field of topics that we have here and we have a different topic every week.

So you got to keep watching and maybe we'll have something that interests you.

And I will say that most of the things that we talk about are either something that you've had to deal with or eventually will.

So our hope then is to give you for choices that you might have to make in your LIFE Ahead of the name of the show and you can call us you see the number on the bottom of the screen (969) 27 twenty .

>> We're going to be talking about taxes tonight.

I'm sure most of you out there are starting to think about if you haven't done them already.

I don't know a lot of people that are finished but maybe you are much more conscious about that.

But a lot of people or at least are gathering the materials and getting ready to do their taxes and this is a good opportunity for you to call and talk to a tax expert tonight and a legal expert please meet if you have watched us enough you would know Heidi Adare Heidi, thank you for coming tonight.

>> Thanks for having me and tax time Heidi is the attorney, by the way, specializing in elder law but your tax time you bring Cindy Werner on with you.

>> She's the tax accountant.

>> What's your official title?

I'm a CPA CPA.

OK, all right.

So she's the one that's going to know the specific tax questions that you have and then if we move on to a legal issue connected with that or whatever, then we're going to refer you to Heidi.

>> OK, enough about the rules of the show, no commercials.

>> We go straight through this half hour.

Let's start with you, Heidi.

>> Taxes are such a big thing but they're all involved in some way with our estate.

What estate documents have to do with taxes are what should we be keeping?

>> It's the reason that I like to do a tax show is that I think it's that time of the year when you just kind of get everything together and organized and you start thinking about projects that other than your taxes that you should be working to accomplish so you just want to make sure you've at least got some basic estate planning documents in place like like a health care rep representative appointment naming who can make health care decisions for you, a power of attorney who can help you with financial matters getting your taxes done if you are incapacities a basic will that says where you want your things to go well it's a interesting in no surprise that that you would give that answer because and we've talked about this in past years.

>> It is I think maybe we get through the holidays.

We just kind of only do what we have to do because we're really getting ready for the holidays and we put everything off.

>> It's like after New Year's or in January I'll get around to this and it is this early part of the year January, February, March when we start dragging out the folders that we've had invoices and financial information in and start to get ready for to do taxes.

But as you said, a good time to think OK, now wait a minute, I need to address this as well now that I'm looking at all of the business parts of my life .

>> Right and it's to do estate planning.

It's great to have a listing of assets and while you're you know, all your assets are kind of flashing before my eyes, you're doing your taxes.

>> Good time to just pull that list together, OK?

All right.

Cindy, do you find this happens with your clients?

Do they come to you with just taxes or are they coming to you with like their whole package of receipts and invoices and assets?

>> They come mostly with taxes .

Some of them come with boxes and that's always joyful when a Xerox box comes.

But there are some people like who are dealing with a trust or an estate.

Yeah.

And it's kind of a new animal for them.

And oftentimes when they're dealing with an estate they're also they've lost somebody near and dear to themselves.

So there's that emotional aspect.

So they need a little bit more care I think and they want to I'd rather have them bring too much than not enough and if if they aren't coming to you as a CPA to help handle some of these taxes that's passed away in the past year.

>> Yes.

Yeah, it is an emotional thing.

Plus you're dealing with somebody else's life you only know about through the papers they have I mean you go about their daily life but as far as things that you need to know for taxes, they just they've gone through mom grandmas file cabinet and pulled out a bunch of stuff and said here, yeah, you take care of but yeah it's mostly but mostly people have their own tax situation to think about so they know what kid of documents they need and they can kind of equate that to what mom or dad or grandma might need.

>> So that's a little bit different.

OK, you hinted at it but let me ask the question do people seriously bring in a box of like Recy some miscellaneous papers and napkin with something scribbled on it and dump it on your desk and say do my taxes?

>> I haven't seen napkins lately but I have had people bring it's a thing of mine.

You know, everything comes in an envelope.

It says tax documents say right.

>> So a lot of people will unfold the document.

Look at and then fold it back up and put it in the envelope and that drives me nuts because you know it's out I need to see it but they'll put it very carefully information.

>> So if you're just given that envelope you don't even know what the topic is or what it's about.

>> Well, you they'll say tax tax information.

>> Oh, I know I get those I know what I mean.

But it doesn't say this has to do with my IRA or this it doesn't have to do with my part time job or anything.

>> It just isn't.

Well I I know the forms I mean I know by the forms for what to expect so I take my things out of the envelope.

>> Thank you.

You're very appreciated.

Your accountant loves you and I have all organized and then I try to organize them into the categories of what's what and then I put a little Post-it note on top of you know this is you know ten ninety nine for whatever you know try try to make it simpler so you're very welcome.

>> We have a phone call already and I would have some here this phone call by the way is from Bais and says if your loved one dies in the middle of the year ,do you have to file taxes for them?

>> All right, Heidi, you talk about this.

Yeah.

So it just kind of depends on how much income they had before they passed away.

If you're in the middle of the year in June, you very well may have earned enough income that you have to file an income tax return.

So you should continue to gather up to ninety nines, talk with the tax preparer and figure out whether a return is owed or not and it may not be from a job.

>> It might just be income derived from investments.

Right dividends or interest or whatever.

>> I know Heidi addressed this issue one other time when we were talking about taxes and share with them Heidi, you told us something very interesting about the time of year when you die and what that has to do with how long it takes to settle in a state.

>> Oh, OK. >> Well that yeah I remember.

So if you passed away in December your family can usually wrap up your estate fairly quickly.

>> Why?

Because your income is done with that year and you've got your April filing deadline and after that there's no more income for you so you already have all your twos or ninety nine .

All right.

You're going to be there because it's the end of the year.

Right but but if you die in June we kind of got to usually wait till spring of the next year to right.

Yeah.

Before you get the taxes done pOK all right.

>> Not that we're suggesting any of you put a date on your calendar by any means but if you're getting very frustrated because you think the estate hasn't been completed yet and handled, that could be one of the reasons and I know that it's you think it can be done and your estate settled in a couple of weeks not the case.

>> What's a typical time?

Oh, you know, our goal is always to get done in under a year or so or a year.

I mean we consider that successful.

You know, sometimes we can be done quicker than that if there's just not a lot going on.

>> So sometimes it takes longer and you from discussions we've had or I've had with some of your colleagues, they say it might also have to do with your assets or can you get a hold of different people that are all over the country nowadays?

>> Right.

Yeah, that and you know, coming to an agreement on selling a piece of real estate, you know, maybe some people in the family want to fix some things up before the sale happens.

Some people don't want to fix up so you got to work through all of those somebody in the family may want buy it and they need to work on trying to get a loan lined up.

You know those things just take time.

Got understan?

>> OK, all right.

If you're getting all your receipts and and everything in line and ready to do your taxes, send it give us some tips.

>> What are some of the most common mistakes, errors, whatever that people do when they're doing their taxes?

Well, first of all, you have to make sure you have all your documents with you and a lot of tax preparers will have you work on a questionnaire and ask you did your marital status change during the year?

>> Did you buy a house or sell a house?

Did you invest in something?

And that gives us a clue that there might be paperwork involved in taxes that you may not have known had a tax significance to it.

>> So we go through that common mistakes.

I see a lot this week actually Indiana has a deduction for real estate taxes paid.

>> Yes.

And and people forget to bring that down so they should bring a copy of their property tax.

>> They're not going to get another new one.

They have to keep the one down one.

But the thing is I can look that online there is oh you can write in public information but what I do what I found lately unfortunately for some clients I've found that there are they forgot to make their November payment.

>> So I have to say I have the joyful job of telling them that they're delinquent maybe they're better.

Look at that.

You know, for some reason I mean we've all forgotten deadlines, you know, so that's happened a lot lately.

And then I had somebody who was self prepare for years and didn't even know that that was a deduction really it's it's you know, we can say, you know, complex what is what is it homestead homestead deduction.

>> Well that's about that reduces your the assessed value of your house so your real estate taxes are lower if you have a homestead deduction but that's that's not income taxes.

OK, got it.

Got it.

I understand what you're saying though about how easy it is to forget.

>> I mean when I get the the tax statement spring and fall and I put it in my written calendar because I could very easily forget if I if I stuck that in the mail slot here in the kitchen, you know, with everything it's easy to forget when November rolls around.

>> Look that was due is there a penalty on your taxes at all or you just have to run and pay it real quick.

What happened?

Oh yeah.

Allen County assesses a penalty if you're OK. >> OK and then do you have to report that on the taxes?

No.

And it's not deductible either.

The only tax write penalties are not deductible.

You know if you have a long, long haul trucker that he says a speeding ticket is part of just part of the job.

Well, I'm sorry that's not done.

Not in although yeah, it's probably a hazard of the job occupational hazard but that's fines and penalties aren't deductible so we'll kind of have to watch for those.

>> James just called in by the way and James, thank you so much for watching us here on LIFE Ahead.

Here's what James wants to know.

He said When it comes to filing taxes, what is the difference between an IRA and a Roth IRA?

>> Let's talk about that.

Well, a traditional IRA is taxable when it comes out.

It's taxes, ordinary income and you'll receive a ten ninety nine are when you withdraw it when you withdraw right.

The only exception to that is if you're old enough 70 and a half and if you can give a charitable contribution directly from your IRA it transferred directly from the fund where you have a Roth IRA to not Roth traditional or the traditional then you don't have to do it.

You don't have to pay tax on it.

Now Roth IRA by definition isn't supposed to be taxable when you withdraw it but there are certain parameters you have to reach the correct age that the account had to be opened for a certain period of time.

But generally the goal is Roth IRAs are not taxable when you withdraw them whether you're taxed on them end Roth IRAs are never taxed, never taxed.

>> OK, I know that you know many financial advisors or CPAs or whatever will advise people to start contributing to a Roth IRA.

>> So you when they're young the reason that they're not taxed is that you put after tax money in a Roth IRA traditional IRA.

That's why you heal that off the top and not pay taxes.

OK, stick it away.

The Roth after you've paid your tax bill is when you fund the Roth.

>> But is there isn't there a limit was it five thousand dollars or something like that of what you could invest in a Roth IRA a year?

>> No, I don't know.

There's limited there's limits depending on age, depending on income for Roth IRA but a really nice thing that a lot of companies are doing right now is they have the ability to do a Roth IRA contribution or a Roth contribution to their pension plan so they can choose to be Roth where they might not meet the income limits to do that.

So we see a lot of that in the younger they are the the better.

>> The idea is to put your money into a round and just don't touch I mean pretend it's not even there but you'd be so excited when you find out that you had a great planning thing for people to do for their kids to encourage savings and to encourage retirement is you know, your kids got your high school kids got a part time job somewhere and they earn fifteen hundred dollars.

Well you could put fifty up to their earnings limit.

You can put that in the IRA so it's a gift to them.

You give them fifteen hundred and that's going to grow.

Compounding is a wonderful thing.

They'll be amazed and you know is one of the things we like to do here and with our purpose of giving education and information.

You know if you listen to some of the things that they're saying, it's advice that you can share with your siblings, with your parents and with your children that will save them a lot of anguish and a lot of money throughout the year.

>> Right, right.

OK, let's go back to taxes again here.

How about twenty twenty three because a lot of that's what a& lot of people are doing right now their taxes for twenty twenty three.

What do they need to think of in terms of any changes there might be is there anything going on with the IRS?

>> Not a whole lot of changes.

OK, we're we're seeing of course the tax brackets change a little bit every year so and those are built into our software.

So there's typically no surprises coming coming from that end.

The thing that has changed recently is and it's kind of related to taxes but not not a part of taxes, OK, there is something out there that became effective January 1st of twenty twenty four .

It's called the Corporate Transparency Act and Beneficial Ownership interests, corporate safety and corporate transparency apparently and it is a way for Fin Sin and that acronym is for Financial Crimes Network.

Find out who owns what kind of companies so they're looking for shell companies.

They're looking for basically what they're looking for is money laundering and so they want to know what type of entity you have people it's been proposed for quite some time but the reporting requirements just started in this year but somebody took it to court and it was declared unconstituional this past Friday.

>> Oh really?

Really?

Yes.

So what happens then?

So now it's kind of on hold.

Maybe we don't have to do the reporting requirements but for twenty twenty three even though right.

Well it was effective January one of twenty four I say so that's something that I accountants have to really help our clients do.

We're referring it to the attorneys to do it.

>> Yeah.

Have you have any idea I mean we've been all all up in arms in our office trying to figure out how best to inform clients of this and assist them with it.

So yeah, I was not aware of that that just happen.

>> I think you guys have a long chat before you leave tonight, Heidi.

How do you go about that if there are major tax changes or state changes or something like that and you're dealing with them from a legal point of view, how do you go about informing people or is it your responsibility?

>> It's really not a lawyer's responsibility to keep it.

I mean it depends on how you set up your engagement with your attorney but in the way that I work, it's your responsibility to come back to me.

Yeah, I try to do informative things like through these shows or articles that I write to get information out there.

But yeah, there's just no way client that we have to say this is a change that might affect you.

>> Right.

There are so many and so many clients and then that changes again and right.

Which is another reason and I know you counsel our viewers to have a meeting with your lawyer.

>> Yeah.

Every now and then every few years or a big life change occurs or you're really big, you know I'm retiring this year.

I've been diagnosed with an illness.

You know, those are the times when you really want to check in.

>> Right.

And maybe there have been changes even when you're younger.

I mean maybe you're all of a sudden you're part of a blended family or things that might might change.

>> It seems like what we do is, you know, boring or not exciting.

>> It is but it's the core of your life .

We're about paperwork the government invented but really I mean we're paying attention reading articles all the time in our world.

We do get excited things do change.

>> So like the issues that you just discussed.

Yeah, that's pretty darn exciting.

Yeah.

You have five minutes left by the way.

If you want to give us a call real quick here with any questions you might have Heidi, let's go back to you as far as our Syndey rather let's go back to your as far as taxes so nothing new about twenty twenty three that people up there don't know.

>> Well something new on Indiana taxes a lot of people are interested in donating to Indiana 529 plans for their kids or grandkids education.

Yeah, and the limit used to be twenty percent of the first five thousand you contributed you got a state tax credit that went up to seventy five hundred dollars this year.

So twenty percent of seventy five hundred dollars is your tax credit.

But they also have now said that you could make a contribution to a 529 plan for twenty three right now up into the due date of the return and they've never let you do that before.

OK so up until mid-April we can make that contribution.

>> You can make that contribution.

So that's that's a new thing this year.

>> OK, that's kind of important.

Could be significant people could take advantage of it if they if they wanted to.

>> OK, I don't know which of you can answer this question but you talked about 529 for you know, children for their education.

>> Does the grandchild have to be any specific age?

>> Can it be a newborn?

Does they have to be a teenager?

What's the rule?

Anything any any any age.

>> OK, all right.

Up to any certain age?

No, no actually.

>> Oh that's great.

And what a gift.

You know what a wonderful, wonderful gifting you as a taxpayer taxpayer benefit from it as well.

>> OK now Heidi, as far as estate tax or trust, are there any tax consequences that people need to know about when they're doing their estate planning other than what a CPA is going to help them with?

Yeah, I mean at this point the federal estate tax limit is in excess of 13 million dollars.

>> Well, I don't know if it impacts how many fewer people if you're in that category call we want to know you want to be your your cousin or something adopted.

Yeah.

but something to be aware of is that that thirteen million dollar exemption unless Congress extends it after twenty twenty five so starting in January of twenty twenty six the exemption is slated to come back down considerably do you think.

>> Yeah but it's going to start at about five point five dollars million which will be indexed for inflation.

They think it may land at about seven.

OK so if you are a person between the seventeen million and thirteen million you may want to check in with your attorney over the next year because you may want to consider some things OK. >> All right.

Good good tip for sure.

OK, estimated tax payments good idea or not what do you think they're required if you owe more than a thousand dollars OK so you're required to do it.

The IRS has I mean if you're not working anymore if you're not working now so IRS says as you get your money we get our share.

OK, so you have to pay that quarterly you can figure them fairly.

A fairly common way to do it is to at least cover your prior year's tax so that if this year it ends up that you owe a lot at least you won't have an underpayment penalty.

>> But again you don't get notified every quarter you have to be responsible.

You're so yeah you do we give you most offices they're going to give you a letter that says here's what you owe.

>> Here's here's what you do.

Send it in.

Here's your coupons for your estimated tax payment.

Send it in.

I will say there's a couple clients I probably do call but I can't possibly call all of them right.

And this year because underpayment penalties are based on prevailing interest rates and we have all seen interest rates go way up through the roof for some things.

>> So we're seeing that there's a little bit more substantial underpayment penalties this year.

There are ways to get out of it but it's it's a little bit more you have to jump through a few more hoops so you're required.

So it's a it's a good idea especially when you transition for working to retirement.

>> Yeah.

To set those up.

Well, I just appreciate the information our half is growing so quickly unfortunately because there's so much more information that we can share with you.

But we hope you've benefited from some of the things that Heidi and Cindy you've been able to share with you.

>> And I think the bottom line from what I'm hearing if we had to summarize both of you is you have to be responsible for yourself.

They will help you with legal or financial advice but listen to them and then do what they tell you in a timely manner.

Well, speaking of time, we're going to see seven thirty here right here again next Wednesday and meanwhile, I want you to stay healthy and stay happy.

>> Good night