All about the challenges of Midlife Finance

A Jambalaya of Updates

While scouting about for ingredients for this blog, I’ve come across bits and pieces that are tasty, but too small to make up a full column. These crunchy tidbits make up a full plate when mixed together; at least one or more is sure to be of help.


The Home Office, Updated
:  If you’ve been thinking about working from home, it’s going to be even easier to take advantage of the home office deduction in 2014. According to the IRS, instead of filling out the longer (and somewhat complicated) Form 8829, you can multiply the square footage of your home office, up to 300 square feet, by $5. That deduction is capped at $1500. (Enter it on Schedule C, Line 30, if you’re self-employed — Schedule A, Line 21, if you work for someone else, but keep a home office.)

     There are drawbacks. The traditional method may give you a larger deduction, especially if you’ve kept detailed records. (Sloppy at this? Then you might well take the shortcut, instead.) If you use the quick method, you can’t depreciate the part of your home used for businessbut you can still claim mortgage interest, real estate taxes and insurance losses. (These deductions don’t have to be split between personal and business use, either, as the standard method requires.)

     Which will do best for you? There’s an easy way to check. Do the quick calculation — then compare it with your 2013 home office deduction. The figures should tell you whether the extra work is worth it. (Go here for more.)

     And for more on self-employment, don’t miss our earlier MLF articles on the subject. Part I is here, and Part II here.

Obamacare Health Plan:  If you still don’t have insurance (or applied for a special hardship exemption), you’re going to be paying a penalty fee. According to this helpful site, “If you don’t have insurance by January 31, 2014 [already past, of course] or obtain an exemption, you get charged a fee for every month you don’t have insurance on yourtaxable income. If you have coverage for at least one day in that taxable year, then you don’t owe the payment for that month.”

     Even if you did enroll by March 31st (the absolute final date to do it this year), your actual coverage may not start until May 1 — but at least you won’t be penalized.

     That penalty is fairly minor this year: $95 per individual, or 1% of your income. But coming years, it’s just going to increase. Don’t wait — do something about this. Visit the official IRS website on exemptions and the Individual mandate for more.

Art Collectors, Beware: Americans don’t know much about this concept, but it may be relocating from Europe soon. It’s called droit de suite (or “right to follow,” en Francais), and applies to the resale of paintings, sculptures and other art pieces.

     Here’s the basic idea: an artist sells his/her painting and receives payment. End of story. If that artist’s work appreciates, both in popularity and price (and every artist hopes it does), they may benefit from selling work in the future — but that’s all.

     Current European Union Law, however, guarantees that visual artists will get a portion of the profits any time a dealer or auction house resells their work. Make the artist a famous one, and the royalties could add up to a healthy sum.

     According to the Denver Post, U.S. Rep. Jerry Nadler is working on legislation that would bring a similar concept to the U.S. Meanwhile, royalties for European artists vary, but average at 5%, and last 70 years longer than the artist. (Hello, estate benefits.)

     Right now in the EU, the kickback only applies if a work sells for more than $1000 Euros — a little more than $1393 USD, at present. If the standard 5% royalty applies, the artist would receive $50 Euros, or $69 USD and change. And where would that money come from? The seller, of course.

Drive Yourself Crazy with Just One Book: Few titles are maddening — but this one is: Debtors’ Prison: The Politics of Austerity Versus Responsibility by Robert Kuttner (Alfred A. Knopf: New York, NY, 2013). Kuttner does an amazing job of documenting Fortune 100 companies, countries and other spendthrifts who waste money and opportunities — then depend on suckers (like our government) for a handout to get them out of their mistakes. (And they get it.) GM, Spain and others couldn’t go bust because they’re too big (and ‘everybody’ will be affected!)

     As we all know too well, this happens. A lot. Kuttner reminds us that plenty of  everyday folks have endured the same problems — but no one rescues them. All fine and good. But instead of advocating for fiscal responsibility for everyone, Kuttner concludes that it’s no use. The big boys will continue to be bailed out of their mistakes. So we ‘little people’ don’t need to act responsibly, either! (That’s when I wanted to throw the book at Kuttner!)

If all this has made you hungry for the finished dish, you’ll find an easy recipe for Shrimp Jambalaya here,courtesy of AllRecipes.com. Enjoy!

 

4 Responses to A Jambalaya of Updates

  1. The reselling fee on art is an interesting one. I’m both for and against it haha!! I think I have to take it in fully to be able to decide one way or the other. As for the Debtors’ Prison book, it sounds like the author makes some good points. No one cares about the person, just the big companies. I think we are going to see the same thing with insurance companies if the young and healthy don’t sign up for healthcare. They are the ones that are going to make the program work financially. If they don’t sign up, then the insurance companies are going to need to be bailed out too.

  2. Holly, I know about the penalty being waived for a select small group…seems to be only those whose Medicare plans don’t meet Obamacre minimums. Go here for more:

    http://nomorecocktails.com/post/2014/01/25/Yet-another-Obamacare-requirement-waived-No-Obamacare-penalty-for-those-in-very-small-plans.aspx

    I haven’t heard about others getting this, though a bunch of people wish it would happen – a survey pitting people agreeing with the penalty vs those wishing it would be waived numbered 1 to 3. But then, you’d figure that would be the case…

    http://www.healthpocket.com/healthcare-research/surveys/people-wanting-obamacare-penalty-waived-outnumber-supporters-three-to-one#.U0CXCVfpl5c

    Obamacare remains wayyyy too complicated. But I think that’s just the reality for any insurance plan. Thanks for writing, both of you.

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