I'll admit, there have been times in the past where I have used a credit card to get me out of a financial pinch. I mean, that's one of the reasons why they are there, emergencies. I came across an article that weighed in on the pros and cons of using a credit card to pay your taxes, and I think it all comes down to your number of options and intent.
We pretty much all know that the IRS will take your taxes in a number of different ways, checks, electronic transfers, credit, debit, your first born, and blood. All joking aside, we have a number of options, but what if you only have one? See, there lies the predicament. You may be escaping a possible audit, but you're also trading one devil for another if you aren't careful. Paying your taxes with your credit card could really hurt your finances and credit score, especially if the balance sits long enough to accrue interest. According to the article, the average interest rate on a credit card is at 17.6%, which is a record high. Just remember, it isn't free to pay your taxes with a credit card.
For those who aren't limited to just their credit card, theres an upside to using it. Say you have enough cash to pay it and you have an open card just collecting dust and not rewards. You could use that opportunity to literally reap the rewards that you get on your card by quickly putting the balance on and paying it off.
That's certainly a good point. Thanks for adding that in there. I could see where in some areas of the country it would be beneficial to stay with Part D.
They definitely did this on purpose, perhaps to cover some sort of oversight in 2018. I would say that it's truly a possibility. Either way, it goes to show how much the government can really be a money pit for tax payers, especially for those who are put between a rock and a hard place such as this. No telling how many people this caught off-guard. Having no anticipation for such a thing could really make or break you during tax season.
For those who are enrolled, or are planning on enrolling in Medicare Part D, many things should be considered, especially for those who may need high-cost prescription drugs. I found an article that definitely raised my eyebrow. People who require specialty drugs for sicknesses such as MS, hepatitis or cancer may be left with a good portion of the bill.
Since 2006, Medicare Part D has helped to make medications affordable for millions of U.S citizens. Still, many have a hard time affording high out-of-pockets costs for their medications. According to the article, specialty tier drugs are defined by Medicare as drugs that cost more than $670 per month. Even though such drugs are taken by the minority of Part D enrollees, such an issue shouldn't be ignored because it touches or will touch all of us one way or another. Spending on specialty tier drugs have and will only increase as years go on. Right now, spending on such drugs takes up 20% of Part D spending, which is 6 to 7 percent since 2010.
An excerpt from the article:
"Median annual out-of-pocket costs in 2019 for 28 specialty tier drugs reviewed by Kaiser range from $2,622 for Zepatier (for hepatitis C) to $16,551 for Idhifa (for leukemia), based on a full year of use, according to the Kaiser analysis.
Part D plans are allowed to charge between 25% and 33% coinsurance for specialty tier drugs before enrollees reach the coverage gap. Then they pay 25% of the cost of their drugs. Once their total out-of-pocket spending exceeds an annual threshold of $5,100 in 2019, enrollees pay 5% of the total drug costs above the catastrophic coverage threshold.
In Mr. Sorkin's case, 5% of his $15,000-per-month drug cost translates into $750 per month. There is no upper limit on out-of-pocket spending."
Then consider that there are still monthly premiums on top of that for both Part B and Part D. Not to mention, vitamins and supplements are not covered by insurance.
Also we must consider that Medicare Part D out-of-pocket costs are only going to continue to increase if congress doesn't do something about it.
"The annual threshold for the catastrophic level of drug coverage grew relatively slowly over the past decade, rising $550 since 2010 to the current level of $5,100 in 2019. But the threshold is scheduled to take an enormous jump of $1,250 next year, to $6,350, due to an expiring provision of the Affordable Care Act. Unless Congress steps in, the threshold before catastrophic drug coverage begins will continue to increase rapidly, reaching $9,450 by 2027."
So what can you do? Check your health care drug plan options each and every year. Switch plans whenever it makes sense. Remember, Medicare open enrollment is from October 15th to December 7th of every year. Staying on top of this may save you a lot of money in the future.
Ok, that Turbo Tax one rocks. Being a history nerd, I found the commercial way more appealing than your usual run-of-the-mill tax ads. I wish they made more like that.
With a new year, and new elections, comes new laws and legislation. I wondered how the New Year would play out for veterans receiving benefits from the government, so I found an article from military.com that spells out what changes we will see for Veterans' benefits. Having veterans in my family, I'm always keeping my eyes peeled for any changes that come through the pipeline. I think it's important to know what changes are being made on the 'Hill' that will affect our veterans. You may not be former military personnel yourself, but it touches our friends and family members, in one way or another. The article breaks down new changes to Veterans' benefits on a state level, as well as Federal, but I wanted to focus more on the Federal, since it will affect veterans on a broader spectrum.
Here's the breakdown:
A provision of the Forever GI Bill that provides more benefits for science, technology, engineering and math (STEM) Programs will become effective Aug. 1, 2019.
The VA will provide up to nine additional months of Post-9/11 GI Bill coverage to certain eligible individuals who are enrolled in a STEM program and use up all their GI Bill benefits.
This applies only to veterans who already have completed at least 60 semester or 90 quarter hours and are in a STEM program that requires more than the standard 128 semester or 192 quarter hours for a degree.
The VA can pay up to nine additional months of GI Bill benefits or $30,000, whichever is less. Those using the Yellow Ribbon program and dependents using transferred benefits are not eligible.
Disabled veterans with a 100-percent disability rating are now eligible for Space-A travel.
New UCMJ Article
Article 128b will be added to the Uniform Code of Military Justice, addressing domestic violence. It includes assault, intimidation, violation of a protective order, and damaging property or injuring animals in a domestic-assault situation.
More UCMJ changes can be found here.
High-Deployment Allowance for Reservists
A new law adds reservists mobilized under Section 1104(b) to those eligible for the high-deployment allowance of up to $1,000 per month.
New Tricare Retiree Dental Program
The big news in Tricare coverage is the replacement of the Tricare Retiree Dental Plan (TRDP) with the FEDVIP program. Also, family members of active-duty personnel are now eligible for vision insurance through FEDVIP.
One change I'm happy to see is the VA adding 9 additional months to Post-9/11 GI Bill coverage. I think it will certainly gives veterans more wiggle room when they use up all their GI Bill benefits.
What changes do you find more impactful? There's always more we can do for our veterans, but are there changes that need to be implemented further?
Definitely will keep this link in mind. I wanted to see how much it has increased from 2004 to 2018. I wasn't surprised what I saw. One thing that I couldn't quite figure out was on the first line of 2018 on Household size 1, I see that it says "48 States, DC, Guam, and US Virgin Islands," but then when I look at 2004, it just says "48 States 1." Did they not count Guam in 2004? I'm really fuzzy on my politics from 2004. I could have sworn there was some territorial dispute going on, at least with tax brackets.
Ok, my dad has thought of this, and has told my mom many times "I could retire right now, and we could move to Thailand, and live like royalty there." It seems as though my dad isn't the only American considering becoming a expat. Many advantages exist for those who consider retiring in another country. Of course, these pros don't come without their cons. So I looked into it. Found a decent article that lays it out on Forbes.
One of the main advantages to retiring abroad, especially in place like Mexico, Portugal or Spain is the U.S. Dollar goes a long way. What costs an arm and a leg in the states could be pennies on the dollar(quite literally) in other countries. Another consideration would be changing locations where the climate is more hospitable, such as the beaches of Thailand. One very important consideration is healthcare. We all know healthcare in America is a joke compared to many other countries. Places like the countries listed above, including Korea offer amazing healthcare to Americans. This would be an excellent advantage for those retiring with health conditions.
So what are the cons? There are few, but they don't necessarily outweigh the pros, in my opinion:
Do you have family obligations?
Do you have an ailing family member who needs you near, either for healthcare reasons or in case of an emergency?
What are you thoughts on being a minority in another country?
In many countries, Americans can be spotted from a mile away. Are you ok with a language barrier? Are you willing to change with and learn a new culture altogether? It isn't difficult to navigate another country. But it should still be considered.
Some other considerations from the Forbes article:
Politics—How comfortable are you with other rules of government and law? Are you comfortable with a socialist or communist government? How about a dictatorship?
Attitude Toward Americans—Would you be comfortable overcoming negative attitudes about who you are and where you come from?
Likelihood of Natural Disasters—Have you had experience living with the threat of hurricanes, tornadoes, floods, earthquakes, or volcanic eruptions? Are you comfortable with the likelihood of one or more of these?
Health Care—How healthy are you currently? Do you need constant monitoring for a health condition? How attached are you to your current doctors?
Language/Communication—Do you speak another language well enough to converse about important issues? How willing are you to learn another language? Are you willing to take classes to learn another language?
Ease of Travel—Do you want or need to travel back to the United States frequently? How easily do you travel?
Entertainment & The Arts—How important to you is American TV, opera, symphony, museums, and theater? Are you willing to give up the kind of entertainment you are used to?
Shopping—How important is the ability to shop in places like Trader Joe's, Nordstrom or Target? Will you have trouble giving up the opportunity to buy what you want easily and quickly?
Infrastructure and Technology—How attached are you to 24/7 electricity? Fast Internet speeds? Uninterrupted phone service? Will you need these for work?
In my opinion, it's totally doable still. It should be considered at least once before you retire. Does anyone agree? Are there cons that I missed? If you do agree, where would you be fine with being an expat? I'd live in Spain myself. :)
Probably should stay at 100% to qualify as top priority, and then start paying off loans in tiers of disabled priority after that, if it ever grows to be able to do so.
I agree. That's an interesting way of thinking about it, priority wise. It would definitely give more structure to such a program. Perhaps going down by fifths or tenths. I'm no expert, so I wouldn't know where to comfortably put the cut-off. I hope they're able to reach out to more veterans, especially since like the article said, so many of them are defaulting on their loans. All in all, good news for sure!
Look out though, Overton window works both ways.. wonder what the right will start saying they want, to combat this tactic.
Very true. I'm thinking perhaps they'll move more towards supporting ideas and reforms that would protect private insurance companies.