The Social Security Strategy

There is a limited window of opportunity to take benefit of a Social Security strategy that could increase your Social Security monthly benefits.
If you were born April 30th 1950 or earlier you can file for benefits at full retirement age and then suspend them to earn delayed retirement credit while allowing a spouse to collect benefits on your record while you delay  An a married couple  has  until April 29th of 2016.
Also if  you were born before April 30th 1950 or earlier , an  individual can file and suspend. If circumstances change the individual can go back and collect the  suspended benefits. However, future benefits will be based on the earlier filing date. The suspension must be filed by April 29th 2016 .
If you  and your spouse were born between May 1st 1950 and January 1st 1954 you can still file a restricted application for benefits until April 29th of 2016. One spouse can choose whether to take a spousal benefits or one based on their work record.
If you are in this age group it is important that you seek advice and take action before April 29th 2016.

Medicaid Eligibility & Spousal Retirement Accounts



Currently there are 31 states* where Medicaid treats a community spouse’s IRA account as a countable resource. Thus, before an institutionalized spouse can qualify for Medicaid benefits, the community spouse’s IRA account must be either protected or spent-down.

Protecting the Community Spouse’s IRA

The best way to protect the community spouse’s IRA account is to make it part of his or her community spouse resource allowance (CSRA). In 2015, with the maximum CSRA being $119,220, if a couple had total countable resources of $275,000 ($175,000 of which was in the community spouse’s IRA account) the community spouse would be advised to leave $119,220 in the IRA account. As for the balance of $55,780, the community spouse would further be advised to invest the amount into a tax-qualified DRA compliant immediate annuity (Tax-Qualified Annuity, or TQA).

Taxation and the Community Spouse’s IRA

The $119,220 remaining in community spouse’s IRA account would not be subject to income taxation. As for the funding of the TQA – which was accomplished by an IRA Direct Transfer (preferred method) or a 60-day IRA Rollover** – the funding transaction would not be subject to income taxation. However, as the community spouse receives the monthly payments from the TQA, he or she would be taxed on the payments received in the given year.

Eliminating the Remaining Spend-Down

As for the remaining spend-down of $100,000, the community spouse would be advised to invest the amount into a DRA compliant immediate annuity (DCIA). Since a DCIA involves after-tax dollars, unlike the TQA, which involves pre-tax dollars, only a small portion of each payment is subject to income taxation in the year of receipt.

One Annuity versus Two Annuities

For purposes of simplicity, some clients have requested to use only one annuity rather than the two detailed above. However, because the Internal Revenue Code does not allow qualified funds (pre-tax) to be mixed with non-qualified funds (post-tax), two annuity contracts are required.


At Krause Financial Services, we understand that Medicaid planning with IRAs is complicated. However, between our unique annuity product line and vast state-specific Medicaid knowledge, we are more than equipped to handle your most challenging cases. So, if you have a case involving a countable IRA, please do not hesitate to get in touch with us. We look forward to it!


The holiday season often prompts people to give money or property to charity. If you plan to give and want to claim a tax deduction, there are a few tips you should know before you give. For instance, you must itemize your deductions. Here are six more tips that you should keep in mind:

1. Give to qualified charities. You can only deduct gifts you give to a qualified charity. Use the IRS Select Check tool to see if the group you give to is qualified. You can deduct gifts to churches, synagogues, temples, mosques and government agencies. This is true even if Select Check does not list them in its database.

2. Keep a record of all cash gifts.  Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.

3. Household goods must be in good condition.  Household items include furniture, furnishings, electronics, appliances and linens. These items must be in at least good-used condition to claim on your taxes. A deduction claimed of over $500 does not have to meet this standard if you include a qualified appraisal of the item with your tax return.

4. Additional records required.  You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.

5. Year-end gifts.  Deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2015. This is true even if you don’t pay the credit card bill until 2016. Also, a check will count for 2015 as long as you mail it in 2015.

6. Special rules.  Special rules apply if you give a car, boat or airplane to charity. If you claim a deduction of more than $500 for a noncash contribution, you will need to file another form with your tax return. Use Form 8283, Noncash Charitable Contributions to report these gifts. For more on these rules, visit

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on



Save Twice with the Saver’s Credit

If you are a low-to-moderate income worker, you can take steps now to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit:
1. Save for retirement. The formal name of the saver’s credit is the retirement savings contributions credit. You may be able to claim this tax credit in addition to any other tax savings that also apply. The saver’s credit helps offset part of the first $2,000 you voluntarily save for your retirement. This includes amounts you contribute to IRAs, 401(k) plans and similar workplace plans.
2. Save on taxes. The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.
3. Income limits. Income limits vary based on your filing status. You may be able to claim the saver’s credit if you’re a:
• Married couple filing jointly with income up to $60,000 in 2014 or $61,000 in 2015.
• Head of Household with income up to $45,000 in 2014 or $45,750 in 2015.
• Married person filing separately or single with income up to $30,000 in 2014 or $30,500 in 2015.
4. When to contribute. If you’re eligible you still have time to contribute and get the saver’s credit on your 2014 tax return. You have until April 15, 2015, to set up a new IRA or add money to an existing IRA for 2014. You must make an elective deferral (contribution) by the end of the year to a 401(k) plan or similar workplace program.
If you can’t set aside money for this year you may want to schedule your 2015 contributions soon so your employer can begin withholding them in January.
5. Special rules apply. Other special rules that apply to the credit include:
• You must be at least 18 years of age.
• You can’t have been a full-time student in 2014.
• Another person can’t claim you as a dependent on their tax return.
6. Visit You figure your credit amount based on your filing status, adjusted gross income, tax liability and the amount of your qualified contribution. Other rules also apply. For more information visit
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There is a one month opportunity to pay Louisiana taxes, interest, and penalties for less. From from October 15th, 2014 through November 14th, 2014 individual and business taxpayers can pay the delinquent tax accounts and file overdue tax returns.

Amnesty will be granted only for eligible taxes to eligible taxpayers who applied during the amnesty period. And who pay or enter into an installment agreement to all the tax have an interest do and all fees and costs for the Pierce designated on the amnesty application

If the application is approved by the Secretary of the Department of Revenue, all other interest and penalties associated with the tax periods will be waived . In  other words if the Amnesty is  approved, the taxpayer only has to pay half the interest and no penalties.

It gets even better,the taxpayer can pay the delinquent amount in installments.

What taxpayers are eligible for Amensty?

Not all taxpayers are eligible for amnesty. There are 5 basic categories of taxpayers who are eligible for amnesty. Taxpayers who fail to file a tax return or report. Taxpayers who fail to report all income or all tax ,interest and penalties that were due. Taxpayers who claimed incorrect credits or deductions.Taxpayers  who misrepresented or omitted any tax due. Certain taxpayers under audit or  in administrative or judicial litigation.

What taxpayers do not qualify for Amensty?

Taxpayers involved in the criminal investigation or criminal litigation for taxes administered by the Louisiana Department of  Revenue do not qualify for Louisiana tax amnesty 2014.

Income tax and sales tax are eligible for the amnesty program. Certain taxes  are not eligible for amnesty.

Frequently Asked Questions

* Are income taxes due for 2012 eligible for Amensty?

Yes , income taxes due for 2012 are eligible for amnesty . Taxes due  prior to January 1, 2014 are eligible for Amensty.

*Is the person in bankruptcy eligible for a Amensty?

Yes,Ia person in bankruptcy is eligible and  should consult with an attorney to determine if the amnesty program would be beneficial. If you wish to consult with us contact us at 225 769 4200.

*What if a taxpayer has not filed all of his Louisiana returns?

The taxpayer will have to file all outstanding Louisiana tax returns and pay the tax and 50% of interest balance owed.

*Does a taxpayer need to hire an accountant or an attorney 2206 them with the amnesty program ?

The taxpayer can represent himself and file for  Amensty. However in complicated tax matters; it is always advisable to see the  assistance of trained and experienced professionals.


Pete Losavio



Ford Motor Co. Not Entitled to Interest on Deposits with the IRS

 In Ford Motor Company v. U.S., 2014 PTC 516 (10/1/14), the Sixth Circuit held that Ford Motor Co. was not entitled to interest between the time the company submitted amounts to the IRS as a deposit, and the time the company requested those amounts be treated as an advance payment for tax deficiencies. Ford argued that the conversion of its deposits into advance tax payments applied retroactively and that interest should thus accrue from the date the company remitted the deposits, instead of when the conversion occurred. The court determined that, at the outset, Ford could have remitted the estimated tax amount as an advance payment, but decided instead for a deposit. Thus, the court held that Ford’s election prevented the remittances from being treated as overpayments, and the IRS correctly refused to pay interest for the time the funds were labeled as a deposit. [Code Sec. 6601].


If you’re a farmer or rancher and drought forced you to sell your livestock, special IRS tax relief may help you.
The IRS has extended the time to replace livestock that farmers were forced to sell due to drought. If you’re eligible, this may help you defer tax on any gains you received from the forced sales. The relief applies to all or part of 30 states affected by drought. Here are several points you should know about this relief:
• If the drought caused you to sell more livestock than usual, you may be able to defer tax on the extra gains from those sales.
• You generally must replace the livestock within a four-year period. The IRS has the authority to extend the period if the drought continues. For this reason, the IRS has added one more year to the replacement period in 30 states.
• The one-year extension of time generally applies to certain sales due to drought.
• If you are eligible, your gains on sales of livestock that you held for draft, dairy or breeding purposes apply.
• Sales of other livestock, such as those you raised for slaughter or held for sporting purposes and poultry, are not eligible.
• The IRS relief applies to farms in areas suffering exceptional, extreme or severe drought conditions. The National Drought Mitigation Center has listed all or parts of 30 states that qualify for relief. Any county that is contiguous to a county that is on the NDMC’s list also qualifies.
• This extension immediately impacts drought sales that occurred during 2010.
• However, the IRS has granted previous extensions that affect some of these localities. This means that some drought sales before 2010 are also affected. The IRS will grant additional extensions if severe drought conditions persist.
Get more on this relief in Notice 2014-60 on This includes a list of states and counties where the IRS relief applies. For more on these tax rules see Publication 225, Farmer’s Tax Guide on You can get a copy of it by calling 800-TAX-FORM (800-829-3676).
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media and subscribe to IRS Tax Tips or any of our e-news subscriptions.

5 Tips on Estimated Tax Payments

Some taxpayers may need to make estimated tax payments during the year depending on the type of income you receive.

If you do not have taxes withheld from your income, you may need to make estimated tax payments.
This may apply if you have income such as self-employment, interest, dividends or capital gains (typical bank account interest is generally insufficient to require estimated payments).
It could also apply if you do not have enough taxes withheld from your wages.
If you are required to pay estimated taxes during the year, you should make these payments to avoid a penalty.
You may need to pay estimated taxes in 2013 if you expect to owe $1,000 or more in taxes when you file your federal tax return.
Other rules apply, and special rules apply to farmers and fishermen.
When figuring the amount of your estimated taxes, you should estimate the amount of income you expect to receive for the year.
Try to make your estimates as accurate as possible.
You should also include any tax deductions and credits that you will be eligible to claim.
Be aware that life changes, such as a change in marital status or a child born during the year can affect your taxes.
You should use Form 1040-ES, Estimated Tax for Individuals, to figure your estimated tax.
You normally make estimated tax payments four times a year.
The dates that apply to most people are:
April 15,
June 17,
Sept. 16 in 2014, and
Jan. 15, 2015.
You may pay online, by phone, by check, by money order, or by credit or debit card.
You’ll find more information about your payment options in the Form 1040-ES instructions.
Also, check out the Electronic Payment Options Home Page at
If you mail your payments to the IRS, you should use the payment vouchers that come with Form 1040-ES.

Down’ s Syndrome and the Link to Alzheimer’s

Down’s Syndrome and the Link to Alzheimer’s

The latest medical research is showing a link between the condition known as Down’s Syndrome and the development of Alzheimer’s disease.
Already scientists know there is a high incidence of Alzheimer’s disease in people with Down’s Syndrome. By age 40, 40 percent of individuals with Down’s Syndrome develop Alzheimer’s. By age 50, the percentage increases to 50 percent. Why is this so? Scientists are not sure, but they have noticed that all people with Down’s Syndrome develop the plaques that cause Alzheimer’s, and they begin to do so at an early age. However, what intrigues them is why 50 percent of the Down’s Syndrome population DON’T develop the disease, even though they possess some of those troublesome plaques. Plaque is a sticky protein called amyloid-beta that covers nerve cells and inhibits the brain’s functioning.
Perhaps the answer lies in the fact that both Down’s Syndrome and Alzheimer’s have a related genetic component. People with Down’s Syndrome have an extra 21st chromosome, and plaques develop from a precursor protein for amyloid-beta which is configured on the 21st chromosome, according to Dr. Cindy Lemere, an associate professor of neurology at Harvard Medical School and Brigham and Women’s Hospital. With this knowledge, some scientists like Dr. Brian Skotko, co-director of the Down’s Syndrome Program at Massachusetts General Hospital in Boston, have begun experimental studies investigating the treatment of individuals with Down’s Syndrome with certain drug therapies. Dr. Skotko is currently using the drug, scyllo-inositol developed by the Elan Corporation, to see if plaque formation can be blocked while other cells in the body are fortified. A possible side effect of the treatment may be enhancement of intellectual functioning. If plaque formation can be stopped or slowed, the theory is that individuals with Down’s Syndrome may be able to function at higher levels. Those results should be available in the near future. In the meantime, he has lots of willing subjects who want to participate in his research.
Others are conflicted about this new possibility. One such person is Andy Majewski, whose son, Ben, has Down’s Syndrome and works at the Down’s Syndrome Program at Massachusetts General. The family considers Ben perfect, “so we don’t look for any changes in him. But the prospect of Alzheimer’s makes you think a bit more about, if there’s a potential cure, and if this can unlock the code to Alzheimer’s, we have to think about it a little more carefully.” Of course, they will involve Ben in the decision. The family is still considering what to do. It’s at least nice that now there may be options.…9/6/2013