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First established in 1935, the Social Security program provides retirement funds to U.S. citizens, covering most Americans. According to the Social Security Administration Fact Sheet, almost 37% of senior men and 42% of senior women receive 50% of their income through social security.

Therefore, every American needs to know and comprehend social security despite age. Here are the most frequent questions about social security and their answers.

Social Security FAQs

There is a lot of confusion surrounding social security, and many people have different questions about social security they want answers for. Below are some social security FAQs to learn more about social security.

Who is Eligible?

Your social security eligibility depends on the credits you earned during your working years. You earn one credit for every $1,640, with a maximum limit of four per year. You need 40 credits total, meaning 10 years of working full-time to qualify.

When Do I Receive My Social Security Benefits?

You receive your social security benefits once you retire; it could be between the age of 65 to 67. You can opt for your social security benefits by 62 if you need them. However, these benefits would be reduced permanently.

Similarly, if you delay your social security benefits until later years, you will get additional or higher benefits than usual.

How Much Do I Have to Pay?

If you work for a company, you will pay around 6.2% of your salary up to $160,200, and your employer will pay the other 6.2%. However, if you are self-employed, then you will have to pay the complete 12.4% yourself.

How Much Do I Get?

Social security benefits vary, depending on a person’s life earnings. The Social Security Administration averages 35 of the highest earning years to come up with a mean sum. They also provide an online social security estimator to help you calculate how much social security you will receive.

Can I Receive My Social Security Benefits Without Retiring?

You might not want to retire from your work but still receive your benefits. You can get your benefits after you reach full retirement age and still work as much as you want. However, your benefits will be cut if you apply for your benefits before retirement age.

How Can I Apply For Social Security?

You can apply for your social security at the local office or apply online. Before you apply, collect all the necessary documents. Try applying a few months before when you want to receive your benefits. This is because processing can take a few months, and it’s better to be prepared.

What is Spouse Benefit?

Your spouse can claim your benefits despite working a paid job. However, the spouse must be retired and over 62 to qualify. These benefits follow many of the same rules as your social security benefits. However, widowers receive 100% of their partner’s benefit plan; otherwise, they would receive 50%.

Get Help With Your Social Security Benefits

At Maggi Tax Advisory & Financial Group, we help you develop a clear understanding of your social security, how to maximize it, and when to receive it. We are committed to helping you get the most out of your savings and years of hard work to enjoy a comfortable and financially stable retirement.

Call us at (727) 799-1701 to schedule an appointment or fill out our form online, and an experienced agent will get back to you.

Finance resolutions are goals that you and your family aim to achieve within the year. Since the new year is upon us, it is time to make your finance resolutions for 2023. These resolutions can include improving personal finance, such as your income, managing your expenses, reducing your debt, or saving and investing.

The first step to achieving your goals is to realize what they are. Once you have written down the target for the year, you can make your resolution and stick by it.

Finance Resolutions for 2023

Finance resolutions must be concise and exact, and you must track their progress throughout the year. Below are some essential finance resolutions you should make and adhere to for 2023.

Focus on Your Needs Instead of Wants

It is easy to succumb to desire. We often find ourselves wasting money we do not have on things we do not need. One of the main reasons for this is that we cannot distinguish between our needs and wants, and that is one of the first finance resolutions you must make.

Needs correspond to the basic things you must have for survival, such as food, shelter, and clothing. Wants are things that vary depending on a person’s interest and are often influenced by their interests.

While it is fine to let loose occasionally, you must consider if you want it or need it when buying something expensive.

Create a Budget

Budget planning is one of the best ways to keep track of your finances. Your budget should detail your income and your expenses, so you can understand where you lack and what you must work on. Before creating a budget, set a financial goal. The goal can be something simple, like saving a certain amount. You must also set a limit to your budget, so you only expend what is necessary.

Save More

Less than 40% of Americans have $1,000 in their savings. Savings are essential in case of emergencies where you might require money. You must set a goal to save a certain amount by the end of 2023. The amount you set must be based on your budget report. For example, if you aim to save a thousand dollars by the end of the year, you must save at least $83 a month. Therefore, your budget must leave room for that amount.

Making an Extra Payment Towards Your Debt

An extra payment a year on your loan can shorten the length of your debt by a few years, depending on how long the loan is due. The debt can be your mortgage or student loans, which can add to your expenses. However, your finance resolutions should include making at least one extra payment towards your debt.

Get Help With Your Finance Resolutions

With over 30 years of experience guiding families, individuals, and businesses in their financial planning, Maggi Tax aims to create innovative and extensive financial strategies for our clients. We can help you with your income and investment planning, 401k rollover management, and making sure you reach your goals in your finance resolutions.

Call us at (727) 799-1701 to schedule a meeting or fill out our form online, and our agent will get back to you.

Only a few people have an appropriate amount of money in their 20s. The 20s involve reckless spending, risks, and low earnings. However, it’s in the 30s when you must buckle down and get serious about your retirement savings. Here, we will discuss how much money you should have saved in your 30s for emergencies and retirement.

Retirement Savings

Your retirement savings are a cushion to land on once you stop working. This is to plan ahead and is essential to living a financially stable and worry-free retirement life. Most of your retirement savings will be decided in your 30s.

Ideally, the money you have saved should be equal to your annual salary. If you earn $60,000 a year, you should have saved $60,000 in your 30s.

This might seem undoable, but it’s not only the money in your savings account. The total amount you have for your retirement savings includes any investments, properties, or stakes. This is why it is more beneficial to invest the money rather than keep it in a savings account.

Emergency Savings

While the 20s are more reckless, the 30s are when you must think ahead. Emergency savings offer a cushion for unforeseeable events and give you time to stand back up.

Ideally, you should have six months’ worth of living expenses saved by 30 for emergencies. This sum is kept away for any dire situations, such as losing your job, having car troubles, needing urgent home repairs, having hospital bills, etc.

How to Save More Money in Your 30s

In your thirties, you still have a few more decades in the workforce, so you can start now even if you are not close to the ideal amount. Below are some tips on how to save money in your 30s.

Focus on Emergency Savings

Emergency savings are essential in a financial crisis, even more so if you have a family. While saving money for retirement also includes investments, having your emergency funds in a savings account is good.

While saving accounts only earn a little interest of less than 1%, you will still have readily available funds without urgently liquidating your assets.

A 401 (k) and a Roth IRA are Equally Important

While your company will offer a retirement plan and make similar contributions as you, you must save enough to receive a full 401 (k). Moreover, you can also add funds to an individual retirement account (IRA) if you have money to spare.

Pay Off Any Debt with a High Interest

Debt with high interest is a liability that sucks away your money the more you let it stay. Therefore, paying the debt off first is essential so you can focus entirely on effectively securing funds for retirement and savings.

Take Planned Risks

Since your retirement is still a while away, you can take some risks with your money. Invest a small percentage of your earnings in stocks and similar investment opportunities. These investments become part of your savings and can also help you earn a profit.

Start Saving Today

Facing challenges coming up with an appropriate strategy to save money? In that case, Maggi Tax can help you develop proper income planning for your emergency and retirement savings. With over three decades of experience and well-trained professional staff, you can count on us to get you where you need to be financially.

Come visit us at our offices in Florida or call us at (727) 799-1701. You can also fill out our form online and contact an experienced agent to help you.

Are you worried about paying your federal income taxes? The IRS has recently announced the new tax brackets for the 2023 tax year. These new brackets can show you how much federal tax money you owe against your taxable income in the coming year. You can also know the revised standard deductions to be observed in 2023.

 

Maggi Tax gives you thorough guidance regarding the new tax brackets and standard deductions to help you plan your income tax payables. For a better idea, let’s review the revised tax figures for married families and single individuals below.

 

New Tax Brackets for Tax Year 2023

 

When Filing Jointly as a (Married) Couple

Income Brackets (Taxable) Owed Tax Amounts
$22,000 or less 10% of the Total Taxable Income
$22,001 – $89,450 $2,200 + 12% of (Income) Amounts Over $22,000
$89,451 – $190,750 $10, 294 + 22% of (Income) Amounts Over $89,450
$190,751 – $364,200 $32,580 + 24% of (Income) Amounts Over $190,750
$364,201 – $462,500 $74,208 + 32% of (Income) Amounts Over $364,200
$462,501 – $693,750 $105,664 + 35% of (Income) Amounts Over $462,500
$693,751 or above $186,601.50 + 37% of (Income) Amounts Over $693,750

 

When Filing as a Single Individual

Income Brackets (Taxable) Owed Tax Amounts
$11,000 or less 10% of the Total Taxable Income
$11,001 – $44,725 $1,100 + 12% of (Income) Amounts Over $11,000
$44,726 – $95,375 $5,147 + 22% of (Income) Amounts Over $95,375
$95,376 – $182,100 $16,290 + 24% of (Income) Amounts Over $182,100
$182,101 – $231,250 $37,104 + 32% of (Income) Amounts Over $182,100
$231,251 – $578,125 $52,832 + 35% of (Income) Amounts Over $231,250
$578,126 or above $174,238.25 + 37% of (Income) Amounts Over $578,125

 

Revised Standard Deductions for Tax Year 2023

The IRS has also revised the standard deduction figures for the tax year 2023. The deductions will increase from $25,900 to $27,700 for married couples (when filing jointly). When filing as single individuals, the deduction amounts will increase from $12,950 to $13,850.

 

The rise in federal income tax figures and standard deductions owes the most to the rising inflation. Moreover, the continuing economic situation may push the trend further in the following tax years. Indeed, the news of increased payable taxes has not been very well received by the general public.

 

Did the IRS Revise Other Taxes?

 

The IRS has also revised the figures for several other provisions. You may notice an increase in the alternative minimum tax. Additionally, the figures have also increased for earned income tax credits, reaching a maximum of $7,430 for those with low-to-moderate incomes. The story does not end here; employees can now move $3,050 into their health flexible spending accounts.

If the above information overwhelms you, let Maggi Tax take care of your taxation needs to steer you out of possible troubles. Contact us here or call (727) 493-7295 to schedule your appointment.

Let’s face it; education is expensive!

No matter how much of a great saver you are or how thoroughly you have researched financial aid options, college costs can still be high. Fortunately, there are plenty of ways you can strategically plan to lower college costs.

Here are some creative ways to lower college costs:

1) Research Aid Options Early On

With high competition nowadays, particularly with uncertain economic conditions, it is wiser to start planning the financial aid process as soon as possible. Leaving it for the last minute would result in missing deadlines and increasing the chances of mistakes.

2) Manage Student Loans Responsibly

Understanding that student loans come with high interest will ensure you responsibly manage them. The less loan you take, the easier it will be for you to repay. Ask the school to return any leftover funds after the school expenses are paid. Be sure to make the payment for the interest now instead of deferring it, as it will burden you more later.

3) Get College Credits in School

Make the most of the opportunity to earn college credits in high school. This reduces the number of college credits you need to finish the degree, reducing your overall cost.

4) Begin in Community College and Transfer

Another creative way of lowering your college cost is by starting at a community college and then transferring to your preferred college. This will allow you to complete all the general courses every school requires at an affordable cost and move on to specific courses at a four-year school. Check if your preferred college will accept credits from the community college.

5) Do Part-Time Jobs

A part-time job is a great way to manage college costs without getting overwhelmed. However, managing work while studying might not be for everyone. You can also focus on classes in your first year to adjust to the load and get a part-time job for the remaining years.

6) Avoid Purchasing New Textbooks

New textbooks can take up a big chunk of the funds. It is best to buy used books and sell them later or find out if your school allows you to rent the textbooks. Be sure to check online to see if any textbook is available from an online retailer which would be less expensive than a physical copy.

7) Consider Deferring a Year

You might be excited to start college, but taking a gap year before starting your classes could save you money. Apply to colleges normally and once you get accepted, request the school to defer you to the following year.

8) Find More Cost-Cutting Ways

There are numerous other ways to lower your costs for college, including:

  • Having home-cooked meals
  • Living at home to avoid accommodation costs
  • Avoiding paying with credit cards
  • Using public transportation instead of your car to save on maintenance, parking, gas, and insurance

Wrapping Up

Financial aid, borrowing money, and saving money are usual ways to pay for college but don’t really lower the overall college expenses. These eight tips will allow you to lower college costs and ensure a good college experience.

It is also wiser to consult an experienced financial advisor to create an effective budget and saving plan for college that will help you keep the costs lower and have a strategy to pay back any loans you take.

 

Estate planning might seem unnecessary or inaccessible for many, but that is far from the truth. Estate planning allows you to arrange and anticipate the disposal and management of your estate during your life in the event of your passing or incapacitation.

It ensures your assets, property, savings, and other items are properly distributed among your loved ones or given to your preferred charity once you are not here or able to make the decisions. It also gives your loved ones clear directions regarding any medical decisions to be made on your behalf.

If you are still unsure about it, here are the many benefits of estate planning:

Helps Avoid Estate Probate

Using the right strategy and tool to plan your estate will protect your loved ones from going through a lengthy, stressful, and costly probate process. Probate is a proceeding supervised by the court to validate your will and ensure the proper estate distribution.

Spares your Loved Ones a Major Tax Cut

Estate planning protects your loved ones from a significant tax burden from the Internal Revenue Service (IRS). Just a few hours of planning can allow you to drastically reduce most or even all the state inheritance and state and federal estate taxes.

Ensures Guardians for Minor Children

Estate planning is especially integral if you have minor children. It allows you to appoint your preferred guardian for the kids in case of your passing before they get older. Not doing so means the court would decide the guardian for your children, which might not always be ideal.

Prepares for Medical Emergencies

In case of a sudden decline in health, your loved ones will be burdened to make medical decisions on your behalf if you are unable to do so. Estate planning allows you to establish legal provisions to ensure your wishes are considered for future medical care.

Prevents Family Messes

With an estate plan, the chances of family arguments and fights are eliminated, even if they don’t agree with the decisions made. This will ensure all your wishes are followed without creating problems among the surviving family members.

Allows End-of-Life Planning

In the event of your incapacitation, the estate plan will provide directions to your loved ones to make decisions based on your choice. End-of-life planning also saves your loved ones from a lot of distress when it comes to making health decisions on your behalf.

Wrapping Up

Not creating an estate plan is bound to create problems for your loved ones in the future. If you want to secure the future of your dependents and other family members through your estate, it is integral to create an estate plan.

Laws related to estate planning can be complex, not to mention the taxes involved. The slightest mistake could lead to costly consequences. Therefore, it is ideal to get a professional involved in creating an estate plan.

Does deciding between a 401(k) or Roth IRA feel like flipping a coin? The good news is that it doesn’t have to be heads or tails. Maggi Tax recommends using both retirement accounts to diversify your tax benefits so you can take full advantage of both accounts. But, let’s explore and compare 401(k)s and Roth IRAs so you can choose the best fit for your financial goals.

401(k)s and Roth IRAs are two of the most popular retirement savings vehicles. Both options allow employees to save for retirement but they differ in a few ways. Unlike Roth IRAs, the 401(k) is an employer-sponsored retirement plan widely offered by most private sector companies in the United States. Typically, any 401(k) contributions you have chosen to make are withheld from your paycheck pre-tax. The money is then deposited and all investments grow tax-deferred in an account. Any withdrawals are subjected to income taxes during retirement. Currently, the IRS allows employees to contribute up to $20,500 to their 401(k). For those 50 years and older, there is an additional “catch-up” contribution of $6,500 for a total of $27,000. As an added bonus, most companies offer employer matching at certain percentages so make sure to take advantage of this free money!

A Roth IRA differs from a 401(k) in that it is an individual retirement account. It allows employees to save for retirement outside the scope of an employer-sponsored plan. Roth IRA contributions are made after-tax so it does not reduce your taxable income in the current year. However, once added to the account, you will never have to pay taxes on the amount again. You may begin taking tax-free withdrawals at 59 ½ years old. Currently, contribution limits are significantly lower than a 401(k) at only $6,000. Similarly to 401(k)s, there is a “catch-up” contribution for those 50 years and older but only for an additional $1,000. One important thing to note about Roth IRAs is that you may only contribute to them if you have earned income.

This brief introduction to 401(k)s and Roth IRAs is by no means exhaustive. Working with a tax professional can help you identify the best financial decisions for your goals. Contact Maggi Tax here or call (727) 799-1701 to schedule your appointment today.

 

There are only a few more weeks until the end of the year. Make the most of the giving season this year by utilizing some of Maggi Tax’s tax-efficient ways to donate to the causes that mean the most to your family. With these strategies, you can ensure that your gift can go the extra mile.

If you are planning a contribution to a charitable organization this year, consider this idea. Gifting a donation by check seems simple and efficient, but it may not be the best bang for your buck. Instead, donors may want to think about gifting appreciated securities. For example, if a donor gives $10,000 in appreciated securities versus $10,000 in cash, both parties can reap a handful of benefits. The donation allows the donor to avoid paying capital gains tax on the security, and the charity avoids taxes when they sell the donated investment. Additionally, the donation can rebalance the individual’s portfolio and reduce the individual’s taxable income if the recipient organization qualifies.

Some philanthropists may also consider an extra “stacking” stuffer this year. If you feel compelled to give more than in previous years, you may want to opt for “stacking” donations. This option gives donors the ability to deduct up to 30% of their adjusted gross income by gifting appreciated securities, and then gifting another 30% in cash. This provides a tax deduction on both securities and cash gifts.

2022 could (and perhaps, should) end with a burst of hope and joy. If you feel inspired to help your community, let Maggi Tax help guide you through the different gifting techniques that will maximize the donations for both the recipient organizations and your family. Contact us here or call (727) 799-1701 to schedule your appointment.

Making a steady, high income with a comfortable retirement on the horizon is nice, but even the affluent can make financial mistakes, most often without realizing it. These common financial hiccups may not wreak havoc on your future but are certainly something to keep top of mind.

Maggi Tax shares three common financial mistakes that high earners can experience.

  1. Lack of a comprehensive estate plan

Most high-income earners may be diligent about savings and retirement plans, but did you know that many fail to develop a comprehensive estate plan? This critical step is one of the most important when it comes to a full wealth management plan, especially if you plan to pass assets or businesses along to the next generation. However, by employing trusts and other estate documents, you can ensure a seamless transition that will minimize taxes and probate expenses.

  1. Financial illiteracy

Similarly to staying up-to-date on headlines and exciting advancements in your field, it is in your best interest to maintain a working knowledge of financial literacy. A base level of budgeting, financial concepts, and investment and savings vehicles will be helpful as your financial wealth grows.

  1. DIY investments

Those that find themselves successful in business may dabble in their own do-it-yourself investing. If you don’t know what you’re doing, this may lead to mediocre results. Consider working with professionals who can relay proven research and tactics to the investor, who will ultimately make final decisions. As they say, work smarter, not harder.

Let Maggi Tax provide you with the tools and resources to fully understand your financial outlook. For over 30 years, we have guided Tampa Bay residents with all aspects of their financial well-being. Contact us here, or call (727) 799-1701 to schedule your appointment today.

What Are the Most Common Estate Planning Mistakes to Avoid?

When creating a financial plan, many say that estate planning is one of their least favorite topics. Of course, no one likes to think about their death so it makes sense that there may be a fair share of mistakes made when drafting an estate plan. At Maggi Tax, we can help you avoid the three most common mistakes. Read on to learn more.

The first essential step to ensure that your estate is distributed correctly is to work with a tax professional, as no amount of discomfort or awkwardness should prevent you from avoiding estate planning in the first place. Estate law is ever-changing and complex and working with an expert is critical, even if only a simple will is needed, professionals can ensure that no obligatory requirements are overlooked, and all vital assets are protected.

Do you plan on gifting stock? Income tax ramifications for assets can vary from when they are given and sold. For example, gifting a stock worth $400 to your nephew that you bought for $100 can leave him liable for a $300 gain, should he sell the stock. However, if the stock transfers upon death, the cost will be “stepped-up” to the current $400 value, meaning your nephew will not be liable for taxable gains. Whew, no awkward family dinners after all.

You may be tempted to name one of your children as an estate beneficiary. But did you know that minors cannot take direct possession of an inheritance? If you pass away and the appointed child is still a minor, the estate could pass into guardianship. Avoid this by naming a custodian or trustee of your choice to manage the inheritance. And because an estate plan is a fluid document and family dynamics can change, take the time to update named beneficiaries so that they are represented accurately.

Would you like to learn more about estate planning? We are here to help! For over 30 years, Maggi Tax has guided Tampa Bay residents with all aspects of their financial well-being. Contact us here or call (727) 799-1701 to schedule your appointment today.

 

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St. Petersburg, FL 33713

(727) 799-1701

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