What the experts say
Taxes and working from home
If you “live in one state but work remotely for an employer based in another,” it could mean a bigger tax bill, said Jeanne Sahadi in CNN.com. Workers risk being double taxed if they live in one state but work for a company based in one of five states—New York, New Jersey, Delaware, Pennsylvania, and Nebraska—that apply a so-called convenience vs. necessity test to remote workers. If it’s determined “that working from home is a matter of convenience for you rather than a necessity for your employer,” you could be taxed on income both in the state where you live and in the state where your company is based. The good news: Many states give you a tax credit for any taxes you pay to another jurisdiction.
Important tips for landlords
“Owning rental property is not as simple as handing over the keys to a tenant and sitting back as the money flows in,” said Russ Wiles in The Arizona Republic. Yes, rental properties can be lucrative: The average annual return on single-family rentals is 9 percent, according to a UCLA study. But be prepared to keep investing. “Properties don’t always pay for themselves,” and you’ll need some “financial flexibility” to cover maintenance and repairs. Mortgage expenses are often higher on rentals than on owner-occupied homes, so try to purchase a home with at least three bedrooms. Those are often easier to lease than smaller homes. Carefully screen prospective tenants with the help of online tools or a property manager, paying careful attention to their past rental history. Familiarize yourself also with your state’s legal obligations for landlords.
The cost of long-term care insurance
The long-term care insurance industry is stumbling under “sky-high premium increases,” forcing many seniors to “make some unpleasant choices,” said Walecia Konrad in CBSNews.com. Today, just a dozen companies offer coverage, down from about 1,000 in 2002, and many policyholders have seen their premiums double in the past two years. What happened? Insurers “underestimated the amount they would pay in claims for runaway nursing-home costs and, because of longer life spans, the length of time they would have to pay them.” Given how fast premiums are climbing, policyholders should reassess their coverage selections and reconsider them if their needs have changed. Another option might be hybrid care policies, which can be paired with permanent life insurance policies.