Tax Question

[ComesoonmyLORD]

Ok, I know it's Christmas, but I have a question about taxes. When Ginger passed away I began receiving Social Security Survivor Benefits for each of the 4 children. Is this taxable income? I tried to send in a federal form so they would withold Federal Income Tax, but the form was returned saying I didn't need it. I'm a little confused, I would think that this would be taxable. Also, anyone know if or how much of life insurance is taxable? Tks.

 

[faithgoeson]

Ok, I know it's Christmas, but I have a question about taxes. When Ginger passed away I began receiving Social Security Survivor Benefits for each of the 4 children. Is this taxable income? I tried to send in a federal form so they would withold Federal Income Tax, but the form was returned saying I didn't need it. I'm a little confused, I would think that this would be taxable. Also, anyone know if or how much of life insurance is taxable? Tks.

When Donny died, we had to pay no taxes on the life insurance. Also, Social Security Survivors Benefits is not and never will be taxable. Thank you, God and Uncle Sam! I don't know if you have to have a certain amount on the life ins. to be taxed or not. Our was so small and only paid the funeral, so my accountant lady friend said don't bother with it. Call H&R Block. They'd probably tell you for free about the insurance. Social Security will send you a statement saying what you earn for each kid so you can have that as proof of income, but you don't put it on your tax forms at all. Also, you will get a raise in January. This happens every year, and I hear we get a good one this coming year. God is good.

 

[ComesoonmyLORD]

That's good news. We always can use a raise can't we? Ginger's life insurance was fairly substantial so I'll check into it. I have a tax CPA that attends church with me, I'll ask him about that. Thanks Faithgoeson!

 

[JeanR]

Actually, this is something I need to check into, also.

I haven't even gotten the insurance money, yet. I can't believe how long it is taking. I have Terry's paycheck until the end of December and that's it. I'm starting to get a little worried. The insurance company assured me that I would have the check by this Monday. Terry was such a good man. He made sure that if he died we would be provided for. I'd still rather have him, though. Ok, I'm going to go cry now.

 

[Missinyou]

The main thing about the insurance money if it's a substantial amount, as was my wife's, is to talk to a good financial councilor. Spread it out so there is some easy access and some not so easy access. Usually the not so easy access has a lot better rate of return. After clearing everything but our house, I have managed to survive on my paycheck, and actually gain, without touching what's invested.

 

[ComesoonmyLORD]

I took a big portion of the life insurance and put it towards the house. I also pre-paid my own funeral expenses so the kids wouldn't have to deal with that. The rest is in a money market account at 3.9%. This was an automatic transaction that was done by the life insurance company. It is easily accessible but I don't use any of it. When I had to refinance the house, and made a large principle payment, it made my house note managable. Now I have just one more truck payment and it's MINE! I have two IRA's also, but I'm looking at something with a little better return. Now that the new job is starting, my monthly finances will be much much better.
We have a Financial Peace University seminar coming up. I think I will attend that also for more ideas.

 

[JeanR]

What is a Financial Peace University seminar? I think this is something I would be interested in. Is it something that is offered country wide or just in a specific state?

I have spoken with a a financial planner and an accountant. They told me what I knew they were going to say and knew that they would discourage me from what I want to do. I want to pay off my house. I don't owe that much and have 11 years to go on the mortgage. My interest rate is only 4.6%. So, of course, they are saying don't pay off the house--invest the money and live off the proceeds.

If I pay off the house I can live comfortably on my paycheck. I would still have some left to invest. If I don't pay off the house then I don't make enough to pay all my monthly bills. They assure me that the proceeds from the investment will make up the difference I need.

I know they are the experts, but I want peace of mind, also. I haven't made any decision yet since I don't have the insurance money.

I thank God everyday that Terry had the foresight to take out as much as he did. There are widows that are struggling to make ends meet. I'm struggling to make a decision and with either decision made, I am ok. I'm not a rich widow, but I will be comfortable.

If I could I'd give up the insurance just to have Terry back. But, that is wishful thinking. How selfish of me to want Terry back instead of rejoicing that he is in the Lord's presence!

 

[faithgoeson]

What is a Financial Peace University seminar? I think this is something I would be interested in. Is it something that is offered country wide or just in a specific state?

I have spoken with a a financial planner and an accountant. They told me what I knew they were going to say and knew that they would discourage me from what I want to do. I want to pay off my house. I don't owe that much and have 11 years to go on the mortgage. My interest rate is only 4.6%. So, of course, they are saying don't pay off the house--invest the money and live off the proceeds.

If I pay off the house I can live comfortably on my paycheck. I would still have some left to invest. If I don't pay off the house then I don't make enough to pay all my monthly bills. They assure me that the proceeds from the investment will make up the difference I need.

I know they are the experts, but I want peace of mind, also. I haven't made any decision yet since I don't have the insurance money.

I thank God everyday that Terry had the foresight to take out as much as he did. There are widows that are struggling to make ends meet. I'm struggling to make a decision and with either decision made, I am ok. I'm not a rich widow, but I will be comfortable.

If I could I'd give up the insurance just to have Terry back. But, that is wishful thinking. How selfish of me to want Terry back instead of rejoicing that he is in the Lord's presence!

Even though the experts say don't pay it off, the Bible says to pay our debts. You are feeling like you should pay it off, and that could be and probably is the Lord guiding you to the right decision. He is our Father, Husband, and Friend. He will lead you to the right decisions. If you can pay the house off, that frees up a huge payment from your paycheck. I know you will not ever regret not having to make those payments. You can do so much more every month without that in the way. Also, many larger churches have financial classes and such. Never hurts to look around for them.

 

[pauldst]

What is a Financial Peace University seminar? I think this is something I would be interested in. Is it something that is offered country wide or just in a specific state?

I have spoken with a a financial planner and an accountant. They told me what I knew they were going to say and knew that they would discourage me from what I want to do. I want to pay off my house. I don't owe that much and have 11 years to go on the mortgage. My interest rate is only 4.6%. So, of course, they are saying don't pay off the house--invest the money and live off the proceeds.

If I pay off the house I can live comfortably on my paycheck. I would still have some left to invest. If I don't pay off the house then I don't make enough to pay all my monthly bills. They assure me that the proceeds from the investment will make up the difference I need.

I know they are the experts, but I want peace of mind, also. I haven't made any decision yet since I don't have the insurance money.

I thank God everyday that Terry had the foresight to take out as much as he did. There are widows that are struggling to make ends meet. I'm struggling to make a decision and with either decision made, I am ok. I'm not a rich widow, but I will be comfortable.

If I could I'd give up the insurance just to have Terry back. But, that is wishful thinking. How selfish of me to want Terry back instead of rejoicing that he is in the Lord's presence!

Cheryl did not have any life insurance, which is a large chunk of what has left me struggling. However, I know that God is taking care of things. I was looking at a shortfall next month and God has taken care of it already! I know God has another wife for me, and I am going to make sure before I remarry to have a good sized life insurance policy in place on both of us.

Jean, I agree that you should do what makes you feel comfortable. The advice that I will add though is to make sure to keep the house insured, just as if it were still mortgaged, and don't forget the property taxes. Both of these are, I'm sure, part of your current monthly house payments. When you figure your monthly bills make sure to add in the same amount for those two things that you are currently paying into the escrow accounts with the mortgage company. Set up a separate account, if you must, to keep from accidentally spending that money. You really don't want to get your note paid off, get comfortable with your monthly expenses, and then some months down the road end up facing a large property tax bill all in one chunk. And the insurance is necessary because with so much money tied up in your house you really don't want to lose all of it if something should happen to the house.

I too, have been selfish and wished Cheryl back. I have wished that I could take her place, cancer and all, but God has made it clear that He has plans for me here, whatever I may want. And, as you said about Terry, Cheryl is rejoicing with her Lord...her favorite place to be. God reigns and His plans are perfect, even when we do not understand them.

Paul

 

[Missinyou]

One thing several people in the finacial world have told me, is that I should not do anything drastic for at least one year. If you visit with your banker he can give you several options that will help. It's kind of ironic that the best advice did come from the president of my bank. I put part in to an interest bearing checking account at 3.9% that allows one withdrawal a year, and then a six month CD and a twelve month CD, both right at 4.9%. I paid off my wife's beauty shop, so he suggested I take the tax payment and put it in the interest bearing checking account. They all agreed on the one year waiting period though, if you can afford to.
I too have wished my Patsy back but then I think about how much better she is in God's Kingdom. Because of the medicine she had to take for the lung transplant, she couldn't do the things that used to give her enjoyment and would never, ever be able to again. It's just my selfish wishes that she back again to where she was miserable and I would never want her to be in that condition again. It tore my heart out at times to see some of the stuff she had to go through. Her last words were, it was going to be a win win cituation for her and that we would be alright. She knew she was going to a far better place, or the doctors would make her better and that I would be alright some day too. Perhaps not this month, this year, or even next year, but it would come.

 

[Missinyou]

OOPS... Silly me... That interest bearing checking account allows one withdrawal a month....not a year.

 

[Missinyou]

Don't know where that quick reply went but it's not on my screen... I meant one withdrawal a month.

 

[ComesoonmyLORD]

What is a Financial Peace University seminar? I think this is something I would be interested in. Is it something that is offered country wide or just in a specific state?

Jean, it's a seminar that teaches you how to be debt free. It's fairly popular where I live. Google it and I'm sure you'll find out all the details. As Faithgoeson said, He wants us to be debt free from the world. I'm like you, I wanted to pay off everything that I could. Unforntunately this house, which is Ginger's dream house we built 4 years ago, still had too much in mortgage. I paid most of it and only have a little left. I hope to pay it off in 3 years. Paul is right about the taxes and insurance. Don't forget those, they'll hit like an atomic bomb at years end if you don't prepare. Often paying things off brings much more peace of mind than interest money. You need to do what brings you peace. I've heard the bit about waiting a year before doing anything and I guess that's good advice for some, but I didn't want to wait that long. It will a year in January and I've pretty much set my course financially before my first anniversary. Financial planners are usually a good source of advice, but make sure you understand completely what they are telling you before making a decision. I know, it seems overwhelming. Just take your time, don't rush into something you don't fully understand. Pray daily about it and God will guide you. Listen to your heart. Press On!

 

[ComesoonmyLORD]

JeanR- I almost forgot. Financial Peace University (FPU) was started by a guy named Dave Ramsey.

 

[Missinyou]

Dave Ramsey has a call in talk show on the Christian channel on my Sirius radio. I listen to him every chance I get and he does have some good advice. I didn't know about FPU though.

 

[Nelle]

I took a big portion of the life insurance and put it towards the house. I also pre-paid my own funeral expenses so the kids wouldn't have to deal with that. The rest is in a money market account at 3.9%. This was an automatic transaction that was done by the life insurance company. It is easily accessible but I don't use any of it. When I had to refinance the house, and made a large principle payment, it made my house note managable. Now I have just one more truck payment and it's MINE! I have two IRA's also, but I'm looking at something with a little better return. Now that the new job is starting, my monthly finances will be much much better.
We have a Financial Peace University seminar coming up. I think I will attend that also for more ideas.

Thanks for mentioning the Financial Peace University, I have been needing to hear of such a thing! Finances can be so anxiety-producing on top of dealing with all of the other stressors that come with being widowed.I did google it, and there are some classes starting up right here in my own town in January. I am already taking pottery class Mon. & Wed. evenings, so would have to go to the church that offers the Tuesday evening Financial Peace classes. Thanks again.

Nelle

 

[JeanR]

Paul,
Thank you for the heads up about the taxes and insurance. I hadn't even thought of that--and they are both due at the same time!

ComesoonmyLord
I looked up the Financial Peace University, but there aren't any seminars in the area of Pennsylvania that I live. I will keep checking, though, because the website looked like it would be a good seminar to attend.

Has anyone heard of Crown Financial Ministries? When I googled Christian financial planning, this popped up, along with the Financial Peace University. They have a seminar near where I live. I know that they have short segments on our local Christian radio, but other than that I don't know anything about them. Their short segments on the radio, however, always seemed to be good.

 

[Nelle]

Paul,
Thank you for the heads up about the taxes and insurance. I hadn't even thought of that--and they are both due at the same time!

Has anyone heard of Crown Financial Ministries? When I googled Christian financial planning, this popped up, along with the Financial Peace University. They have a seminar near where I live. I know that they have short segments on our local Christian radio, but other than that I don't know anything about them. Their short segments on the radio, however, always seemed to be good.

Larry Burkett was a pioneer of financial planning for Christians, after he passed away his ministry was renamed Crown Financial. They should be excellent for you.


Night night,
Nelle

 

[Missinyou]

Is Crown Financial the one that has the Road Map to Financial Freedom? I got something in the mail about that just the other day.

 

[ComesoonmyLORD]

I'm not sure about the name, but I do know that Larry Burkett has some excellent advice. I've listened to him for several years on our local christian radio station.