Do You Have Unclaimed Property?

Finding money in a coat pocket is always a nice surprise, but what if you found that you could search the internet to locate lost assets?  Most states have an unclaimed property website that allows you to search your name to determine whether you may have property that the state is holding for you. Illinois is currently holding $3.5 billion in abandoned assets that are unclaimed by their residents. 

It is a good practice to check every year or two with your state to see if you may have unclaimed property in the state where you currently or previously lived.  Many times when you move, checks are sent to your old address.  If the payor is not aware that you moved, the funds are eventually deposited with the state as unclaimed property.  

You may also find assets that may have been held by loved ones who have passed away. This is one of the most common reasons for unclaimed property to go to the state when someone dies and accounts are abandoned.  As estate planning attorneys, we do a search frequently for estates that we have handled to make sure we did not miss anything when administering an estate.

What is unclaimed property?

Common types of unclaimed property include: checking and savings accounts, uncashed wage and payroll checks, uncashed stock dividends, and stock certificates, insurance payments, utility deposits, customer deposits, accounts payable, credit balances, refund checks, money orders, traveler’s checks, mineral proceeds, court deposits, uncashed death benefit checks, and life insurance proceeds.

In most states, you can file a claim form to reclaim your property.  The claim form will tell you which documents you will need to provide to make a claim.  

The following are a few websites for the unclaimed property if you live or have lived in these states. 

Illinois

Wisconsin

Minnesota

Iowa

Indiana

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.

Income Tax Break for Illinois Residents with Certain Dividends

It's a little-known fact that if you are an Illinois resident, you may be permitted to subtract certain dividends from specific Illinois companies. Under Illinois law, dividends you receive from a corporation that conducts business in a foreign trade zone and is designated a “High Impact Business” are eligible for the subtraction modification from Illinois base income.

Over the past few years, I have had a number of clients with stock ownership who received dividends from companies that qualify for the dividend subtraction in Illinois.  Depending on the total dividend distribution, this subtraction can be a sizable reduction in Illinois State Income Taxes, especially for shareholders who may have received stock through their employment with the company.

I am currently aware of the following 4 companies that have published letters to their shareholders notifying them of the potential dividend subtraction for Illinois that have current letters online for 2017.

Abbott Laboratories (Tax year 2017 letter)

AbbVie Inc. (Tax year 2017 letter)

Caterpillar (Tax year 2017 letter)

Walgreens Boots Alliance, Inc. (Tax year 2017 letter)

There may be other qualifying companies in Illinois although it is best to receive a letter from the company if you decide to utilize the dividend subtraction on your income tax return.  If you believe you have received dividends from a qualifying company in the past 3 years, you may want to determine if filing an amended Illinois Income Tax Return is worthwhile.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.

Diversify Your Retirement with a Backdoor Roth IRA

Retirement is something that everyone should start thinking about once they begin their careers. Unfortunately, saving for retirement is a topic that commonly only becomes a worry as we get closer to retirement. For many families, expenses continue to grow as children are born and raised and as a result, retirement planning does not become a top priority until later in life.

If you are interested in having the options of both tax-deferred and non-taxable retirement options, it may be beneficial to utilize a Roth IRA. Unlike a traditional IRA or 401(k) tax-deferred retirement accounts (which are contributions to a retirement plan made with before tax income and then taxed on the distribution), a Roth IRA allows an individual to invest retirement savings and pay the tax on their income upfront. After the initial contribution, all growth and withdrawals are tax-free.

Unfortunately, many individuals are not allowed to open Roth IRAs because they make too much money under the traditional rules.  The current IRS income limits for 2016 only allow anyone with adjusted gross income below $132,000 (single) and $194,000 (married filing jointly) to contribute to a Roth IRA.

However, with a backdoor Roth IRA, the rules are different.  Anybody can contribute regardless of income.  Further, if an individual begins to contribute to a Roth IRA in their 20's, by the time they are nearing retirement age that investment will have grown into a substantial tax free asset. IRA and Roth IRA contributions for 2016 can be made up until April 15, 2017.

Distributions from Roth IRAs are also more flexible than traditional IRAs.  You may begin to withdraw your earnings from a Roth IRA at the age 59 1/2 as long as the Roth IRA has been in existence for 5 years.  The contributions to a Roth IRA may be taken out at any time without penalty. This is a benefit for individuals who may need emergency funds without suffering any tax or penalties upon withdrawal.  Further, unlike IRAs and 401(k)s that have Required Minimum Distribution (RMD) upon the age of 70 1/2, Roth IRAs do not have a RMD.  Therefore you can withdraw funds at your discretion.  

Here are the basics of how you proceed with a backdoor Roth IRA:

You contribute to a traditional IRA. It is easiest to go about a backdoor Roth IRA if you do not already have a traditional IRA. First, work with an IRA provider and make a traditional IRA contribution up to the yearly limit ($5,500 in 2016 and 2017, $6,500 for individuals over the age of 50).

Convert the account to a Roth IRA. Next, working with your IRA administrator, once you have contributed to a traditional IRA, convert those funds to a Roth IRA. It is important to do this conversion as quickly as possible to avoid any increase or decrease in the investment.

If you have an existing traditional IRA.  If you already have a traditional IRA that has been invested for some time, the conversion to a Roth IRA is more complex and requires pro rata conversion of the gains along with the contribution.  If you already have a traditional IRA, work with your investment adviser and tax adviser to determine the possible tax consequences.

By utilizing Roth IRAs, you can diversify your retirement investments and insure tax free growth which can be very beneficial in retirement.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.

Tax Savings for 2017: Commuter Tax Benefit

As we begin the New Year and resolutions are made, a common resolution is to budget or save money in the coming year.  One way to reduce spending is to find tax savings throughout the year which can increase your take home pay as well as reduce your income taxes.

The Qualified Transportation Fringe, also known as the Commuter Tax Benefit allows Employees to use up to $255 pretax dollars to pay for public transit passes, vanpool fares and parking.

The pre-tax benefit allows employees to save  on their annual taxes by allowing them to use pre-tax dollars for their commutes. An employee using the full $255/month pre-tax transit benefit can save over $1,000 in federal and state taxes by the end of the year!

Employers can also save money through the pre-tax transit benefit.  The annual payroll tax saving of upwards is $400 per employee if that employee is using the full benefit amount. 

The pre-tax transit benefit is a win-win for everyone involved and should be considered by all eligible employees and promoted by employers. Contact your Human Resources or Payroll department if you are eligible for this benefit.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.