Healthcare Traveler - February 2009 - (Page 17)

as rapidly, it will still be more expensive than last year. If you don’t have one, get a programmable thermostat, which will allow you to use less heat at times when you don’t need it—when you’re at work or while you’re sleeping, for example. Also, look for areas in your home where heat is escaping, such as windows, doors, and fireplaces. You should use caulk, weather stripping, and plastic to seal up any gaps. Other options to think about include buying new insulation, washing clothes in cold water, cutting down on shower times, and opening the blinds to let the sun in. Investing in foreclosed properties Q I live in an area with a lot of foreclosed homes. It seems like a good investment to buy some of these properties and turn them around for proﬁt once the housing market takes off again. How do I get started? » Side business deductions I recently bred my two Norwich terriers and sold the puppies. It was so much fun that I may start breeding dogs as a side business. What must I do to be able to deduct the related costs on my tax return? A: You’ll have to show that you’re A: Foreclosed homes can be a bargain, and even more so if you’re able to repair the homes yourself, rather than paying someone to ﬁx plumbing, lay down new carpet, and the like. Of course, investing in foreclosed homes brings along plenty of risk because no one knows when housing prices will stabilize. Additionally, sellers of foreclosed homes aren’t required to provide the same disclosures as traditional sellers, so you’ll know much less about the house you’re buying. If you think it’s worth the risk, though, a good place to start is foreclosure property listings. These listings are public record and can be found in real estate magazines, newspapers, and online at sites such as www.foreclosurelistings.com and www.realtytrac.com. Also, check with lenders’ REO (real-estate owned) oﬃcers, who are in charge of the company’s foreclosed properties. In general, when you’re interested in foreclosed properties, banks and lenders are your safest bet. » Budgeting for healthcare in retirement I’m planning to retire soon and obviously want to avoid common financial mistakes that many retirees or soon-to-be retirees make. What are some common retirementrelated missteps? A: It may be a bit of a cliché, but serious about making a profit. That could prove tricky, since you won’t be dependent on your income from breeding dogs and presumably you haven’t made money at it (or a similar activity) before. Be sure you can prove that you put considerable time and effort into your breeding business. Take demonstrable steps to learn how to run this type of business and consult advisers who know how to do it successfully and profitably. If you lose money initially, making changes to try to improve your results can help support your profit motive. If the IRS decides that your venture is a hobby rather than a business, you may still be able to deduct some expenses, but you must do so in a certain order and the total can’t exceed your income from the activity. For further details, see IRS Publication 535, available at www.irs.gov/. retirement, assuming no employer coverage, according to an estimate from Fidelity Investments. That figure has risen 41% since Fidelity published its first annual estimate in 2002. » Deducting investment losses I have taken a beating in the stock market lately. How can I deduct investment losses? A: Capital losses on the sale of it’s never too early to start thinking about retirement. The first thing to do is create a realistic budget and compare it with the amount of money you expect to have available. That said, let’s focus on one common (and big) mistake that retirees often make: underestimating healthcare costs. Just because you work in the healthcare industry doesn’t mean you won’t make the same mistake. You’re no doubt familiar with the troubles facing Medicare and Social Security as more Baby Boomers retire —not to mention the sheer cost of healthcare, which has sometimes risen by more than 10% in recent years. A 65year-old couple retiring in 2008 needed $225,000 just to cover medical costs in investments such as stocks, bonds, mutual funds, and other securities are deductible with some limits. First, the losses must be realized and not unrealized paper losses. In other words, an actual sale must take place. The annual limit on the deduction of capital losses is $3,000. However, you can use capital losses in excess of this limit to offset current-year capital gains from the sale of other investments, against prior-year installment sale gains, and against current-year capital gain dividends. Capital losses not otherwise absorbed or deducted in the current year can be carried forward to future tax years. This department originally appeared in Medical Economics, a sister publication. For subscription information, call 877-922-2022. www.memag.com www.healthcaretraveler.com February 2009 Healthcare Traveler 17 http://www.foreclosurelistings.com http://www.realtytrac.com http://www.irs.gov/ http://www.memag.com http://www.healthcaretraveler.com

Table of Contents Feed for the Digital Edition of Healthcare Traveler - February 2009

Healthcare Traveler - February 2009 Editor’s Desk Contents In a Flash Paws for Thought Field Notes Med Ec-cerpts The Economic Meltdown What Really is a “Tax Home”? Beach Therapy Drug Update Professional Update Advice of Counsel Cityscape Advertisers’ Index Name It Contest Rules On Assignment Tax Facts Dot.com Big Deals Allied Corner Going the Distance Classifieds Tales from the Road

Healthcare Traveler - February 2009

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