I er the last four years, have done enough back and forth, ttweeted both parties equal further, that people will now come to grudgingly say, okay, you are someone we can do business with. The Senate Majority pac, which affiliated with harry reid, they stopped answering my questions midway through the Campaign Season because they felt they were not getting a fair shake for me. Pm sunday night at 8 00 eastern and pacific on cspans q a. On the cspan , networks. Here are some of our future programs. 10 00 am eastern, the washington ideas form. Energy conservation. K club owner, warren brown. An inventor, dean kamen. 4 oclock eastern, the Brooklyn HistoricalSociety Holds a conversation on race. And apollo 7 astronaut, walt cunningham, on the first manned spaceflight. New years day on cspan2, author hector tobar on the 33 men who were buried in a chilean mine. And Richard Norton smith on the life of rockefeller. And Cheryl Atkinson, on her on the nces reporting obama administration. New years day on American History tv. 10 00 am eastern, juanita abernathy, 4 00 pm, Benjamin Karp on the link between alcohol and prerevolutionary new york city. 8 00 pm, the cartoonist draws 10 president ial caricatures. New years day on the cspan networks. For our complete schedule, go to cspan. Org. Washington journal continues. Host wwe want to welcome back the program, Kevin Mccormally of kiplinger. To talk about yearend tax perperson advice. Guest pedro, im happy to be here. Host bbefore he left, some bills were passed. Of those affect how taxpayers pay their taxes next year . Guest they reinstate a bunch of breaks, but just for 2014. The bill was signed last week, and it expires next week. But there are some important ones, particularly for businesses 50 depreciation. During the housing crisis, they said if you l that when a lender forgives debt foreclosure, le or the homeowner is given a form that says they have to pay tax on the amount of debt. So congress said, we are going tax on forgiven debt. That expired at the end of but last week they reinstated it. There are a lot of things that the past. But in one way, it is exactly the same as it was last year. Because what they did was restore the bricks that were there in 2013. Bring till cant themselves to deal with the tax law Going Forward. Michigan, who retired the last thing he did was drop a huge tax reform bill in the hopper. He knew it was going to go nowhere. Take over is going to and start to figure out tax reform. The last factor for we had was 1986. People think it is going to happen, but not until after the next elections. Host as far as next year is concerned, those taxes expire next week. After that, they dont exist anymore . Guest they dont exist but everyone expects congress to restore them again. It all comes down to the revenue. They dont want to extend them permanently because you look at 10 year cost lets do it one year at a time. The way tthese guys sort of handle everything. Doing something longterm, which is particularly what taxpayers, the businesses need. A plan and a way to invest that is best for the shareholders and their families. Host a list of things people can do to benefit for next years tax advice . Guest behind door number one is contributions. If you can afford to give money you itemize and deductions which about 25 of taxpayers do yyou write a check or charge it to a credit card by december 31, you get a tax refund. Behind door number two is even more important. That is your portfolio. The market is still open for another couple of days. There are still some areas you can tell, you can take those losses for 2014. Was a huge decline in oil prices. Now, people who brought oil stocks five years ago, they probably will have gains after the fall. But if you are buying shares in august at the peak, you might want to sell some of those shares. You get to pick which shares you sell, but you have to tell your broker exactly which ones. You can choose what you pay for those shares versus what you pay for them. That loss can offset other gains. Particularly r, for wealthy people. It is important to hold down there is a because surcharge for medicare that your income is 200,000, 250,000 on a joint. The top bracket is at 9. 6. If you can keep below that and it helps syntaxes, you out. There is also a surtax on medicare premium. Income ou can pull your below that they can take it up to over 300. They can triple what you pay each month for medicare. At all need to look these numbers and figure out what to do monday, tuesday, wednesday. Host so that sets an example of some of the advice you can take advantage of in the last few days. To ask our guest questions about tax issues for next year, here is how you can do so. You can tweak your questions or comments. Email us, too. It comes to hen healthcare the first year that people are really going to have to give information. Year 2014 is the first that all individuals are required to have healthcare or pay a penalty. Congress decided, in its irs enforce ave that. Although people are required to have healthcare in 2014, the insurers are not required to report to the government uuntil 2015. So theres absolutely no way the government can enforce this law. But individuals are expected to comply with it. So a lot of individuals will 1095 a or b. That tells you whether or not you have insurance. Get that are not if you dont get one, theres no problem. There is a little box that you check that says i have insurance. Insurance, t have you cannot check that box and you have to figure penalty. A 1095 a where people got a subsidy from the for the s to help pay Health Insurance, they will get that form to say how big of a subsidy they got. They have to reconcile that subsidy, which is based on an estimate of their 2014 income. If youre subsidy was too big, you have to pay some of it back. If it was too low, youll get a bigger refund. Tax preparers were horrified at this, it is going to be, kidded. It is going to be a mess. Host so, even if you buy popular tax software, will it be ready . Guest oh, it will be ready. Just be extra questions. The software is really good as far as taking you stepbystep through it. I think it will work, but the are willing us up bby people who generally do their own returns. It is going to be much work obligated. Host our first call is from bill. Bill, from virginia beach, virginia. Go ahead. Caller yes, sir. Thank you for taking my call. Am currently on medicare, and i also use a plan which im happy with. Primary question is tthe part b premium that on a pretax out basis. I am allowed to . Guest probably not. There are selfemployed, is because selfemployed people can deduct that. But it is only deducted if all medicare expenses exceed 7. 5 of all your adjusted income. Host ralph from new york, good morning. Caller yes, good morning and thank you for cspan. A proud uaw member ffrom upstate new york, and i want to the n ur guest extenders, is Congress Going to and act on them or are they eliminated . Guest president obama signed a law last friday. It expires wednesday night, but they did extend all the from january 1 to december 31, 2014. But now, the law is pretty much exactly as it was last year at this time. The tax breaks that extended at the end of 2013 have now been retroactive. So, your tax situation will be almost identical to what it was in 2013. Host luis, good morning. Out of california, go ahead. Is the in order to home . Guest im sorry, pedro. I cannot hear that. Host could you repeat that slowly . Caller yes, is the taxes still the same if home two years . Guest yes, the capital sales for home. I understand that is your question. The profit is almost completely taxfree. Host a couple things that your magazine recommended, you mentioned a little bit, but when it comes to 401 k s and things like that, is there anything you can do to take advantage for next year . Guest the problem with 401 k s it is pretty much up to your employer. Most of it comes out of a payroll deduction. So if you have another check left in 2014, maybe you can get them to take more money out of it. A few plans will accept direct contributions, but very few. The rest of the retirement much have an equal deadline for your 2014 contributions. Iras, your individual 401 k s, all you have until next year to put in money and still deducted. Host one of the things you about is the differences between a traditional 401 k and they roth 401 k . What are the disadvantages and advantages between the two . Guest roth 401 k s are so, you put in 1000 and you are in the 25 bracket, it really only cost you 750. If you choose the roth account inside an ira, which many but not all, offer in that thousand and election cost you 1000. With the roth ira, because you pay tax going in, you pay no tax coming out. Over l the earnings, maybe the 40 year working life, will be taxfree. It is a wonderful thing. Now, it is a tough call to make. It depends on what your tax bracket is now compared to what you are making when you retire. With roth, youre paying taxes now to have been taxfree later. Older people, like me, we are not the high tax bracket now. I actually do use the ross because i want to have that diversity in retirement. So i can choose, do i take money out of my roth ira . Or do i take it out of my traditional ira . Are not en played again pushing myself into a higher tax bracket. Host so you can have two at the same time, if you wanted to. Caller exactly. If you have a roth ira and your employer makes a mess, you have both going red along. When you retire, you can take in a oth part and put it roth ira. And continue that diversification. Caller i read an article that said you dont have to be a tax the property is gguest im sorry, im confused. You brought up foreclosed property with a 401 k account . Caller yes. Guest you took a hardship withdrawal from a 4401 k you can escape the 10 penalty. But that money is still fully taxed. Got s one of the sort of used in attacks got yous in the tax. Am on permanent disability from a work comp injury on the job. Had several substantial i do s, and i wondered if claimed the health a vehicle and property stolen, do i not have a right a loss for ese as taxes wwhile i am receiving federal disability . Guest if you tax income is pretty low, you may be actually able to get a tax loss on that property. To take is that loss, you have to have reported it to police. You have to judge how much money you lost on the deal. Check out irs. Gov. Host back to reporting. What about people who are unemployed and dont make enough to qualify for Health Insurance . Guest there are literally dozens of exemptions for not having Health Insurance. Is another thing that they really worry about. If you deserve an exemption, have to have it before you file your return. Exchange to go to the your how them how much income is an figure out whether or not you qualify for exams and under the penalty. It is going to be a mess for a long time. Host david, thank you for holding on. From college station, texas. Go ahead. David, hello . Lets try scott. Scott from dallas, texas. Caller hi, thank you for taking my call. My question is concerning irs knows that. They look at 10 . Those are the people who get cash and have a chance to hide it. Not saying they do hide it, but theyre the only ones who have a chance to. Most of us dont have an opportunity. Craig from florida, go ahead, please guest could you explain how to do the tax penalty for those who do their own taxes if you didnt have qualified Hillary Clinton in 2014 host absolutely not. No, its 95, period, or 1 of your income over a certain level, the filing threshold for your family status. So its 1 . So its 100,000, it would be 1,000. So, i mean, a lot of people say its 95, its not a deterrent. Actually, that 1 will catch that more people. But there are all these exceptions to the rule. One thing id like to ask maybe is when it comes to the subsidy thats been paid to taxpayers to undercut the cost of the Health Insurance throughout the year, even if you had much larger subsidy than incurred, its capped. Congress is really trying to hold this down for low income people. For high income people, its 100 of filing threshold. Its very complicated. Theres a form in the tax, irs developed a form for it. Youll get it in your tax package and its complicated. Caller you can go to irs. Gov and get this type of information . Host yeah, the forms are out. Some of them are draft forms. Its another problem that irs had for about 100 years in a row with congress dragging its feet on tax legislation until the very last minute. The irs announced that the tax filing season, which ought to start the third week in january will be delayed until february because theyre not ready. The computers havent been programmed to take all these last minute changes into account and test them. The forms are ready and you can find the form that this penalty will be computed on and figure it out. Marrow, go ahead, please. Caller good morning, gentlemen guest good morning. Caller what do you think about investing in roth ira or traditional ira guest what kind of investments . Caller like gold, or anything like an orc guest you cant put it in ira unless its gold coins. Other investments makes sense. Multiple partnerships is one thing a lot of people talk about. These will be like pipeline companies. The problems with mlps in an ira, is they generate too much taxable income. That income is taxed as an additional ira, so you have to be careful about that. On the other hand, i have an mlb in my ira because it doesnt produce very much of this business tax related income. Id get some advice before do you it. Reporter host bob, up next, milton, florida. Caller hi, i have a question, medicaid waiver payments. If you receive a medicare waiver payment for disability care, if its on a w 2, the waiver on line 7, and you back it out on line 21, because it is not a taxable item, however, once you put it in on line 7, you qualify for eic, child care guest im sorry. Im not familiar with this issue at all. I cant help you. Its the kind of thing that the irs can answer quickly. I understand you need to put it in income for earned Income Credit but i dont understand how to backs out, sorry. Host mike from pennsylvania, hi. Caller im mike. My brother and i are new Small Business owners. We just formed an llc this past year, and i was surprised to find out that we started paying a pay check to ourselves in the second half of the year, and i was surprised to find out that we were required to pay Unemployment Compensation insurance, the company was, in the state of pennsylvania, but werent allowed to collect unemployment even if business was slow, and i guess the state why do we have to pay this tax if were not even allowed to collect unless its like a forced bankruptcy or a only in very rare circumstances, and to me, it sounds like the state is just collecting a bunch of money from Small Business owners on their wages and never having to pay any of it out. Id like to hear what the comment is from the professionals there. I mean, is that a loop hole from the state to collect on the wages of Small Business owners . What is his thoughts on that . Guest ive never heard of this being presented. I know the Small Business owners, including the nanny tax we talked about earlier, you have to pay Unemployment Compensation tax for nannies so you have to pay any for your employee even yourself if youre the employee. I dont understand why youre prohibited from claiming, if its an issue im not aware of it, im sorry. Host george, from dallas, good morning, go ahead, please. Caller yes, sir. My question is, is i have a mother thats 84 years old, and shes in very poor health, and im the only child, and shes her house is free and clear. Weve got the deed and safe deposit box, and shes wanting to sign it over to me completely, but i am in the will, i am the only child. Is there any tax fees to turn it over to me or not . Guest absolutely not. Thats probably a huge mistake. Im sorry, shes not in great shape. If she gives that house to you now, your tax basis will be what she paid for the house. Say the house was 100,000, she paid 25 for it. If you sell the house, youll owe taxes on the 75,000. If you inherit the house through her will, the tax basis is whatever it is if she dies. I talk to a lot of lawyers about this. People in your situation, where an elderly parent thinks theyre going to do a big favor by passing on the house now rather than waiting on the will, but it can be a big tax headache. I would check with the lawyer and i think it would be a big mistake to do it. Host steve, parkersburg, west virginia. Youre next, go ahead. Caller yes, what is the max im 54 years of age, guest youre 53, the max it would be 6500 for 2014. Its 5500 for people under 50 and up, its 6500 this year and next year as well. Host do you have a followup . Caller thank you for your time guest how many people achieved the maximum putting into it guest ive never seen statistics on it. Im sure its very low. All the retirement statistics is people are not saving for retirement the way they need to if they want to maintain their lifestyle. Theyve never seen a figure on how many people do, but im sure its low. Guest you see this big figure, and how they achieve it. Theyre going to get there. People wait until the end of the year. Youre not going to be able to come up with 6500, but its the kiplinger pen itch, pay yourself first. Save some of it for the retirement. Everyone should put into the 401k to capture an employer match because its free money. If you can go beyond that into the ira, do that as well. Host does it work for the 529 savings as well guest yes, those are the state savings college plans. If your state offers a deduction for what you contribute for a child or grandchild, the money has to be in by december 31 because that deduction on your state return. Theres no federal deduction for that, but the earnings are federally tax free. The great way to save for retirement but you need to start i just put money into my three branch accounts yesterday, because the oldest one is two, the other was just born but 18 years from now, it can grow and be important to their education. Host monticello, georgia. David, welcome. Caller good morning, thank you, cspan. My question is, i was disabled about three years ago, and i was elected to Public Office november of 2013, which comes with a meager salary of 450 a month, and thats tax