In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

Take Advantage of These Tax Breaks for Every Life Stage!

By Sandra Block

Don't miss out on these 35 money-savers

JewishWorldReview.com | It's no secret that the U.S. tax code is fatter than the proverbial Manhattan phone book. Aside from what that says about our tax system, the sheer density of the code increases the risk that taxpayers-especially last-minute filers-will overlook tax deductions and credits that could save them serious money. Here's a look at breaks that could trim your tax bill no matter where you are on your journey through life.


First comes love, then comes marriage, and then comes your first joint tax return. Whether this is cause for celebration or despair depends on your financial situation. Dual-income couples who earn about the same amount could find themselves subject to a marriage penalty. When one spouse earns significantly less, though, the couple will likely get a marriage bonus. In either case, you don't want to ignore these marriage-friendly tax breaks.

Spousal IRA. This IRA offers a way to provide retirement security for a stay-at-home spouse, and it could reduce your 2013 tax bill, too. The working spouse can contribute up to $5,500 to a spousal IRA on behalf of the nonworking spouse ($6,500 if the nonworking spouse is 50 or over). The contribution is deductible, even if the working spouse is covered by an employer-provided retirement plan, as long as your combined modified adjusted gross income is less than $178,000; a partial deduction is available on MAGI of up to $188,000. (If the working spouse isn't covered by an employer plan, there are no income limits.) You have until April 15 to make a contribution for 2013. This is an "above the line" deduction, which means you don't have to itemize to claim it. It will reduce your adjusted gross income dollar for dollar. If you're in the 25% tax bracket, for example, a $5,500 contribution will shave $1,375 from your tax bill.

Tax-free health benefits. Employer-provided health insurance for spouses of married workers is generally tax-free. While many companies provide health insurance for domestic partners, those benefits are reported as taxable income, which can add hundreds of dollars to the cost of health insurance.

Owning a Home

You probably know that interest on your home mortgage is deductible, and interest on a home-equity loan or line of credit is usually deductible, too. But that's not the only way owning a home can cut your taxes.

Deduction for mortgage insurance premiums. Lenders typically require home buyers who put less than 20% down to buy private mortgage insurance. If you paid PMI last year, your premiums are deductible, as long as your adjusted gross income-whether you're single or married filing jointly-didn't exceed $109,000 and you took out your loan after 2006. The National Association of Realtors says this often-overlooked tax break saves the average homeowner $3,000. (Unless Congress renews it, this tax break will not be available after December 31, 2013.)

Deduction for points. When you buy a house, you get to deduct all at once points paid to get your mortgage, which can add up to a sizable tax break. When you refinance, the deduction is more complicated because you're required to deduct the new points over the life of the loan. If it's a 30-year mortgage, for example, you can deduct one-thirtieth of the points per year. That may not sound like much, but keep track. When you pay off the loan-because you either sell the house or refinance again-you can deduct all undeducted points. Unless, that is, you refinance with the same lender. In that case, you add the new points to those left over from the previous refinancing and deduct the combined balance over the life of the loan.

Energy-saving tax credits for home improvements. This may be your last chance to claim a tax credit for installing new energy-efficient windows or making similar energy-saving home improvements. You can receive up to $500 in total tax credits for eligible home improvements made since 2006. The credit applies to 10% of the purchase (not installation) cost of certain insulation, new windows, external doors and skylights. There are limits on specific projects-for example, the maximum you can claim for new windows is $200. For details, go to www.energystar.gov. Unless Congress renews them, these tax breaks are limited to home improvements made before December 31, 2013.

Energy-saving tax credits for big projects. If you embark on a more ambitious energy-saving project, you may qualify for a larger tax credit. You can claim a credit for up to 30% of the cost of buying and installing geothermal heat pumps, solar water heaters, solar panels and small wind-energy systems. This credit doesn't expire until December 31, 2016.

Tax-free capital gains on home sales. Married couples can shelter up to $500,000 in taxes on the sale of a home, as long as both spouses lived in it for two out of five years before the sale. For single homeowners, the maximum amount of tax-free profit is $250,000. To claim the entire exclusion, you must file a joint tax return, and you or your spouse (but not necessarily both) must have owned the home for two out of the past five years.

Starting a Family

Unlike some high-end restaurants, the tax code is child-friendly. Claiming a son or daughter on your tax return will shelter up to $3,900 of your income from taxes, saving you $975 if you're in the 25% tax bracket. And that's just the beginning of the money-saving tax breaks you'll enjoy.

Child tax credit. This credit shaves up to $1,000 off of your tax bill, and you can claim it every year until your child is 17, provided you meet income thresholds. Remember: A credit is more valuable than a deduction because it represents a dollar-for-dollar reduction in your tax bill. For 2013, the credit phases out (and eventually disappears) for married couples with MAGI above $110,000 and single parents with MAGI of more than $75,000.

Child- and dependent-care credit. If you pay someone to watch your children younger than 13 while you work, you're eligible for a 20% to 35% credit for up to $3,000 in child-care expenses for one child or $6,000 for two or more. The percentage decreases as income increases. In 2013, families that earn more than $43,000 can claim only 20% of eligible costs.

In addition, if you contributed to your employer's flexible spending account for dependent-care expenses, you can't claim the credit for the same expenses covered by the flex account. However, if you paid for the care of two or more children and contributed the maximum $5,000 to a child-care flex account, you can use the dependent care credit to cover up to an additional $1,000 in child-care costs.

Adoption credit. In 2013, you can claim a credit for up to $12,970 in eligible adoption expenses per child. The credit is phased out for families with modified adjusted gross income of more than $194,580; families with MAGI of more than $234,580 are ineligible. If the amount of the credit exceeds your tax bill, you can carry over unused credits for up to five years.


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You thought Pampers were expensive? Wait until you have to pony up for college tuition. Luckily, the tax code also offers money-saving breaks for parents of college-bound students.

529 college-savings plans. You won't get a federal tax break for contributing to one of these state-sponsored plans. The benefits come later, when Junior starts college. Withdrawals for qualified college expenses, including your investment gains, are tax-free. Thirty-four states allow you to deduct at least a portion of your contribution on your state return, so check out your own state's plan first. However, you can invest in any state's 529 plan. If your child gets a full-ride financial aid package, you can transfer the plan to another child, or go back to school and use the money for your own college costs. If you use the money for a nonqualified purpose, the earnings will be taxed and hit with a 10% penalty.

Coverdell education savings accounts. Like 529 plans, you can use these accounts to put aside money for your child's education. However, the limits are much lower-just $2,000 per child for 2013. (Many states allow savers to invest a maximum of $200,000 or more in their 529 plans.) But Coverdells can be used for a broader range of expenses, including private elementary and high school education (529 plans can only be used for college or graduate school). For 2013 contributions, the income cut-off is $110,000 for single filers and $220,000 for married couples who file jointly. You can contribute to both a Coverdell and a 529 plan for the same child.

American Opportunity credit. This credit is worth up to $2,500 per student for each of the first four years of college. The credit phases out for MAGI of between $80,000 and $90,000 for single taxpayers and between $160,000 and $180,000 for couples. The credit is available to offset the cost of tuition and related expenses.

Lifetime Learning credit. This tax break could pay off if your child decides to attend graduate school. The credit is worth up to 20% of eligible expenses of up to $10,000, for a maximum of $2,000. Unlike the American Opportunity credit, there's no limit to the number of years a student can claim this credit. You can claim it for a dependent child, a spouse or yourself. To qualify for the full credit in 2013, your MAGI must be below $53,000 if you're single or $107,000 if you're married filing jointly. Singles with MAGI of up to $63,000 and married couples with MAGI of up to $127,000 are eligible for a partial credit, but after that, the credit disappears.

Tax-free interest from savings bonds. Ordinarily, interest from savings bonds is taxable. But if you use the proceeds to pay for college expenses for your child, yourself or your spouse, interest may be tax-free. The tax break is limited to series EE bonds purchased after 1989 and series I bonds. It phases out for single taxpayers with MAGI of $74,700, or $112,050 for married couples filing a joint return. Taxpayers with MAGI of more than $89,700, or $142,050 for a joint return, are ineligible.

Many young children receive savings bonds as gifts, but proceeds from those bonds aren't eligible for tax-free interest, even if the money is used for education. That's because the savings bond owner must have been at least 24 years old when the bond was purchased to qualify.

Student-loan interest. Taxpayers who pay interest on qualified student loans are eligible to deduct up to $2,500 of the interest. The deduction phases out for MAGI of between $60,000 and $75,000 for single filers or $125,000 to $155,000 for married couples who file jointly. You can't claim this deduction for your child's student loans, even if you're paying them off, because you're not liable for the debt. However, the deduction isn't lost if you pay the bills: Your child can claim the interest deduction on his or her tax return as long as you're not claiming your child as a dependent. The IRS treats the payment as if it were a gift to the child, who then paid the debt. This is an above-the-line deduction, meaning the child doesn't have to itemize to claim it.


Divorce is expensive, even if it's amicable. So make sure you understand the tax breaks associated with ending your union.

Deduction for paying alimony. Alimony is usually deductible, and you don't have to itemize to claim this tax-saver. You must file Form 1040 to claim a deduction; you can't file 1040A or 1040EZ. Be aware, though, that if you receive alimony, the payments are taxable (and, again, you must use Form 1040 to report it). Child-support payments are not deductible, and the recipient doesn't have to pay taxes on them.

Dependency exemption. When parents separate or divorce, the tax code generally gives the custodial parent the dependency exemption, which is worth $3,900 per child on 2013 returns. There are exceptions, however. The custodial parent can waive the exemption and permit the noncustodial parent to claim it instead. This must be done in writing on IRS Form 8332. The waiver may be permanent or done on a year-to-year basis.

Medical-expense deduction. If you paid a child's medical expenses last year, you may still be eligible to deduct those expenses, even if you can't claim the child as a dependent. You still must meet the high bar for medical deductions: Only unreimbursed expenses that exceed 10% of your adjusted gross income (unless you're 65 or older, in which case it's 7.5%) are deductible. But if both you and your child had high medical bills last year, you might be able to get over this hurdle.

Running a Business

Self-employed workers, both full- and part-time, are eligible for a smorgasbord of tax breaks. Yet fear of audits and simply not knowing the rules lead many business owners to leave money on the table.

Home-office deduction. In the past, many self-employed workers spurned this tax break, convinced it would invite an IRS audit. But a change that took effect in 2013 makes the tax deduction more accessible-and less dangerous.

New IRS rules allow self-employed taxpayers to deduct their home offices by using a simple formula based on the size of their offices. You can deduct $5 per square foot, up to a maximum of 300 square feet, or $1,500.

The rule doesn't change eligibility requirements for the deduction. You must still use the space regularly and exclusively for business. Employees who work from home can't deduct a home office unless their employer requires them to work there. But you'll no longer have to fill out an IRS form listing your actual expenses, such as the percentage of your home's utilities used in your home office (although you'll still have the option of using actual expenses, which could result in a larger deduction).

Retirement accounts. Many taxpayers with income from a part-time or freelance business overlook the tax benefits of a Simplified Employee Pension (SEP) IRA, says Stephen DeFilippis, an enrolled agent in Wheaton, Ill. You have until April 15 (or October 15 if you file for an extension) to set up an account and fund it for 2013. For 2013, you can contribute up to 20% of your self-employed income, up to $51,000. The contribution lowers your taxable income and will grow tax-deferred until you retire.

A solo 401(k) offers the potential for even greater tax-deferred savings because you fund it as both an employee and an employer. For 2013, you can contribute up to $51,000, or $56,500 if you're 50 or older. However, in order to make contributions for 2013, you would have had to set up your account by December 31, 2013.

Deduction for Social Security and Medicare taxes. Self-employed workers have to pay the full 15.3% Social Security and Medicare tax, which can come as a shock if you're accustomed to having an employer pick up half of the toll. But you can deduct half of those taxes, even if you don't itemize.

Deduction for Medicare premiums. If you continue to run your business after you're eligible for Medicare, here's something you may not know: Premiums paid for Medicare Part B and Medicare Part D, plus the cost of supplemental Medicare (medigap) policies, are deductible.


Taxes can take a big bite out of your retirement savings, especially if you've piled up a lot of money in tax-deferred accounts. But retirees enjoy some tax breaks, too.

0% capital-gains rate. This tax break is available to all taxpayers, but it's particularly valuable to retirees who need to start tapping their savings. Taxpayers in the 10% and 15% tax brackets owe 0% on long-term capital gains. For 2013, married couples qualify for the 0% rate if their taxable income is $72,500 or less. Taxable income is what's left after you subtract personal exemptions, plus the standard deduction or itemized deductions, from your adjusted gross income.

Medical-expense deduction. As mentioned earlier, you can't deduct medical expenses unless they exceed 10% of your adjusted gross income. There's an exception, though, for seniors. If you are 65 or older, you can deduct medical expenses that exceed 7.5% of your income, through 2016. If you're married and only one spouse is 65 or older, you're eligible for the lower threshold.

Higher standard deduction. Many retirees who have paid off their mortgages no longer have enough qualifying expenses to justify itemizing deductions. There's an upside, though: Once you turn 65, you're eligible for a larger standard deduction. For 2013, if both spouses are 65 or older, they can claim a standard deduction of $14,600. Single seniors can claim a standard deduction of $7,600.

Death of a Family Member

As you manage your loved one's estate, it's important to understand how taxes could affect your inheritance.

Step-up in basis. In the majority of cases, the tax basis of inherited property is the fair market value of the property upon the death of the previous owner. This provision can result in a significant tax break for taxpayers who inherit property that has appreciated in value, such as long-held shares of a stock or mutual fund. For example, suppose your father bought stock for $100 and it was worth $200 when he died. If you inherit that stock, your basis would be $200, and you would owe capital-gains tax only if you sold it for more than $200. If you sold it for less than $200, you'd be eligible for a tax-saving loss, even though you still come out ahead.

Inherited IRAs. If you inherit a traditional IRA from your spouse, you can roll it into an existing IRA or one you establish for this purpose. The advantage to this strategy is that you don't have to start taking required minimum distributions-and paying taxes on the money-until you're 70.

Children and other nonspouse heirs can't roll an inherited IRA into their own IRAs, but they can minimize taxes by setting up an inherited IRA with the name of the decedent on the account. In general, as long as you start taking required minimum distributions by December 31 of the year after the IRA owner dies, you can base withdrawals on your own life expectancy. The withdrawals will still be taxable, but the rest of the money will continue to grow tax-deferred.

And if you were fortunate enough to inherit a Roth IRA, be thankful for your loved one's foresight. Spouses who inherit a Roth never have to take RMDs. Nonspouse beneficiaries must take RMDs based on their life expectancy, but the withdrawals are usually tax-free.

Extended home-sale exclusion. The $500,000 exclusion from capital gains on the sale of a home is available to surviving spouses, but you must follow the rules and stick to a timetable. You qualify for the full exclusion if you sell no later than two years after your spouse's death, and if the requirements for the exclusion (you both lived in the home for two of the past five years) were met immediately before your spouse's death. You won't qualify for the full exclusion if you remarry before the date of the sale.

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Sandra Block is a senior associate editor at Kiplinger's Personal Finance magazine.

All contents copyright 2013 Kiplinger's Personal Finance Distributed by Tribune Media Services. All rights reserved.