Ask the Financial Doctor: Can I change my Social Security number after identity theft?

Q: What is the annual gift-tax exclusion for 2023? What is the lifetime estate tax exemption for 2023?

A: For 2023, the annual gift-tax exclusion will increase from $16,000 to $17,000. The lifetime estate exclusion will be $12.12 million for individuals and $24.24 million for couples.

Q: What is the standard deduction for 2022 and 2023?

A: The standard deduction for 2022 is $12,950 (individuals) and $25,900 (couples filing jointly). For 2023, the standard deduction is $13,850 (individuals) and $27,700 (couples filing jointly). For couples, each partner 65 or older will get an additional $1,500.

Q: What is the open enrollment for Medicare?

A: People under Medicare coverage can switch from the traditional Medicare to a Medicare Advantage program and to other Medigap insurers from Oct. 15 through Dec. 7. Medicare Advantage plans are offered by private insurers that cap your out-of-pocket expenses and most cover dental, hearing and vision care. As long as your doctor belongs to the network, a Medicare Advantage plan offers significant benefits. If you stay with the traditional Medicare then you should purchase a Medigap policy to contain your medical expenses.

Q: I am under age 65. Can I qualify for Medicare coverage?

A: You are eligible for Medicare if you are a citizen, lived in the U.S. for five years in a row and are disabled and have been receiving Social Security Disability Insurance (SSDI) for at least 24 months. If you have end-stage renal disease and are getting dialysis treatments you could qualify for Medicare. If you have Amyotrophic Lateral Disease (ALS) you will automatically be enrolled in Medicare when you receive your first monthly check from SSDI.

Q: I am 74 years old and I have never taken a distribution from my IRA. Do I have to take a mandatory distribution at a certain age?

A: Assuming that you have a traditional IRA, you must take the first distribution by April 1st in the following year after age 72. In your case, you should have taken at least two distributions. You have violated the IRS rules and the penalty is 50% of the required minimum distributions (RMD) plus interest. I recommend that you seek a tax professional to correct your situation. If you have a ROTH IRA then you have no problem because there are no mandatory distributions.

Q: How much of the Social Security benefits are reduced if I apply earlier than my full retirement age (FRA)?

A: Anybody born in or after 1960 has a FRA of 67. A worker who started receiving benefits at 62 will get a 25% or 30% benefit reduction depending on the FRA of 66 or 67.

Q: My wife and I own a brokerage account jointly. If both of us die what happens to the assets of our brokerage account?

A: The brokerage account would belong to the estate of the last person to die. In the case of simultaneity of death, a "will" can specify who the last person is. A brokerage account can have a "trust" name and upon death the trust document takes over. If you do not have a "will" or a trust then you can set up a transfer on death (TOD) designation on the brokerage account to name your beneficiaries. The TOD will override any named beneficiaries in your "will" or "trust." Additionally, the TOD will avoid the probate process.

Q: Somebody stole my social security number and is impersonating me. Can I change my Social Security number and reclaim my identity?

A: You can't easily change your Social Security number even if it has been stolen. Identity theft is one of the fastest growing crimes in America. First, contact one of the three major credit-reporting agencies — Equifax, TransUnion, or Experian to place a fraud alert on your credit file. Second, call the IRS at 800-908-4490 to prevent the thief from filing a fraudulent tax return in your name. Third, contact the fraud department of each company that you suspect fraudulent activity.

Q: I am considering a nursing home for my husband who is suffering from dementia and Alzheimer's disease. The nursing home refuses to admit him because I have no power of attorney. What can I do?

A: You can go to court and be appointed the conservator of your husband, check with the nursing homes on their rules. If you still have difficulty then I recommend that you consult with an elder attorney.

Q: My uncle recently passed away and owned several U.S. savings bonds with a face value of $35,000. These bonds are 37 years old. Are these bonds earning any interest?

A: No, these bonds have stopped earning interest after 30 years and need to be redeemed. The accumulated interest will be over $25,000 and either the beneficiaries or your uncle's estate will have to pay the federal taxes on the interest income.

Q: What is the federal credit amount if I buy an electrical vehicle (EV)?

A: The federal credit for an EV or plug-in hybrid is $7,500 if you satisfy three rules.

Rule 1: The van, truck or SUV must have a Manufacturer's Suggested Retail Price (MSRP) less than $80,000; for a regular car the MSRP must be less than $55,000.

Rule 2: Your modified adjusted gross income (MAGI) must be less than $150,000 (single) and $300,000 (joint).

Rule 3: The vehicle must be assembled in North America and have 40% of the critical battery materials sourced in the United States or in a country which the United States has free-trade agreement. In 2024 the percentage increases to 50%

Richard Rysiewski, a Certified Financial Planner®, welcomes all questions on tax and financial matters. Please send to Richard Rysiewski, Financial Doctor, 3001 Hartford Lane, Shelby Twp., MI 48316.