My husband died last year, and I'm selling our home. Do I still get to exclude $500,000 of home-sale profits from taxes, or am I limited to the $250,000 exclusion for singles?
R.S., Raleigh, N.C.
Surviving spouses may exclude $500,000 of home-sale profits from taxes if they sell the house within two years after their spouse dies, as long as they owned and lived in the house for two of the five years before the death. Also note that if you and your husband jointly owned the house, at least half of the profit that accrued before he died became tax-free upon his death.
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Employer health benefits. I am signing up for next year’s company health insurance, and I’m wondering if the cost increases and coverage changes are typical. Is there anything I can do to save money?
M.C., Reston, Va.
Large employers anticipate that health care costs will rise by about 6% in 2017, and they’re making changes to manage those expenses—boosting premiums, increasing out-of-pocket costs, shrinking provider networks and adding restrictions on drug coverage (see 5 Ways to Save on Prescriptions). But they’re also introducing new programs to help you save money.
The median deductible is $1,425 for employee-only plans and $2,900 for family coverage, according to the National Business Group on Health (NBGH). More than one-third of employers will offer only a high-deductible plan in 2017. Many will contribute to health savings accounts for employees with those plans. A typical contribution would be $600 for employees with self-only coverage or $1,100 for families.
Employers are also expanding web tools to let you compare costs for drugs, procedures and tests. And you can save money with telehealth, or remotely provided health care, now offered by almost all plans. For example, a consultation with a doctor by video for an upper respiratory infection might cost $40, compared with $700 for a visit to the ER, $150 for urgent care and $100 for an office visit, says Brian Marcotte, president of the NBGH.
Low-fee stock purchases. I’d like to buy stock for my grandchildren, but I don’t want to pay high brokerage fees. Can I buy stock directly from a company such as Disney?
L.W., Harrisburg, Penn.
Yes. Disney’s direct investment plan has a minimum initial investment of $175, or $50 if you use monthly electronic deductions. You can reinvest dividends automatically. Commissions are just 2 cents per share, but you’ll pay a $20 onetime enrollment fee, plus a $1 fee for automatic investment or a $7 fee for investments made by check.
You could build a portfolio of several companies by opening a custodial account with a low-cost broker. For example, TD Ameritrade has no investing minimum and charges $9.99 per trade; it also has more than 100 commission-free exchange-traded funds.
Water line protection. I received a letter from my water company about buying water-service-line protection for $3.99 per month from a private company. Is this a good idea?
J.C., Takoma Park, Md.
Most home insurance policies don’t automatically cover damage to pipes outside of your house. Ask your plumber what the risks are for your property and how much replacing the water line might cost. If you decide you need the coverage, see if you can buy a rider from your home insurer, then compare that with the plan being offered. Review exclusions and coverage limits, and find out whether you can use your own plumber, whom you may prefer to a plan’s contractor.
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