dsmWealth: October 5, 2023

BY STEVE DINNEN

Serious cooks yearn for serious kitchens. They come in handy when you make 2,000 meals per day, which is the average output for WesleyLife’s local Meals on Wheels program.

On Nov. 1, the nonprofit’s leaders will cut the ribbon on a serious new kitchen that’s three times the size of its current cramped setup in Sherman Hill, which doesn’t have a garbage disposal or even a dishwashing machine.

Community philanthropist Suzie Glazer Burt got the ball rolling for Meals on Wheels with a $1.05 million donation to its “So Much More Than Meals” capital campaign. That money helped WesleyLife buy a building at 3206 University Ave. that has been overhauled to house the spacious new kitchen. In gratitude, it’s named Suzie’s Kitchen.

In total, the campaign has raised more than $11 million, thanks to additional donations from Tom and Linda Koehn, Steve and Cathy Lacy, and Nixon and Virginia Lauridsen, among others.

Meals are available to anyone older than 60 and military veterans of all ages and are designed to help people who have difficulty shopping for food or preparing meals. Each meal costs $8.70, but that price may be reduced or eliminated depending on the client’s financial situation. Meals are delivered seven days a week to private homes as well as 15 sites for groups.

For many recipients, their Meals on Wheels driver is the only person they see during the entire day or even the week. Drivers are trained to check on clients' well-being, which can make a big difference. Sophia Ahmad, WesleyLife’s vice president for philanthropy, said the WesleyLife team estimates that the daily visits save three to seven lives each year.

With its new kitchen, Meals on Wheels is living up to the name of the “So Much More Than Meals” campaign. The staff now includes an agronomist who will manage a hydroponic garden for fresh produce. And next spring, the site will open Hugo, an eatery run by Des Moines restaurateur Lynn Pritchard, and a space for special events, with seating for up to 100 guests.

Volunteers wanted for Meals on Wheels and Hope Ministries
BY STEVE DINNEN

Financial donors are usually in short supply at charitable organizations. Volunteers are even scarcer.
Meals on Wheels is one group that relies heavily on volunteers — specifically, drivers. The program relies on volunteers to distribute 2,000 meals around town every day.

About half of Meals on Wheels recipients live in their own homes. They’re often older and alone, and many don’t venture out very often. For many recipients, the delivery Meals on Wheels volunteer is the only person they see during the day or even the entire week. Drivers are trained to check on clients' well-being, which can make a big difference. Sophia Ahmad, WesleyLife’s vice president for philanthropy, said WesleyLife estimates the daily visits save three to seven lives each year.

So ring them up if you’d like to help: 515-298-5773. They’ll put you to work.

Speaking of volunteers … Hope Ministries is looking for folks to help assemble and deliver meals to 3,500 people for Thanksgiving. Its food donation day is Wednesday, Nov. 22, and volunteers are needed then. Then drivers will be needed on Thanksgiving Day to distribute all of that food to people in a timely fashion.

Volunteer registration for Hope Ministries is open now at hopeiowa.org.

Taylor Swift tickets and a new IRS rule: What you need to know
BY KELLEY TAYLOR FOR KIPLINGER

If you’re a Kansas City Chiefs fan or a “Swiftie,” you might have wondered recently whether Travis Kelce and Taylor Swift are dating. But all the excitement and talk about Swift’s appearance at an NFL game has also raised questions about what Eras Tour tickets have to do with taxes.

So, to sort out some of the confusion, here’s what you need to know about how reselling concert tickets (not just those for Swift’s tour) might impact your tax bill.

Ticketmaster, StubHub tickets and your taxes

It's not uncommon to come across Eras Tour, Beyonce Renaissance Tour and other tickets being resold on platforms like StubHub and Ticketmaster, particularly during times of high demand. Assuming, for instance, Swift's tour tickets originally sell for around $449, ticket resellers can profit substantially from selling coveted seats for $1,300 or more. That’s where tax comes in.

You may be subject to new IRS reporting requirements if, as in that example, you resell your ticket(s) online and profit at least $600. Form 1099-K reporting rules apply if you sell goods or services (not just concert tickets) online and receive payment through third-party payment networks like Stripe, PayPal, Venmo and others.

Why is this an issue now? A $600 online sale wasn’t a significant concern for so many casual sellers before. That is mainly because the threshold for IRS 1099-K reporting used to be $20,000 and more than 200 business transactions. Now, a single $600 transaction can trigger the reporting requirement.

This is the new “$600 rule.” Last year, the IRS delayed the implementation of the rule. That delay was supposed to give payment networks more time to prepare to send millions more 1099-K forms and online sellers more time to understand the new requirement.

New $600 rule for online sales 1099-K reporting

Many businesses are subject to 1099-K reporting requirements. A few examples include popular platforms like Etsy, Depop, eBay, Poshmark, etc. (But this is far from an all-inclusive list.) If you need clarity on whether you will receive a 1099-K for 2023, most of these sites have information on their websites that can help.

However, personal transactions (e.g., personal payments to friends and family) on payment networks, including Venmo, PayPal, Cash App, etc., are not considered "payments for goods and services." The 1099-K third-party payment network reporting rule doesn't apply to payments made that were gifts or other personal money payments to family and friends.

Unless something changes legislatively (some groups are asking Congress for 1099-K relief for casual online sellers), the $600 rule will apply for the 2023 tax year (i.e., federal income tax returns that are normally filed in April 2024). That means if you received payment for goods or services of $600 or more through online platforms this year, you will likely receive a 1099-K form by Jan. 31, 2024, to use when you file your 2023 federal income tax return.

Will you have to pay taxes on your ticket sales?

Receiving a 1099-K doesn’t necessarily mean you will have to pay taxes on your ticket sales. For example, on its website, Ticketmaster tells sellers that the 1099-K “just provides the total gross transactional amount processed by Ticketmaster during that calendar year.” As always, your tax liability depends on several factors, including taxable income, tax deductions and credits.

However, whether you receive a 1099-K or not, it is important to report any taxable income on your federal income tax return as required by the IRS. (This typically includes profits from reselling concert tickets.)

If you are worried about the impact of your online selling on your tax liability, consult a trustworthy tax professional.

When parents and kids both have student loans
BY JULIA CARPENTER FOR THE WALL STREET JOURNAL

The cost of student loans isn’t just affecting young Americans. It is rippling through generations of families at once, hampering the ability to build wealth and prepare for retirement.

There is roughly the same number of student loan borrowers under the age of 34 as those aged 35 and older, according to data from studentaid.gov. The older category holds nearly two-thirds of outstanding student debt, the data shows. Both groups will be saddled with an extra monthly payment when the $1.7 trillion in student loans comes due again this month.

Almost everyone in the Ayotte family is paying student loans right now.

Jameson and Melanie Ayotte are repaying loans they took out for graduate school nearly 30 years ago. The Massachusetts-based couple have amassed $86,000 in student debt, and are $26,000 away from fully repaying it.

Two of their three children are already in college, on a mix of scholarships, grants and federal student loans.

“It’s downright depressing at the end of the day,” said Jameson, a 51-year-old firefighter.

For decades, many Americans followed a conventional road map: Go to college, get married, buy a home and then start a family. There was also the hope that they would be financially stable enough to help children with their college payments when the time came.

But that road map is now often breaking down. Multiple generations are struggling to get out from their own college loans, compounding unease about their collective financial future. The breakdown also creates a practical problem: The younger generation isn’t able to pay off their loans quickly without help from their parents, and then neither generation is able to save as much for the future.

“What you’re talking about is a degree of generational indebtedness,” said Cliff Robb, professor of consumer science at the University of Wisconsin-Madison. “It can create this feeling of despair.”

Laurel Taylor, CEO and founder of Candidly, a student debt technology and coaching platform, accumulated nearly $200,000 in student loan debt. Her mom also took out a Parent Plus loan for $35,000 of Taylor’s undergraduate education.

Taylor, now in her 40s, said she is finally feeling confident in her finances. But during the time she and her mother were making student loan payments, they both sacrificed saving for retirement and emergencies.

“She was, like, ‘Girl, I had no money to put into a 401(k),’ and that was heartbreaking,” Taylor said of her mother. “Between my mom and I, we missed out on at least two decades of compound interest on wealth while paying down debt.”

‘Not a fair playing field’

Borrowers aged 50 to 61 hold more than $296 billion in outstanding student loan debt, according to the data from studentaid.gov. Such a financial commitment has a lasting effect across generations.

“It dampens financial milestones,” said Lowell Ricketts, data scientist at the Federal Reserve Bank of St. Louis. “You think about this debt balance then falling on multiple members of the household. It puts a lot of pressure on the borrower.”

Nancy Pavelka, a 60-year-old mental-health counselor in Long Branch, N.J., has $358,000 in college debt: for her own advanced degree and Parent Plus loans for her two daughters.

“I didn’t want them to take out more loans because I knew it would ruin their life,” she said.

Pavelka said she has seen the ripple effects student loans have on families in which several members hold student debt, and she worries for her daughters’ future financial security.

“It’s not a fair playing field,” Pavelka said of the loans both she and her daughters had to take out as a result of the rising cost of a college education. “It’s just absurd.”

Earlier this year, the Biden administration announced changes to income-driven repayment and public-service loan-forgiveness plans. These updates are designed to lower required monthly payments and speed up the path to forgiveness, which the Education Department said would help millions of borrowers across multiple ages and generations.

“I think we’re in a tough situation, and it’s hard for me to see a way forward that is quick and easy,” said Monnica Chan, an assistant professor of higher education at University of Massachusetts-Boston.

Pavelka has worked with financial advisers to help minimize the toll monthly payments will again take on her budget but is dreading October’s student-loan payment restart. After an expensive divorce and a house foreclosure, she has given up hope of retiring before age 70.

“I’ve always worked: at bars, at restaurants, I taught, I nannied. I’m not lazy. I’m not expecting a handout. It’s just daunting,” she said of repaying student loans.

On the whole, Americans are retiring later than they have in the previous three decades, according to Gallup, and nonretired workers report feeling pessimistic about their financial preparations for later life.

Jameson and Melanie Ayotte, a 52-year-old physical therapist, are still at least 10 years away from retirement. Jameson said he is sometimes overwhelmed at the thought of continuing to pay off his own loans as his children just begin to chip away at theirs.

“What will happen in five, six, seven, eight years for us to look at retirement? What can we pass on, if anything?” he said. “It doesn’t even exist as far as we’re concerned. It’s so far-fetched.”