Melanie After surviving a FEMA-declared natural disaster,  Melanie spent $45,000 on repairs and flood protections, only to discover new tax relief laws passed after they filed. Can she still claim the benefits – and how should everyday taxpayers keep up with retroactive rules?

Danielle: Danielle is considering a mini-retirement while her husband takes time between jobs. They have plenty of savings, and she dreams of traveling but she’s worried about health insurance, leaving work, and feeling lost. Could stepping away now be the reset she needs?

Leigh: Leigh and her husband have $125,000 sitting in a 529 that they don’t need for education. Their goal is to pay off the mortgage so one of them can stay home with the kids – what’s the smartest way to use this money?

Pedro: Pedro took Paula & Joe’s advice – now he is into a fully remote job that pays 30% more, matches his benefits, and gives him a community that fits his values.

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Melanie: How can I take advantage of retroactive tax relief for natural disaster victims?

I was researching the One Big Beautiful Bill Act and saw that it included tax relief for disaster victims. Then I learned about the Federal Disaster Tax Relief Act of 2023, which wasn’t passed until December 2024 – long after I filed my 2023 return.

That law provides retroactive relief for 2023. That year, I experienced a FEMA-declared natural disaster and spent about $22,000 on demolition and house repairs and another $23,000 on a flood control system, a drain tile system and sewer pipe repair.

I received some financial help from FEMA, plus $5,000 from my homeowner’s insurance. Can I still benefit from these relief bills? Should I amend my 2023 return? What documentation will I need to do this properly?

More broadly, how is someone supposed to know about a retroactive bill like this? If I qualified, should FEMA have notified me? And how can an average person keep up with future legislative changes to make sure they don’t miss out on relief?

Danielle:  How do I handle health insurance during a mini-retirement?

I’m in my early 30s, and my husband will soon be between jobs for six months to a year. We have plenty of savings to hold us over, so I’m tempted to take a mini-retirement.

I’d love to travel, visit the national parks, maybe live in Hawaii for a while – basically do the things that bring me joy, since work doesn’t anymore. But I can’t wrap my head around the health insurance piece. Where do we go? What are our best options?

I want to take this step before we have kids. I’m scared to leave my job, but staying doesn’t make me happy. I’m also nervous that even after this mini-retirement, I won’t know what truly brings me joy or what kind of work to pursue afterward.

Maybe that means I need this time off even more. Could a mini-retirement now be better than trying to retire 10 years early?

Leigh:  What should I do with $125,000 left over in a 529 plan?

I’m 31 and my husband is 33. We have a great income and are debt-free other than our mortgage. We both have master’s degrees and don’t plan on going back to school.

We have a 4-month-old son who could potentially use the 529, but my parents are setting up an account for him that will be fully funded. I don’t know the amount, but I expect it will be enough to cover his needs.

I’ve been rolling over $7,000 per year into my Roth IRA, but since the lifetime cap is $35,000, there will still be a substantial amount left once that option runs out. We’ve already withdrawn $30,000 over the last two years to pay down our mortgage, but the taxes and penalties give me heartburn. Since withdrawals for non-educational purposes are taxed at ordinary income rates, plus state income tax here in Oregon and a 10 percent penalty, it feels painful.

I don’t anticipate anyone in my family needing these funds for education. My husband and I are working toward paying off our mortgage so one of us can stay home with our kids, and while the 529 balance would help, it wouldn’t cover the full payoff.

What’s the best way to think about this money and how to use it?

Pedro:   How I transitioned from federal work to a remote job I love?

I was a federal employee who had been called back into the office, and I was looking for a way out. You both gave me really solid advice: look for roles at the intersection of tech and government, and instead of just blasting out résumés, focus on building connections and finding referrals.

That’s exactly what I did – and it worked. I landed a job with a company that does government contracts at both the federal and state level, and I’m loving it so far. I’m about a month in, and their culture is completely in line with my values. The company is fully remote, and many employees – including my supervisor – are digital nomads. I feel like I’ve found not just a job, but a community, and I really enjoy the work.

On top of that, I matched all the benefits I had with the government, plus I got a 30% pay increase. The role is 100% remote. It’s exactly what I was hoping for, and I’m already planning my next RV trip to Alaska.

 

Resources Mentioned:

Episode 605
StackingBenjamins.com/Guides
Federal Tax Relief of 2023

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