Monday, November 27, 2017

How to Know if the Knock on Your Door is Actually Someone From the IRS

People can avoid taking the bait and falling victim to a scam by knowing how and when the IRS does contact a taxpayer in person. This can help someone determine whether an individual is truly an IRS employee.

Here are eight things to know about in-person contacts from the IRS.

  • The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
  • There are special circumstances when the IRS will come to a home or business. This includes:
    • When a taxpayer has an overdue tax bill
    • When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment
    • To tour a business as part of an audit
    • As part of a criminal investigation
  • Revenue officers are IRS employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return. Generally, home or business visits are unannounced. 
  • IRS revenue officers carry two forms of official identification.  Both forms of ID have serial numbers. Taxpayers can ask to see both IDs.
  • The IRS can assign certain cases to private debt collectors. The IRS does this only after giving written notice to the taxpayer and any appointed representative. Private collection agencies will never visit a taxpayer at their home or business.
  • The IRS will not ask that a taxpayer makes a payment to anyone other than the U.S. Department of the Treasury.
  • IRS employees conducting audits may call taxpayers to set up appointments, but not without having first notified them by mail. Therefore, by the time the IRS visits a taxpayer at home, the taxpayer would be well aware of the audit.
  • IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.

Thursday, November 23, 2017

Happy Thanksgiving from NFS!



From All of us here at

Northeast Financial Strategies, Inc.

WE GIVE THANKS...

... For Our Families
... For Our Friends
... Four Our Clients
... For Our Communitiy
... For You

HAPPY THANKSGIVING!

Tuesday, November 21, 2017

Marijuana and the IRS

Currently, 29 states and the District of Columbia allow legal use of marijuana in some form. Several more will join in 2018, while advocates in other states are pushing to add marijuana initiatives to upcoming ballots. Marijuana sales are big business and generate needed tax revenue for the states. Although state law legalizes activities related to its production and sale, marijuana is considered a Schedule I drug under the Controlled Substances Act of 1970. As such, this activity continues to be illegal under federal law. This dichotomy of state and federal laws on the use and sale of marijuana presents unique challenges to the industry. 

Federal Taxation

As far as the IRS is concerned, all income is taxable, even illegal income. IRS publications state that “illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.” When no other crimes could be pinned to Al Capone, the Internal Revenue Service obtained a conviction for tax evasion. As the astonished Capone left the courthouse he said, "This is preposterous. You can't tax illegal income!" But the fact is income from whatever source derived (legal or illegal) is taxable income.

State legalization often comes with heavy regulation and oversight. In addition, growers, distributors and dispensaries incur costs like any other business. They hire employees and pay overhead costs. For federal tax purposes a legitimate business is allowed to deduct all “ordinary and necessary” costs from revenue in order to compute their taxable income. This is not the case for the trafficking of controlled substances such as marijuana. Although all illegal income is taxable, not all expenses are deductible.

Thursday, November 16, 2017

2017 Year-End Tax Planning For Individuals

Year-end 2017 is shaping up as an important deadline to have tax strategies in place to take advantage of certain opportunities before they sunset along with the close of the tax year on December 31, 2017. A major challenge this year, of course, involves the uncertainty that will remain, likely into late November/early December, over pending tax reform legislation. This includes uncertainty regarding rate cuts, certain deductions, and much more. Effective strategies in response to any of these “tax reform” priorities involve close monitoring of any proposed tax bill as it moves through negotiations within the various Congressional tax committees and Trump administration officials, with year-end action steps ready to go based upon alternative legislative outcomes.

Although year-end 2017 may be unique because of possible tax reform, planning during the final weeks and months of this year involves much more –both in terms of traditional year-end strategies and strategies developed in response to developments that have taken place since last year. Here are some points to consider:

Data gathering. Year-end planning should start with data collection and a review of prior year returns. This includes information on losses or other carryovers, estimated tax installments, and items that were unusual. Conversations regarding next year should include discussions of any plans for significant purchases or dispositions, as well as any possible life cycle events.

Income tax rates. One of the most significant factors in tax planning for individuals is their tax bracket. The most direct control taxpayers have over their tax bracket rests in their ability to control the timing of income and deductible expenses. For example, taxpayers who expect to be in a lower tax bracket in 2018 should consider deferring income to 2018 and accelerating deductions into 2017. Also relevant are “tax reform” proposals that may compress tax brackets and lower tax rates. These changes could present year-end tax planning opportunities for taxpayers depending on when any proposed rate changes go into effect.

Wednesday, September 20, 2017

First Time Homebuyer Seminar Announced

First Time Homebuyer Seminar
HarborOne U, Mansfield MA
Wednesday, October 18th, 2017
6:00 pm to 8:00 pm


Make a well-informed decision when you buy your first home. This seminar provides you the opportunity to get answers to your many questions from the professionals involved in the home buying process. Professionals include Mortgage Originator, Buyers Agent & Realtor, Real Estate  Attorney, Insurance Agent, JEFFREY SCHWEITZER, Tax Advisor and Home Inspector.

Tuesday, September 12, 2017

Equifax Cybersecurity Incident & Important Consumer Information

By now, you may have heard about the recent cyber security incident at Equifax, one of the largest
credit reporting agencies in the United States. Popular news sources have reported that nearly 143 million people or nearly half of the U.S. population.

Credit reporting agencies work differently from other data companies, so while you may never have dealt with Equifax, their servers were still likely to have your data.

Here are some tips to help you protect yourself:


  • Equifax has set up an online registry you can check using your last name and the last six digits of your Social Security number, but it doesn't offer satisfying results (check back in later this month!). There are also questions about an arbitration clause and what you're really getting from its offer of free ID theft protection. There's no harm in waiting a week or two while all that shakes out.
  • Get a copy of your credit report from AnnualCreditReport.com and mark your calendar to get another one in about three months.
  • Be on the lookout: Watch your mail for anything suspicious. Check your bank accounts at least weekly for signs of fraud. Listen closely when applying for a loan or a government benefit for signs that someone else might be using your Social Security number. Get your annual Social Security benefits statement online and look for anything unusual.
  • Consider putting a security freeze on all your accounts — the most serious but most proactive step you can take. But take this step with great care. If you plan to shop for a car loan or a home loan any time soon, you probably shouldn't do this, because security freezes lock credit report files so no one — not even you — can open a new credit account in your name. Freezes also generally cost money (the rules vary by state; Trans Union has a grid showing you the varying fee levels by state and consumer criteria), and they can be a hassle, because when it comes time to get a mortgage or an auto loan, consumers sometimes don't remember the procedure to "thaw" their reports.

If you think you have been affected by this or any other Identity Theft/Fraud occurence, please contact our office for a FREE copy of the booklet "Taking Charge - What To Do If Your Identity Is Stolen".


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Monday, September 11, 2017

Why Now Is The Best Time to Buy Life Insurance



The sluggish economy continues to put financial strain on many of us. So it just makes sense to examine our budgets and look for ways to trim the fat from our monthly expenses and put more into savings, if possible.

That’s a great way to help stabilize your finances, but it’s also important that you have a financial safety net in place in case something were to happen to you. Life insurance is one of the few guarantees your family could rely on to maintain their quality of life if you were no longer there to provide for them.

There are 95 million adult Americans without life insurance, according to LIMRA, an insurance industry research group. The fact is, the vast majority of Americans need life insurance and, sadly, most people either have none or not enough. If someone depends on you financially, you need life insurance. It’s that simple.

September is Life Insurance Awareness Month, making it the perfect time to take stock of your life insurance needs. And there are three additional reasons why now is the best time to look into getting life insurance.

You’ll never be younger than you are now. While that may sound obvious, youth is on your side when it comes to life insurance. It makes good financial sense to get coverage when you’re young and healthy, as premiums are based on your age and health. For most policies, your premiums will be locked in at that rate over the life of the policy, and can’t be raised due to a change in your health status.

It’s affordable, with rates near historic lows. People overestimate the cost of life insurance by nearly three times, according to a recent study conducted by LIMRA and the LIFE Foundation, a nonprofit insurance education organization. In fact, life insurance rates remain near historic lows; the cost of basic term life insurance has fallen by nearly 50 percent over the past decade. For example, a healthy 30-year-old can buy a 20-year, $250,000 level-term policy for about $13 per month.

Life happens. One day life is going along smoothly, and the next, you’re thrown a curve ball. No one knows what the future holds. None of us expect to die prematurely, but the truth is roughly 600,000 people die each year in the prime of their lives. That’s why today is always the best day to take care of your life insurance needs.

Life Insurance Awareness Month is the ideal time for a life insurance review. I urge everyone to take a few minutes out of their busy schedules to make sure they have adequate life insurance protection.

Consumers can get a general sense of their life insurance needs by going to www.lifehappens.org/lifecalculator and using the online calculator offered by the LIFE Foundation. The next step should be to contact a local insurance professional, who can conduct a more comprehensive needs analysis and help you find the right products to fit your specific needs and budget.

Held each September, Life Insurance Awareness Month is an industry-wide effort that is coordinated by the nonprofit LIFE Foundation. The campaign was created in response to growing concern about the large number of Americans who lack adequate life insurance protection. Roughly 95 million adult Americans have no life insurance, and most with coverage have less than most insurance experts recommend. For more information on life insurance, visit LIFE’s website at www.lifehappens.org.

Call us at 800-560-4637 and we can help you through the entire life insurance process!



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Saturday, August 5, 2017

On This Day...Lincoln Imposes First Federal Income Tax

On this day in 1861, Lincoln imposes the first federal income tax by signing the Revenue Act. Strapped for cash with which to pursue the Civil War, Lincoln and Congress agreed to impose a 3 percent tax on annual incomes over $800.

As early as March 1861, Lincoln had begun to take stock of the federal government’s ability to wage war against the South. He sent letters to cabinet members Edward Bates, Gideon Welles and Salmon Chase requesting their opinions as to whether or not the president had the constitutional authority to “collect [such] duties.” According to documents housed and interpreted by the Library of Congress, Lincoln was particularly concerned about maintaining federal authority over collecting revenue from ports along the southeastern seaboard, which he worried, might fall under the control of the Confederacy.

The Revenue Act’s language was broadly written to define income as gain “derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever.” According to the U.S. Treasury Department, the comparable minimum taxable income in 2003, after adjustments for inflation, would have been approximately $16,000.

Congress repealed Lincoln’s tax law in 1871, but in 1909 passed the 16th Amendment, which set in place the federal income-tax system used today. Congress ratified the 16th Amendment in 1913.