Thursday, September 30, 2010

Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date

A crucial filing deadline of Oct. 15 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked. Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.

The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

Here are 10 facts to help nonprofit organizations maintain their tax-exempt status.

  1. Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010.
  2. Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.
  3. A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.
  4. Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice and a voluntary compliance program for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
  5. Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N also known as the e-Postcard. To file the e-Postcard go to the IRS website and supply the eight information items called for on the form.
  6. Under the voluntary compliance program, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.
  7. The relief is not available to larger organizations required to file the Form 990 or to private foundations that file the Form 990-PF.
  8. Organizations that have not filed the required information return by the extended Oct. 15 due date will have their tax-exempt status revoked.
  9. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status and any income received between the revocation date and renewed exemption may be taxable.
  10. Donors who contribute to at-risk organizations are protected until the final revocation list is published by the IRS.

Taxpayers Face Oct. 15 Deadlines: Due Dates for Extension Filers, Non-Profits Approach

WASHINGTON — Oct. 15 is fast approaching and is a key deadline for millions of individual taxpayers who requested an extension to file their 2009 tax returns. It is also a crucial due date for thousands of small nonprofit organizations at risk of losing their tax-exempt status because they have not filed the required forms in the last three years.

“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS Commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”

Don’t Miss Your 1040 Deadline

The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return. Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.

Free File is a fast, easy and free way to prepare and e-file federal taxes online. The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies.

File If You Are Tax Exempt

Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file the required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15 under the one-time relief program.

The IRS has posted on a special page of IRS.gov the names and last-known addresses of these at-risk organizations, along with guidance about how to come back into compliance. The organizations on the list have return due dates between May 17 and Oct. 15, 2010, but the IRS has no record that they filed the required returns for any of the past three years.

Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.

Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15. That will bring them back into compliance.

Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee. Details about the VCP are on the IRS website, along with frequently asked questions.

Check Your Withholding

With little more than three months remaining in the calendar year, individual taxpayers are encouraged to double check their federal withholding now to make sure they are having enough taxes taken out of their pay.

“Now is a good time to make sure your employer is withholding the proper amount,” Shulman said. If you face a shortfall in your federal withholding, there is still time left in the year to make up the difference.”

The average refund for 2009 was $2,887, up 8 percent from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks.

Those who should pay particular attention to their withholding include:

  • Married couples with two incomes
  • Individuals with multiple jobs
  • Dependents
  • Some Social Security recipients who work and
  • Workers who do not have valid Social Security numbers.

Retirees who receive pension payments may also need to check their federal withholding.

As was the case in 2009, taxpayers who wind up owing tax because too little was taken out of their paychecks during 2010, may qualify for special relief on a penalty that sometimes applies. Depending on their personal situation, some people could have less withheld from their paychecks than they need or want. Failure to adjust withholding could result in potentially smaller refunds or in limited instances may cause a taxpayer to owe tax rather than receive a refund next year.

The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding. Worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer, or adjust the amount of quarterly tax paid.

Wednesday, September 29, 2010

IRS Issues Guidance on Expanded Adoption Credit Available for Tax-Year 2010

WASHINGTON — The Internal Revenue Service today issued guidance on the expanded adoption credit included in the Affordable Care Act. The IRS also released a draft version of the form that eligible taxpayers will use to claim the newly-expanded adoption credit on 2010 tax returns filed next year.

The Affordable Care Act raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can get it even if they owe no tax for that year. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply.

In addition to filling out Form 8839, Qualified Adoption Expenses, eligible taxpayers must include with their 2010 tax returns one or more adoption-related documents, detailed in the guidance issued today.

The documentation requirements, designed to ensure that taxpayers properly claim the credit, mean that taxpayers claiming the credit will have to file paper tax returns. Normally, it takes six to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. The IRS encourages taxpayers to use direct deposit to speed their refund.

Tuesday, September 28, 2010

Yes, the SBA is releasing $30billion add'l funding for small businesses, but the trick, still, is to find a bank willing to lend to your small business.
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Monday, September 27, 2010

Thursday, September 16, 2010

IRS to Hold Special Open House Saturday, Sept. 25 for Veterans and Persons with Disabilities

WASHINGTON — The Internal Revenue Service will host a special nationwide open house on Saturday, Sept. 25 to help taxpayers –– especially veterans and people with disabilities –– solve tax problems and respond to IRS notices.

One hundred offices, at least one in every state, will be open from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through issues and leave with solutions.

In many locations, the IRS will partner with organizations that serve veterans and the disabled to offer additional help and information to people in these communities. Partner organizations include the National Disability Institute (NDI), Vets First, Department of Veterans Affairs, National Council on Independent Living and the American Legion.

“Taxpayers have tremendous success solving their tax issues at our open houses,” IRS Commissioner Doug Shulman said. “I want to encourage veterans and people with disabilities to come in on Sept. 25. Just like we reached out earlier this year to small businesses and victims of the Gulf Oil Spill, we want to help other taxpayers put their toughest problems behind them.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS open house on June 5, over 6,700 taxpayers sought and received assistance and 96 percent had their issues resolved the same day.

At the Sept. 25 open house, anyone who has a tax question or has received a notice can speak with an IRS employee to get an answer to their question or a clear explanation of what is necessary to satisfy the request. A taxpayer who cannot pay a balance due can find out whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise — an agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed — will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

Taxpayers requiring special services, such as interpretation for the deaf or hard of hearing, should check local listings and call the local IRS Office/Taxpayer Assistance Center ahead of time to schedule an appointment.

The open house on Sept. 25 is the third of three events scheduled after this year’s tax season. Plans are underway for similar events next year. Details will be available at a later date.

Reminder for Small Tax-Exempt Organizations

The IRS also encourages representatives of small tax-exempt charitable community organizations, many of which serve people with disabilities and veterans, to file Form 990-N before the Oct. 15 deadline. Community organizations that fail to file a Form 990-N by this date risk losing their tax exempt status. As of June 30, more than 320,000 organizations were at risk of losing their exempt status.

Wednesday, September 15, 2010

Tuesday, September 14, 2010

3 Life Changing Events That May Change Your Insurance Needs

Your life insurance coverage should be reviewed on a regular basis to ensure you have adequate coverage, but a major life change is a particularly important time to assess your life insurance needs. Here are three life events when you should review your life insurance policy:

1) A change in family situation: Did you get married, divorced, have a baby, adopt children, or change jobs? Any of these life events are likely to change the amount of life insurance coverage you need.

2) An upward change in your income: A big promotion or a raise may be a good reason to review your coverage. Life insurance is often purchased to replace the income of the breadwinner in a family. If your income increases, you may need to review the face value (the amount paid to beneficiaries at the policyholder's death) of your life insurance policy.

3) Retirement: If retirement is just around the corner, it may be time to assess your life insurance policy. According to the Insurance Information Institute (III), life insurance can keep surviving spouses from receiving reduced Social Security benefits. For example, those who begin collecting Social Security survivors benefits at age 60, rather than at the full-benefit age of 66 or 67, receive a permanently reduced Social Security benefit. Having life insurance coverage in place may prevent your spouse from having to live on less.

These may not be the only reasons to review your policy; however, these events cover three times in your life when you should review your life insurance needs. Please contact me if you need to review your coverage.

Monday, September 13, 2010

Don’t Be Afraid to Calculate How Much Life Insurance You Need—It’s Easier Than You Think

I read an excellent article, “How Much Life Insurance Do You Need?” written by Kimberly Lankford in Kiplinger’s Personal Finance magazine. It stated that standard formulas for figuring out how much life insurance you need, such as buying coverage equal to eight to 10 times your annual income, are inadequate shortcuts.

It further states that instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring out your life-insurance needs. Life experiences such as marriage, parenthood, homeownership, college expenses, changing jobs with different employee benefits and the reality of lower investment returns on devastated investment funds require you to evaluate these factors in determining the appropriate insurance types and amounts.

The article then went on to discuss the various financial areas to review in this decision: income replacement, final expenses, education expenses, mortgages and other debts. But you don’t need to do this the hard way. Just use my online Life Insurance Needs Calculator for unbiased, third-party results, and then together we can work to determine the type of life insurance that may be best for you.

I want the decision-making process to be as simple as possible for you—and the results may just surprise you. Contact me now.

Friday, September 10, 2010

Don't Forget the Sept. 30 Deadline for Eligible Homebuyer Credit Purchases


Eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April have until Sept. 30, 2010, to close the deal. Let me know if you need assistance in amending your 2009 return in order to claim the credit and expedite your refund.

People Have Too Much Life Insurance? The Facts Say Otherwise...

"How much life insurance do you need?

Most people have too much. This 5-step process can help pinpoint your needs."

These were the headlines for an article in The Chicago Tribune on Aug. 12, 2010. While the article itself is relatively reasonable, the headlines are misleading. Most people do not own too much life insurance. In fact, a LIMRA International report, which was released Aug. 27, 2010, shows that only 44% of Americans own individual life insurance, and 30% own no life insurance at all. Eleven million households with children under the age of 18 own no life insurance. Zero, zip, nada, none.

While the article does a fair explanation of how to determine the appropriate amount of life insurance you might need, I think it is reasonable to assume, based on the LIMRA statistics, that most people are, in fact, under insured, not over insured when it comes to life insurance.

I am dedicated to educating these consumers on the importance of life insurance and making sure they understand not just what it is, but what it does. This is my goal for September, which is Life Insurance Awareness Month (LIAM). LIMRA’s statistics make it all the more imperative for me to achieve this goal. 



Thursday, September 9, 2010

"It’s Time to Learn"

According to a new Hartford Life survey, just 29% of full-time workers making less than $50,000 said they “completely understand” life insurance. And less than two-thirds of those workers had life insurance through their employers.

The survey showed that Gen Y workers and less educated workers also showed a lower understanding along with less ownership of life insurance products. Just 30% of workers with a high school education said they completely understood life insurance, compared with almost two-thirds of workers with a college education.

These numbers are very distressing, but there is hope. In 2010, 69% of working women took advantage of employer-sponsored life insurance benefits, compared with 64% in 2009. Seventy percent of men enrolled in life insurance benefits at work in 2010, up from 67% in 2009.

While a recent LIMRA study tells us that individual ownership of life insurance is at a 50-year low, people are taking advantage of employer-offered benefit programs. This is an area where the LIFE Foundation is working diligently to increase its educational resources to assist these employees in understanding what insurance does—and not just life insurance, but disability, long-term care and in the near future, critical illness insurance.

Our mission is to educate the American consumer, and during September we are doing this through Life Insurance Awareness MonthContact me today for your Complimentary Insurance Review.


Wednesday, September 8, 2010

Will Use of the Marital Deduction Eliminate the Federal Estate Tax? Check out NFS September Estate Ideas
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Tuesday, September 7, 2010

Guarantees in an Insecure World

Not many people are interested in plain vanilla, when triple-fudge bomb is available. Let me explain. The promise of big—even huge—returns on investments during the halcyon days of the market drew many people’s eyes off a financial-planning fundamental: life insurance. Who wanted to talk about death and 3 or 4 percent returns on the cash accumulation feature in a permanent life insurance policy when the promise of double-digit returns in the market lay glittering on the horizon?

Then the market tanked, taking with it 20 or 30 percent of many people’s portfolios—sometimes even more. That has lead to a renewed interest in the “plain vanilla” of the financial planning world. September is Life Insurance Awareness Month, the perfect time to explore why proper amounts of life insurance should be the foundation of your personal and business financial plan.

People are facing an entrenched “recession,” collapsing job security, depleted retirement accounts and an unstable investment environment. The beauty of life insurance is that it offers guarantees in a world that suddenly seems void of them. Life insurance provides guaranteed death benefits that keep your family secure in the world they know and the lifestyle they are used to, should the worst happen to you.

Used as a planning tool for small-business owners or partners, those same guaranteed death benefits can help keep your business from dying along with you. What other kind of financial product allows you to pay a such a small amount to ultimately receive such a large, guaranteed benefit?

It’s also good to keep in mind that permanent life insurance policies offer you a guaranteed accumulation feature. As the cash value of the policy grows, it offers you another, not often talked about, feature: the ability to take out a loan against that amount—guaranteed. No bank or savings and loan is going to offer you that promise. What a blessing that guaranteed loan might be if a family or business emergency came along and you needed to tap that money, no questions asked.

It seems to me that you owe it your family and business to take a look at how the guarantees of life insurance can secure their world. Wouldn’t it be nice to know that you had a life insurance policy that promised to pay when your loved ones or business partners needed it most?

If you don’t currently own life insurance, or feel that you don’t have enough to meet your personal and business needs, I encourage you to contact my office so we can begin a Complimentary Policy Review.




by Jack Dewald, CLU, RHU, Chair of the LIFE Foundation Board of Directors

Thursday, September 2, 2010

Don’t Be a Statistic—Do It Today

Yesterday marked the beginning of a month when the focus turns to a topic that most people don’t want to talk about or even think about: life insurance. But they do so at their own—and their family’s—peril. September is Life Insurance Awareness Month (LIAM). It’s a national campaign designed to draw attention to the fact that many people have no or inadequate amounts of life insurance, which, if not remedied, could have serious and long-lasting consequences for their families.

It’s not about scare tactics. It’s not about getting you to do something you don’t want to. It’s about staring reality in the face. LIMRA just published a study with some shocking numbers. But there is just one number that I want to focus on here: 11 million. Eleven million American families with children under 18 have no life insurance. 11. Million.

Numbers that big can often make your eyes glaze over … a thousand, a million—lots, right? Well, let’s make it individual. Let’s take a look at one girl, Tracy Basden, who found herself in financially dire straits because her parents had no life insurance. I’ve watched her video at least a dozen times, and it never fails to make me cry. Watch it here.

Imagine your children without parents and without money. How does that feel?

Now here is an example of a family that had proper life insurance in place. Actress Leslie Bibb is the spokesperson for LIAM, and says that she was fortunate to have a father “that loved his family enough to expect the unexpected. His life insurance was his legacy of love to our family, allowing us to carry on with our lives and to continue living.” While also heart-wrenching, her story has a very different ending. You can watch it here.


Life Insurance Awareness Month is not a really a national campaign, it’s a personal campaign. What are you going to do today to ensure that your family is taken care of if you die prematurely? You can come up with a thousand excuses for not getting the life insurance you need—11 million families have. I urge you to spend a few minutes with LIFE’s online Life Insurance Needs Calculator to see what amount of insurance you may need. And keep in mind that buying life insurance may be much more reasonable than you expect. For example, a healthy 35-year-old male can get a $250,000, 20-year level term policy for about $170 a year.

Make today the day that you stop being part of the 11-million-family statistic. Call me today for your free comprehensive life insurance review!


Wednesday, September 1, 2010

The 7 Wonders of Life Insurance

Life insurance …

1. Buys time – Allows loved ones to focus on their grief by helping to pay for the funeral and other final expenses.


2. Provides a fresh start – Lets loved ones start with a clean slate by helping to pay off credit card bills, outstanding loans and even the mortgage.


3. Generates income – Helps replace lost income for years to come so that surviving family members can continue to pay for life’s necessities.


4. Offers flexibility – Gives a surviving spouse the chance to take time off from work or to switch to a job that offers a more flexible work schedule.


5. Creates opportunities – Can provide funding to start a business, or pay for schooling so surviving family members can train for a new career.


6. Funds the future – Offers a way to fund longer-range goals like a college education for the kids or a secure retirement for a surviving spouse.


7. Leaves a legacy – Gives parents the chance to leave future generations with the legacy of long-term financial security.