Friday, December 30, 2011

Ensure Your Family's Security with an Estate Plan

No matter what your net worth, you should have an estate plan in place. Such a plan ensures that your family is cared for and your assets maximized upon your death. An estate plan consists of your will, health care documents, powers of attorney, life insurance coverage, and post-mortem letters.

For those of you with an estate plan already, good for you! But we have a piece of additional advice: make it a priority to review the plan every two years to see whether it needs updating.

Thursday, December 29, 2011

5 Things to Do Now For 2012 Payroll

While 2011 is not yet over, it’s not too early to starting planning ahead for 2012. If your business has employees, here are some things to help you get ready for next year.

1. Decide on wage increases

If you can afford to give raises, you probably want to keep up with what your competitors may be offering. According to one survey, most companies are giving raises of 3%. Raises are running higher for technology jobs.

Tuesday, December 27, 2011

IRS Promotes Saver's Credit

WASHINGTON, D.C. - The Internal Revenue Service is encouraging more taxpayers to take advantage of the "saver's credit."

The credit enable low- and moderate-income workers to begin to save for their retirement while earning a special tax credit in 2011 and the years ahead, the IRS noted.

The saver’s credit helps offset part of the first $2,000 that workers voluntarily contribute to individual retirement arrangements, 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

Friday, December 23, 2011

Payroll Tax Cut Temporarily Extended into 2012

WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.

Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld

Thursday, December 22, 2011

Money-Saving Year-End Tax Tips for Small Business

Although tax season is still a few weeks away, now is the time to take advantage of a basket of tax opportunities that can help your small business reduce its tax liability and save money come April 2012.  

Read on for seven tips that can help you maximize your deductions and claim the credits you deserve.

Tuesday, December 20, 2011

Must I take my required minimum distribution as cash?

Q: Is it mandatory that my required minimum distribution (RMD) be taken as cash or can a specific stock the value of my RMD be moved from the IRA account to a regular taxable account? How about a specific stock used as an RMD to a Roth conversion account? Would this be taxed as a conversion and an RMD?

A: An RMD can be satisfied by distributing an asset in-kind or in cash. If you are distributing an asset to satisfy an RMD, it will be based on the fair market value of that asset upon distribution. You will have to check with your IRA custodian to determine if they will allow an in-kind distribution to satisfy an RMD.
An RMD in cash or in-kind cannot be rolled over to a Roth IRA. You can, however, use the cash to make a contribution to a Roth IRA - if you are eligible to make a contribution.

Monday, December 19, 2011

Are You Looking For That Last Minute Gift Idea?

Seasons Greetings!

Are You Looking For That Last Minute Gift Idea?

Look no about giving the gift of INCOME TAX PREPARATION this holiday season? Our Gift Certificates can be given in any amount you want. It is totally up to you!

Call Jeff today at 800-560-4637 extension 14 to get your Gift Certificate for Tax Prep today. We accept all major credit cards, checks, money orders and cash. The Gift Certificate can be picked up in person, mailed or even emailed directly to the recipient! You decide.

From all of us here at NFS, THANKS and HAPPY HOLIDAYS!!

Looking Ahead…Federal Estate and Gift Taxation

Looking Ahead…Federal Estate and Gift Taxation  

Individual Income Tax Reductions

Individual Income Tax Reductions

Thursday, December 15, 2011

IRS Announces 2012 Standard Mileage Rates

WASHINGTON — The Internal Revenue Service today issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
  • 55.5 cents per mile for business miles driven
  • 23 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

IRS Offers Tips for Year-End Giving

WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:

Special Charitable Contributions for Certain IRA Owners

This provision, currently scheduled to expire at the end of 2011, offers older owners of individual retirement accounts (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.

Monday, November 28, 2011

Taxpayers Wrongly Deducted $700M for Investment Theft Losses

WASHINGTON, D.C. - More than $697 million a year in deductions for investment theft losses may have been erroneously claimed by taxpayers, according to a new government report, resulting in a revenue loss of over $41 million to the Treasury.

Tuesday, November 1, 2011

Most Retirees Will Not See Full COLA in 2012 Social Security Checks

The Bureau of Labor Statistics has unveiled a  3.6% cost of living adjustment for Social Security recipients, but most retirees will not see the full benefit increase in 2012.

The Bureau of Labor Statistics, Washington, D.C.,says this is due to the expected increase in Medicare Part B premiums, which are deducted from recipients’ Social Security payments. This will affect the approximately 75% of Social Security recipients who were exempted from Part B premium increases in 2010 and 2011 when there was no COLA.

“It is evident that Americans can no longer rely solely on Social Security and pensions to provide guaranteed income through retirement,” said Cathy Weatherford, chief executive officer of the Insured Retirement Institute, Washington, commenting on the bureau’s announcement. “It is vitally important for all Americans to create holistic retirement plans that will truly guarantee retirement income.

“As an historic number of Americans approach retirement, we are seeing growing uncertainty in sources of retirement income that have traditionally been considered a ‘guarantee,’ such as Social Security and pensions,” she added. “This has left many boomers concerned about retirement.”

-Warren S. Hersch,

Monday, October 24, 2011

Six Ways to Manage Cash Flow as a Seasonal Business Owner

Do you operate a seasonal business? If your revenue peaks and declines depending on the time of year, or you only operate your business during a certain season—then you can be considered a seasonal a business owner.

If this is you, then you know that monitoring and managing your cash flow and revenues through these fluctuations is essential. Below are six ways you can better plan and manage for the ebb and flow of seasonal business cash flow.

Make a Budget that Includes Cash Flow Projection

Every business operates off a set budget, but if you operate a seasonal business it’s important to include a cash flow projection template as part of your financial planning process. This will help alleviate the guesswork involved in predicting your income and outgoings over the year, and inform you of the best ways to conserve cash flow throughout the year.

If you can, plan your cash flow over a year.  Use historical reports from previous years to forecast your revenue, your busiest months, and your estimated sales for each month. You’ll also need to consider your fixed expenses (rent, utilities, etc.) and your variable expenses (salaries, inventory, taxes, etc.) as well as when these variable expenses will hit.

Now that you have a view of your revenues and outgoings you can develop strategies to manage cash flow throughout the year.

Steam Roll Your Invoicing

One way of expediting the flow of cash as you head into your quiet season is to modify your invoicing policies. If you can, try to secure a percentage payment upfront. This will also help you deal with slow paying customers.

Negotiate Flexible Payment Terms from Your Suppliers

Just as you want to expedite the flow of cash in, you should also consider negotiating extended payment terms from your suppliers. This is especially useful as you head into your busy season and incur most of your variable expenses (inventory, marketing, etc.). The trouble is you won’t see any immediate returns on those investments until your revenues kick in, so an extended payment plan can help ease the pain of these pre-season costs.

Find Alternative Sources of Income

Earning income from alternative sources or diversifying your products or services to include ones that will be popular during your off-season is a great way of keeping cash flowing and your business top of mind. Don’t forget to check whether you need any additional business licenses or permits to do this,'s "Permit Me" tool can help you find the paperwork that you might need.

Consider a Short-Term Loan or Line of Credit

Government-backed small business loans are a useful option if your cash flow projections show potential tight spots in your calendar. One option to consider is the Small Business Administration (SBA) CAPLine Loans umbrella program which helps small businesses meet their short-term and cyclical working-capital needs. Part of the CAPLine program is the Seasonal Line short-term working capital loan program which provides advances against anticipated inventory and accounts receivable to help businesses with seasonal sales fluctuations.

Another option is a revolving line of credit (RLC). An RLC is a flexible method of borrowing cash for your seasonal small business needs. It is very similar to a credit card in the sense that an RLC has an established credit limit that you can borrow up to, only without a plastic card.

Use Your Downtime for Planning

Use your off-season wisely. Regroup, review, and plan ahead to ensure a profitable busy season. How did your business perform against its plans? Did your marketing campaigns pan out as well as you’d hoped? What new products and services can you introduce in the new season? What’s the competition up to? How can you position yourself against them?

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed.

Wednesday, October 19, 2011

Friday, October 14, 2011

Can I convert part of an active SEP to a Roth IRA?

Q: I have an active SEP (Simplified Employee Pension) IRA. I’ve been hearing about the positives involved with Roth IRAs and would like to take advantage of the tax-free savings as soon as possible. Can I convert part of it to a Roth IRA right now?

A: As long as the SEP agreement allows you access to the funds (and most SEPs will allow you access), you can do a conversion from the SEP account to a Roth IRA. If you will be receiving future SEP contributions in the account, make sure that you leave enough money in the account to keep it active. Enjoy the benefits of a Roth IRA and make sure you have enough outside money to pay the tax on the conversion.

Thursday, October 13, 2011

IRS Wrongly Demanded Repayments of First-Time Homebuyer Tax Credit

The Internal Revenue Service mistakenly sent notices to approximately 80,000 taxpayers telling them they needed to repay the First-Time Homebuyer Tax Credit.

A new report by the Treasury Inspector General for Tax Administration found that 27,728 taxpayers were notified they had a repayment obligation even though they had purchased their homes in 2009, when there was no repayment obligation. In addition, the information provided by a vendor hired by the IRS to use third-party data to identify individuals who may have disposed of their principal residences was unreliable, resulting in 53,558 individuals who incorrectly received notices to repay the Homebuyer Credit.

The First-Time Homebuyer Tax Credit was a program aimed at stimulating the housing industry. While it helped prop up the industry, especially in the wake of the mortgage crisis, the quick ramp-up and shifting requirements left the IRS issuing the tax credits to thousands of taxpayers who did not fit the qualifications, including minors. The IRS was then forced to demand repayments of the tax credits that had been issued incorrectly, as well as from homeowners who fit into the various recapture provisions if they didn’t hold onto their homes long enough.

The TIGTA report found that the IRS is having difficulty determining which taxpayers have to repay the First-Time Homebuyer Credit. The report acknowledged that the IRS accurately issued the vast majority of the notices, over 5.2 million, informing taxpayers of the need to repay the credit.

However, at the same time, the IRS did not send notices or sent incorrect notices to 61,427 households due to programming errors or incorrect information on the tax accounts. Of those 61,427 households, 12,495 individuals were notified that they did not have to repay the Homebuyer Credit, when in fact they did have a repayment obligation; 27,728 taxpayers were notified that they had a repayment obligation despite having purchased their home in 2009 (only 2008 purchases have a repayment obligation); 2,152 individuals who bought their house in 2008 were incorrectly notified that they did not have a repayment obligation unless they sold their house; 18,220 did not receive a notice reminding them of their repayment requirement; and 832 deceased individuals may have been sent an incorrect notice regarding repayment.

“The IRS processed the vast majority of Homebuyer Credit Claims accurately,” said TIGTA Inspector General J. Russell George in a statement. “However, IRS officials still need to eliminate the programming errors that resulted in thousands of taxpayers being misinformed about their repayment status.”

The Homebuyer Credit was created by Congress in 2008 to help stimulate the housing industry by encouraging people to purchase their first homes. Subsequent legislation in 2009 and 2010 revised, extended and expanded the Homebuyer Credit in an attempt to help boost a sluggish real estate market. The Homebuyer Credit was a refundable credit that could result in a tax refund when the credit exceeded the tax liability, even if no income tax was withheld or paid.

Each of the laws with Homebuyer Credit provisions contained different credit amounts, qualification requirements and repayment requirements. Individuals who received the Homebuyer Credit for a home purchased in 2008 are required to pay back the total amount received for the Homebuyer Credit over 15 years beginning in 2010. There are some exceptions. In addition, individuals who received the Homebuyer Credit in 2008, 2009 or 2010 generally must repay the entire amount they received, if, during the three-year period beginning on the purchase date and after the year for which the individual received the homebuyer credit, they dispose of the home or it ceases to be their principal residence. If the disposition is a sale, the repayment requirement is applicable to the extent there is a gain on the sale of the home.

“The scope of the FTHBC was unprecedented in that it required the development of a comprehensive and balanced strategy to administer the credit amid the many unique situations that could trigger the recapture provisions, and to provide information to affected taxpayers to assist them in complying with their tax reporting obligations,” wrote IRS Wage and Investment Division Commissioner Richard C. Byrd Jr. in response to the report.

TIGTA recommended that the IRS ensure that Homebuyer Credit repayment notices are accurately issued; correct erroneous purchase dates on tax accounts; and discontinue using third-party vendor data to identify individuals who may have disposed of their principal residents unless the reliability can be significantly improved.

The IRS agreed with two of TIGTA’s recommendations. For the remaining recommendation relating to accurately issuing notices, the IRS indicated it is replacing some of its notices with an online tool for taxpayers to obtain their Homebuyer Credit repayment status. It plans to make the Web-based tool available to taxpayers for the 2012 filing season.

Michael Cohn, Accounting Today

Monday, October 10, 2011

Couples Not Doing Social Security Planning

A majority of married couples in their 60s lack the knowledge about how to maximize their Social Security benefits and whether or not to expect Social Security advice from a financial planner.

According to a recent survey of 532 married couples between the ages of 60 and 66 by, a company that provides retirement planning software, Social Security planning is becoming an expected service from financial planners. However, the vast majority of people are unaware of strategies that could increase their lifetime Social Security benefit by $20,000 to $40,000 or more.

Awareness of the various planning options available was more common among those wih higher incomes and net worth. People who expected financial planners to perform Social Security planning and analysis for them were more commonly those with higher incomes and net worth.

Seventy-four percent of people with household income exceeding $200,000 would expect to receive advice on Social Security benefit options from a financial planner, compared to only 48 percent of those with household incomes less than $50,000.

The survey found that 77 percent of the respondents expect to receive advice from the Social Security Administration on how to maximize their Social Security retirement benefits. However, most SSA personnel are not trained to provide more information than monthly benefit amounts at different election ages, and the SSA prohibits its representatives from dispensing advice.

Financial planners were the second most popular choice, with 56 percent of the survey respondents saying they would expect to receive Social Security advice from their financial planner.

-Michael Cohn Accounting Today

Thursday, October 6, 2011

Moving Out of the Home Office — Four Tips for Growing Businesses

Did you know that an astonishing 52 percent of small businesses are home-based? That’s according to the SBA’s Office of Advocacy.
Running a home-based business must have numerous advantages for many business models, and for businesses of different ages.  For example, during the start-up phase it represents a low-cost and low-risk avenue for conducting business. However, a home office has its limitations. Small business owners often find that they are not cut out to work from home, or they’ve found their enterprise growing and need to hire employees, or they simply need a more professional space in which to conduct business.
But how do you make a seamless and cost-effective transition from a home-based business to a professional office space? Here are some best practices to consider as you expand beyond your home-based business environment.
Assess Your Needs and Your Budget
If you are considering a commercial property lease, make sure you have a clear sense of your budget on a per-square-foot basis. Ask yourself how many offices, cubes, or workstations you’ll need, now and in the future. If you anticipate further growth, preempt the need for multiple moves by looking for a building that has extra space you can expand into should you need it. For advice on negotiating a commercial lease, read: 6 Tips for Negotiating a Commercial Property Lease without Getting Burned.
Your budget should also include cost estimates for furniture, utilities, and IT needs. Don’t go overboard though; as you transition from home to an office, invest your resources wisely. One option is to rent office furniture and equipment, or buy government surplus equipment (a little known but very cost-effective way to equip your business.) Alternatively, you may want to introduce a hot-desking policy or shared office space. This will allow employees to literally share a “hot-desk” on a rotating basis. So if one employee is teleworking or taking flex time, another employee can use the same desk space.
Consider Serviced Offices or Suites
A great option for making the transition from a home office to a professional environment is to rent a serviced office or executive suite. Usually located in busy business districts, these premises are fully equipped and managed by a facility management firm. The rental agreements for these spaces are often more flexible than commercial leases and also give you the option of easily scaling up if you need to. Typically a serviced office broker can help you locate the right space.
Decide on a Location
Deciding on a location for you new office or retail outlet will take some research. You want your presence to be felt, but you also want to make sure you’re visible and within reach of your target customers. If you are in the retail service industry, having a store concept or design in mind is also a good idea; this will help you pitch your business to commercial leasing companies seeking the “right kind of tenant” for their property.
For more tips on choosing the right business location, read SBA’s Tips for Choosing a Business Locationand don’t forget to be aware of zoning restrictions at your new location.
Update Your Business Regulatory Paperwork
When you relocate your business to a new city, county, or state you’ll need to update several key business requirements. For example, both your business licenses and permits and your “Doing Business As” name (DBA) filing will need to be updated with your local government.  Visit the Incorporating and Registering Your Business page for more information on how to re-register your business in a new location. If you move to a new state you’ll also need to understand your new city/county tax requirements, as well as notify your previous state of your move. Find links to your state revenue office here.
From Caron Beesley of SBA...
Caron Beesley has over 15 years of experience working in marketing, with a particular focus on the government sector. Caron is also a small business owner and works with the team to promote essential government resources for entrepreneurs and small businesses.
What Is An Annuity?

Wednesday, October 5, 2011

And the Winner is...

As you may be aware, September was National Life Insurance Awareness Month sponsored by LIFE - A Nonprofit Organization.

Going along with this theme, Life Insurance Selling Magazine sponsored a video contest called "Life Now!" which ran for the entire month of September. since I help folks with their overall financial picture, I felt inclined to enter a video into this contest. Well, with YOUR help and support, I WON the video contest. Not only will I receive a free IPad2 for winning, I will also get a piece in one of the upcoming issues of the magazine.

So, I just wanted to say THANKS!!!!!!!!

Monday, September 26, 2011

First Time Homebuyer Seminar

First Time Homebuyer Seminar

November, 8, 2011 6:00 pm to 8:30 pm

Make a well-informed decision when you buy your first home.
This seminar provides you the opportunity to get answers to your questions from professionals involved in the home buying process.
  • HarborOne Mortgage Originator, Donald Cross
  • Buyers Agent & Realtor, Kathy Doherty
  • Real Estate Attorney Roxanne Richard
  • Insurance Agent, Merideth Kaeppel
  • Tax Advisor, Jeffrey Schweitzer
A light dinner is Served.

Please visit the HarborOneU Website to reserve your spot - space is limited.

Wednesday, September 21, 2011

What a story!

Dorsey and Hattie Hoskins, twin sisters, lost their father when they were just toddlers. They are teens today and they’re still OK financially because of the smart life insurance planning their parents did. Such an amazing story!
NFS Business Briefs for September

Thursday, September 15, 2011

Thursday, September 8, 2011

Life Insurance: Why Do I Need It? What Does It Do?

So, why do you need life insurance?
What often comes to mind when thinking about life insurance is that you can use it to pay final expenses. You’ve seen the commercials: Funeral expenses, burial costs and medical bills can add up to a hefty amount. The last thing you want is for your loved ones to shoulder this extra burden. Life insurance can be used to plan for these final expenses. Permanent life insuranceis available in various amounts, so you can pick a death benefit that meets your needs.
But there are other considerations to keep in mind. You can use life insurance …
As mortgage protection. Whether you live by yourself, with a spouse or significant other, you may want to buy life insurance as mortgage protection. Think about it: You don’t want the person you live with to be homeless if you die unexpectedly, do you? Term life insurance can be used to pay off an outstanding mortgage balance. Just select a term that matches the length of your mortgage payment period. Some companies even offer decreasing term insurance, which means the death benefit decreases along with your mortgage balance.
For income replacement. You and your significant other may have planned for a future based on two incomes, but what if one of you passes away unexpectedly? Life insurance can be used to replace the lost income so the survivor can maintain the same standard of living.
For college funding. Yeah, I know. You don’t have kids, so this one only applies if you do or if you have grandchildren you want to help. Have you seen the tuition rates lately? Life insurance can help fund a college education. If you die, the death benefit may be invested and potentially grow to the needed amount by the time your children or grandchildren reach college age. If you have permanent policies, the cash value may be used to help fund tuition costs. Feel better knowing that you helped prepare for their future—even if you are not there to see it.
There are also a few provisions—additional benefits, if you will—that you may not be aware of.
Probate protection. If the beneficiary of a life insurance policy is a named person and not your estate, the death benefit is free from probate costs.
Incontestability. After the policy has been in force for two years, it becomes incontestable, meaning that the policy cannot be revoked, unless it was fraudulently obtained.
Free from the claims of creditors. In many states, the cash values of the life insurance policy are free from the claims of creditors if the policy is personally owned.
So, are you starting to see the need for life insurance? You will call me right now, right? The number is 800-560-4637 x14. Don’t put it off! Remember, the younger you are when you get insurance, the lower the cost and the easier it is to get approved.
Marvin H. Feldman, CLU, ChFC, RFC, President and CEO of the LIFE Foundation
Visit NFS at Wrentham Day!

Wednesday, September 7, 2011

What Sources of Funds May Be Available to Help You Financially Survive a Critical Illness?
Be a part of the “larger picture.” Join hundreds of others who are posting photos of those they’ve protected with life insurance. The result will be an incredible online Insure Your Love picture mosaic. Let me know once your photo’s up so I can find it in the mosaic. A great bonus: For every photo that gets posted, $1 will go to providing tuition assistance to students who’ve lost a parent.

Tuesday, September 6, 2011

You may think you have nothing in common with Los Angeles Lakers and reality TV star Lamar Odom, but you’d be wrong. No matter how famous (or not!) you are, there’s a need to protect your family with life insurance:

Thursday, September 1, 2011

Life Happens

No one knows what the future holds. Hopefully, only good things are in store for you.

But realistically, bad things will happen too.

Even if you don’t consider yourself a cautious person, you take little steps every day to improve the odds that good things will happen and guard against the possibility of bad things happening.

You wear seatbelts.

You lock your doors when you leave home.

You try to eat well and exercise.

In other words, you may not be able to control the future, but you can stand up to it. You don’t have to get wet when it rains. You can carry an umbrella.

True, it’s easy to take these little steps. The bigger steps, though, can require contemplating some pretty unpleasant things.

What would happen to your family if you became ill or injured and couldn’t work? Or, worse yet, if you died? Or if your spouse died?

Standing up to the future means making sure you and your family can carry on, even in the face of a disaster. That’s where life insurance and other forms of insurance come in.

Life insurance won’t guarantee you’ll never face a tragic situation, just as wearing a seat belt won’t keep you from crashing your car. But it will provide your family with financial protection. And whatever hopes and dreams you have for your loved ones can still be realized, even if the worst were to happen.

That’s why we say LIFE Happens. It really does. No matter what the future throws at you. September is Life Insurance Awareness Month and in the coming weeks we will be presenting you with some great information on Life Insurance and how you and your loved ones can benefit from having coverage.

Please do not hesitate to contact us for more details!

Saturday, August 27, 2011

President Declares Emergency For Massachusetts

President Declares Emergency For Massachusetts

WASHINGTON -- The U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) announced that federal aid has been made available to Commonwealth of Massachusetts to supplement the commonwealth and local response efforts in the area due to the emergency conditions resulting from Hurricane Irene beginning on August 26, 2011, and continuing.

Wednesday, August 24, 2011

Monday, August 22, 2011

Seven Tax Tips for Recently Married Taxpayers

With the summer wedding season in full swing, the Internal Revenue Service advises the soon-to-be married and the just married to review their changing tax status. If you recently got married or are planning a wedding, the last thing on your mind is taxes. However, there are some important steps you need to take to avoid stress at tax time. Here are seven tips for newlyweds.
  1. Notify the Social Security Administration Report any name change to the Social Security Administration so your name and Social Security number will match when you file your next tax return. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at, by calling 800-772-1213 or at local offices.
  2. Notify the IRS if you move If you have a new address you should notify the IRS by sending Form 8822, Change of Address. You may download Form 8822 from or order it by calling 800–TAX–FORM (800–829–3676).
  3. Notify the U.S. Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence or refunds.
  4. Notify your employer Report any name and address changes to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.
  5. Check your withholding If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on to assist you in determining the correct amount of withholding needed for your new filing status. The IRS Withholding Calculator will give you the information you need to complete a new Form W-4, Employee's Withholding Allowance Certificate. You can fill it out and print it online and then give the form to your employer(s) so they withhold the correct amount from your pay.
  6. Select the right tax form Choosing the right individual income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. Itemized deductions must be claimed on a Form 1040, not a 1040A or 1040EZ.
  7. Choose the best filing status A person’s marital status on Dec. 31 determines whether the person is considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually filing jointly is more beneficial.
For more information about changing your name, address and income tax withholding visit

IRS Summertime Tax Tip 2011-20

Thursday, August 18, 2011

Credit Reports: What You Should Know

How do lenders determine who is approved for a credit card, mortgage, or car loan? Why are some individuals flooded with credit card offers while others get turned down routinely?

Because creditors keep their evaluation standards secret, it is difficult to know just how to improve your credit rating. It is important, however, to understand the factors and to review your credit report periodically for any irregularities, omissions, or errors. Reviewing your credit report annually can help you protect your credit rating from fraud and ensure its accuracy.

Credit Evaluation Factors

Many factors determine your credit. Here are some of the major factors considered:

"Authorized user" payment history
Checking and savings accounts
Charge-offs (Forgiven debt)
Child support
Closed accounts and inactive accounts
Payment history
Recent loans
Collection accounts and charge-offs
Cosigning an account
Credit limits
Credit reports
Debt/income ratios
Department store accounts
Payment history/late payments
Finance company credit cards
Income/income per dependent
Revolving credit
Number of credit accounts

These factors may be used, and weighted, in determining credit decisions. Credit reports contain much of this information.

Obtaining Your Credit Reports

Credit reports are records of consumers' bill-paying habits. Credit reports are also called credit records, credit files, and credit histories and are collected, stored, and sold by three credit bureaus, Experian, Equifax, and TransUnion.

Recent changes to the Fair Credit Reporting Act (FCRA) require that each of the three credit bureaus provide you with a free copy of your credit report, at your request, every 12 months.

If you have been denied credit or believe you've been denied employment or insurance because of your credit report, you can request that the credit bureau involved provide you with a free copy of your credit report - but you must request it within 60 days of receiving the notification.

Disputing Errors in Your Credit File

The Fair Credit Reporting Act (FCRA) protects consumers in the case of inaccurate or incomplete information in credit files. The FCRA requires credit bureaus to investigate and correct any errors in your file.

Tip: If you find any incorrect or incomplete information in your file, write to the credit bureau and ask them to investigate the information. Under the FCRA, they have about thirty days to contact the creditor and find out whether the information is correct. If not, it will be deleted.

Be aware that credit bureaus are not obligated to include all of your credit accounts in your report. If, for example, the credit union that holds your credit card account is not a paying subscriber of the credit bureau, the bureau is not obligated to add that reference to your file. Some may do so, however, for a small fee.

Fair Credit Reporting Act (FCRA)

This federal law was passed in 1970 to give consumers easier access to, and more information about, their credit files. The FCRA gives you the right to find out the information in your credit file, to dispute information you believe inaccurate or incomplete, and to find out who has seen your credit report in the past six months.

Understanding Your Credit Report

Credit reports contain symbols and codes that are abstract to the average consumer. Every credit bureau report also includes a key that explains each code. Some of these keys decipher the information, but others just cause more confusion.

Read your report carefully, making a note of anything you do not understand. The credit bureau is required by law to provide trained personnel to explain it to you. If accounts are identified by code number, or if there is a creditor listed on the report that you do not recognize, ask the credit bureau to supply you with the name and location of the creditor so you can ascertain if you do indeed hold an account with that creditor.

If the report includes accounts that you do not believe are yours, it is extremely important to find out why they are listed on your report. It is possible they are the accounts of a relative or someone with a name similar to yours. Less likely, but more importantly, someone may have used your credit information to apply for credit in your name. This type of fraud can cause a great deal of damage to your credit report, so investigate the unknown account as thoroughly as possible.

We recommend an annual review of your credit report. It is vital that you understand every piece of information on your credit report so that you can identify possible errors or omissions.

If you need help obtaining your credit reports or need assistance in understanding what your credit report means, give us a call.

Wednesday, August 17, 2011

Tuesday, August 16, 2011

Back-to-School Tips for Students and Parents Paying College Expenses

Whether you’re a recent graduate going to college for the first time or a returning student, it will soon be time to get to campus – and payment deadlines for tuition and other fees are not far behind. The Internal Revenue Service reminds students or parents paying such expenses to keep receipts and to be aware of some tax benefits that can help offset college costs.

Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return.

1. American Opportunity Credit  This credit, originally created under the American Recovery and Reinvestment Act, has been extended for an additional two years – 2011 and 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return).

2. Lifetime Learning Credit  In 2011, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student, but to claim the credit, your modified adjusted gross income must be below $60,000 ($120,000 if married filing jointly).

3. Tuition and Fees Deduction  This deduction can reduce the amount of your income subject to tax by up to $4,000 for 2011 even if you do not itemize your deductions. Generally, you can claim the tuition and fees deduction for qualified higher education expenses for an eligible student if your modified adjusted gross income is below $80,000 ($160,000 if married filing jointly).

4. Student loan interest deduction  Generally, personal interest you pay, other than certain mortgage interest, is not deductible. However, if your modified adjusted gross income is less than $75,000 ($150,000 if filing a joint return), you may be able to deduct interest paid on a student loan used for higher education during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single tax year. However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis. You can claim the American Opportunity Credit for your sophomore daughter and the Lifetime Learning Credit for your senior son.

You cannot claim the tuition and fees deduction for the same student in the same year that you claim the American Opportunity Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

For more information,please do not hesitate to contact me for help.

Thursday, August 11, 2011

Five Tax Scams to Avoid this Summer

Hiding income offshore, identity theft and return preparer fraud topped the IRS’s list of tax scams in 2011. The Internal Revenue Service issues an annual list of the top 12 tax scams, known as the “Dirty Dozen.” These scams are illegal and can lead to significant penalties and interest and possible criminal prosecution.

Here are five year-round scams every taxpayer should know about.

1. Hiding Income Offshore The IRS aggressively pursues taxpayers involved in abusive offshore transactions and the promoters who facilitate or enable these schemes. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks and brokerage accounts, or by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans.
In February, the IRS announced a second voluntary disclosure initiative to bring offshore money back into the U.S. tax system. The new voluntary disclosure initiative will be available through Aug. 31, 2011.

2. Phishing Scam artists use phishing to trick unsuspecting victims into revealing personal or financial information. Scams take the form of e-mails, phony websites or phone calls that offer a fictitious refund or threaten an audit or investigation to lure victims into revealing personal information. The IRS never initiates unsolicited e-mail contact with taxpayers about their tax issues. Phishers use the information to steal the victim’s identity, access their bank accounts and credit cards or apply for loans. Please forward suspicious scams to the IRS at You can also visit, keyword phishing, for additional information.

3. Return Preparer Fraud Dishonest tax return preparers cause trouble for taxpayers by skimming a portion of the client’s refund or charging inflated fees for tax preparation. They attract new clients by promising refunds that are too good to be true. To increase confidence in the tax system, the IRS now requires all paid return preparers to register with the IRS, pass competency tests and attend continuing education. Taxpayers can report suspected return preparer fraud to the IRS on Form 3949-A, Information Referral.

4. Filing False or Misleading Forms The IRS continues to see false or fraudulent tax returns filed to obtain improper tax refunds.

Scammers often use information from family or friends to file false or fraudulent returns, so beware of requests for such data. Don’t claim deductions or credits you are not entitled to and never willingly allow others to use your information to file false returns. If you participate in such schemes, you could be liable for financial penalties or even face criminal prosecution. The IRS takes refund fraud seriously, has programs to aggressively combat it and stops the vast majority of incorrect refunds.

5. Frivolous Arguments Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe. If a scheme seems too good to be true, it probably is. The IRS has a list of frivolous legal positions that taxpayers should avoid on These arguments are false and have been thrown out of court repeatedly.

For the full list of 2011 Dirty Dozen tax scams or to find out how to report suspected tax fraud, visit

Wednesday, August 10, 2011

Tuesday, August 9, 2011

August 13th and 14th is the 2011 Massachusetts Sales Tax Holiday Weekend

The following information has been provided by the Massachusetts Department of Revenue.

I. Introduction

A recently enacted statute provides for a Massachusetts “sales tax holiday weekend,” i.e., two consecutive days during which most purchases made by individuals for personal use will not be subject to Massachusetts sales or use taxes. St. 2011, c. 86 (“the Act”).  The Act provides that the sales tax holiday will occur on August 13 and 14, 2011and on those days, non-business sales at retail of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes, subject to certain exclusions. The following do not qualify for the sales tax holiday exemption and remain subject to tax: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500. The Act charges the Commissioner of Revenue with issuing instructions or forms and rules and regulations necessary to carry out the purposes of the Act.

 II. Purchases Qualifying for the Exemption

The exemption applies to sales of tangible personal property bought for personal use only. Purchases by corporations or other businesses and purchases by individuals for business use remain taxable. Purchases exempt from the sales tax under G.L. c. 64H are also exempt from use tax under G.L. c. 64I. Therefore, eligible items of tangible personal property purchased on the Massachusetts sales tax holiday from out-of-state retailers for use in Massachusetts are exempt from the Massachusetts use tax.

 III. Specific Rules

The following rules are to be applied by retailers in administering the Massachusetts sales tax holiday exemption:

 A. Non-Exempt Sales. All sales of motor vehicles,[1] motorboats,[2] meals,[3] telecommunications services,[4] gas,[5] steam, electricity, tobacco products[6] and of any single item whose price is in excess of $2,500, do not qualify for the sales tax holiday exemption and remain subject to tax.

 B. Threshold. When the sales price of any single item is greater than $2,500, sales or use tax is due on the entire price charged for the item. The sales price is not reduced by the threshold amount. For example, if an item is sold for $3,000, the entire sales price of the item is taxable, not just the amount that exceeds $2,500.

 Exception: Under G.L. c. 64H, § 6(k) there is no sales tax on any article of clothing unless the sales price exceeds $175; in that case, only the increment over $175 is subject to tax. If, on the sales tax holiday, the price of an article of clothing exceeds the threshold, the first $175 may be deducted from the amount subject to tax. The $2,500 threshold amount is not increased by $175.

 Examples:  A customer buys a suit on the sales tax holiday for $600. No tax is due.

A customer buys a wedding dress on the sales tax holiday for $2,550. Tax is due on $2,375 ($2,550 – $175).

C. Multiple Items on One Invoice. Where a customer is purchasing multiple items on the sales tax holiday, separate invoices do not need to be prepared. As long as each individual item is $2500 or less, there is no upper limit on the tax-free amount each customer may purchase.

 Example: A customer purchases a television, a stereo receiver, and a computer. The three separate items costing $1,500, $1,200 and $2,000 can be rung up together, all tax free.

 D. Bundled Transactions. When several items are offered for sale at a single price, the entire package is exempt if the sales price of the package is $2,500 or less. For example, a computer package including a CPU, keyboard, monitor, mouse, and printer with a single sales price of $3,500 would not qualify for the sales tax holiday exemption because the single sales price of the package ($3,500) is more than the sales tax holiday threshold amount of $2,500.

 Items that are priced separately and are to be sold as separate articles will qualify for the sales tax holiday exemption if the price of each article is $2,500 or less. For example, a customer purchases a personal computer for $3,000, and a computer printer for $200, each of which is priced separately. The purchase of the personal computer will not qualify for the exemption because the sales price ($3,000) is in excess of the sales tax holiday threshold amount of $2,500. However, since the sales price of the computer printer ($200) is less than $2,500, the printer would be exempt from tax.

 E. Coupons and Discounts. If a store coupon or discount provided by a retailer or manufacturer reduces the sales price of the property, the discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less. If a store coupon or discount applies to the total amount paid by a purchaser rather than to the sales price of a particular item and the purchaser has purchased both eligible property and taxable property, the seller should allocate the discount on a pro rata basis to each article sold.

 Example: A furniture store customer has a coupon for 20% off her entire bill. She purchases a dining room table for $1,800, and a sofa for $3,500.  The total discount available is $1,060 ($5,300 x .20), of which $360 is attributable to the table ($1,800 x .20), and $700 is attributable to the sofa ($3,500 x .20).  No tax is due on the sale of the table. Tax of $140 is due on the sales price of the sofa, $2,800 ($3,500 – $700), as even its discounted price exceeds the $2,500 threshold.    

 F. Exchanges. Consistent with the Department’s usual practice, if a customer purchases an item of eligible property during the sales tax holiday, but later exchanges the item for an identical or similar eligible item, for the same price (“an even exchange”), no tax is due even if the exchange is made after the sales tax holiday, see LR 03-8.  

 G. Layaway Sales. A layaway sale is a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time and receives the property when the last payment is made. Layaway sales do not qualify for the sales tax holiday, even if the last required payment (or payments necessary to complete the transaction) are made on August 13 and 14, 2011.

 H. Special Order Items; Transfer of Possession after Sales Tax Holiday.  Special order items such as furniture are eligible for the sales tax holiday so long as they are ordered and paid in full on the sales tax holiday weekend, and the cost of each item is $2,500 or less, even if delivery is made at a later date. Generally, a customer pays for an item when the seller receives cash, a credit card number, a debit authorization, a check, or a money order or the buyer and seller enter into financing arrangements with a third party, including an affiliated entity (but excluding seller financing where the seller extends credit to the customer). A prior special order purchase with a deposit paidbefore August 13, 2011 will not qualify for the holiday, even if the retail customer pays the entire remaining balance due on August 13 or 14, 2011.

 I. Rain checks. When a customer receives a rain check because an item on sale was not available, property bought with the use of the rain check will qualify for the exemption regardless of when the rain check was issued if the rain check is used on the sales tax holiday weekend. Issuance of a rain check during the sales tax holiday weekend will not qualify otherwise eligible property for the sales tax holiday exemption if the property is actually purchased after the sales tax holiday.

 J.  Rentals.  Generally, rentals for thirty days or less of tangible personal property other than motor vehicles and motorboats are eligible for the sales tax holiday, even if the rental period covers days before or after the holiday, providing payment in full is made during the sales tax holiday weekend. The sales tax holiday does not apply to rentals or leases of tangible personal property of any type if the term of the rental or lease contract is longer than thirty days.

 K. Rebates. A rebate is a refund of an amount of money by the manufacturer of a product to the retail purchaser of the product. If a vendor sells tangible personal property to a customer who applies a manufacturer’s rebate to reduce the sales price at the time of the sale, the rebate is generally treated as a cash discount and is excluded from the sales price. The discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less.  

 If a vendor sells tangible personal property to a customer who will receive a rebate after the sale (e.g., by mailing a coupon to the manufacturer), the full purchase price of the property determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less, and tax must be charged on the full purchase price if it is over $2,500.

 If a vendor offers a customer a cash discount upon the purchase of tangible personal property and the customer also receives a rebate from the manufacturer of the property after the sale, only the cash discount given by the retailer is excluded from the sales price for purposes of the sales tax holiday exemption. The amount of the manufacturer’s rebate is not deducted from the sales price.

 L. Internet Sales. If a customer orders an item of eligible property over the Internet, the item is exempt if it is ordered and paid for onAugust 13 or 14, 2011 Eastern Daylight Time. Generally, a customer pays for an item when the seller receives a credit card number, a debit authorization, a check, or a money order. The actual delivery can occur after the holiday period. For example: a customer orders a computer over the Internet with a sales price of $2,000 and charges the sale to his credit card at 1:00 p.m. (EDT) onAugust 13 or 14, 2011; the computer has a delivery date of September 20, 2011.  The sale is exempt since the computer was ordered and paid for during the sales tax holiday.

 M. Splitting of Items Normally Sold Together. Articles normally sold as a single unit must continue to be sold in that manner. Such articles cannot be priced separately and sold as individual items in order to obtain the sales tax holiday exemption.

 N. Returns. Generally, sales tax may only be refunded to a retail customer on returns within 90 days of the sale. G.L. c. 64H, § 1. For the 90 day period following August 13 or 14, 2011, when a customer returns an item that could have qualified for the sales tax holiday exemption, the vendor may not credit or refund sales tax to the retail customer unless (1) the customer provides a receipt or invoice that shows the tax was paid or (2) the seller’s records show that tax was paid. Sellers may set their own return policies. This requirement is not intended to change or extend a seller’s return policy.

 O. Erroneously Collected Taxes. Customers who were erroneously charged sales tax by a vendor for an exempt purchase should take their tax paid receipt to the vendor to obtain the refund. If the vendor has previously remitted the erroneously collected tax to the Department, the vendor may file an application for abatement of the erroneously collected tax within 3 years upon satisfactory evidence that the vendor has credited or refunded the tax to the purchaser.

 IV. Responsibilities of Retailers

 A. Participation. All Massachusetts businesses normally making taxable sales of tangible personal property that are open on August 13 or 14, 2011must participate in this sales tax holiday.

 B. Erroneous Collection. Any sales or use tax erroneously or improperly collected by a retailer on August 13 or 14, 2011 must be remitted to the Department of Revenue.

 C. Certification of Nonbusiness Use by the Purchaser. Normal business records showing the date of sale, item(s) purchased, and selling price must be kept by the retailer/ vendor. However, a separate certification from the purchaser on transactions of $1,000 or more will not be required for the 2011 Sales Tax Holiday. The requirement that purchases under the Sales Tax Holiday be for nonbusiness use is unchanged and purchasers paying for tangible personal property with business credit cards or checks must be charged tax on the items purchased.

 D. Out-of-State Retailers. Out-of-state retailers registered to collect Massachusetts sales and use taxes must participate in this sales tax holiday. Such retailers should not collect sales/use tax for items ordered and paid for onAugust 13 or 14, 2011 in accordance with the rules of this technical information release. The retailers must keep records sufficient to verify the date of sale, item(s) purchased, and selling price.

 E. Penalties.  Retailers that back-date sales occurring after August 14, 2011 or that forward-date sales that occurred beforeAugust 13, 2011 in order to make them appear to qualify for the sales tax holiday or otherwise fail to follow the rules in the TIR in order to improperly avoid collecting and remitting sales or use tax may be subject to the tax evasion penalties of G.L. c. 62C, § 73, including a felony conviction, a fine of not more than $100,000 or $500,000 in the case of a corporation, or by imprisonment for not more than five years, or both, and may also be required to pay the costs of prosecution.