Saturday, July 31, 2010

Beneficiaries Can Bank Proceeds, Bypass Life Insurer Accounts

According to, some beneficiaries could vastly benefit by banking their proceeds instead of using a life insurer account. As the article explains, many of consumers are confused by ads that convince beneficiaries they cannot make investment choices on their own.

Policyholders may assume when buying life insurance that beneficiaries will get the payouts in a single bank check. That may not be the case, Bloomberg Markets magazine reports in its September issue. Insurance companies such as Prudential Financial Inc. profit by holding onto the money in their own accounts and issuing checkbooks, essentially IOUs, for survivors to access their money.

“The language they use at the time is all couched in reassuring phrases -- let me give you the security of not having to make an investment choice,” said Lawrence Baxter, professor of the practice of law at Duke University School of Law in Durham, North Carolina. “It leverages off of that state of emotional distress.”

After a loved one passes away, survivors must file a claim and provide a death certificate, according to Bob Hunter, director of insurance for the Consumer Federation of America in Washington. The insurer will then contact the beneficiaries with options for payment, which usually include keeping the money in an account with the insurance company, Baxter said.

“It’s very easy for trusted companies to mislead naïve customers, and life insurance companies are trusted,” said Daniel Kahneman, a professor of psychology and public affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University and a Nobel Prize winner. “The fact that they seem to be outside the regulatory reach is shocking.”

Continue reading at…

Money Makeover: Married Couple, Separate Finances

Earlier today, I came across this interesting article from CNN on Michelle Spranger and Scott Zuckerberg. The article discusses the story of a couple that has been married for eight years, but maintain separate finances. According to the article, they finally decide to merge their finances to make their lives a little easier.

Scott, 43, has a full-service broker, variable annuities, and a union pension, while Michelle, 42, uses a discount brokerage account and IRAs. Neither knows what the other is doing.

"The only thing we have together is a checking account," Michelle says. "We need to merge and have a common goal."

Troy, Mich., planner Warren McIntyre agrees. For starters, the couple isn’t even sure how much they're saving annually. Both are self-employed: Michelle is a freelance producer, meeting planner, and writer earning $90,000 to $115,000 a year; Scott makes $60,000 to $75,000 as a lighting and rigging technician for films.

With fluctuating incomes, they must be really diligent about saving. McIntyre's advice: Sock away at least 15% of their pay. That, plus Scott's pension and their real estate, should get them to a comfortable retirement.

Continue reading at…

IRS Commissioner Doug Shulman's Remarks from the 990 Filing Extension Conference

From the IRS Newsroom:

Today, we’re announcing relief for small nonprofit organizations who are at risk of losing their tax-exempt status because they have missed or are about to miss the deadline for filing Form 990-N or Form 990-EZ with IRS. We believe it’s important to give these organizations an opportunity to preserve their valuable tax exemption.

Here’s why relief is needed: Back in 2006, Congress passed legislation mandating that all tax-exempt organizations, except churches and church-related groups, file annual returns with the IRS starting in 2007. This meant that very small organizations that had never filed before would have to start doing so.

This law also said that any organization failing to file for three consecutive years would automatically lose its federal tax-exempt status. So the IRS spent the past three years conducting an extensive and unprecedented outreach effort to alert very small organizations to their new filing responsibility. Among the examples, we have sent over 1 million letters to small nonprofit organizations alerting them about the filing requirement since the law was passed. But even with that effort, we found when we got to May 17, the first date that would trigger the three-year rule, we found that many organizations still had not filed a return.

So here is what we’re doing: We’re offering a two-part program to bring small organizations back into compliance. First, we’re extending the filing deadline to Oct. 15 for the smallest organizations, those with gross receipts of $25,000 or less. These are the groups that have to file the Form 990-N, the e-postcard. It’s very simple. All they need to do is provide eight information items. If an organization goes to our Web site,, supplies those eight items, and files electronically by Oct. 15, it will be back in compliance and its tax-exempt status will be intact.

We’re also offering relief for somewhat larger organizations, which are eligible to file the Form 990-EZ. For these groups, we’re launching a voluntary compliance program. Under this program, you file your three delinquent returns and pay a small fee. As long as you file by Oct. 15, you won’t lose your tax exemption. I should note that none of this relief is open to larger organizations that have to file the Form 990 or to private foundations that file Form 990-PF.

The 10 Richest Presidents

Forbes put together a great story on the 10 wealthiest Presidents of the United States. To see what Presidential faces grace the list, check out a segment of the story below or watch this slideshow on

Don't believe all that born-in-a-log-cabin hype. Only four United States presidents actually started out that way, Abraham Lincoln being the most famous. By the time the other three, Franklin Pierce, James Buchanan and James A. Garfield, entered the nation's highest office, they shared one trait with its other 40 occupants: All had achieved a certain measure of financial prosperity.

Despite two centuries of campaign rhetoric touting identification with the common man, the simple fact is that no truly poor individual ever has become president of the United States.

Can anyone grow up to be president? If history is a judge, one just cannot become President unless they first amass sufficient financial wherewithal to withstand often income-less political races. (If Sarah Palin runs for president she'll need that $10 million Forbes estimates she has earned in book advances and speaking fees over the past year.)

Like citizens themselves, some presidents have been richer than others as they exercised their weighty responsibilities. Who were the flushest?

For our money, George Washington wins hands down. In the largely tax-free environment that characterized colonial America, he was considered one of its richest residents, a product of his shrewd business sense, a marriage to a wealthy widow and several inheritances. He benefited from an older brother's marriage into a powerful family, while early work as a surveyor helped give him a keen understanding of land.

Thursday, July 29, 2010

Foreclosures Climb in 75% of Metro Areas

During the first six months of the year, major metropolitan areas in states like in Florida, California, and Nevada saw drastic hikes in their foreclosure rates. According to CNN Money, unemployment has replaced bad mortgages as the leading cause of these foreclosures.

RealtyTrac, an online marketer of foreclosed homes, said that California, Florida, Arizona and Nevada continue to lead the nation in the rate of foreclosures. Las Vegas was the worst-hit city.

But now unemployment has replaced toxic mortgages as the leading cause of foreclosures throughout the country, according to spokesman Rick Sharga.

"Las Vegas has seamlessly shifted from having a high level of foreclosures due to bad loans," said Sharga, "to defaults caused by a high level of unemployment." Some 14.5% of its work force was idle in June, up 2.1 points from last June.

Las Vegas had one filing for every 15 households in the metro area. The second highest rate was in Cape Coral/Fort Myers, Fla., with one for every 20 households. Two California cities, Modesto and Merced, tied for third with one filing for every 22 households.

Continue reading at CNN…

IRS Offers One-Time Special Filing Relief Program for Small Charities

Thousands of small charities and non-profits lost their tax-exempt status for failing to file tax returns for 2007 – 2009. In their newest press release, the IRS announced they will are giving these charities a second chance to reclaim their status, as long as they file their missed returns by October 15th of 2010.

The IRS today posted on a special page of 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.

“We are doing everything we can to help organizations comply with the law and keep their valuable tax exemption,” IRS Commissioner Doug Shulman said. “So if you do not have your filings up to date, now’s the time to take action and get back on track.”

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.

Oil Hovers Near $77 On US Economy, Crude Demand

From the Associated Press:

Oil prices hovered near $77 barrel Thursday in Asia amid signs of a slowing U.S. economy and weak demand for crude.

Benchmark crude for September delivery was up 16 cents at $77.15 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 51 cents to settle at $76.99 on Wednesday.

Oil has traded near $75 most of this year on mixed U.S. economic news — corporate earnings have rebounded but the unemployment rate remains high. On Wednesday, a Federal Reserve report said the economic recovery is slowing in some parts of the country.

Oil consumption also appears to be sluggish. Crude supplies grew by 7.3 million barrels last week, according to the Energy Department's Energy Information Administration. Analysts expected a drop of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Supplies of gasoline and distillates, which include diesel and heating oil, also rose.

Barclays Capital said in a report that the main driver of oil prices has been skittish sentiment about the economic recovery. "It may take a while before the ghosts from the previous crisis go away entirely."

Jobless Claims in U.S. Declined by 11,000 to 457,000

Last week the number of first-time jobless claims dropped by 11,000 putting the total at 457,000. Although this may be a good sign, the number of people still receiving unemployment benefits rose, which many expects claim is slowing the pace of economic growth.

“The underlying pace of claims has not made any measurable improvement,” said Ellen Zentner, senior U.S. macro economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Businesses are investing in equipment but other than that there’s little impetus” for them to hire, she said.

Economists forecast claims would fall to 460,000, from a previously reported 464,000 for the prior week, according to the median of 42 projections in a Bloomberg survey. Estimates ranged from 445,000 to 500,000.

Stocks rose as companies from Exxon Mobil Corp. to Goodyear Tire & Rubber Co. posted better-than-estimated earnings. The Standard & Poor’s 500 Index rose 0.2 percent to 1,108.67 at 10:28 a.m. in New York. The yield on the 10-year Treasury note rose to 3 percent from 2.99 percent late yesterday.

Four-Week Average

The four-week moving average of claims, a less-volatile measure, dropped to 452,500 last week, the lowest since May 8, from 457,000, today’s report showed.

The number of people continuing to collect unemployment benefits rose to 4.565 million in the week ended July 17, from 4.484 million the prior week.

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Wednesday, July 28, 2010

Cities Threaten to Cut 500,000 Jobs

Local government agencies around the country are having ongoing budget and deficit problems, and officials are now saying that unless Congress steps in they will be forced to cut thousands of jobs. As CNN explains, many of these jobs include government workers and safety personnel.

Cash-strapped cities and counties have been cutting jobs to cope with massive budget shortfalls -- and that tally could edge up to nearly 500,000 if Congress doesn't step up to help.

Local governments are looking to eliminate 8.6% of their total full-time equivalent positions by 2012, according to a new survey released Tuesday by the National League of Cities, the National Association of Counties and United States Conference of Mayors.

"Local governments across the country are now facing the combined impact of decreased tax revenues, a falloff in state and federal aid and increased demand for social services," the report said. "In this current climate of fiscal distress, local governments are forced to eliminate both jobs and services."

The depth of the recession has pushed cities to make reductions in departments that are typically shielded from cuts because they provide core services to residents, including public safety, public works, public health, social services and parks and recreation.

Continue reading at CNN…

Financial Literacy for Kids a Big Worry for Parents, BofA Says

According to Bank of America, financial management is the most important lesson a parent can teach their child. Although there are obviously many other important lessons parents teach their children, I do agree that financial literacy can help children lead a more stable life, and should be instilled at a young age.

The Merrill Lynch Affluent Insights Quarterly, which surveyed 1,000 Americans in June with investable assets of at least $250,000, found that 51 percent cited “financial know- how” as the most important life lesson to share with their children. That compares with 54 percent who named maintaining ties to family, 26 percent who said choosing the right spouse and 11 percent who mentioned staying physically fit.

“Cash and debt management, along with their children’s financial literacy, have become increasingly important to our clients as they juggle often competing financial demands while hoping to teach the next generation how to effectively manage their own money,” Dean Athanasia, head of banking and the direct investment division for Bank of America Global Wealth and Investment Management, said in a statement.

As uncertainty over jobs and long-term economic recovery increases, affluent investors are worried about rising college and retirement costs, the survey said. About 40 percent of respondents said they are concerned about the rising cost of college education and 46 percent are worried about their ability to preserve an inheritance for their children.

Continue reading at…

What Would Happen if the Bush Tax Cuts Expire

From the Wall Street

What would it actually mean for you if they let the Bush tax cuts expire at the end of this year, and we went back to the old Bill Clinton tax rates adjusted for inflation?

This is a thought experiment, not a prediction or a recommendation.

The tax cuts, passed in 2001 and 2003, are front and center now and will be a hot issue going into the elections this fall. Unless something is done by the end of the year, they'll expire. With the economic recovery looking shaky, expiration is particularly controversial.

Most of the attention has understandably focused on highest earners, who are likely to be most affected by whatever happens. But as the debate has gathered pace I have been wondering what it might mean for everyone else. After all, according to the IRS just 4% of Americans earn more than $200,000 a year.

How high were taxes back in the 1990s? How would those rates seem now? The American Institute of CPAs supplied me with the numbers. I updated the tax brackets to account for inflation.

Sure, everyone's taxes are different, and the U.S. tax code is so horrendously Byzantine that the moment you say anything you run into a thicket of caveats. But let's run some numbers. And let's take a very broad brush approach to this. Let's assume you're a typical filer, you take the standard deduction, and let's just look at the biggest tax issues.

Coming Up: Tax-Free August Shopping

The new school year is just around the corner, and for millions of parents and students that means back-to-school shopping. Luckily, several states will be offering sales tax holidays in August. This year there are 17 states with tax holidays that apply to a number of items including clothing and basic school supplies. put together a good summary of the states offering tax-free shopping. I have included a portion of their article below, but you can find the full text at

Within the next five weeks 17 states with sales taxes will be offering "holidays" during which certain purchases can be made tax-free. Take a trip to the right mall at the right time and you can save up to 10% in tax (including local levies) and possibly more, since some retailers offer sales timed to capitalize on the attention sales tax holidays draw. (Five states--Alaska, Delaware, Montana, New Hampshire and Oregon--have no general sales taxes.)

The timing for these holidays is no accident. The average family will spend $606 on back-to-school shopping for K-12 students this year, up from $549 last year, according to the National Retail Federation. In fact, back-to-school is the second-biggest consumer spending event for retailers, behind the winter holidays.

Mississippi kicks off the tax-free shopping season on Friday, July 30, with a two-day period when clothing items costing less than $100--but not school supplies--will be free from the state's 7% sales tax. In August 15 states will hold holidays, generally covering such items as school supplies, clothing costing less than $100 per item and in some cases, computers. In high-income Connecticut, clothing and footwear priced at up to $300 will be exempt from the state's 6% state tax.

Sales tax holidays aren't all aimed at back-to-school shopping, however. In Louisiana, on Aug. 6 and Aug. 7, shoppers can buy all sorts of items, including furniture, costing up to $2,500 free of state sales tax. Then in September, at the start of dove hunting season, the state will offer a special sales tax holiday for hunting supplies. (Guns, ammunition and off-road vehicles, but not hunting dogs, are exempt.) South Carolina also will hold a "Second Amendment" holiday, exempting handguns, rifles and shotguns from sales tax on the Friday and Saturday after Thanksgiving--during deer hunting season

Tuesday, July 27, 2010

9 Warm Weather Ways to Lower Your Tax Liability

It is quite unbelievable that August is just around the corner, and as the triple digit heat is keeping many indoors, there are a few things you could do to both make your summer more enjoyable, and lower your tax liability. Making tax savvy decisions throughout the year can ensure a lower tax liability come April.

1. Upgrade your Air Conditioning

If you have an old air conditioning system, and looking to upgrade, not only will a new, energy efficient model reduce your electric bill but it can also lead to a federal tax credit. The American Recovery and Reinvestment Act of 2009 created a $1,500 tax credit for energy efficient home upgrades, and if you purchase a qualifying model it could result in significant tax savings.

2. Enroll in a Local College Class

Looking for a way to spend some of your free time on the weeknights or weekend? Consider enrolling in a local college class. Not only will you be able to pick up new skills that could help improve your career, but you can take a tax deduction for tuition and other mandatory school fees. This is called the Tuition and Fees Deduction, and is reported directly on Form 1040 or Form 1040A.

3. Dual Pane Windows

Single pane windows were common among houses built a few decades ago. If your home still has single pane windows, I highly recommend upgrading to dual pane. They will increase the value of your home, lower your energy bill, and can qualify for the $1,500 energy tax credit.

4. Install Solar Panels

Next time you are outside and feel the heat of the sun beaming down on you, consider installing solar panels on your rooftop. They may be expensive, but you can claim a tax credit for up to 30% of the price of the upgrade on your next tax return. To learn more about solar tax credits, check out this link at

5. Volunteer with your Children

If you have children that are out of school on summer break, consider taking them to volunteer at a local charity such as a soup kitchen or meals on wheels group. Although there is no deduction available for volunteering your time, all expenses related to the effort are deductible such as supplies donated, or miles driven while volunteering.

6. Send your Kids to Day Care

Parents of children under the age of 13 can quality for a tax credit if you need to send them to a day camp during summer break. The costs associated with enrolling your children in day care can count towards the Child and Dependent Care Credit.

7. Start a College Savings Account

Although most students have the summer off, the new school year is going to begin in just a few weeks. As your children get older, you might want to think of opening a 529 college savings account. There are two different types of 529 plans, but they both have significant tax benefits.

8. Throw a Summer Office Party

If you run a small business, then throwing a summer office party is a great way to show your employees how much you appreciate their hard work. Additionally, the cost of supplies such as food and beverages are fully deductible business expenses.

9. Buy an Energy Efficient Vehicle

As I explained in this blog entry from a few weeks ago, there are still plenty of vehicles that qualify for a federal tax credit. During the summer months plenty of dealerships offer incentives for buying a car, meaning you can get a great deal on a new vehicle and a valuable tax credit.

The Tax Hike Nobody's Talking About

The media has placed a lot of attention on a few minor tax changes, such as the new tanning tax. However, little focus has been put on a major tax hike that is about to occur. Unless Congress takes immediate action, the Marking Work Pay credit is due to expire; if it does expire, working taxpayers across the country will have more money withheld from their paychecks.

The credit, introduced last year as part of the government's stimulus package, boosts paychecks by up to $400 for single filers and up to $800 for joint filers, by reducing the amount of tax withheld from each paycheck.

But unlike those cuts, which were largely viewed as a benefit for wealthier Americans, the Making Work Pay credit is designed exclusively as a middle-class benefit, and will affect a wider base of taxpayers.

Continue reading at…

The Tax Lady Roni Deutch: A Short Biography

If you have ever wondered what I was doing before I began resolving tax debts for the America taxpayers, then check out the video embedded below! My team put together this short biography on how I became a tax lawyer, even going back to stories of my childhood little league days. Be sure to subscribe to my YouTube channel for more great videos.

BP Oil Spill To Cost U.S. Taxpayer Almost $10 Billion


Oil giant BP said it plans to offset the entire cost of its Gulf of Mexico oil spill against its tax bill, reducing future contributions to U.S. tax coffers by almost $10 billion.

BP took a pretax provision of $32.2 billion in its accounts for the period, for the cost of capping the well, cleaning up the spill, compensating victims and paying government fines.

However, the net impact on BP's bottom line will only be $22 billion, with the company recording a $10 billion tax credit, most of which will be borne by the U.S. taxpayer, a spokesman said.

BP's UK tax bill will also be reduced, BP added.

Analysts said BP could prompt more public and political anger in the United States by deducting all the costs, and especially the expected fines BP will face.

In 2006, Boeing Co decided to forego seeking a tax deduction for any of a $615 million settlement with the government in 2006 over ethics charges, under pressure from lawmakers.

More Women Taking On Second Job

Families across the country are struggling to keep up with mounting bills, while still managing to keep food on the table. As this article from ABC News explains, 27 million Americans are working second jobs to make ends meet, and a record number of women are taking on extra work as well.

For Marie Benoit-Wilcox, a second, freelance job is matter-of-fact, and gets started even before her "day job" begins. Benoit-Wilcox, a perinatal system coordinator at St. Luke's Hospital in Manhattan and mother of two teenagers, has been supplementing her income for over a decade selling Avon cosmetics. Each morning when she wakes shortly after 4 a.m., she spends an hour at her Irvington, N.J., home working on client lists and going over orders before commuting to the hospital.

"Saturdays are my all-day-Avon day," she says. "And Sunday I hope I've got time with my family, maybe see a concert or have a party with the kids."

It may seem like a time crunch, but the success she's seen over the past decade make it all worth it. The moonlighting money has enabled her to give her children private educations, a college fund and a family cruise to the Caribbean.

Benoit-Wilcox began her second career as a sales rep after her mother, also involved with Avon, became ill in 1999. "I wanted to be able to keep buying the products, so the only solution was selling myself!" she jokes. She has been with the company for 11 years, including three consecutive years of soaring success--moving a benchmark 112,000 units of Avon product--and sees only great things in the future, for both her business and her family.

Continue reading at ABC…

Monday, July 26, 2010

Questions for the Tax Lady: July 26th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Do all states have a sales tax?

No. Actually only 45 states, as well as the District of Columbia levy a general sale and use tax. Alaska, Montana, Delaware, New Hampshire, and Oregon do not impose a state sales tax. However, Alaska does allow for local sales taxes, and a few other states have a variety of specific excise taxes.

Question #2: If I have to move to a different state for a new job, can I deduct all of my moving expenses?

Depending on how far you have to move for the new job, and how long you work for the new employer, you may qualify to deduct qualifying expenses. Some of these expenses include packing, transportation, shipping costs, and storage bills. For more information on the job relocation deduction, check out this article on the Roni Deutch Tax Center – Tax Help Blog.

Unclaimed IRS Tax Refunds

Last week my team posted a handful of articles to the learning center, including this informative article on unclaimed IRS tax refunds, and unfilled tax returns. As the article explains, the average undeliverable refund check in 2009 was $1,148, and although there are various reasons these refunds go unclaimed the most common cause is an unfilled return.

Each year, it is estimated that hundreds to thousands of individuals fail to file tax returns which would otherwise result in a refund. Unclaimed tax refunds often result as a busy taxpayer who is expecting a tax refund puts off sending in the tax forms until it is completely forgotten. As of March 2010, there is about $1.3 billion is sitting in Internal Revenue Service coffers, lost by the more than a million taxpayers who neglected to file a 2005 tax return by April 15, 2009.

The deadline for claiming a refund for 2006 was April 15, 2010. All unpaid refunds for 2006 were handed over to the U.S. Treasury.

Each year, some people don’t file a return because they don’t owe taxes. But knowing that you will not owe taxes for a given year should not prevent you filing a tax return, because you may still be eligible to receive a refund through various credits. The IRS doesn’t send refunds until it gets a Form 1040 (or 1040A or 1040EZ) that details just how big the government’s check should be. So, even if you will not owe taxes, filing a return may be in your best interest.

Continue reading at…

Geithner Favors Allowing Tax Cuts for the "Wealthy" to Expire


In another move sure to up the ante in the perceived class warfare being waged by the Obama administration, Treasury Secretary, Timothy Geithner has said that he is favorably disposed to allowing the present tax cuts for the "wealthiest people" to expire.

He calls it the "responsible thing to do", although most Blue Dog Democrats and Republicans would disagree, as they see it as a failed economic policy (increasing taxes on the wealthiest people) that would only hurt economic growth, in the long run.

While speaking on ABC's "This Week" this morning, Geithner professed that allowing the tax cuts to expire would send a signal to the world that the United States was willing as a country, to take concrete steps, necessary to reducing long-term budget deficits.

What he however failed to propose was how exactly the government intended to make up for the still expected shortfall, as the so-called wealthiest people already pay close to two-thirds of the taxes.

The truth is that invariably, higher taxes on the wealthiest people, will end up hurting the economy in the long run as the latter will withdraw or significantly reduce their charitable donations, thus negatively impacting the non-profit sector of the economy.

Five Critical Steps for Effective Crisis Communications

Over the weekend The Glass Hammer posted a great article contributed by Susan Stern, of Stern & Associates, explaining how to prepare for a communications crisis. I have included a section of the article below, but you can find the full text here.

Few companies or organizations will never face a serious and immediate challenge at some point during their history. How effectively and quickly the organization deals with the threat and communicates with the media, customers, employees and other key publics often determines how its products, services and corporate leaders are viewed – positively or negatively – for many years to come.

What essential steps should executives and managers take to avoid damaging their brand and ensure a positive outcome when a crisis occurs?

Step 1. Create a Written Crisis Communications Plan

Effective crisis communication depends on implementing a thorough plan based on the ordinary challenges a company could face in the course of an ordinary day as well as extraordinary events such as terrorist attacks, natural disasters and workplace violence. The plan must be designed to help your organization’s leaders quickly and effectively communicate important information and key messages to the media, customers, employees and other key publics. A crisis communications plan is an essential corporate tool in today’s world. With social media and text messaging rapidly spreading information – and potential misinformation – to a wide audience in minutes, it’s critical to be able to act swiftly and effectively before the damage begins. Delays caused when organizations need to start framing their response from scratch force them to play “catch up” with the media and other key audiences.

Your plan should be a framework for action, containing the information gathered during your initial organizational work as well as material you’ve developed based on specific scenarios your company could face. It should be flexible enough to be quickly edited and customized for a specific situation so it does not appear that you’re simply issuing off-the-shelf statements.

It is also important that individuals in your company who could potentially speak with the media be trained by a public relations practitioner with crisis experience to understand the preferred communications techniques and effectively deliver key messages on a regular basis and when it counts most.

Continue Reading at…

Friday, July 23, 2010

What is an Estimated Tax Payment?

Yesterday a new article was published at the learning center. This new article explains estimated tax payments, and offers answers to a handful of questions related to quarterly tax payments.

Estimated tax payments are a method used to calculate and pay income tax on income that is either not subject to withholding or due as a result of insufficient withholding. Income not subject to withholding includes: Unemployment benefits, Self-employment income, Alimony, Interest, Dividends, Rent, Awards, Prizes, and asset-Sale gains.

As a general rule, if a taxpayer is self-employed or has any other non W-2 income, that taxpayer may need to pay estimated taxes each quarter.

How do I Know if I Need to make Estimates Tax Payments?

By following this chart, you may determine whether or not you need to make Estimated Tax Payments:

1) Do you expect to owe less than $1000 in taxes for 2010 after subtracting withholdings & credits from the total amount of taxes you expect to owe?

If Yes, you do not need to make ETP.

If No, proceed to the next question.

2) Do you expect your withholding to amount to be at least 90% of the tax you will owe for 2010?

If Yes, you do not need to make ETP.

If No, proceed to the next question.

3) Do you expect your withholding to be at least 100% of the tax on your 2009 return?

If Yes, you do not need to make ETP.

Continue reading at…

Tax Tools and Financial Calculators has a NEW LOOK! It also has also been updated with LOTS of helpful tax tools and calculators. We had them designed to assist taxpayers with their financial and tax planning strategies. I have listed the names of a few of our new calculators below, but check out to try them out!

Should I pay down debt or invest more?

What is the impact of increasing my 401(k) contribution?

How much should I be saving for college?

How much can I contribute to an IRA?

What is the impact of early withdrawal from my 401(k) plan?

US Senate Rejects Effort To Repeal Estate Tax


A Republican-led effort to permanently repeal the estate tax garnered only 39 votes in the Senate, as the motion failed during debate on extending jobless benefits.

Estate-tax votes are closely watched since they occur infrequently, and opponents of the tax and its supporters seek to gain ground among lawmakers.

The motion from Sen. Jim DeMint (R., S.C.), fell on a 39-59 vote. Senators Olympia Snowe and Susan Collins of Maine and George Voinovich of Ohio—voted to oppose repeal.

Senators Blanche Lincoln of Arkansas and Ben Nelson of Nebraska—supported the repeal effort.

Under the 2001 tax cut law, the estate tax was repealed for one year only in 2010. Heirs of those who die this year are not subject to any federal estate tax, although they must pay a capital gains tax when they sell inherited assets.

Congressional Democrats have said they want to reinstate the tax at levels in effect in 2009--a 45% tax rate on inherited wealth that exceeds $3.5 million.

20% of Americans Hit by Major Economic Loss

A new Economic Security Index study found that economic losses were at a 25-year low for Americans last year, with about 20% of the population facing major losses. The study – which has been tracking economic data sine 1985 – used a wide variety of information to achieve accurate results.

According to CNN Money, the index was constructed by Yale political scientist Jacob Hacker, and the project was funded by the Rockefeller Foundation.

The ESI defines people as economically insecure when their situation meets two criteria. First, within a year's time they have lost 25% or more of their available gross income. Available gross income is the money they have left over after paying for medical costs and debt. Second, they don't have enough in an emergency fund or other liquid reserves to make up the difference.

Hacker noted that it can typically take between six to eight years to restore one's available income to its previous level. Meanwhile, a survey cited by Hacker found that 48% of Americans said last year they only had enough resources to carry them for two months before experiencing any economic hardship.

According to the index, which is based primarily on Census Bureau data, 12.2% of Americans were economically insecure in 1985. By 2009, Hacker and his team estimate that 20.4% of Americans could be classified that way. The actual number of people affected increased by more than half, from 28 million in 1985 to roughly 46 million by 2007, the last year for which hard numbers were available.

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Latest Good Reads

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Update on UBS secret bank accounts: Swiss Court ruling on release

Getting your credit limit raised

Thursday, July 22, 2010

10 Ways to Increase your Savings

With a record number of taxpayers living paycheck to paycheck, these days many people are finding it difficult to save money. We all work hard for the income we earn and it is nice to be able to put a little away for the rainy day – so, I have put together the following list of saving tips.

1. Set a Savings Goal

If you are serious about saving money, then I highly recommend the following: set a goal, a timeline, and a plan of attack. Depending on your unique financial situation your goal might be to save up enough money for a new car, or it might be to just put extra funds in your savings for that rainy day. Whatever your goal is, it is always helpful to identify it, and work towards achieving that goal.

2. Focus on Paying Off Debts

Many of us have credit cards, and are simply paying the minimum monthly payment. Do you believe sending monthly payments to a creditor can significantly inhibit your ability to save? Believe me, it does. Therefore, you should focus on paying off your credit cards as soon as possible. It is always a good rule of thumb to begin paying down cards with the highest interest rates, which will help you save as much of your money as possible. As you work towards paying these cards off, it is important to not use them any more then you absolutely have to. A good habit to get into is to pay the monthly balance in its entirety each month.

3. Put Together a List of Monthly Expenses

In order to assess areas that you can save, you should put together a list of all of your monthly expenses. Then, determine which expenses are required (rent, car payment, health insurance, etc.) versus those that are unnecessary (such as coffee, landscaping, gym memberships, etc.) By making these two separate lists you can focus on finding ways to save.

4. Trim "Unnecessary" Expenses

After your list is complete, you should identify all the ways you can trim your unnecessary expenses. This could include eating out less, brewing your own coffee, mowing your own lawn, downgrading your cable or satellite service, or finding a gym with a less expensive membership fee. It might be difficult to go without some of these luxuries at first, but once you begin seeing the result of your savings you will be encouraged to trim more and more!

5. Reduce Household Monthly Expenses

Even though you cannot simply get rid of some monthly household expenses, you may be surprised to see how much money you can save with a little effort. When your lease is up ask your landlord to reduce the rent, or move to a cheaper place. If you own your home you might be able to refinance with a lower interest rate. Additionally, you should check your insurance policies to make sure you are not “over insured,” and paying an inflated premium. You could even start an office carpool to lower your gasoline bill. Be creative; you are sure to find a few ways to reduce your monthly expenses across the board.

6. Stick to your Budget

Millions of families across the country make a monthly budget for expenses, but sticking to that budget is often easier said then done. You should make your budget a priority, and get your whole family involved in the process. Maybe invest time in having a weekly or monthly family budge meeting.

7. Become a Discount Traveler

Summer is often the season when families take a vacation. However, your vacation does not have to break the bank. You could save money by looking for cheaper hotel rooms online, or take a frugal camping trip this year.

8. Review Tax Withholdings

While looking for ways to cut your expenses, it is also a good idea to look over the taxes being withheld from your paycheck to make sure you are not over or underpaying. If you overpay the government each month then you are basically giving the IRS an interest free loan. Instead, you could get more money in your paycheck, and put that money into a savings account.

9. Interest Earning Savings Account

As part of your plan to save money, you should consider looking around to find a savings account with the best interest rate possible. If you have enough spare cash you might be able to put the money into a high interest savings account. However, these accounts often have restrictions such as a large minimum balance.

10. Put Money from Each Paycheck into Savings

If you are committed to saving, then you need to make it a priority and see that money from each of your paychecks goes into your savings account. You could decide to put a specific percent of your income into savings, or a dollar amount, whatever you select the most important thing is to stick to your plan. Many banks even offer automatic transfers from your checking to savings account, which is a great way to make sure you add more funds to your savings each month.

Wednesday, July 21, 2010

7 Most Popular Business Tax Deductions

The Roni Deutch Tax Center submitted another quest blog to be published on the Franchise Business Review blog. The new entry explains the 7 most popular business tax deductions. I have included a segment of the article below, but you can find the full story at

1. Startup Expenses

IRS rules allow you to deduct up to $5,000 of your expenses in starting a business. These expenses are known as capital expenses and you can deduct them during the first year you are in business. If your total startup costs exceed $5,000 then the remaining amount must be deducted over the next fifteen years.

2. Auto Expenses

If you use a vehicle for business purposes then you can deduct some of the associated costs. The specific rules around auto expenses are tricky to understand but basically you can either track and deduct all the business related expenses, or take the standard mileage rate.

3. Education or Learning Materials

Any costs associated with business related education can be deducted. This includes both payments made for self-improvement for you and your employees. Night classes, seminars, conferences and even books are great examples of learning expenses.

4. Advertising, Promotions & Publicity

Small business owners usually remember to write off the costs of paid advertisements. However, do not forget that you can deduct any costs related to promoting your business. These expenses vary widely from business cards, printing flyers, etc.

Obama Signs Wall Street Reform Into Law

As was expected, President Obama signed the new financial reform bill into law earlier today. The bill, which was over a year in the making, will be used to regulate financial institutions and protect the U.S. consumers and taxpayers.

"These reforms represent the strongest consumer financial protections in history," President Obama said. "And these protections will be enforced by a new consumer watchdog with just one job: looking out for people - not big banks, not lenders, not investment houses - in the financial system."

In a major signing ceremony at the Ronald Reagan Building in Washington, President Obama was flanked by a number of lawmakers who worked on the legislation, including Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., the two committee chairmen who sponsored the bill.

The new law attempts to shine a light on complex financial products called derivatives and immediately gives regulators stronger powers to break up financial companies that have grown too big.

Among its many provisions, the law also creates a new consumer protection agency which would set rules to curb unfair practices in consumer loans and credit cards.

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U.S. Could Lose $37 Billion a Year to Tax Havens: Levin


The U.S. government loses $37 billion per year in tax revenues because multinational corporations stash money in overseas tax havens, Democratic Senator Carl Levin and a group of small businesses said in a report on Tuesday.

Levin, who for years has pushed for a tough law to fight tax evasion among corporations, has enlisted some small businesses to back his so-far unsuccessful proposal to close loopholes letting companies legally avoid taxes by keeping income abroad.

"There are too many small businesses now paying more than their fair share," Levin told reporters on a conference call. "It creates a very unfair competitive situation."

Levin wants to attach some of his proposals to help fund a bill that sets up a $30 billion fund for small business. Levin has tried to attach his initiative to other bills in the past without success.

The coalition of small companies favors banning the use of overseas tax havens, which are generally unavailable to smaller firms.

The Tax Implications of Divorce

This morning a new entry explaining the tax implications of divorce was published on the Roni Deutch Tax Center – Tax Help Blog. As the article explains, our complicated tax system can often make stressful situations, such as a divorce, even more stressful. I have included a segment of the article below, but to learn more about the tax implications of divorce, check out the Roni Deutch Tax Center – Tax Help Blog.

Tax Filing Status

Even if you spent most of the year married to your partner, if you become legally divorced on or before December 31st, you will not be eligible to file a joint return. Therefore, if you are in the process of getting divorced, which will not finalize before the end of the year, you will need to file as a married taxpayer (either a joint or separate return). If you and your former spouse are on good terms, you should try to discuss tax planning as it related to your divorce. Additionally, if you are unmarried and your spouse was not a member of the household for at least six months of the year, and you have a qualifying dependent, you may be able to take advantage of the head of household filing status.

Child Custody and Tax Exemptions

If you had children with your ex-spouse then a whole new set of tax complications may emerge depending on the specifics of your child custody arrangements. If one parent is required to make child support payments, that parent will not be able to deduct the payments on a federal return. Additionally, child support payments are not considered taxable income for the parent receiving the payments. The parent has majority custody can also claim the children as dependents, and benefit from the resulting tax incentives.

Living Situation

A home is often the most expensive purchase a taxpayer will make in their lifetime, and can result in serious financial issues during a divorce. You and your former spouse will undoubtedly need to decide what to do with the property after the divorce is finalized. One ex-spouse may decide to continue living there, possibly with dependent children, or you may decide to sell the home and split the proceeds. If you do sell the home, and profit from the sale, then you will want to reinvest those funds within two years to avoid the capital gains tax.

Divorce and Attorney Fees

There is a small category of attorney fees may be deductible expenses on your tax return. For example, although, the legal fees for the divorce itself are not deductible, legal fees related to estate planning due to a divorce may be. To be on the safe side, you should ask your attorney to divide the bill into non-deductible charges, tax-deductible alimony charges, and property settlement charges. By doing this, we will be able to help your tax preparer have sufficient proof to claim the tax deductible fees on your return.

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Tuesday, July 20, 2010

Obama Keeps Pressure on GOP on Jobless Aid

In an ongoing fight to extend unemployment benefits to thousands of struggling Americans, President Obama is urging Republican Senators to vote in favor of the bill today. Some experts predict they Democratic party already has enough votes to avoid a filibuster, but President Obama reportedly does not want to take any risks. If passed, the bill would provide aid to an estimated 2.5 million unemployed Americans whose jobless benefits have expired.

Once Senate passage of $33.9 billion in extra funds is also approved by the House, a step expected this week, money will begin flowing to jobless workers across the country. California, New York, Florida and Illinois are among the states with the highest numbers of jobless whose benefits have expired. The benefits would be retroactive to June and last through November.

The defeat of the GOP filibuster is considered assured. The move requires 60 votes, a mark Senate Democrats will reach Tuesday after their newest member, Carte Goodwin of West Virginia, is sworn in to take the place of the late Sen. Robert C. Byrd. A key vote will take place minutes after Goodwin takes his place in the Senate.

Nonetheless, President Obama sought to increase pressure on Republicans Monday, appearing in the White House Rose Garden to press his election-year message that the GOP is blocking financial help to struggling Americans.

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Proposed Florida Tax Relief Amendment Under Attack

A tax proposal on Florida’s November ballot is causing quite a stir, because opposition feels it is unclear and poorly written, which would confuse voters. If passed, the law would provide an extra property tax break to some homebuyers. However, both labor unions and taxpayer groups are opposing it.

According to the Associated Press, a Tallahassee judge has scheduled a final hearing Thursday in the lawsuit seeking to remove the Amendment from Florida's November ballot.

The proposal, which the Legislature approved last year, would give people who have not owned a home for at least eight years an added — but temporary — homestead exemption on primary residences purchased on or after Jan. 1, 2010.

The Florida AFL-CIO and Jacksonville resident Brian K. Doyle say in their lawsuit that the title and summary are flawed because they don't mention the purchase date.

The plaintiffs also argue the title says the added exemption is for "new homestead owners" and the summary refers to "a first-time homestead" despite the eight-year provision that allows previous homeowners to qualify.

Doyle would not qualify for the tax break and many union members are government employees paid from property taxes that would be cut by the amendment.

In a written response, the state says the title and summary accurately describe the proposal's chief purpose and that the purchase date is the kind of detail not required by law.

IRS Files $1.13M Tax Lien Against Lil Wayne

From WebCPA:

The Internal Revenue Service has filed a tax lien for $1,138,760 against rap singer Lil Wayne, who is currently in jail on weapons charges.

The lien covers taxes owed from 2004, 2005 and 2007. The 27-year-old performer, also known as Weezy but whose real name is Dwayne Michael Carter Jr., has had problems with the IRS in the past. The IRS filed a lien for $977,840 against him in 2008, but he paid the taxes he owed later that year, according to the Detroit News.

Carter was arrested in July 2007 for possessing a .40 caliber pistol and marijuana following a performance at New York’s Beacon Theatre. He pleaded guilty to the weapons charge and is currently serving a one-year sentence on Rikers Island in New York.

Small Banks That got Bailout Money May Need More

According to the Congressional Oversight Panel, many of the smaller banks that received bailout money from the government may need more cash in order to survive. Less than 10% of these smaller financial instructions have paid the government back the funds they were loaned, and some have even missed dividend payments. I have included a section of a story below on this new development, but you can find the full text here.

If you keep up on banking news, you may have heard the most recent dire report on small banks: If your small bank has taken bailout money from the federal government, that's a good sign your financial institution may be in trouble.

That's the latest from the Congressional Oversight Panel, which last week unveiled a report that drew attention to the fact that most of the small banks that received bailout money are struggling to pay it back.

If you're doing business with a small bank and are suddenly worrying about its health, here's some perspective:

Most of the small banks out there are doing just fine. The U.S. has approximately 8,000 banks, from a handful of giant, nationally known banks and all their branches (Bank of America, for instance, has approximately 7,500 branches across the country) to all those regional and local banks scattered across the 50 states.

Out of the more than 7,900 small banks that remain after you take away, say, the nation's 30 largest banks, a scant one-tenth -- just 707 banks -- took $205 billion of the $700 billion in bailout money. So plenty of small banks out there didn't take any bailout money and are doing quite well.

Monday, July 19, 2010

Questions for the Tax Lady: July 19th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: I saw in the news that the homebuyers credit was extended. What is the new cutoff to qualify for the credit?

The deadline for closing on home purchases has been extended from June 30 to Sept. 30, 2010. This means that in order to qualify for the credit, the purchase of your home must be completed before September 30th, 2010. However, as the buyer, you are still required to have entered need to enter into a binding contract by April 30, 2010.

Question #2: Will I have to pay a tanning tax on lotions and supplies I purchase at my local tanning salon?

No. According to the IRS the tax does not apply to spray tans or topical creams and lotions. It is only levied on the actual indoor tanning service.

Changing Stance, Administration Now Defends Insurance Mandate as a Tax


When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

More Americans Are Forfeiting Citizenship to Escape U.S. Taxes

According to the Financial Times, a significant number of Americans living outside the country are renouncing their US citizenship to avoid paying taxes on their worldwide income and gains.

As many as 743 American expatriates made the irreversible decision to discard their passports last year, according to the US government – three times as many as in 2008.

The trend was particularly noticeable in the UK, where 190,000 Americans live and work. There is a waiting list at the embassy in London for people looking to give up citizenship, with the earliest appointments in February, lawyers and accountants say.

Wesley Snipes Loses Appeal in Tax Case

Last Friday it was reported that Actor Wesley Snipes would indeed have to serve jail time for tax evasion, after he lost his appeal. For those of you who might have forgotten, Snipes was sentenced to serve three years in prison for failing to file tax returns for 1999 through 2001.

A federal appeals court on Friday upheld the 47-year-old actor's 2008 conviction in an Ocala, Florida, court for three misdemeanors stemming from felony tax charges.

At his sentencing in April 2008, prosecutors said Snipes, a Florida native who has a residence in Windermere, had earned more than $38 million since 1999, but had filed no tax returns or paid any taxes.

Saturday, July 17, 2010

Where the Jobs Are

Although many taxpayers across the county are having trouble finding employment, there are a few communities with thriving job markets. posted an interesting story on the 25 counties that have experienced the most job growth. I have included two of the cities that made the list below, but you can see the full slideshow here.

  1. Lincoln County, SD

Towns include: Sioux Falls

Job growth (2000-2009): 67.0%

Even though it's almost 1,200 miles away, Lincoln County wasn't immune to the financial crisis that rocked Wall Street.

Too-big-to-fail banking giants Citibank and Wells Fargo call this area home -- but Lincoln county isn't all dollars and wide open spaces. A strong retail and healthcare presence helped keep the county going strong when banks were on the brink.

Sanford Health and Avera Health are currently the county's largest employers, and they're expanding. Both are building regional clinics and treatment facilities in the area. A major cancer treatment facility is scheduled to be completed by late 2010.

  1. Williamson County, TX

Towns include: Cedar Park, Round Rock

Job growth (2000-2009): 58.9%

Dude, they got Dell! With the computer manufacturer as the county's largest employer, Williamson County has a tech-savvy workforce that helps draw other businesses to the area.

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