Tag Archives: Financial Information

Retirement Savings 2017

Looking forward to 2017 you should review your retirement plans to determine what changes, if any, you want to make. Individual retirement plans (IRAs and 401(k)s) are two of the most common defined contribution plans and offer tax-advantaged retirement savings.

The annual limit for contributions for traditional and Roth IRAs for 2017 is $6,000. People age 50 or older in 2017 can contribute an additional $1,000 for a total potential contribution of $7,000.

The annual imit for contributions for 401(k), 403(b), and 457(b) plans is $18,000. Workers age 50 or older in 2017 are permitted an additional catch-up contribution of $6,000 for a total potential contribution of $24,000.

401(k) v. IRA:

  • 401(k)
    • For employees of companies that offer such plans
    • Employer may match the contribitions up to 6% of salary
    • Pay taxes later (upon withdrawal during retirement)
  • Individual Retirement Plan (IRA)
    • Roth IRA
      • Pay taxes now
      • Tax-free withdrawals of contributions only (not earnings or interest on contributions) at any time
    • Traditional IRA
      • Pay taxes later
      • Receive potential tax deductions now

Now, get to it . . .

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This Blog is made available by me, an attorney licensed to practice law in the State of Connecticut. I am not a recruiter, hiring manager, or career agent. Nor am I an expert in any of the areas or issues related to job search activities. I am merely sharing my job search experiences with you. This Blog/Web Site is designed to provide accurate information on the subjects presented but should not be considered professional or legal advice.

Example of An IRS Phone Scam

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My post on January 13, 2016 forewarned of IRS Scams during this upcoming tax season.

Below is an example of one such phone scam as experienced by AARP Consumer Advocate Ron Burley in the December 2015/January 2016 edition of AARP Magazine. Here is Mr. Burley’s article in its entirety:

“An alert AARP member recently got a call from an “IRS agent” and right away sensed something was bogus. The agent left a voice mail message saying back taxes were owed and told the man to call back right away.

fotolia_92696714“The AARP member contacted me instead, and I returned the call, posing as him.

“The supposed IRS agent told me that my only hope to avoid jail was to pay fines and back taxes before the police came knocking on my door. He also said there might be a way I could stay out of the slammer, but only if I acted quickly.

“For the next 10 minutes, he alternated between threats of pending arrest and hopes for salvation. Finally, he directed me to a local market where I could purchase several thousand dollars’ worth of Green Dot MoneyPaks – a way to transfer cash to another person instantly by just giving him or her a secret code number. Having received my instructions, I promised to call back when I’d completed my mission. I didn’t, of course, because I knew right away this was a scam.

“The Federal Trade Commission reports that, from 2013 to 2014, complaints about the “IRS Scam” increased 20-fold, with more than 54,000 Americans being targeted in 2014. Fraudsters often target immigrants or older Americans less likely to have the knowledge or support system that would keep them from falling into the trap. As in my case, after stoking the fires of fear, the phoney agent turns helpful, providing a solution that involves sending cash in a quick and untraceable way.

“Unfortunately, IRS scammers often thwart tracking efforts by operating from overseas, using relayed calls, and by showing fake caller IDs. The display on my phone actually read “IRS GOV.”

“Of course, most of us, wouldn’t fall for a foreign scammer’s heavily accented delivery and unlikely story, but some always do. And the prospect of pending arrest might rattle even the coolest of us.

“Scammers often bolt at the first sign of discovery. When I called back my scammer and identified myself as a journalist, he gave me a terse response and hung up.

“Here’s what you should do if you receive a suspicious “IRS” call.

  • Assume it’s a scam. The IRS doesn’t call people about back taxes; it’ll send you a notice by mail. If you think you might have unpaid taxes, call the IRS at 800-829-1040.
  • Hang up the phone. Do not engage the caller in any way. Any information you provide may just mark you for more bogus calls.
  • Report the incident. If you are contracted by phone, report the incident to the U.S. Treasury inspector general for tax administration at 800-366-4484. If contacted by email, forward the message directly to the IRS at phishing@irs.gov.
  • Educate others.  Talk to the vulnerable people in your life about the scam.

“Finally, stay abreast of con artists’ latest tricks and find out how to protect yourself against fraud by going to the AARP Fraud Watch Network at aarp.org/fraudwatchnetwork.”

Now, get to it . . . But be careful out there.

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This Blog/Web Site is made available by me, an attorney licensed to practice law in Connecticut. I am not a recruiter, hiring manager, or career agent. Nor am I an expert in any of the areas or issues related to job search activities. I am merely sharing my job search experiences with you. This Blog/Web Site is designed to provide accurate information on the subjects covered but should not be considered professional or legal advice.

Money and Work – How Sharp Are Your Skills?

fotolia_61198618According to Jean Chatzky, an American financial journalist, author, and motivational speaker, today’s 20 to 30 year olds (born between the years of 1982 and 2000) have developed some useful and practical financial skills. Ms. Chatzky suggests that these skills are transferable to workers of all ages. Ms. Chatzky has given personal financial advice on various television shows and is the financial news editor for NBC’s Today Show.

In the December 2015/January 2016 edition of AARP Magazine, Ms. Chatzky suggests that we could all pick up a few financial pointers from millennials.

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  1. Save more money.
    • Millennials stick closely to a budget and increase the amount that they contribute to their 401(k) with each pay rate increase or job promotion.
    • The maximum 401(k) contribution for 2016 is $18,000.
    • If you are 50 years or older in 2016, you can make the 401(k) contribution plus an IRA catch-up contribution of up to $6,000 for a total maximum contribution of $24,000.
      • A traditional IRA contribution is tax-deductible.
      • A Roth IRA is a special retirement account where you pay taxes on money going into your account and then all future withdrawals are tax fee.       fotolia_77684650
  2. Don’t overuse credit cards.
    • Many people get into trouble with credit. If your balance is creeping up each month or if you are using one card to pay off another, you may be overusing your credit cards.
    • Many millennials pay with cash or debit accounts.
    • You may be tempted to cancel your credit cards but don’t. Canceling credit cards has been shown to negatively impact credit scores.fotolia_99648697
  3. Use technology to reduce the costs associated with investing.
    • According to InvestmentNews, financial advisors charge an average of 1.2% in fees annually to manage a $500,000 portfolio.
    • Many millennials use robo-advisers to manage their portfolios.
      • Robo-advisers are online wealth-management services that use algorithms, rather than people, to manage portfolios.
      • Robo-advisors such as Wealthfront, Schwab Intelligent Portfolios, Vanguard Personal Advisor Services and Betterment keep costs low by investing in exchange-traded funds.

Source: December 2015/January 2016 AARP Magazine, page 22.

Now, get to it . . .

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This Blog/Web Site is made available by me, an attorney licensed to practice law in Connecticut. I am not a recruiter, hiring manager, or career agent. Nor am I an expert in any of the areas or issues related to job search activities. I am merely sharing my job search experiences with you. This Blog/Web Site is designed to provide accurate information on the subjects covered but should not be considered professional or legal advice.

Tax Year 2015 – What’s New?

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There are not a lot of changes to the Tax Code for 2015. Here are a few topics that may affect your income tax filing.

Standard Mileage Rate for tax year 2015:

  • The standard mileage rate for the cost of operating a vehicle for business is 57.5 cents per mile. You may also deduct the cost of tolls, parking, property taxes and interest.
  • The standard mileage rate allowed for use of your vehicle for medical purposes is 23 cents per mile.
  • The standard mileage rate for use of your vehicle for volunteer services for an eligible charity is 14 cents per mile.

Medical and Dental Expenses: You may deduct that part of your medical and dental expenses that exceeds 10% of your adjusted gross income (7.5% if either you or your spouse is age 65 or older in 2015).

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Individual Retirement Account (“IRA”) and Retirement Account Contributions to Roth and Traditional IRA’s remains at $5,500 (the same as for tax year 2014). If you are age 50 or older in 2015, you may contribute an additional $1,000 (for a total maximum contribution of $6,000).

  • Contributions to 401(k), 457, 403(b), and similar retirement plans increased to $18,000. If you are age 50 or older in 2015, you may contribute an additional $6,000 to your 401(k), 457, 403(b), or similar retirement plan (for a total maximum contribution of $24,000).
  • Self-employment pension plan (SEP) contributions increased to $53,000 for 2015.
  • Please review your primary beneficiary and contingent beneficiary (if applicable) designations on all of your retirement and IRA accounts and update accordingly. This is important for several reasons, including the proper calculation of post-death required minimum distributions (RMD).

Health Savings Account (HSA): The maximum HSA contribution increased to $3,350 for individuals and $6,650 for families. If you are age 55 or older in 2015, you may contribute an additional $1,000 to your HSA. Tax payers have until April 15, 2016 to contribute to an HSA for a 2015 deduction.

You can request copies of past tax returns (referred to as tax transcripts) online at http://www.irs.gov/Individuals/Get-Transcript. This information can be used to validate income and tax filing status for mortgage applications, student and small business loan applications, and for tax preparation.

Education Credits for College: Typically, you will receive a Form 1098-T from the institution to show the costs paid during the tax year. These forms are not always accurate and are frequently audited by the IRS. It is recommend that you obtain a transcript of the account information from the institution to verify the information on the Form 1098-T.

Charitable Deductions must be supported by documentation for every dollar you claim as a deduction. For charitable donations of more than $250.00, official documentation must be obtained from the charitable organization. Valuations for non-cash donations like clothes, furniture, appliances, and vehicles are available at www.struck.com or www.itsdeductible.com. The IRS frequently audits non-cash contributions. There is no deduction for donations of your time to charitable organizations. For example, the value of your time spent building a home with Habitat for Humanity is not deductible.

Some forms and other information you may need for filing your 2015 tax return:

  • Affordable Care Act (ACA) – Health Insurance Marketplace
    • Form 1095-A: Health Insurance Statement if your received coverage from the Exchange
    • Form 1095-B: Health Coverage
    • Form 1095-C: Employer Provided Health Insurance
    • Exemption Certificate Number if you received an exemption from the Exchange
  • Wages/Income
    • Wage Statements – Form W-2
    • Pension/Retirement/IRA Income – Form 1099-R
    • Interest and Dividend Income – Form 1099-INT/Form 1099-DIV
    • State Income Tax Refund Amount – Form 1099-G
    • Social Security Income – Form SSA-1099
    • Unemployment Income – Form 1099-G
    • Alimony received
    • Information on the sale of stocks or bonds (including the original cost basis of the securities) – Form 1099-B
    • Self-employed Business Income and Expenses – Form 1099-MISC/1099K
    • Lottery or Gambling Winnings – Form W-2G
    • Income and Expenses from Rentals
    • Income from Partnerships, S Corporations, Trusts, and Estates – Schedule K-1
    • Cancellation of Debt, Abandonment of Secured Property – Form 1099-C & 1099-A
    • Distributions form 529 College Savings Plans – Form 1099-Q
  • Deductions from Gross Income
    • Health Savings Account (HSA) Contributions – Form 5498-SA
    • Educator Expenses up to $250.00
    • Alimony paid
    • SEP/IRA Contributions
    • Tuition and Fees deduction – Form 1098-T (remember to request the transcript from the school/institution)
    • Student Loan Interest – Form 1098-E

Now, get to it . . .

Source: Bacon and Gendreau Tax Preparation and Financial Services, 62 LaSalle Road, West Hartford, CT, www.bgtaxct.com

bitmoji155069107-3This Blog/Web Site is made available by me, an attorney licensed to practice law in CT. I am not a recruiter, hiring manager, or career agent. Nor am I an expert in any of the areas or issues related to job search activities or personal or professional income taxes. I am merely sharing my job search experiences with you. This Blog/Web Site is designed to provide accurate information on the subjects covered but should not be considered professional or legal advice.

How to Avoid Tax-Related Identity Theft

 

fotolia_44519607Tax-related identify theft occurs when someone uses your Social Security Number (“SSN”) to file a tax return and claim a fraudulent (and usually excessive) tax refund. Generally, an identity thief will use your SSN to file a false return early in the year – in January or February. They may already be filing fraudulaent returns. It is unlikely that you will know that an identity thief has filed a fraudulent return until you try to file your correct and proper tax return. The Internal Revenue Service (“IRS”) will return your tax filing to you with a note that a tax return with your SSN has already been filed.

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How to reduce your risk of tax-related identity theft:

  1. Do not carry your social security card, or any document with your SSN on it, with you on a daily basis. Carry it only when you are going to need it for a particular purpose such as applying for a Passport or registering for school.
  2. Do not disclose your SSN to anyone unless it is absolutely necessary. For example, medical professionals routinely ask for SSNs as part of their patient forms. Your physician does not need your SSN to treat you because medical records are kept by your name and birthdate. YOU DO NOT HAVE TO DISCLOSE YOUR SSN JUST BECAUSE SOMEONE ASKS FOR IT.  Do not be afraid to ask why your SSN is needed. Be comfortable that you are providing it only when necessary and to someone who will protect the information.ask why.
  3. Protect your personal and financial information at home and on your computer. Protect your personal computers using firewalls, anti-spam and anti-virus software, update security patches, and routinely change passwords to internet accounts.
  4. Shred any documents that contain confidential personal and financial information.
    • If you do not have a shredder, Staples and other stores will shred information for relatively low cost.
    • Take advantage of free shredding. Many banks and other businesses sponsor free shredding events in most communities several times a year.
  5. Do not give personal and financial information over the telephone, through the mail or on the internet unless you initiated the contact or you are absolutely sure with whom you are speaking.
  6.  Check your credit report annually. There are free services online like www.creditkarma.com.
  7. Check your Social Security Administration earnings statement annually. If you do not receive an earnings statement directly from the IRS, it is available at the IRS website at www.IRS.gov.

 

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“IRS” scam phone calls are very common this time of year. You need to be careful to protect yourself and your family.

What you need to know:

  1. The IRS WILL NEVER call you to demand immediate tax payments.
    • Let me repreat that . . . The IRS WILL NEVER call you to demand immediate payment of taxes owed.
    • The IRS WILL NEVER call you to demand tax payments without having first mailed a bill to you (probably several bills and written demands for payment).
    • Quite frankly, what government agency works this quickly?
  2. The IRS WILL NEVER demand that you pay taxes without giving you the opportunity to question or appeal the amount they claim to be owed.
  3. The IRS WILL NEVER require you to use a specific payment method for paying your taxes, such as a prepaid debit card.
  4. The IRS WILL NEVER ask for credit card or debit card numbers over the telephone.
  5. The IRS WILL NEVER threaten to have you arrested by local police or other law-enforcement officials for failing to pay your taxes.

If you receive a telephone call from someone claiming to be from the IRS and demanding money from you, here’s what you should do:

  1. If you know that you owe taxes or think you might owe taxes, call the IRS at 1.800.829.1040 to confirm the amount due and the due date for the payment. The IRS employees can help you with a tax payment issue.
  2. If you know that you do not owe taxes or have no reason to believe that you owe taxes, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484.
    • You can also file a complaint at www.tigta.gov using the FTC Complaint Assistant; choose “Other” and then choose “Imposter Scams.”
    • If the complaint involves someone impersonating an IRS agent or other government official, include the words “IRS Telephone Scam” in the notes.

Source: www.bgtaxct.com (Bacon and Gendreau Tax Preparation and Financial Services, 62 LaSalle Road, West Hartford, Connecticut)

Now, get to it . . .

bitmoji155069107-3This Blog/Web Site is made available by me, an attorney licensed to practice law in CT. I am not a recruiter, hiring manager, or career agent. Nor am I an expert in any of the areas or issues related to job search activities or taxes. I am merely sharing my job search experiences with you. This Blog/Web Site is designed to provide accurate information on the subjects covered but should not be considered professional or legal advice.