Archive for December, 2008

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10/20/08 – How Does the Emergency Economic Stabilization Act Affect You?

by P. Lewis Robinson
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Dec
10

How Does the Emergency Economic Stabilization Act Affect You?

 

In recent weeks you’ve probably heard a lot about the Emergency Economic Stabilization Act, but do you know what this new legislature actually entails?  This bill, signed by President Bush on October 1, 2008, gives the Treasury Department the ability to “purchase, insure, hold, and sell a wide variety of financial instruments, particularly those that are based on or related to residential or commercial mortgages.” It also calls for new tax breaks and tax increases for all types of businesses and individual taxpayers. Some of the new tax provisions included in this bill are as follows:

 

  • Compensation is limited for executives employed by financial institutions that are bailed out by the U.S. Treasury.
  • Mortgage debt forgiveness relief is extended through the end of 2012.
  • Tax-free fringe benefits are available, starting in 2009, for workers who choose to ride a bicycle or use a transit system to get to and from work.
  • Energy efficient property credits are modified and extended.
  • The 6.2% FUTA payroll tax rate is extended through 2009.
  • Certain types of companies who do not pay income taxes will have to include specific types of deferred compensation in their taxable income.
  • A temporary increase in the AMT exemption amounts will be in effect for 2008.
  • The ability to use personal tax credits to offset the AMT is extended.
  • The option to deduct sales taxes, instead of state and local income taxes, as an itemized deduction is extended through 2009.
  • Effective for 2008 and 2009, individuals who don’t itemize can take an additional standard deduction for property taxes paid during the tax year.
  • The option to donate part or all of an IRA to a charity, without reporting the distribution on the tax return, is extended through 2009.
  • Effective for 2008 only, the additional child tax credit threshold is lowered to $8,500.
  • Various new provisions for national and regional disaster relief areas now exist for taxpayers in the relative jurisdictions.

 

For more details on these provisions, please visit: http://taxes.about.com/b/2008/10/02/tax-provisions-in-the-bailout-legislation.htm

You may also want to print this article to use for future reference.

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10/13/08 – What Type of Money Market Do You Have?

by P. Lewis Robinson
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Dec
10

What Type of Money Market Do You Have?

 

The current economic crisis is causing many of us to worry about our money market accounts.  Although this is a legitimate concern, it is important to know the difference between money market accounts and money market funds. The names of these savings vehicles are very similar, but their functions are very different.

 

Money market accounts are merely savings accounts offered by banks that pay a higher rate of interest than normal savings accounts or interest-bearing checking accounts.  Banks usually require there to be a minimum of $1,000 to $2,500 in these accounts, and typically only allow up to three checks to be written from an account each month. Usually, FDIC insured banks provide up to $100,000 of protection for each account holder.  If the institution files bankruptcy, account holders are still entitled to all of their money that does not exceed $100,000.

 

The recent volatile economy has led the FDIC to increase the deposit insurance limit from $100,000 to $250,000 per account holder.  This temporary increase became effective on October 3, 2008 and will extend through December 31, 2009.  For more information please visit: http://www.fdic.gov/news/news/financial/2008/fil08102a.html

 

Money market funds are mutual funds that invest in short-term debt securities, such as Treasury bills.  These funds do not qualify for FDIC insurance even if they are purchased through your bank.  Insurance is not usually a concern with mutual funds, because these high-quality, short-term maturity, money market funds historically maintain a stable share price of $1.00.  This stability has made money market funds very popular investment vehicles.

 

However, in recent weeks investors have seen their money market fund share prices drop below the norm. This has prompted the U.S. Treasury to create a temporary guarantee program that protects money market shareholders from losses.  This program only covers the shares owned in a participating fund as of September 19, 2008.  It is currently in effect for three months, but the Treasury Secretary has the authority to extend it through September 18, 2009. For further information on the Treasury Temporary Guarantee Program please visit:  http://www.ustreas.gov/press/releases/hp1163.htm

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10/6/08 – Intuit Online Backups

by P. Lewis Robinson
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Dec
10

INTUIT ONLINE BACKUPS

 

Did you know that you can backup your personal data files online?  Online backups are a great way to protect your personal data files in the event a virus, power outage or human error erases everything on your computer.

Intuit offers online backups for as little as $4.95 a month for 1GB and $14.95 for 10GB.  Most data files, including QuickBooks files, can be backed up to these online data centers.  You can choose which files you want to backup and schedule automatic backups for times that are convenient for you.

This service is safe and secure, because your data is encrypted and stored in two separate online data centers.  If you ever need to access any of these files you can retrieve them using any computer that has an internet connection. 

For more information on this service please visit:

http://quickbooks.intuit.com/product/add_ons/online_data_backup.jsp?view=overview#tabAnchor

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9/29/08 – Car Operating Costs From Dave Ramsey

by P. Lewis Robinson
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Dec
10
Car operating costs from David Ramsey
Sure, the gas prices may be sky-high today, but here’s something that might interest you. In 1975, gas costs were 34.4% of the cost of driving a car 15,000 miles a year. Today, that rate is about 21%.

Bottom line … you are the answer. You don’t have to wait for gas prices to come down in order to start doing well with money. You just need to drive something you can afford. If it’s a car that’s a few years old, then so be it. If it’s used and you pay cash, then you won’t overspend and can put your money toward other debt. 

 

So that means the cost is coming from somewhere else. The insurance, the repairs, the actual cost of thSe car losing value has made car operating costs go up drastically, rather than a percentage of what gas is. It’s buying too much car that gets you in trouble! 

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9/22/08 – How To Increase Limits for Federal Deposit Insurance Coverage

by P. Lewis Robinson
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Dec
10

HOW TO INCREASE LIMITS FOR FEDERAL DEPOSIT INSURANCE COVERAGE:

   Check with your bank to see if they offer this service.

CDARS     (Certificate of Deposit Account Registry Service)

With CDARS, banks can offer you up to $50 million in Federal deposit insurance coverage. So you can manage all of your CDs through a single bank, without hassle.

With CDARS, you get One Bank, One Rate, One StatementSM

  • One Bank: Investors can access multi-million dollar FDIC insurance coverage by working with just one bank — the bank you know and trust.
  • One Rate: Investors negotiate one rate for each CD maturity and enjoy the option of reinvesting them through a simple process.
  • One Statement: Investors receive one easy-to-read statement summarizing all of their CD holdings.

With CDARS, you can say “goodbye” to running around town to multiple banks. No more opening up multiple title accounts in different rights and capacities of family members to maximize FDIC insurance at one bank. There also is no need to manually consolidate account statements or interest disbursements, which frees up your valuable time. You can enjoy the peace of mind associated with access to full FDIC insurance on your CDs. You’ve worked hard for your money. Now, let it work hard for you. As always, your confidential information remains protected.

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9/15/08 – When Should I Started Drawing my Social Security Benefits?

by P. Lewis Robinson
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Dec
10

 When should I start drawing my social security benefits? 

 

This is one of the toughest retirement decisions for anyone turning 62.  The Social Security Administration has released a new online tool to help with calculating your social security benefits based on numerous variables.  The estimator will allow you to project future earnings, use different employment factors that may occur during retirement, and try out the age at which you would like to retire.  The estimator will not calculate benefits for a spouse, but it is easy to use and gives you enough flexibility to change the variables under which you are retiring. 

 

Below is the link to the social security estimator. 

http://www.socialsecurity.gov/estimator/

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9/8/08 – Charitable Donations

by P. Lewis Robinson
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Dec
10

Have you ever wondered how to get a tax deduction without writing a check? There’s one deduction that’s available to you in your own home and it doesn’t take a lot of effort to get it.

 

We all have clothing, furniture and household items in our homes that are not being used. Giving those items to a qualified charity helps in more ways than one. First, you are ridding your home of clutter and unused items. Secondly, by donating them to a charity, you are allowing less fortunate individuals to buy these items from the charity’s thrift store at far less than the item’s value when new. And lastly, you receive a tax deduction for the fair market value of those items on your tax return.

 

All you have to do is make a list of the items given and obtain a receipt from the charity. You’ll also need to value each item. This is generally what the charity’s thrift store is selling the item for, not what you paid for it or even what you think it’s worth. There are also several guides available on the internet to assist you in assigning value to the items.  For higher value items, you make want to take pictures for your tax file and notate on your list the reason for the higher value (designer clothing, etc).  It is also important to remember that only items in “good condition or better” are eligible for the deduction.

 

Simply file your receipt and list with your tax documents and provide it to us with your tax organizer. You’ll receive the pay-off for those few hours of your time when you file your tax return next year.

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9/2/08 – Insurance Review Time?

by P. Lewis Robinson
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Dec
10

INSURANCE REVIEW TIME?????

When was the last time you reviewed your liability and catastrophic insurance coverages?  You know you should review both coverages and premiums at least every three years.  This risk and its related cost is usually the least item looked at by a businessperson, but is normally a big cost item on the P&L.  Since you have not looked at it in a while, now is the time to call in your insurance agent or broker to review coverages and quote the renewal or change of existing coverages.  It would also be wise to ask two other insurance agents or brokers to review coverages and offer a quote.  You may be very pleasantly surprised to see what is wrong with your existing coverage or premium costs.  Be sure to tell your current insurance agent that you will be soliciting two other quotes so he or she knows where he or she stands.

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8/25/08 – Fake E-mails from the IRS are Scams

by P. Lewis Robinson
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Dec
10

Fake Emails from the IRS are Scams

Never Fall for an Email Pretending to be from the IRS

By William Perez, About.com

The Internal Revenue Service never contacts taxpayers via e-mail. So if you have received an email claiming to come from the IRS, chances are the email is a scam. Here’s how you can protect yourself.

Identifying Scam Emails

Does the email ask for your credit card, bank account, PIN, password, or other sensitive information?

“The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.” (Source: IR-2007-109)

Common Themes in Email Scams

Email scams often trick you into thinking you have a missing refund, are under criminal investigation, refers to a non-existent tax form, or asks for your credit card number.

Recent email scams have shown some similarities, such as spelling mistakes and showing tax refunds for an amount that includes dollars and cents. (Usually, tax refunds are for amounts in whole dollars.)

Don’t Click on Links or Open Attachments

The email probably contains links to Web sites or attachments. Do not click on those links or open any attachments. Those Web pages or attachments could contain malicious software or code designed to hijack your computer.

Forward the Email to the IRS for Investigation

You can forward to the email to the IRS. Investigators at the tax agency will use the information contained in the emails to track down the criminals.

To forward the email, make sure your email software is displaying all the headers in the message. Many email programs show only the most important headers by default. Once you are displaying all the headers, forward the fake email to phishing@irs.gov.

“The IRS can use the information, URLs and links in the bogus e-mails to trace the hosting Web sites and alert authorities to help shut down these fraudulent sites.” (Source: IR-2006-49)

The IRS will probably not acknowledge the receipt of your email.

Delete the Email

After forwarding the email to the IRS, delete the email. You might also want to run a scan of your computer using your antivirus or internet security program.

Contacting the IRS

If you have any concerns or questions about your taxes, you should contact the IRS directly. Here’s some phone numbers:

Tax Refunds: 1-800-829-4477, or visit Where’s My Refund on the IRS Web site.
Questions about Your Taxes: 1-800-829-1040, or visit a local IRS office.

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8/11/08 – Should I Withdraw Money from my Retirement Account?

by P. Lewis Robinson
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Dec
10

Ever think about withdrawing money from your retirement account?  Decide whether or not it is really worth it…

Click on the link below:
William’s Tax Planning Blog

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