David V. Fazio E.A. | Westbridge Accounting Services

American Recovery and Reinvestment Act of 2009

As most of you know, President Obama signed The American Recovery and Reinvestment Act of 2009 (ARRA) on February 17th. The much anticipated $787 billion stimulus package is now law after moving through Congress in less than four weeks and contains nearly $300 billion in tax relief to individuals and businesses in an attempt to jump start the U.S. economy out of recession.

I try not to send out newsletters during tax season (there are 30 returns stacked behind my desk that still need my attention), but after receiving no less than 20 calls and emails about this today I wanted to pass the information I have been given. Please note that the IRS has not passed their official interpretation of the ARRA, so any information provided is subject to change.

2009 Stimulus Payments

There is no Stimulus Payment planned for 2009.

Making Work Pay Credit

Instead of mailing off Stimulus Payments like last year, the IRS will be “tweaking” the federal tax withholding tables a bit for 2009 and 2010. Workers will start to notice an increase in their paychecks equaling approximately $13/week in the near future.

The maximum credit is $400 ($800 for a married couple). Most will receive this credit by reduced wage withholding. Self-employed taxpayers will most likely receive the credit on their tax returns. The credit only applies to taxpayers with adjusted gross incomes under $75,000 ($150,000 married).

Here is an interesting question… if you work 3 jobs, will each job apply the $400 credit to your withholding calculations? The answer from the IRS is yes. Therefore, you may want to revise your Form W4 with your employers and have an additional $15/week ($30/bi-weekly) withheld during the year if you normally only receive a small refund or normally owe federal income tax.

$250 Economic Recovery Payment

The new law provides a one-time payment of $250 (for 2009 only) to individuals who receive Social Security (it appears both SSI and SSDI qualify), Railroad Retirement, federal pensions and veteran’s disability benefits. Unlike last year’s Stimulus Payment, these checks will be coming from the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board and qualified recipients will not need to file a tax return in order to receive their $250.

First-Time Homebuyer Credit

The $7500 credit for first-time homebuyers is still on the books for purchases between April 9, 2008 and December 31, 2008 along with the requirement that the credit be repaid at $500 per year starting in 2010. The unpaid portion of the credit (up to the gain on the sale of the home) must be paid back when the home is sold.

For purchases after December 31, 2008 the credit is increased to $8,000 and there is no payback provision as long as the house is owned for 36 months. Even better: if a first-time homebuyer (defined as someone who did not own a home for 3 years from the date of purchase) buys a house in 2009, they can amend their 2008 tax return to receive a refund in approximately 8-12 weeks!

New Car Deduction

The ARRA allow for a deduction for sales and excise taxes on the purchase of a new car between February 16, 2009 and January 1, 2010. There are income limitations, however. If your income is over $125,000 ($250,000 married), the deduction is reduced.

The maximum purchase price of the vehicle to fully qualify for the special deduction is $49,500. Most new cars, light trucks, motorcycles, SUVs and even motorhomes under 8,500 pounds generally qualify. Sales taxes paid in conjunction with a lease agreement do not qualify for the special deduction.

Please note that I am receiving conflicting information as to whether this will be a special line item deduction used to arrive at adjusted gross income or an addition to the standard deduction. Because adjusted gross income controls many other deductions and credits allowed on the return, the first method of reporting would be more favorable.

Unemployment Compensation

ARRA provides that the first $2,400 in unemployment benefits will be non-taxable for federal income tax purposes.

HOPE Education Credit

Renamed the American Opportunity Tax Credit for 2009 and 2010 now covers all four years of college (the HOPE only covered the first two years). The maximum credit is increased to $2,500 (100% of the first $2,000 in qualifying expenses plus 25% of the next $2,000) and is refundable (can be refunded to the taxpayer even if their taxes have already been reduced to zero).

Even better… books now qualify for the credit!

The income phase-out (reduction in credit) is also increased so benefits are lost only when taxpayer’s adjusted gross income exceeds $80,000 ($160,000 married).

Earned Income Tax Credit

The EITC has been increased for 2009 and 2010 and can now be based upon three qualifying children.

Note: with times as tough as they are, taxpayers who routinely qualify for the EITC on their tax returns may want to consider having the credit advanced to them in their paychecks. Contact your payroll or human resources manager for Form W-5.

AMT Patch

Congress has amended the tax code to insulate approximately 26 million middle-income taxpayers from having to pay the Alternative Minimum Tax on their returns in 2009 by increasing the exemption amounts.

Transit Passes

Qualified transportation fringe benefits such as T passes and employer paid parking up to $230 per month starting in March can be excluded from your W2 income starting on March 1^st through 2010.

COBRA Benefits

The new law allows an individual who is involuntarily terminated between September 1, 2008 and January 1, 2010 to pay only 35% of their health insurance premium under COBRA. The employer will make up the remaining 65% (which they will recoup as a special payroll tax credit).

Please remember that Massachusetts requires all residents to have health insurance. Penalties apply if you are uninsured for more than 3 consecutive months.

Note: if you were terminated before February 17, 2009 and declined COBRA coverage, your employer should notify you that you have only 60 days to opt back in to being covered.

Estimated Taxes

For 2009, individuals whose primary source of income is from self-employment and their total income is less than $500,000 will be required to pay quarterly estimated tax payments based upon 90% of their 2008 tax liability instead of the usual 100%.

Residential Energy Property Credit

Judging by how many of you brought in your Home Depot and Lowe’s receipts this year; I know how disappointed you were to not be able to deduct your new furnace, hot water heater, doors, windows, insulation, etc. Don’t feel bad, I put in 11 new windows and two doors last summer myself.

The good news is that the REPC is back for 2009 and 2010 with an even higher cap ($1500 vs. the old $500 cap for 2006 and 2007). The 30% credit is good for:

· Insulation materials

· Exterior windows

· Skylights

· Exterior doors

· Central A/C

· Natural gas, propane or oil water heaters and furnaces

· Electric heat pump water heaters

· Advanced main air circulating fans

Solar hot water property, geothermal heat pumps and wind energy property also qualify for the credit.

Other Provisions for Businesses

The 50% bonus depreciation and Section 179 asset expensing increases from 2008 are being carried over to 2009. Businesses with net operating losses can carry those losses back five tax years instead of two and carry forward any remaining losses to 2010.

The Losers

The generations of the future… the national debt has risen to unprecedented levels. Expect tax rates to increase in the future when the economy eventually stabilizes.

Tax Season Notes

In general, things are going smoothly here. The IRS is processing most refunds according to schedule (2-3 weeks for direct deposit and 3-4 weeks by check). The Mass. DOR is issuing refunds in as little as four days. To check on your IRS refund, call 1-800-829-1954. To check your Mass. refund, call 1-800-392-6089.

Many thanks to the many clients who have referred their friends and families to Westbridge this year! If you have referred a client to me and they have not been seen yet, please make sure they know how to get here. We had an unfortunate incident with a new client who could not find the house and was trapped in voicemail when I ran late with one client and the client scheduled after her arrived early. As you know, my clients get my undivided attention while I am preparing their return and I do not answer the business line. Directions are available on my website.

There are now less than 8 weeks left in the season. I am almost fully booked until mid-March. Any appointments rescheduled after March 15^th may have to go “on extension” until after tax season ends. Monday, Tuesday and Saturday appointments for the remainder of the season are almost completely booked and I am running very tight on evenings at this point. If you have not scheduled your tax appointment, I urge you to schedule very soon.

If you left a message with an unfamiliar voice on the other end of the phone this week… yes, that was my daughter taking your call. She has been a great assistant this week during school vacation and I will miss her help come Monday! I’m also proud to announce that she has been selected as an “All Star” for her division in our town’s basketball league and will be facing East Bridgewater next month! You go girl!!

I also can't thank my wife Angela (aka the tax season widow) enough. She works a ten hour day only to come home to a house full of hungry kids who need to go to a basketball game, Cub Scout meeting or have their homework checked yet still manages to book appointments for me. Also, thanks to my son Joey who can always be counted on to send down a snack for Dad after the last client leaves and was also a huge help shoveling the parking lot during those relentless January snowstorms! I started this firm on my own almost ten years ago but it has truly evolved into a family affair!

Finally, I typically do not see clients on April 15^th because I’m usually putting out various fires such as filing extensions, amending returns and reprinting payment vouchers for those who lost them. Please note that this year the office will be closed on April 15^th this year due to a memorial service for a family member.

As always, if you have any questions or concerns, please do not hesitate to drop me an email at Dave@westbridge-accounting.com.

Dave

Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice in this communication, including any attachments or enclosures, was not intended or written to be used, and it cannot be used, by any person or entity for the purpose of avoiding penalties imposed under the Internal Revenue Code.

NEW ON WWW.WESTBRIDGE-ACCOUNTING.COM

· Tax Year 2009 IRS inflation-adjusted deductions, credits, exemptions, etc.

· Senior Alert!!! RMDs not required for tax year 2009 and tax-free IRA distributions for qualified charitable donations

· Understanding the Recovery Rebate Credit

· Small Business Alert!!! 2008 1099s must be furnished to recipients by February 2^nd

· “Stimulus Package” does not mean another round of checks!

Well, what a year. Unless you got married, had a baby or hit the lottery last year I think most of us are glad to put 2008 behind us! I hope everyone enjoyed the holidays and survived the recent storms. To my Western Mass. clients in Lunenburg, Townsend and Fitchburg; I hope the blackout as the result of the December ice storms was brief for you.

I have already been receiving a flood of calls for appointments. For some of you, getting an appointment last tax season was harder than getting into a Jonas Brothers concert so I urge everyone to schedule very early this year. Looking at my notes from last year, I was totally booked for February by January 30^th and March was completely booked by February 20^th. I don’t want to see anyone shut-out of their preferred appointment time so please consider scheduling your appointment now before things get too hectic. Also, please bear in mind that if you need to reschedule an appointment that it may be several weeks before I can get you back in.

I also wanted to let you know that my house was re-sided over the summer and is no longer yellow. It’s sage green now. I’m still trying get out of the habit of telling clients “it’s the yellow house on the corner of Turnpike St. and Snell’s Way”. By the way, if you got lost last year trying to find me, you can get directions here!

Now is the time to start gathering your tax forms as they come in the mail. I suggest you get a large envelope and stuff it with the forms as they arrive. Also, refer to my list of forms you must bring to your appointment at http://www.westbridge-accounting.com/taxes. Nothing is more frustrating for clients than to arrive at their appointment and then find out that they are missing a W2 or a 1099 form and their return is exiled to the pile of returns waiting for information.

Please remember that if you suffered a foreclosure, agreed to a short sale, had a credit card or other loan charged-off or if you declared bankruptcy your tax return just became more complicated. It is very important to let me know these facts when you schedule your tax appointment in order to allow sufficient time to prepare the return. It is also important that you bring all of the documentation to me to in order to properly ascertain any tax consequences (or benefits) of the transaction. New (favorable) tax rules apply to foreclosures and short sales so make sure you bring everything to your appointment!

Please also let me know if you became self-employed, purchased a home, sold a home or purchased rental real estate last year so I can schedule a longer appointment if necessary. Finally, don't forget that I will need to know how much your Stimulus Payment was last year. In certain circumstances you can receive an additional tax credit if your Stimulus Payment was less than the maximum allowed. If you cannot remember, the IRS has a website where you can obtain this information.

If you own a small business you should be getting your books in order. Please remember that if you bring in a bunch of bank statements and receipts for me to categorize and total you will be paying a much higher fee than if you come in with neatly organized records which have already been categorized and totaled. I don’t mind doing the accounting work but it will be billed at my hourly rate.

With regards to the new Massachusetts health insurance requirements. Please note that you may receive more than one 1099-HC form this year if you were insured by multiple companies. For example, I expect three this year because my wife started out with one company’s plan, ended up with another policy when she was laid off and then changed plans again when she started a new job. Remember, the Mass. DOR penalty for being uninsured the entire year is steep (almost $1000 per uninsured taxpayer if your income is above the limit) and is calculated based upon each the number of months you were uninsured.

Well, it’s that time again and I am ready for everyone. I have one more tax update class to finish this weekend. The freezer is stocked for Angela and the kids with three months worth of homemade chili, assorted casseroles and spaghetti sauce. I renewed my driver’s license today and got a flu shot. I’m stocked up on copy paper, Kleenex, coffee and road salt. I’ve cleared time to make a few of Adrianna and Joe’s basketball games. I’d say we’re good to go!

The IRS will begin accepting e-filed returns next Monday… I’m ready when you are and I’m looking forward to seeing you all very soon!

Dave Fazio E.A.
508.586.2600

Dear Westbridge clients:

I have been trying to get this newsletter out for four weeks now. It has been difficult to set the tone of the letter because of the current state of the economy. I certainly don’t want it to be all “doom and gloom” but from the phone calls I have received between May and now, I know that there are many of you struggling financially. Even in my own household we had to endure an eight week period of unemployment when my wife was laid off over the summer (FYI… given the choice between being attacked by a cobra and paying for COBRA, I’ll take the snake any day).

Times are tough for most of us. We’ve seen the value of our homes drop dramatically; we’ve seen our 401k lose much of its value (I’m calling mine a 201k now that I’ve lost almost half of it); refinancing a mortgage or even obtaining a car loan is harder than ever; and even though gas prices have finally dropped under $3 per gallon, we are still feeling the effects of higher prices for food, clothes, heat and insurance.

Although it does not compare to the Great Depression, it is the worst economic collapse this country has seen since the 1930s. To survive, we are all going to have to do some belt-tightening and perhaps reevaluate what is truly important in our lives. Despite whatever financial turmoil there is in our own houses, we can’t wait around for a bailout from Congress. I just don’t see it happening.

Below are some articles I’ve just published regarding tax law changes, interesting court cases and information for small businesses. I’ve also added some commentary on tips and tricks to muddle through the down times.

Please know that I am here to answer any questions you may have during the “off-season” by phone (508-586-2600) or email (dave@westbridge-accounting.com).

Sincerely,

Dave Fazio EA

Westbridge Accounting Services

Dave’s latest online articles:

· Congress passes new first-time homebuyer credit worth up to $7,500

· The IRS has increased the standard mileage rate for the last half of 2008

· The Mass. DOR attempting to flush out employers who misclassify employees as independent contractors (this is a “must-read” for all business owners!)

· The Mass. DOR now revoking drivers licenses and registrations for unpaid income taxes

· Small Mass. businesses may not have to pay sales tax on energy purchases

· Tax Court denies waiver of 10% penalty on military family’s early retirement withdrawal

· Tax Court denies generous donors a charitable deduction for lack of substantiation

· FDIC limits

· Protect the equity in your home by Homesteading

· 61% of returns by unlicensed tax preparers sampled contained errors (courtesy of MarketWatch)

With the US economy in crisis mode and most Americans being squeezed left and right with higher prices, tighter credit restrictions and investments teeter-tottering up and down 5% daily, I’ve put together a few money tips for my clients.

Note that all tips may not apply to your current financial situation. Many tax firms specialize in catering to a specific clientele (investors, upper-incomers, etc.). My clients, however, range from students who landed their first jobs to retirees and everyone in between. They are singles, couples, families, low income, high income, investors, small business owners and wage earners.

Pay your bills on time

Just one missed payment can drop your credit score enough to make a difference if you are applying for a loan, credit card, renting an apartment, looking for a new job or even trying to obtain telephone service. A lower credit score can result in utility companies requiring security deposits, denial of employment, higher interest rates on all forms of credit, reduction in credit limits and denial of loans.

Check your credit report for free

You are entitled to a free credit report (but not your credit score) every 12 months. You can grab reports from the 3 major bureaus (Experian, Equifax and TransUnion) by visiting www.annualcreditreport.com online, by calling (877) 322-8228 or by mail by completing an Annual Credit Report Request Form.

Notify creditors and credit bureaus of ANY errors on your report

Any incorrect information can be detrimental to your score. First make sure that all of the accounts are truly yours. If you’ve been reported for late payments or charge-offs, check your records to make sure the information is accurate. Ensure all public records (liens, foreclosures, bankruptcies, etc.) are valid.

Don’t bank on your home equity

Over the past several months banks have notified customers that their Home Equity Lines of Credit (HELOC) have been frozen or the amount available to draw has been drastically reduced. If this is your emergency fund then it’s time to face reality and ramp up your savings.

Get the employer match, then plan for the unexpected with savings accounts and CDs

Accountants and financial planners have been driving home the same advice for years… “You need to fully fund your 401(k) plan for retirement! You’ll save thousands of dollars in taxes today!” Now more than ever we need safety nets for unforeseen expenses whether it is unemployment, medical or housing related. In these uncertain financial times, I am now advising clients to make sure they have an emergency fund in safe non-retirement accounts to access in emergencies. Continue contributing to your 401(k) to the limit your employer will match your contributions, but have cash set aside for emergencies. Scour the web for the best savings account rates and consider staggering CDs at an FDIC insured bank. Still concerned about taxes? Then consider AAA municipal bonds which are free of federal (and possibly state) taxes. If your emergency fund is complete, then consider increasing your 401(k) contribution more, but not until then.

Now that you’ve started that non-retirement nest egg, make it grow

I’ve been speaking with clients who have been out of work for long stretches (6+ months) at a time this past year. Unemployment checks just don’t cut it (and they’re taxable). Hitting up an IRA or 401(k) can result in unexpected tax bills and will ultimately reduce your retirement income in the long run. For our own financial security we must have at least 3-6 months of living expenses (rent/mortgage, utilities, food, clothes, insurance, car/credit card payments, etc.) banked away in a dual income household. If you are the sole breadwinner in your household then consider 6-12 months of living expenses.

The market IS unstable right now – but exit with caution

I’ve been flooded with calls from clients. Retirees… investors… trust beneficiaries… last month they were nervous and now they’re scared to death. We all are. Please remember that I am a licensed tax professional and not a certified financial planner. I know zero about stock market trends and I do not know where the bottom is in what seems to be a freefall.

The only thing I can tell you is what I am doing with my own portfolio. I’m in it for the long-term and praying that any so-called bailout will bring stability and increased share prices to the market. My portfolio is down 45% from a year ago just like yours and though I’m tempted to cut my losses, sell everything and move it to cash; I worry that I would miss the eventual rebound.

Review your credit/debit card statements for unnecessary expenses

· Are you still paying for a gym membership but haven’t gone in the past 3 months?

· Do you still pay for dial-up internet service even though you have DSL or cable?

· Do you have every channel imaginable on your cable service but basically watch the same five stations?

$20 here and $20 there truly does add up over time. Cut out 3 unnecessary $20 bills a month will save you $720 a year.

Learn to say NO!

Say it to yourself, then say it to your kids… “If we don’t need it, then we’re not buying it”. My wife and I have become really good at this over the past year and you know what, they’ve stopped asking. If we’re taking them shopping they need to bring their own money because unless it’s school-related I’m not interested in hearing about it. I don’t care if everyone has a tricked out cell phone, the newest iPod, a $100 pair of sneakers or the Wii. Santa’s coming soon, try him.

It’s a new world… get used to it

No-doc mortgages, 110% home financing with 0% down, bad-credit-no-problem loans, double digit annual real estate appreciation and amateur house flipping are all history. Just like the tech stocks and the employee stock options of the 90s, these fads have passed. The new economy will force lenders to scrutinize credit scores and home values before approving mortgages. Real estate appraisers will be cautious with their valuations. Borrowers will be expected to put 10-20% down and have a credit score of 720 or higher.

Frugal is not a four-letter word!

It’s time to get thrifty and be proud of it. FYI… I no longer feel the need to wear sunglasses and a baseball cap when shopping at PriceRite – I strut into that store like it was Neiman Marcus. Talk to older family members who lived through the Depression and WWII. They’ll tell you about ration stamps and how the ladies drew lines on their legs because stockings were so expensive (if you could even find them). Let’s unabashedly bring back some of the old-fashioned “tried and true” ways our parents and grandparents survived their economic crises.

· Revive the old recipes like Tuna Casserole, homemade cookies and Ambrosia

· Have the kids birthday party at home and make the cake from scratch

· Hang a clothes line, reuse tin foil and accept hand-me-downs from family

· Stop saying “My treat” and start saying “Dutch treat”

· Last year’s catered affair should now be “Pot Luck” and “BYOB”

· Clip coupons and mail out rebate forms

· Carpool

· Drive the speed limit

· Use cash, not credit

· VOTE

· PRAY

Summer greetings to the best clients an accountant could ask for! I wanted to touch base with everyone before the kids are officially out of school and we all kick off the summer season.

QUICK LINKS TO DAVE’S ARTICLES ONLINE

· Updates on Massachusetts health care requirements (http://westbridge-accounting.com/0608001)

· IRS Income Discrepancy Notices are in the mail (http://westbridge-accounting.com/0608002)

· Stimulus Payments (http://westbridge-accounting.com/0608003)

· Massachusetts’ Department of Revenue working with other state agencies and IRS to flush out the “Underground Economy” – this is a must-read for anyone considering working under the table or not reporting all of their cash income! (http://westbridge-accounting.com/0608004)

“Summertime… and the livin’ is easy”… NOT!

Gershwin wrote those lyrics for Porgy and Bess in the middle of the worst economic depression our country ever faced. So here we are some seventy plus years later trying to keep our chins up during another official recession. Summer officially starts next week and here is what we are looking forward to:

· Gas prices that have already topped $4.00/gallon and expected to rise to $4.15-$4.50 depending on who is reporting the story.

· Basic kitchen staples like eggs, milk and fresh fruit and meat have become even more expensive.

· The Midwest weather is expected to raise the price of corn (due to crop flooding) which will ultimately raise the price of corn-fed meat and poultry even further.

· The collapse of the mortgage industry and reduced real estate values have left many homeowners with very little or even negative equity in their homes.

· Those that actually have money put aside for a rainy day are seeing ridiculously low returns on savings accounts and CDs or are getting nauseous from the roller coaster ride the stock market has been on since 2008 started.

This is not going to be an easy summer for most of us. Those who commute are paying over $100 a week to keep their tanks filled. Those who want to vacation are debating whether they want to pay 35% more for gas in the minivan or pay all the ridiculous surcharges the airlines are tacking on now. Dozens of clients have called and said they got their rebate checks, but some say they are going to pay off credit cards or just using it to meet basic household expenses. Others are calling looking for the tax ramifications of losing their home to foreclosure.

At the baseball fields the parents are talking about where they are cutting back… vacations, restaurants, that extra cup of coffee from Dunkin Donuts. The hottest news in town is which gas station is selling for under $4 and where you can get a gallon of milk for less than $3. Then we hear that the local food pantries are seeing twice as many clients as last year.

It’s easy to become depressed with the newscasts, especially in the internet age and 24/7 cable news. It is important to remember that recessions are temporary (the average recession period since World War II is 11 months) and after the 1991 recession the country entered an economic expansion that lasted 10 years.

I don’t generally comment on economics (I struggled through 2 semesters at Bridgewater State and squeaked by with Bs) but the state of the economy right now is beginning to lead to many tax-related questions from clients such as…

· Is unemployment taxable? (yes)

· If I take a hardship withdrawal from my IRS/401k is it taxable? (yes, and probably with a 10% penalty to boot)

· I’m thinking about starting a business. If I lose money is it deductible? (generally it is)

· I’m now working under the table, do I need to declare the income (big yes)

· What will happen if I can’t pay my estimated tax this quarter (a penalty, possibly)

· My mom gave me $10,000 as a gift. Do I owe taxes on this? (No, but does she want to adopt an accountant?)

Please know that even though I do not keep a set schedule for summer office hours that I am more than happy to answer any tax questions you may have during the off-season. Just call my office or simply drop me an email.

Dave

SUMMERING CHEAP AND FUN

My kids have been warned that we are cutting back this summer and saving money. Here’s my plan to “summer on a shoestring”…

· $35 Massachusetts ParksPass (http://www.mass.gov/dcr/parkspass.htm) to visit some of the state’s great local parks and beaches. Dig out the old cooler and stuff with PB&J sandwiches, some apples, grapes and a Tupperware pitcher of Crystal Light.

· $5 Grandstand Seats to the Brockton Rox (www.brocktonrox.com) beats the $50 the Red Sox are charging (if you can even find them). Feed the kids hot dogs before we leave (saves $2 each at the park) and offer to spring for popcorn and sodas. Accidently leave wallet and cash at home.

· Sirloin tips on the grill with sautéed mushrooms and onions will run about $15 for our family of four vs. over $100 at a halfway decent restaurant.

· 8 homemade burgers, some frozen fries and a ½ gallon of homemade lemonade can be done for about $7 vs. $24 at Burger King.

· A half gallon of ice cream, pint of Hershey’s syrup, a jar of cherries and a can of whipped cream will make 8 good size sundaes for about $8 vs. about $35 for 8 sundaes at a casual restaurant.

· Never take a solo trip… plan food shopping, doctor’s visits, etc. together to consolidate errands and save gas!

· Have a yard sale (it will never happen but it’s a good way to declutter and make a little money)

· Go fishing!

· Note to self… stay friendly with anyone who has a pool until September!

HAPPY FATHER’S DAY!

Becoming a dad had to be the most exciting and blessed day of my life. After doing it for eleven years I can honestly say it doesn’t get any easier, but I wouldn’t change it for anything! Best wishes to all of the Dads out there for a happy Father’s Day this Sunday. Also, to all of the moms who have to be both Mom and Dad, this day’s for you too!

UPCOMING TAX DEADLINES

06/16/08 2^nd Quarter Federal and Massachusetts Estimated Tax Payments are due

09/15/08 3^rd Quarter Federal and Massachusetts Estimated Tax Payments are due

09/15/08 Corporate returns "on extension” are due

10/15/08 Individual returns "on extension” are due

10/15/08 Last day to make 2007 SEP-IRA contributions for returns "on extension"

Courtesy of Internal Revenue Service

Those phishers are at it again! Whether by phone or email these scums are posing as employees of the most feared agency of the Federal government. They are attempting to lure taxpayers into disclosing Social Security Numbers, bank account numbers and credit card numbers. Here's the latest warning from the IRS:

WASHINGTON - The Internal Revenue Service today warned taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure. The IRS expects such scams to continue through the end of tax return filing season and beyond.

The IRS cautioned taxpayers to be on the lookout for scams involving proposed advance payment checks. Although the government has not yet enacted an economic stimulus package in which the IRS would provide advance payments, known informally as rebates to many Americans, a scam which uses the proposed rebates as bait has already cropped up.

The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft.

Typically, identity thieves use a victim's personal and financial data to empty the victim's financial accounts, run up charges on the victim's existing credit cards, apply for new loans, credit cards, services or benefits in the victim's name, file fraudulent tax returns or even commit crimes. Most of these fraudulent activities can be committed electronically from a remote location, including overseas. Committing these activities in cyberspace allows scamsters to act quickly and cover their tracks before the victim becomes aware of the theft.

People whose identities have been stolen can spend months or years ? and their hard-earned money ? cleaning up the mess thieves have made of their reputations and credit records. In the meantime, victims may lose job opportunities, may be refused loans, education, housing or cars, or even get arrested for crimes they didn't commit.

The most recent scams brought to IRS attention are described below.

Rebate Phone Call
Refund E-mail
Audit E-Mail
Changes to Tax Law E-Mail
Paper Check Phone Call

Checkout the details behind these scams by visiting the IRS website. Remember, neither the IRS or Mass. DOR contacts taxpayers via email and rarely by telephone. If you have received either a phone call or a suspicious email you can contact IRS at phising@irs.gov or contact Dave.

Courtesy of Mass. DOR

For 2008:

Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for failure to purchase health insurance, as those at this income level are not required to pay an enrollee premium for Commonwealth Care health insurance.
Penalties for individuals with incomes from 150 to 300% of the Federal Poverty Level will be half of the lowest priced Commonwealth Care enrollee premiums for which an individual would have qualified, depending on his or her income.
Penalties for individuals with incomes more than 300% of the Federal Poverty Level will be:

Half of the lowest priced Commonwealth Choice Young Adult Plan premium (without prescription drug coverage) for individuals up to age 26.
Half the lowest priced Commonwealth Choice Bronze premium (without prescription drug coverage) for those 27 and above.

Penalty rates are based on the Commonwealth Health Insurance Connector's plan prices as of January 2008.
Penalties for married couples without health insurance (with or without children) will equal the sum of individual penalties for each spouse.

Penalties for 2008

Individual

Income

Category*

150-200 % FPL

200-250% FPL

250-300% FPL

Above 300% FPL

Age 18-26

Above 300% FPL Age 27+

Penalty

$17.50/month

$210/year

$35/month

$420/year

$52.50/month

$630/year

$56/month

$672/year

$76/month

$912/year

* Compare individual's annual family household income to chart immediately below to determine applicable Federal Poverty Level (FPL).

Federal Poverty Level - Annual Income Standards

Family Size	150% FPL	200 % FPL	250 % FPL	300 % FPL
1	$15,324	$20,424	$25,536	$30,636
2	$20,544	$27,384	$34,236	$41,076
3	$25,764	$34,344	$42,936	$51,516
4	$30,984	$41,304	$51,636	$61,956
5	$36,204	$48,264	$60,336	$72,396
6	$41,424	$55,224	$69,036	$82,836
7	$46,644	$62,184	$77,736	$93,276
8	$51,864	$69,144	$86,436	$103,716
For each additional person add	+$5,220	+$6,960	+$8,700	+10,440

Visit the Commonwealth Connector website for information on obtaining health insurance at http://www.mahealthconnector.org/.