Later Filing of Tax Returns Due to Law Changes

Congress passed new laws regarding taxes (actually renewed some laws that were going to expire) on December 17, 2010 so the IRS is saying that returns that itemize deductions claiming sales taxes, or returns getting the educator's deduction (basically school teachers) or anyone claiming education credits may not be able to file their returns until Mid to Late February because the forms won't be ready before that date.  There are options.  I am telling my clients to get me their taxes timely like they always do so we can be ready when we can file the returns....and we can possibly file returns without the above deductions then amend the return when the forms are ready.

Pay On Death Accounts

Here is something even I have not yet done but hopefully will take care of this coming week.  If you should die, to make transferring your bank accounts easy, you should consider having a pay-on-death account (POD) which basically means that when you die, the balance in the account passes directly to the named beneficiary and bypasses probate.  Using a POD or transfer-on-death (TOD) account is the simplest way to keep assets held in bank and brokerage accounts from becoming part of an individual's probate estate.  And an individual's will does not control who inherits a POD or TOD account.  With a POD/TOD account, you can name a new beneficiary at any time.  Not all states have a POD/TOD law.  Even without a law, individuals can make use of the accounts by doing business with a broker or a bank based in a state that has one on the books.

Estate Tax Law Changes

Most people will not be affected by the current estate taxes because their estates don't fall into the range where their estate will be taxed.  The Middle Class Tax Relief Act that went into law on 12/17/10 is as follows:

2010 - Exemption $5,000,000 or $0 -- Tax Rate 35% or 0%
2011 - Exemption $5,000,000  -- Tax Rate 35%
2012 - Exemption $5,000,000 -- Tax Rate 35%
2013 - Exemption $1,000,000 -- Tax Rate 55%

Of course, all of this is subject to law changes but basically what it means it, you pay -0- estate taxes if your estate is below $5,000,000 which quite frankly is the vast majority of taxpayers.  The laws are quite complicated and I will be glad to discuss your specific situation with you.

Change in Withholding effective 1/1/11

Effective 1/1/11 the withholding rates for social security (FICA) is decreasing from 6.2% to 4.2% on the first $100,000 of wages ...  Please contact me if you have any questions on this.  You can get the actual tables from Notice 1036 on the IRS's website which is www.irs.gov.

IMPORTANT! Another Scam out There on Annual Corporate Reports

I pulled this right off of Sunbiz.org so you know it is a scam.  I knew it was the moment I saw it...and hopefully the Attorney General will stop this one before it does too much damage.....NEVER fall for an email asking you for personal information.  I am trying to figure out how they got the email addresses....

CONSUMER ALERT!   Arvitas, LLC is a private company sending e-mails to businesses in Florida offering to file annual reports.   ARVITAS IS NOT AN AGENT OR REPRESENTATIVE FOR THE FLORIDA DEPT. OF STATE, DIVISION OF CORPORATIONS.   Arvitas is acting on its own to solicit business for its own company.   It is offering to file annual reports for business entities in Florida at an inflated fee.   They do not offer any additional service than what is available to the public on sunbiz.org.   The Attorney General´s Office, on behalf of the Dept. of State, is currently legally pursuing Arvitas´ activities.

Credit Counseling

You can't drive down the street, turn on the radio or TV without hearing someone say call us and we will cut your credit card debt in half or cut your payments in half or some similar drivel. The problem with almost every single one of these companies is they are scamsters.  Basically you end up paying them a fee and rarely do they help you.  In my opinion, IF you need credit counseling or assistance with budgeting your current bills, there is only one legitimate place to go.  You should contact NFCC.org and they will refer you to a free or low cost counselor in your area.

Refinancing At Today's Low Mortgage Rates

In Florida a huge number of people have lost their homes to foreclosures, short sales or have no equity because of the downfall in the real estate market.  But there are still a few people who have 5, 6 or 7% mortgages and have equity in their homes.  IF you are one of those, this is a great time to refinance.  Refinancing homes and pulling cash out was one of the big mistakes people made when the market was going up up up in value.  I NEVER recommend refinancing your house and taking out cash for ANY reason because I believe EVERYONE should try to become debt free.  That being said, if you can take your current mortgage at 6% and get a 3.9% interest rate for very little cost, then you should definitely consider doing this.  There are several great places to refinance right now including places like your credit union, some online loan companies and even banks.  I will be glad to analyze your situation to help you determine if this makes sense for you.