#queens ny tax debt relief

[taxreliefrus]

As you approach retirement age, the thought of returning to work might be on your mind. Whether you're considering part-time roles or fully immersing yourself back into the workforce, this article is designed to provide insights into the financial aspects of such a decision.

[taxreliefrus]

GIFT TAX TREATMENT OF TUITION PLANS

Qualified tuition plans (QTPs) provide a means for family members and others to save for the future educational needs of children. Investment earnings within a QTP account are tax deferred and not taxable when withdrawn if used to pay qualified tuition and certain other expenses.

Each individual’s contribution to a QTP (also sometimes referred to as a “Section 529 plan”) on behalf of a designated beneficiary is treated as a gift subject to the normal gift tax rules. Thus, no gift tax return is required for any contributor if the contribution is equal to or less than the amount of the gift tax annual exclusion for the year of the gift, which for 2019 is $15,000.

Special Election – When a donor’s total contribution to a QTP for the year exceeds the annual exclusion amount, the donor may make a special election treating the contributed funds as if they had been contributed ratably over a five-year period starting with the year of the contribution.

Example: Grandpa Lee contributes $75,000 to granddaughter Whitney’s QTP in 2019. By using the election, grandpa’s contribution is treated as if the contribution was made equally over a five-year period – that is, as if he’d contributed $15,000 in each of 2019, 2020, 2021, 2022 and 2023. If grandpa makes any more QTP contributions during those years, those contributions would then exceed the annul gift limit and require a gift tax return to be filed. The same would be true if grandpa makes other gifts to Whitney.

To make the five-year election grandpa must file a Form 709, Federal Gift Tax Return, for the calendar year in which the contribution is made.

The election is available only with respect to contributions not in excess of five times the annual exclusion amount for the calendar year of the contribution. Any excess is treated as a taxable gift in the calendar year of the contribution. However, that does not necessarily mean any gift tax will be owed since there is also a unified gift and estate tax lifetime exclusion (currently in excess of $11 million) that will shield most taxpayers like grandpa from any gift tax.

If grandpa were married, he and grandma could make an election under the gift-splitting rules for the QTP contribution to be made one-half by each of them, thus allowing them to double up on the annual and the special 5-year amounts.

If in any year after the first year of the five-year period, the amount of the gift tax annual exclusion is increased for inflation, the donor may make an additional contribution in any one or more of the four remaining years up to the difference between the exclusion amount as increased and the original exclusion amount for the year or years in which the original contribution was made.

Example: In 2017 when the annual gift tax exemption was $14,000, grandpa made a $70,000 contribution to his granddaughter’s QTP and made the 5-year election. For 2018 the annual gift tax exemption was increased to $15,000. Thus, grandpa can make an additional $1,000 contribution for each of the remaining 4 years of the 5-year election period.

Change of Beneficiary – A change in the designated beneficiary, or a rollover to the account of a new beneficiary , is treated as a taxable gift if the new beneficiary is assigned to a generation below the generation of the old beneficiary. Such a transfer isn't a taxable gift if the new beneficiary is a member of the family of the old beneficiary, and is assigned to the same generation, as the old beneficiary.

If the new beneficiary is assigned to a lower generation than the old beneficiary, the transfer is a taxable gift from the old beneficiary to the new beneficiary, regardless of whether the new beneficiary is a member of the family of the old beneficiary.

In addition, the transfer would be subject to the generation skipping transfer tax (GST) if the new beneficiary is assigned to a generation which is two or more levels lower than the generation assignment of the old beneficiary. The five-year averaging election may be applied to a transfer.

Example: Suppose Whitney had not used the funds from the QTP or has finished her higher education and had some funds left over in the plan, and grandpa (or the trustee of the account if grandpa is not the trustee) decides to change the account beneficiary to his great-granddaughter Annabelle. Since Annabelle is in a generation lower than Whitney, the change of beneficiary represents a gift from Whitney to Annabelle. However, the five-year averaging election may be applied to the gift.

Eligible Expenses – Distributions from QTP, including earnings on the amounts contributed to a QTP, aren’t taxed for income tax purposes if they are used to pay qualified higher-education expenses of the account beneficiary. In addition to tuition, eligible expenses include the following:

Fees;

Books;

Supplies;

Equipment;

The purchase of computers or peripheral equipment, computer software, or internet access and related services that will be used primarily by the beneficiary while the beneficiary is enrolled at an eligible educational institution;

Room and board if the beneficiary is attending a qualified school at least half time; and

A special needs student’s expenses that are necessary to enable the student to enroll or attend an eligible educational institution.

When distributions exceed eligible expenses, the beneficiary of the QTP is the one who would include the non qualified distributions in his or her income. The calculation of the taxable amount of the distribution can be complicated if the beneficiary received a tax-free scholarship. In some cases a 10% penalty also applies on the taxable distribution that is included in income.

While QTPs are generally intended to be used for higher education expenses, for years after 2017, up to $10,000 distributed from a QTP for tuition expense (but not for related other expenses) paid so the beneficiary can attend an elementary or secondary school (kindergarten through grade 12) is considered a qualified education expense that would be tax-free. However, some states have not recognized this provision, and so such distributions would be at least partially taxable for state purposes.

Direct Payment of Tuition – Some potential contributors to a QTP for family members may wish to pay for the tuition when it is actually incurred rather than saving for it in advance. If that individual makes the tuition payment directly to a qualified school, college or university the gift tax does not apply.

If you have questions related to QTPs in general or changing beneficiaries, please give this office a call.

Contact Us -

Address - 147-08 235 Street Rosedale, NY 11422

Email - info@taxreliefrus.com

Phone -  (844) 829-2292

Website - TAX RELIEF R US

Blog - GIFT TAX TREATMENT OF TUITION PLANS

[taxreliefrus]

IDENTITY THEFT AND YOUR TAX RETURN

You should be very cautious about being duped by Internet identity thieves. We want to remind you about this fast-growing threat and how to protect yourself from being a victim and avoid the immense amount of trouble and aggravation that accompanies identity theft. As the tax-filing season approaches, the identity thieves are gearing up with tax scams to sucker you into providing them with your identity information, which they can then use to charge against your credit cards, tap your bank account, steal your tax refund, file a fraudulent tax return in your name . . . the list goes on and on. These thieves are clever, and some even disguise e-mails to look as if they come from a government agency ; the IRS banner has been used in many scams to steal taxpayer identities. For example, you may receive an e-mail with the IRS banner indicating that you have a refund coming and directing you to a web site where you are duped into revealing your identity to obtain the refund. During the holidays, scammers were sending out e-mails disguised as being sent by major department stores - you may have received one indicating that you had won a gift card and asking you to reveal your financial information to receive the gift card. The scams, known as phishing, have one goal: to trick you into revealing your personal and financial information. The scammers can then use that information - such as your Social Security number, bank account, or credit card numbers - to commit identity theft or steal your money. Here are some tips you should know about phishing scams: 1. The IRS never asks for detailed personal and financial information such as personal identification numbers (PINs), passwords, or similar secret access information for credit card, bank, or other financial accounts. 2. The IRS does not initiate contact with taxpayers by e-mail to request personal or financial information. If you receive an e-mail from someone claiming to be a representative of the IRS or directing you to an IRS site:

Do not reply to the message.

Do not open any attachments. Attachments may contain malicious code that will infect your computer.

Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website and entered confidential information, you may have compromised your financial information. If you entered your credit card number, contact the credit card company for guidance. If you entered your banking information, contact the bank for the appropriate steps to take. The IRS website provides additional resources that can help. Visit the IRS website  and enter the search term “identity theft” for additional information.

3. The address of the official IRS website is www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site.

4. If you receive a phone call, fax, or letter in the mail from an individual claiming to be from the IRS but you suspect he or she is not an IRS employee, contact the IRS at 1-800-829-1040 to determine whether the IRS has a legitimate need to contact you. Report any bogus correspondence. You can forward suspicious e-mails tophishing@irs.gov

If you have any questions or doubts related to a letter, phone call, or e-mail from the IRS or other taxing authorities, please call this officebefore responding or providing any financial or personal information. Better safe than sorry!

Contact Us - Address - 147-08 235 Street Rosedale, NY 11422 Phone - (844) 829-2292 Email - info@taxreliefrus.com Website - Tax Relief R Us Blog - IDENTITY THEFT AND YOUR TAX RETURN

[taxreliefrus]

WHAT HAPPENS WHEN I DEFAULT ON A BUSINESS LOAN?

What does it mean to default on a loan?

A loan default is the failure to meet the financial obligations indicated in the loan agreement that is signed by you and your lender. Often, a loan default translates into the business owner's inability to pay their debts on time. Due to the differences in each loan agreement, default penalties vary. However, the effects of defaulting on the loan fall into two general categories- immediate repercussions and future implications for both you and your business.

What are the immediate effects to my business if I default on a loan?

Drop in business and/or personal credit score. Missing your payments and defaulting on your loans negatively impacts your business credit score. Your personal credit score may be affected, depending on the type of business structure that you have in place. 

Increased interest rates. Your business interest rates (and possibly your personal interest rates) may increase if your credit score dips. Depending on your loan agreement, a higher interest rate could affect the loans that you currently have, as well as future loans you plan to seek.

Foreclosure or seizing of property and collateral. Foreclosure may be the most severe repercussion due to a loan default, allowing lenders to recuperate losses from loan defaults. In this situation, your lender will have the full right to take control and ownership of your property and collateral that you have included in your contract. They normally will sell your property privately or by a public auction, depending on the profit margin.

What steps should I take next?

Negotiate terms with your lender. If you default, you can try renegotiating the terms of your loan contract with your lender. While lenders may not always be willing to renegotiate, if you are successful you can minimize the damage to your business's financial health. Ways to reduce the negative impacts of the loan default include:

• Changing the terms of payment, e.g., paying less per installment but for a longer period of time

• Paying less over more time with a higher interest rate

• Asking your lender to forgive a portion of your late payment and agree to pay on time in the future

Consider government debt relief options. The federal government’s Small Business Administration (SBA) can help facilitate business loans with a third party lender, guarantee a bond, or help a business find venture capital. During severe financial crises, the government often creates specific programs for a limited time to help faltering small businesses.

Cut costs. Minimize your expenses. Though this may not be an ideal situation, you can consider laying off part of your staff and downsizing your business, among others. If you are paying rent for your place of business, consider moving to smaller quarters or to a locale where rents are less expensive, if doing so won’t harm your business’ sales or  a move won’t be too costly.

Sell business assets. Liquidating business assets or converting your assets into cash may temporarily help you pay off your loans until you can afford to pay your bills on time again.

Consult a lawyer. Consulting a lawyer about your options may also help you through the process. 

What does this mean for the future of my business? 

Difficulty finding new loans. After you default on one loan, it will make it much more difficult to find a new loan. If loans are the chief means of financing your business, then you will be running into some difficult hurdles. You may want to start looking into other methods of funding your business.

Bankruptcy. If your business cannot repay its loans, you may need to file for bankruptcy.

What Can I Do to Avoid a Loan Default?

Of course, the best way to avoid defaulting is to pinpoint the pitfalls of bad loans and avoid them at all costs. To avoid loan defaults, business owners should remember the following best practices:

• Have a concrete payment plan before you decide to borrow.

• Do not offer collateral and property in your contract that you cannot afford to lose.

• Read the fine print and thoroughly understand the terms of the contract.

Contact Us -

Address - 147-08 235 Street Rosedale, NY 11422

Phone - (844) 829-2292

Email - info@taxreliefrus.com

Website - Tax Relief R Us

Blog - WHAT HAPPENS WHEN I DEFAULT ON A BUSINESS LOAN?

[taxreliefrus]

SOLUTIONS FOR A PERSONAL CREDIT CRISIS

It can happen any number of ways. You can lose your job. Have an expensive medical emergency. Find yourself with three children in college. Be an adult during a national financial crisis. Whatever causes it, you may find yourself in crisis mode money-wise, and need some quick solutions. There are a number of ways to get through it, to see light at the other end. But it'll take assertiveness and perseverance, and you will have to make some sacrifices. Here are some suggestions.

• Be proactive, not reactive. Start working on the problem when you see it on the horizon, not when you can't bear to answer the phone or open the mail for fear of a bill collector.

• Assess your situation. And take enough time to do it thoroughly. Record your regular expenses and liabilities. You can do it on paper, in an Excel spreadsheet, or in a personal finance program or Web site. Pick one system and stick with it, so all of your planning will be coordinated.

• Build a budget. Based on that information, create a budget you can live with using paper and pencil or computer software.

• Write down everything you spend. Everything. Then compare this regularly to your budget.

• Calculate the money that will come in every month and everything that's due every month, quarter, and year.

• Identify payments that must be paid in full. This probably includes things like your mortgage or rent, utility bills, and insurance payments.

• Contact creditors and negotiate short-term payment reductions. Of course, you can't do this with everyone, or maybe even the majority of your creditors. But you can, for example,  try to refinance or consolidate student loans , get the interest on your credit cards lowered, and set up budget plans with your energy company.

• Scale back on expenditures where possible. Do you really watch all 800 channels on your cable system? Cut back to basic cable. Go to the library for books and DVDs. Take advantage of resources like Mary Hunt's Debt-Proof Living columns. Use coupons, visit garage sales and Goodwill for clothes and household goods, and avoid high-end groceries and restaurants. You don't have to go into austerity mode, but cutting back $10 here and there will add up.

• Do not increase your debt. You don't have to cut up your credit cards, but put them in a drawer and don't use them unless you have a dire emergency. Concentrate on paying them off.

• Consider a credit card balance transfer. But only do so if you're sure you can pay off the balance in the stated time period.

• Save $1 a day on something and bank it. Apply it to a credit card, put it in savings, or use it to buy something you need and have been avoiding buying. • Consider adjusting your retirement deductions. This should be way down on your list. 401(k)s and such are too important to skimp on unless you absolutely must.

• Ask your doctor about switching any medications to generics.

• Do not rob Peter to pay Paul. For example, do not use credit cards to buy groceries or pay bills.

• Save on energy. Raise or lower thermostats more than you usually do. Combine car trips where you can. Use the vehicle with the best mileage whenever possible. Have your furnace tuned every year. Use cold water in the washing machine.

• Make gifts instead of buying them. It'll save money and mean more to the recipient.

• Adjust your tax withholding. If you're getting a refund, you're giving the government a loan. Adjust your withholding at work to decrease your estimated payments, and you can use that money now.

• Evaluate your phone service. Do you know what extras you have, and do you need them? Can you get by with just your cell phone and drop your land line? If your contract is nearly up and you don't use the phone much, consider a prepaid cell phone.

Any one of these ideas taken alone wouldn't seem like it would save enough money to make it worthwhile. But do enough of them, and you'll probably be surprised how much you can save. Use that savings to retire debt, and you'll eventually have enough money  to spend on things you've been avoiding. But try to stay out of debt and in the money.

Contact Us - 

Address - 147-08 235 Street Rosedale, NY 11422

Email - info@taxreliefrus.com

Phone - (844) 829-2292

Website - Tax Relief R us

Blog -  SOLUTIONS FOR A PERSONAL CREDIT CRISIS