Getting ready for your Income Tax Preparer or CPA

Ugggh:  It is Tax Season again and that is sure to make people feel uneasy.  Let’s face it, no one likes to do their taxes, do they?  There are so many reasons to dislike this dreaded yearly project:  Tax preparation takes too much, time, costs too much, it is too difficult, and the hatred for the Government to name a few.

But we still need to file.  Every year.  So it is always best to get organized and strategized in an efficient manner before preparing your taxes.

I like to start with a 10 x 13 envelope and label it Tax Stuff 2017.  When the envelopes and assorted 1099s come in the mail you can open them and put all forms right in the envelope.  Once you have all your forms you can organize and take notes with any pertinent changes your advisor should know about.  I feel this is the most important part:  List your questions, comments, ideas on a word document and review in detail with your tax preparer.

Technical folks may want to use Intuit Link which is an online portal that makes it easy for you to upload your tax documents and data and send them to our office in a timely, secure, and organized way. If this sounds interesting, you can find out more about Link at https://proconnect.intuit.com/link/faqs/ .

Listen below as Win Damon and Stu talk about this topic on WJOP Joppa radio FM 96.3 in Newburyport.

 

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About Stu: With more than 29 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

5 Ways to Help Pre-Retirees Balance Goals

When it comes to retirement, my advice is to plan years in advance for this very day, and concern yourself with issues beyond how much money you have.  It is important is to realize that most people don’t fully retire now, they transition into a part time career to help their brains continue to fire and to keep themselves busy.  Here are 5 tips for folks who are considering retirement.

1. Time is of the essence. When it comes to retirement, the longer your time frame, the better — so start planning early! At least five years before retirement or semi-retirement is a great time to begin the formal retirement planning process. (Of course, you’ve already been saving for years at this point!) Work with a financial advisor who employs strategies that align with your best interests.

2. Make a budget and stick to it. Create a realistic budget based on your guaranteed income and your regular expenses, along with a cushion for “worst-case scenario” items such as health care and emergency funds. Your budget should help balance the payment of short-term monthly bills with 401(k) and IRA savings for the long-term.

3. Understand your life priorities. Consider the trade off (a.k.a. the opportunity cost) between working versus retirement. Need help creating this vision? Our Wealth Vision financial planning software will help you plan for all the “what if” scenarios you can dream up.

4. Understand how financial planning connects retirement components. The face of retirement has changed, and your financial planner can help you navigate these new realities. In the past, folks retired and died soon after; today, it’s essential to plan for longer life expectancies that require a range of investment options. These options may include simply working longer, especially for those that are healthy and enjoy their jobs, as well as a diversity of investment buckets to ensure a comfortable retirement.

5. Get a handle on your taxes and health care expenses ahead of time. Converting qualified money to Roth IRAs over time can help you save taxes over a lifetime; investigate this tax-mitigating strategy before it’s time to retire. Take charge of your health care expenses by looking into Medicare at least six months before you turn 65.

Above all, enjoy the journey — but take care to remain balanced in your financial life.

Listen below as Win Damon and Stu talk about this topic on WJOP Joppa radio FM 96.3 in Newburyport.

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About Stu: With more than 29 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

For more information please visit our website at www.erocktax.com

 

 

The Economics of Snow Storms

The snow is falling in the Northeast and other parts of the country are seeing snow for the first time in a long time and in some cases ever!  Snowstorms can often have a very significant impact on the economy and business, and in fact the storms of a few winters ago caused the Gross Domestic Product (GDP) of the USA to fall by 2.1% in the first quarter of the year!  There was so much lag time in service that inventory got backed up and the supply chain was interrupted.

Snow storms are particularly bad for hourly employees such as restaurant workers who wont be called into work the day of the storm and possibly for days after.  On the other hand, snow plow drivers and folks who shovel will benefit tremendously from the weather.  In the storms from a few winters’ ago a roofing company we are familiar with had many hourly laborers shoveling off roofs for weeks!  Of course all the skiers love the snow and the economy around the mountains flourish in the snow!

Listen below as Win Damon and Stu talk about this topic on WJOP Joppa radio FM 96.3 in Newburyport.

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About Stu: With more than 29 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

For more information please visit our website at www.erocktax.com

 

Quick Income Tax Tip to Start the 2017 filing Season

Welcome to the 2017 Income Tax Filing Season.  Electronic submissions start January 29, But many of you won’t file until March or April or beyond.  Quick tip:  Contact your tax advisor right away to see how tax reform affects your for the 2018 year and beyond.  Do not wait until you file your 2017 return to get valuable information you need now.

Below are some important dates on the calendar for 2018 filing.  Please reach out with any questions you may have.

 

For calendar year tax returns reporting 2017 information that are due in 2018, the following due dates will apply.

 

Form  2018 Filing Due Date (Tax Year 2017)
Form W-2 (electronic or mail)Form 1065 – Partnerships

Form 1120S – S Corporations

Form 1040 – Individuals

FinCEN 114 – FBAR (will be allowed to extend)

January 31stMarch 15th

March 15th

April 17th

April 17th

Form 1041 – Trusts and EstatesForm 1120 – C Corporations

Form 990 Series – Tax Exempt Org

Form 5500 Series – Employee Benefit Plan

 

April 17thApril 17th

May 15th

July 31st

 

FormForm 1065 Extended Return

Form 1120S Extended Return

Extended Due DatesSeptember 17th

September 17th

Form 1041 Extended ReturnForm 1120 Extended Return

Form 1040 Extended Return

FinCEN 114 (Extended with Form 1040)

Form 990 Series Extended Return

October 1stOctober 15th

October 15th

October 15th

November 15th

Form 5500 Series Extended Return November 15th

 

 

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About Stu: With more than 29 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

For more information please visit our website at www.erocktax.com

 

Stu talks about 8 Basic Money Lessons Everyone Should Know

The news is in, and it’s scary: Americans are falling behind the rest of the world when it comes to financial literacy. A recent study of 29,000 teens across 18 industrialized countries found that financial literacy rates in the United States fell right in the middle of the spectrum, just under Latvia and Poland and right above France and Russia. The most financially literate teens were in Shanghai.

But it’s not just the younger generation that’s lacking in financial know-how; research indicates that only 40 percent of U.S. adults keep a budget, and a third of Americans can’t answer three simple financial questions on topics such as how interest works, how inflation works, and the difference between stocks and funds.

Let’s combat this lack of financial literacy. Here are eight basic money lessons that everyone should know.

1. The earlier you start saving, the better off you’ll be when it’s time to retire, thanks to the “magic” of compounding interest. Saving your money in an interest-bearing account means that it compounds itself over time.

2. If you spend more than you earn, you’ll always be in debt. Simple rule: You must bring in more than you shell out in order to come out ahead. Living not only within, but also below your means is the key to financial security for the long term.

3. There is no reward without risk. If you keep your money safe in a low-interest account, such as a
bank account, you’re passing up on the the chance for higher returns. This may be fine for the short term, but over the long term, riskier investments — such as a highly diversified portfolio (see #4) — have a higher potential to produce significant rewards.

4. Diversification is key. Remember that old saying, “Don’t put all your eggs in one basket”? That really applies to your investments. True diversification is broad and deep, and it helps you weather the inevitable ups and downs of the market. Your financial advisor can help you ensure that your portfolio is truly diversified.

5. Treat managing your money as a lifestyle choice. Decide early on that you will control your money, and make it a habit. Create a balanced budget and stick to it, revisiting it when necessary.

6. Prioritize your spending. When it comes to spending money, what matters most? Is it saving for a new car each year, taking a vacation, or living in a nicer (more expensive) area? Does it make you happier to eat out or to renovate your kitchen? Figure out what is most fulfilling, and then prioritize. Differentiating between needs and wants can help you stay within your budget and still live comfortably.

7. Save smart. Create a financial plan that includes your long-term goals; then, adjust your savings
to meet that plan. Craft your investment and savings activities around your goals, so you can avoid surprises later.

8. Avoid debt. While some debts, such as student loans, mortgages and car loans, are almost unavoidable and help you get where you want to be in life, some types of debt — such as credit card debt — should be avoided if at all possible.

These basic tips are a start, but the financial industry is constantly changing. It’s essential to continue educating yourself and improving your financial literacy in order to make truly well-informed decisions.

Listen below to Stu and Win Damon chat about this topic on Joppa Radio FM 96.3 WJOP Newburyport, MA

Like what you have read? Please share with friends.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu talks about the Income Tax implications of drawing from an IRA

 

Do you have questions about withdrawing from your IRA? We like to describe the potential growth in an IRA as a bell curve, hopefully growing up over the years, and then slowly being drained over the rest of your life expectancy, starting at age 70 ½ years old.

There are three types of withdrawals, also known as distributions:

 

  • Owner withdrawal before age 59 ½, after age 59 ½, and after age 70 ½;
  • Owner passes away and the spouse inherits account;
  • Owner passes away and a non-spouse inherits the account.

Distributions before age 59 1/2. In addition to all applicable federal and state taxes, if you take distributions before age 50 1/2, you’ll also have to pay a 10-percent penalty. However, under certain extenuating circumstances, you may avoid the penalty—though you’ll still owe the taxes. Exempt situations may include:

  • Buying your first home;
  • Paying for a child, grandchild, or spouse’s school;
  • Unreimbursed medical costs that are more than 7.5 percent of your adjusted gross income;
  • Health insurance premium costs, if you’re unemployed for 12 weeks or more;
  • In the case of disability or death.

Distributions after age 59 1/2. There are no penalties or restrictions if you take disbursements between the ages of 59 1/2 and 70 1/2. Remember, your interest, dividends, and capital gains will be taxed as ordinary income, so you may owe state and federal taxes.

Distributions after age 70 1/2. Once you turn 70 1/2, you must take distributions. Also known as minimum required distributions or MRDs, if you don’t make these withdrawals, you’ll pay a penalty of up to 50 percent of the amount you should have taken.

If you pass away and your spouse inherits your account. Good news: if your spouse doesn’t need the funds right away, they can roll them over into their own IRA then take distributions after 59 1/2. If they need the funds early and are under age 59 1/2, they can roll the funds into a so-called “Inherited IRA” account and avoid the 10-percent penalty.

If you pass away and a non-spouse inherits your account. If your IRA passes to a non-spouse beneficiary, they may transfer the assets into an inherited IRA beneficiary account. Distributions will depend on your beneficiary’s age and life expectancy, and will be taxed as part of their income.

The rules that govern IRA distribution and inheritance are complex. Meet with a trusted financial advisor to work through the details.

Considering tapping into your IRA? Know the rules first to avoid fees, taxes or penalties.

Listen below to hear Stu and Win Damon review this topic on Joppa Radio 106.1 Newburyport

 

Like what you have read? Please share with friends.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu chats TAX Reform with Win Damon on FM 96.3 Joppa radio

Tax reform is front and center these days as potential plans for reform are being pushed and are in ASAP mode.  As usual there are so many stories and claims to this extremely huge issue.  After reviewing dozens of articles I am hard pressed to find any that say that reform as it is currently being debated is going to be good for America.

The one argument the GOP continues to use is the “trickle down” theory which says cut tax on the richest and the fruits of the tax cut will trickle down to the masses.  This I find to be unequivocally untrue and in fact it did not work under Reagan or Bush and will fail again if enacted.  The rich and big corporations will get richer, the poor will get poorer, and the middle class will continue to shrink.  The cut will stimulate little job creation, will not repair our crumbling infrastructure, and will most certainly lead to vital cuts for programs such as medicare and social security as well as ballooning the already massive deficit.

In fact, I have not found one article advocating for these cuts that uses any “theory” besides trickle down.  See the articles below among many others that show how amazing these cuts are for the top 1/2 of 1%.  In fact the “pass through” tax break will provide massive tax cuts to the super wealthy.  Please read for yourself below.

http://www.businessinsider.com/trump-gop-tax-plan-middle-class-effects-tpc-analysis-2017-11

https://www.cbpp.org/research/federal-tax/republican-leadership-tax-plans-pass-through-tax-break-would-provide-massive  (From the Center on Budget and Policy Priorities)

I hope I am wrong but all the intellectual studies back up my claims.  Trickle down will fail and cause far higher inequality in America.  Again, I hope i am incorrect.

 

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About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Erock Tax lets plan for the 2016 Tax filing Season

Well folks it’s that time of year again:  Dreaded Tax Season.   Lot’s to think about as a new administration takes over.  Will tax cuts benefit you and your family or will the middle class get caught in the middle again in regards to taxes?

For you personally and professionally, it is always best to stay organized throughout the year when planning for your taxes.  Even if you do not open up all the envelopes that arrive each day in the mail it’s ok.  You can simply get a large 10 x 13 envelope and put all your tax documents in it when they come in.  When you are ready we will review all your pertinent forms, get your 2016 returns filed, and start planning for 2017 and beyond!

You see taxes are not about just filling in the forms and forgetting about it.    The planning process is often overlooked but it really is the most important part of the tax filing process, especially if you are self employed and/or pay estimated taxes.  If you plan correctly, you won’t get a huge refund or you won’t owe too much unexpected money come tax payment time.

Please reach out when you have questions; do not wait until you have all your tax documents! Do not let financial and tax issues stress you out.  Get the answers you need in a timely fashion.  You will be glad you did!

Stu has quick video message about the beginning of tax season

https://youtu.be/IHm4cagAF30

Listen below as Stu and morning guy Win Damon chat up this topic on WNBP FM Radio 106.1 in Newburyport, MA and streaming live at WNBP.com .

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

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Stu and Win Damon chat with Bob Pezzella of RMS Mortgage

iStock_000062644558_Full

Stu Steinberg and  Win Damon of WNBP FM 106.1  in Newburyport had a great chat with local mortgage expert Bob Pezzella (NMLS #112811) .  As a local tax guy and entrepreneur, I love to bring others on WNBP for my weekly chats.  Bob fits perfect of course, and now is an amazing time to buy a home.  Click on our radio chat below.

Diligent, meticulous, laser-focused.  This should be your mind-set if you are preparing to buy a home or getting ready to sell the one you’re in…

This holiday-post-election season finds us in a bull market trading off of the idea that lower personal and corporate income taxes will stimulate the economy coupled with the belief that deregulation has been constraining growth.  All week and today the DOW has seen unprecedented highs breaking through 19,000.  A rate hike from the FED next week is virtually 100%.

What does this have to do with your new home sale or purchase?  Higher interest rates will cost you more money per month and for the long haul and can also affect your borrowing power.  You can help minimize this impact by carefully monitoring your credit score and financial profile to ensure that you qualify for the best rates and programs available.

When you’re out holiday shopping and you open a new store charge to reap the large discount that’s offered, make sure you get that first bill and make timely payments. Credit card late payments can crush your credit score, knocking you out of qualifying for the best mortgage opportunities.  In short, get organized now, speak with your financial planner, accountant,  loan office, realtor.  If you’re thinking “Spring Market” NOW is when that preparation starts!

Like what you have read? Please share with friends.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

A Review of GOP Presidential Candidate Donald Trump’s Income Tax Plan

Close - up US Tax income form

I spoke with Win Damon last week about Mr. Trump’s income tax plan.  His plan would cut taxes and lead to higher incomes for taxpayers at all levels of income, including the wealthy and the super wealthy.  In many ways it is a classic GOP tax plan where the money flows from the rich in the form of huge tax cuts and trickles down to the middle and lower incomes though jobs and further economic gain.

Single filers making less than $25,000 and married filers making less than $50,000 will pay no taxes on the plan.  Currently around 45% Americans do not pay any tax and the number would increase under Trump’s proposal.

One point of interest is that Mr. trump wants to go after one particular group of super wealthy folks and make them pay their fair share:  The Hedge Fund Guys.  He’s talking about them everywhere.  They pay income tax at the long term capital gains rate of 23.8% instead of the ordinary income tax rate of 43.4% on monies that they earn.  The key here is that they are not risking their own money, and should be taxed at the ordinary income tax rate like all other workers who are not risking there own money!

In the end, Trump’s plan cuts rates at the top and the very top even more than Jeb Bush, and this will surely lead to more arguments about trickle down and inequality in America.

With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He also uses his CPA expertise in many areas of personal finance.  Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Click below to hear the chat with Win Damon on WNBP.com and FM radio 106.1 WNBP in Newburyport, MA.

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