Category: Business Written by Courier Newsroom
Because of the end-of-the-year “fiscal cliff” negotiations, the IRS delayed the start of tax filing season until Jan. 30 this year. Some taxpayers faced further delays in filing, including those who claimed residential energy credits or whose returns involved property depreciation or general business credits. With or without delays, there are always those who end up filing their taxes at the last minute. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers these tips for people who scramble to get their returns in by the April deadline.
1. Don’t panic
Even if you’ve been putting off filing your return, you can still get it in on time. Take that important first step: locate all the documents you need and organize your paperwork. Sometimes that can be the hardest part.
2. Check your facts
It's much more stressful to get your return done in a hurry, and errors may creep in if you’re rushing. Take extra care to double check your figures and confirm that your Social Security number and other data on your return are correct.
3. Go electronic
Instead of standing in long lines at the post office, take advantage of the opportunity to file your returns electronically. According to the IRS, nearly 100 million taxpayers used the e-file option last year. You can use the IRS Free File system or ask your CPA to prepare and file your return electronically for you.
4. Talk to an expert
Speaking of CPAs, if you are running behind and don’t usually use a tax preparer, this may be the year to put a CPA’s expertise to work for you. A CPA can quickly tell you what paperwork you need and make sense of your tax situation, taking this burden off your shoulders.
5. Get it done
Know that if your return is late and you owe taxes, you could face interest and penalties that can really add up. If you don’t file a return at all, the IRS can assess tax based on the information it has—which may not include exemptions or deductions you deserve—and begin a collection process. Even if it will take a lot of effort to get your return done on time, it’s worth it.
6. Consider an extension
If you can’t file your return on time, you may be eligible for a six-month extension of the due date, but keep in mind that you still must properly estimate the amount you will owe and pay that amount by the regular deadline. If you don’t, you may be subject to interest and penalties. It may be possible to avoid a late payment penalty if you can show reasonable cause for missing the deadline. An automatic two-month extension to file a return and pay taxes is available to taxpayers who are out of the country on the normal due date because they reside overseas or they are on military duty outside the United States.
7. File even if you can’t pay
If you’ve been putting off filing because you don’t have the money you owe, don’t fail to send in your return. The IRS offers payment plans to eligible taxpayers who can’t pay their taxes all at once. If you’re not financially able to pay your tax debt immediately, you may qualify for an installment agreement that allows you to make payments over time. Your local CPA can help determine if you qualify for IRS payment plans and help you apply for one.
Your CPA can help
Whether you’re racing to finish your return or facing questions about other aspects of your financial life, be sure to turn to your local CPA. He or she can help you address all your critical financial concerns.
(To find a CPA in Pennsylvania by location or area of expertise, visit www.IneedaCPA.org.)
Last Updated on Friday, 05 April 2013 09:47
Category: Business Written by Courier Newsroom
by Marlene Cooper
(NNPA)—I was first introduced to the court proceeding called “probate” as a result of a frantic call I received soon after I began practicing law. The caller, a real estate agent, was handling an escrow and found that the sale couldn’t be completed because the seller (his client) didn’t have title to the property. Unfortunately, the property in question was still in the name of the seller’s mother who had died several years earlier. Because the seller didn’t have title, the escrow couldn’t be completed, the real estate agent lost his commission, and the matter had to be taken to court before any further action could be taken with respect to the property.
Many people who have inherited real estate are surprised to learn that they must go through probate in order to legally transfer the property into their name. They usually learn of their need for probate only after they have decided to sell the property or borrow against it. When they find out that the average probate takes 15 months to complete, they are disappointed that their plans have to be put on hold. Then, when they find out what probate costs, they are shocked. For the average home in Los Angeles County, now valued at $350,000, probate costs can exceed $25,000!
Even those that are aware that they must go through probate put it off for various reasons—primarily the cost, time, and/or “hassle” involved in a court proceeding. However, procrastination can lead to unforeseen problems down the road. For example, a person who inherits a piece of property might think that the property is worth a certain amount and has made big plans for the future based on the anticipated inheritance. However, the individual may not be aware of creditors or other heirs that have a legitimate claim to the property until their claim is revealed through the probate process. In one case I know about, a person was sharing in the rental income from the property for years, but when the probate was completed it revealed that the person sharing in the rental income had no legal claim to the property at all.
When probate procrastination goes on for years, it becomes a huge problem to sort out the various interests in the property. Many of us have heard of instances where a family inherited property “down South” a long time ago, never went through probate and now there are so many relatives involved that it seems hopeless and not worth any one person’s time and effort to get the title issues resolved.
Of course the best solution to probate problems is to avoid probate altogether through a living trust. A forward-thinking property owner would do well to save his or her heirs the time, expense and “hassle” of probate. If, on the other hand, you are that unfortunate heir who is faced with probate, it is best do it sooner rather than later.
Last Updated on Friday, 05 April 2013 09:42
Category: Business Written by Charlene Crowell
(NNPA)—One of the worst ironies of the nagging economic recession is that consumers with the fewest financial resources have lost the most. Now, a new report finds that payday loans not only strip much-needed income from low-income families, but harms the economic viability of the communities where they operate, draining nearly $1 billion a year. Written by the Insight Center for Community Economic Development (Insight Center), it also reveals other net negative impacts of these small-dollar, high cost loans on economic growth and personal bankruptcy filings.
The Insight Center examined the net economic impact of the $3.3 billion in interest that borrowers paid to non-bank payday lenders in 2011. The study found that if consumers collectively had an additional $3.3 billion in discretionary spending, it would have resulted in $6.34 billion in economic activity and created 79,000 jobs. In comparison, payday lending activity added $5.56 billion to the national economy and created 65,000 jobs.
Combining these figures shows a net loss from payday lending of $774 million in economic growth and more than 14,000 jobs. That’s in addition to $169 million lost through Chapter 13 bankruptcies.
“This nearly $1 billion loss in economic activity should serve as a strong signal that, in addition to the well-documented harm to the families directly receiving payday loans, payday lending harms local community economies and the overall economy,” the report states. “Payday lending drains over $2.5 million from the economy each day. In addition, we estimate that more than 38 people lose their jobs each day due to the economic drain of payday lending.”
Payday lending has been a centerpiece of the Center for Responsible Lending’s research and policy efforts over the past decade. CRL also supported the new report’s development.
Earlier CRL research determined that each year 12 million Americans become entrapped in payday loans, taking out an average of nine loans per year. With more than 22,000 locations, there are more than two payday stores for every Starbucks coffee store.
CRL has also documented how storefront payday lenders tend to concentrate locations in low-income and communities of color. The Southern states of Alabama, Louisiana, Mississippi, Tennessee, and South Carolina had the highest number of payday stores per 10,000 residents. Outside of the Deep South, Missouri and Nevada were the only states with comparable density of payday storefronts.
Similarly, the Insight Center found that five states charged the greatest amount of payday loan interest were California, Texas, Florida, Mississippi and Illinois. In these locales, financial payday losses ranged from $135 million in California to $55 million in Illinois.
Remarking on the Insight Center’s new findings, Keith Corbett, CRL executive vice-president said, “Payday lending is really financial assault on communities of color. By preying on consumers with few resources, this predatory product takes what little they have and winds up leaving borrowers worse off than before these loans.”
Corbett’s comments are underscored by the Insight report’s finding: “Far from creating opportunity, payday lending creates impoverished households and endangers local economies.
Last Updated on Thursday, 04 April 2013 05:59
(NNPA)—Have you ever turned on the light in a dark basement and shuddered as cockroaches scurried away? I get that same sense of revulsion whenever I hear about unscrupulous swindlers taking advantage of the victims of natural and manmade disasters.
The Better Business Bureau has dubbed these human cockroaches “Storm Chasers” because they creep out of the woodwork after every major storm or disaster. In fact, because fraud was so widespread after Hurricane Katrina, the Department of Justice created the National Center for Disaster Fraud, a central information clearinghouse for more than 20 federal agencies where people can report suspected fraudulent activities tied to disasters of all types.
One common scam is where supposed repair workers blitz impacted neighborhoods, hoping to ensnare frazzled homeowners. Their typical line is, “We’re really slammed but with a cash deposit you can ensure a spot on our busy schedule.” Or, they’ll scare people into thinking their home is dangerously unsafe, sometimes actually creating damage during their “inspection.”
Often, these Storm Chasers just take the money and run. Or, if they do show up and make repairs, their work or materials are shoddy. This could leave you on the hook financially since your homeowners insurance probably won’t cover unauthorized or fraudulent repairs.
Here are a few tips from the Better Business Bureau to avoid becoming a storm chaser victim:
Ask your insurance company about what’s covered under your policy and specific filing requirements. Also ask them to survey the damage and see whether they have approved contractors.
Never hire a laborer or contractor on the spot. Get at least three estimates based on the same specifications and materials. Check their references, licensing and registration information with the National Association of State Contractors Licensing Agencies (www.nascla.org/licensing_information); also read reviews posted by the BBB.
Require written contracts that specify work to be done, materials to be used, start and end dates, responsibility for hauling away debris, and costs broken down by labor and materials. Verify that the contractor’s name, address, phone number and license number are included, as well as any verbal promises and warranties.
Read the fine print. Some shady contracts include clauses allowing substantial cancellation fees if you choose not to use the contractor after your insurance company has approved the claim. Others require you to pay the full price if you cancel after the cancellation period has expired.
Ask your contractor to provide proof of current insurance that covers workers compensation benefits, property damage and personal liability.
You’ll probably be asked to pay an upfront deposit to cover initial materials—one-quarter to one-third is reasonable upon delivery of materials to your home and once work begins.
Never pay in full in advance, and don’t pay cash. Have the contract specify a schedule for releasing payments, and before making the final payment, ask the contractor to provide proof that all subcontractors have been paid—if not, you could be liable for their fees.
And finally, remember the adage, “If it sounds too good to be true, it probably is.”
(Jason Alderman directs Visa’s financial education programs. To participate in a free, online Financial Literacy and Education Summit April 17, go to www.practicalmoneyskills.com/summit2013.)
Last Updated on Friday, 05 April 2013 09:37
Category: Business Written by Damon Carr
Payday loans are offered under various alias: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. I will add another alias, “Legalized Loan Sharking”. Loan Sharking is defined as a person who lends money at excessive rates of interest. Unlike Loan Sharking, if you default on a payday loan, you do not have to worry about “Mr. Guido” hunting you down to cause bodily harm. However, the ill effects brought on by Payday loans will bring a black eye to an already bruised checking account.
Payday loan companies are one of the fastest growing segments in the Financial Service Industry. Initially payday loan companies set up shop in areas dominated by low-income households. Today you will find payday loan companies located in the suburbs and near college campuses. Many states have usury laws, which prohibit lending institutions charging exorbitant interest rate. As a way to mitigate usury laws many payday loan companies have partnered with national banks that are exempt from such laws. As a result payday loan companies are in every state. These companies focus on branding itself as a helping hand for you during the hard times. Be on the lookout for wolves in sheep clothing! The industry has forecasted $2 billion dollars in revenue this year. Chances are there is a payday loan company coming soon to a location near you.
How do payday loans work?
As long as you have a pulse, you will more than likely qualify for a payday loan. There are no credit checks or verifications done. Qualifying for a payday loan requires only a paycheck stub, photo ID, and a utility bill. You are required to sign a loan agreement and write a postdated check for the amount borrowed plus a fee. Fees for payday loans ranges anywhere from $15-$25 for every $100 borrowed. Upon payday, the lender will deposit the postdated check. For example, you borrow $500 with a fee of $20 per $100 ($20 x 5: Fee = $100). Therefore you write a postdated check for $600. On payday, which is usually 2 weeks later, the lender will cash the $600 check. The annual percentage rate on this loan is 520 percent. If 520 percent annual percentage rate is not usury (above legal limits), WHAT IS? There have been rates recorded as high as 2000 percent.
As the old adage says “easy come, easy go.” In general, people who borrow from these check-cashing companies has exhausted their credit cards and depleted whatever savings they had. They seek payday loans because it is easy to qualify for the loan. Within five minutes you can walk away with money. Note: I mentioned fast and easy. One would think that AFFORDABILITY would be factored into the equation. In most cases borrowers are borrowing money without the means to pay back the loan. When the lender deposits the check, it often sets off a string of bounced checks causing penalties and late charges and NSF fees on other credit obligations. If you do not repay the loan the payday loan companies will take you to court seeking a judgment. As the contract you signed indicates, you will be sued for late charges, interest after maturity and NSF fees in addition to the money borrowed. Many people who do pay back the loan sacrifice payment of another bill. Many others try avoiding penalties by extending the loan term for another 2-week period. The payday loan companies will add an additional fee for granting you the extension. The end result in each case is a never-ending debt cycle.
I view payday loans as throwing money at the symptoms. Many people who seek payday loans have yet to diagnose the cause of needing payday loans.
They simply recognize that they need more money and seek payday loan services to pacify the situation. Like all aliments left unchecked it will continue to come back causing further strain to your condition. The symptom in most cases is “Too much MONTH left at the end of YOUR MONEY!” The problem is overspending, no savings, poor money management, and no financial game plan. Unfortunately there is no quick cure. Only TIME and an EXECUTED PLAN will cure your ailment. I will share solutions in upcoming columns.
(Mortgage and Money Coach Damon Carr is the owner of ACE Financial. Damon can be reached at 412-216-1013.)
Last Updated on Thursday, 04 April 2013 09:58
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