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Gary DellaPosta, CPA explains the latest IRS tax scams circulating. From the "Federal College Tax Scam" to phishing email scams aimed at bookkeepers, to the newest mail scam asking you to send a money order, Gary explains them all and how they are trying to steal your hard earned money. Gary gives his tips for spotting the scam, explains each scam, and then gives you phone numbers and resources for what to do if they contact you.
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 The Cost of Raising A Child Birth through Infancy
By: Gary M. DellaPosta, CPA Here are the costs you can expect up to birth and during the first year: Note: For a second or third child, you will spend much less on furniture, clothing, and toys, but health care, child care, and food will remain the same. Hospital Costs According to the Transforming Maternity Care Partnership, in 2011, an uneventful hospital delivery, on average, in the United States cost between $10,657 (vaginal birth, no complications) and $23,923 (cesarean section birth with complications). The actual costs you pay, of course, vary depending on your health care coverage. Baby Supplies and Equipment Before you bring the baby home, you'll buy a crib, a changing table, and a swing or bouncy seat. The moderately priced versions of these three things will cost you about $1,200. You'll also need at least one stroller that you can expect to pay about $400 for. A full-size infant car seat will cost you about $150-$200, and a full-size high chair will cost $150. Finally, you will spend several hundred dollars on washcloths, sheets, blankets, towels, undershirts, onesies, and other baby clothes. Also, think about whether you plan to use a diaper service, cloth diapers, or use disposable ones. Feeding and Diapers The American Academy of Pediatrics recommends exclusively breastfeeding your baby for at least 6 months. Many women, of course, choose to breastfeed longer than that. Nursing mothers will have to invest in several good nursing bras and nursing pads (about $50) as well as a nursing pillow (about $25). If you plan to return to work after 3 months, consider investing in a hospital-grade breast pump, which will run you about $400. In comparison, a year's worth of ready mix powder formula costs about $1,350. If you buy the ready-to-serve type of formula the cost, is even more, running well over $2,000. You'll also need a year's supply of bottles, at about $90, and you'll have to add another $40 to replace the nipples at least twice in a year. When your baby is ready for solid foods, you will also need to account for the cost of rice cereal and baby food. Diapers are another expense you need to consider. Cloth diapers are the least expensive option. Disposable diaper costs for the first year run about $850, and a diaper genie costs about $40. Child Care Child care expenses vary widely. Child care in a day care center costs much less than a live-in nanny (unless you have multiples, then a nanny or au pair is the less expensive option), and prices for daycare centers vary widely. Child care in a day care center costs much less than a live-in nanny. A mid-priced day care center charges on average $975 per month for your infant's care, or close to $12,000 per year. Health Care Your infant will visit the doctor about six times during his or her first year, including well-baby check-ups as well as the inevitable colds and fevers of infancy. How much you will spend for doctor visits during the first year depends on your health insurance. Toys and Clothes You will spend about $500-$600 on toys and clothing during the first year (in addition to what you bought for the layette.) Total for the First Year Your total expenses for the first year run about $15,000-$18,000. The biggest variable is the cost of health care.  Financial Friday: The Individual Shared Responsibility Provision By: Gary M. DellaPosta, CPA The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment for any months without coverage or an exemption when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your tax return. In most cases, the shared responsibility payment reduces your refund. If you are not claiming a refund, the payment will increase the amount you owe on your tax return. Here are some basic facts about the individual shared responsibility provision. What is the individual shared responsibility provision? The individual shared responsibility provision calls for each individual to have qualifying healthcare coverage--known as minimum essential coverage--for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. Who is subject to the individual shared responsibility provision? The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the shared responsibility payment if the dependent does not have coverage or an exemption. How do I get a health coverage exemption? You can claim most exemptions when you file your tax return. There are certain exemptions that you can obtain only from the Marketplace in advance. You can obtain some exemptions from the Marketplace or by claiming them on your tax return. You will claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040, Form 1040A, or Form 1040EZ. You can file any of these forms electronically. For any month that you or your dependents do not have coverage or qualify for an exemption, you will have to make a shared responsibility payment What do I need to do if I am required to make a payment with my tax return? If you have to make an individual shared responsibility payment, you will need to use the worksheets found in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. You only make a payment for the months you did not have coverage or qualify for a coverage exemption. If you need assistance, please call. What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return? The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment and they routinely work with taxpayers who owe amounts they cannot afford to pay. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you. Visit our website for more great information and free tax calculators! Gary DellaPosta is a CPA and founder of the firm. A graduate of Bryant University, he is a member of the American Institute of CPA's as well as the Massachusetts Society of CPA's. In addition to providing accounting, tax and advisory services to individuals and businesses, he also provides litigation support to attorneys and has been recognized as an expert in numerous Massachusetts' courts. Mr. DellaPosta serves on the Board of the Barnstable County Mutual Insurance Co., where he serves on the audit, investment and employee benefit committees. He is a Director at The Cooperative Bank of Cape Cod, where he serves on audit, governance, and personnel committees, and is a former director of Eastern Bank and Plymouth Savings Bank. He is also the former Treasurer of the Community Health Center of Cape Cod and is a former trustee of Heritage Museum & Gardens. Visit his website for more info
WE CAN is offering a free bankruptcy informational workshop (Beginning the Conversation) on October 5, Monday in Harwich. Partners welcome; Free onsite childcare; and light supper included. Call to register: 508-430-8111   By: Gary M. DellaPosta, CPA
Got kids? They may have an impact on your tax situation. Here are eight tax credits and deductions that can help lower your tax burden.
Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant University, he is a member of the American Institute of CPA's as well as the Massachusetts Society of CPA's. In addition to providing accounting, tax and advisory services to individuals and businesses, he also provides litigation support to attorneys and has been recognized as an expert in numerous Massachusetts' courts. Mr. DellaPosta serves on the Board of the Barnstable County Mutual Insurance Co., where he serves on the audit, investment and employee benefit committees. He is a Director at The Cooperative Bank of Cape Cod, where he serves on audit, governance, and personnel committees, and is a former director of Eastern Bank and Plymouth Savings Bank. He also serves as the Treasurer of the Community Health Center of Cape Cod and is a trustee of Heritage Museum & Gardens. By:
Robert Osol, Esq Consider this scenario: John and Mary are a married couple with two young children, and they are deeply in debt. John was the breadwinner in the family. He had a good paying job until the company downsized and then he was without a job for eight months. John and Mary have a house that they bought in in 2006. It is now worth less than what they paid for it. They owe more on the first mortgage than what the house is worth. They also have a second mortgage on the house. John and Mary are behind 6 months on both mortgages and they owe a decent amount of credit card debt. The credit card companies have increased their interest rate to 29.9% because of the defaults and one of the companies is threatening to sue them. They have a car with a car loan on it. They owe more on the car than what it is worth. John recently got a new job, however, he is making less than he was at his old job. The mortgage companies are sending John and Mary letters and calling them and telling them that they have to bring the mortgages current immediately or they will foreclose. They won’t take partial payments; they want all of what they are owed. John has some money in a 401(k) from his prior job. He is contemplating liquidating the 401(k) to bring the mortgages current. He knows, though, that he will have a tax consequence for taking the money early. He will have to pay taxes on the money at the end of the year and a 10% penalty. What should John and Mary do? Should they take the money from the 401(k) now to bring the mortgages current and worry about the taxes later? What about the credit cards? They don’t have enough money in the 401(k) to pay them off and they can’t afford to pay the monthly payments and the two mortgages because of John’s cut in pay. What about the car? They are paying a car loan for a car that is worth only about half of what they owe. John and Mary aren’t sure what to do, so they decided to come to me for a FREE bankruptcy consultation. John and Mary are surprised to learn that if they file a Chapter 13 bankruptcy they will get a much better result AND they will get to keep their retirement money for exactly that-retirement. If they file a Chapter 13 bankruptcy they can; · Immediately stop all collection activity from all creditors. · Spread the first mortgage arrears out over a period of time anywhere between three and five years. · “Strip” the second mortgage. This means that the lien will be removed from the property and the creditor will be treated the same as all other unsecured creditors. · Pay unsecured creditors as little as 0%. · Refinance the car so that they are only paying the lender what the car is worth and the remaining balance owed will be treated the same as all other unsecured creditors. John and Mary understand that it will take three to five years to complete their Bankruptcy “Plan” and that they will have a bankruptcy on their credit. They believe, though, that they will still come out ahead because they will be “cleaned up” once the bankruptcy is complete. They will be current on the first mortgage and they will no longer have a second mortgage or any unsecured debt. Also, once they finish their Plan they will be able to get a new car loan right away if they need to and a few years after that they will be able to refinance the mortgage if they want to. After they weighed the pros and cons, they determined that they will be back on track faster by filing a bankruptcy rather than taking their 401(k) money, paying taxes on the money, struggling to pay back their debt, and then trying to rebuild their credit. Robert Osol, Esq 536 Main Street Falmouth, MA 02540 ROSOL@Melia-Osol.com (P) 508-864-5088 (F) 508-798-4041 Attorney Osol is a partner at Melia & Osol. He practices law focusing on creditor law, commercial claims, bankruptcy, real estate law, small business law and estates.  By: Gary M. DellaPosta, CPA Here is a summary of the possible sources of financial aid. The types of aid and tax implications change frequently, so consult your financial advisor for specifics when you're approaching the time to seek financial aid. Grants, the best type of financial aid because they do not have to be paid back, are amounts awarded by governments, schools, and other organizations. Some grants are need-based and others are not.
Loans may be need-based, and others are not. Here is a summary of loans:
To make a thorough investigation, you should fill out the financial aid application, which you can obtain from the school's financial aid office. You will have to provide tax returns. The amount you are determined to be eligible for depends on your income, the size of your family, the number of family members currently attending college, and your assets. Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant Financial Friday ~ How can I increase the amount of financial aid my child is entitled to?6/20/2014  By: Gary M. DellaPosta, CPA Here are some strategies that may increase the amount of aid for which your family is eligible: Try to avoid putting assets in your child's name. As a general rule, education funds should be kept in the parents' names, since investments in a child's name can impact negatively on aid eligibility. For example, the rules for determining financial aid decrease the amount of aid for which a child is eligible by 35 percent of assets the child owns and by 50 percent of the child's income. Example: If your child owns $1,000 worth of stock, the amount of aid for which he or she is eligible for is reduced by $350. On the other hand, the amount of aid is reduced by (effectively) only 5.6 percent of your assets and from 22 to 47 percent of your income. Reduce your income. Income for financial aid purposes is generally determined based upon your previous year's income tax situation. Therefore, in the years immediately prior to and during college, try to reduce your taxable income. Some ways to do this include:
Have your child become independent. In this case, your income is not considered in determining how much aid your child will be eligible for. Students are considered independent if they:
Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant  By: Gary M. DellaPosta, CPA Some people are surprised to learn they're due a large federal income tax refund when they file their taxes. Others are surprised that they owe more taxes than they expected. If this has happened to you, then it's time to check your federal tax withholding or payments. Here are some tips to help you bring the tax you pay during the year closer to what you'll actually owe--and avoid a tax surprise when you file your 2013 tax return next year. Wages and Income Tax Withholding
Self-Employment and Other Income
Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant  By: Gary M. DellaPosta, CPA This year's tax deadline may have come and gone already but it's never too early to start planning for next year. With that in mind, here are six things you can do now to make next April 15 easier. 1. Adjust your withholding. Why wait another year for a big refund? Now is a good time to review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller. 2. Store your return in a safe place. Put your 2012 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return. If it is easy to find, you can also use it as a helpful guide for next year's return. 3. Organize your recordkeeping. Establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time. 4. Review your paycheck. Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle. 5. Consult a tax professional early. If you are planning to use a tax professional to help you strategize, plan and make financial decisions throughout the year, then contact your tax professional. You'll have more time when you're not up against a deadline or anxious for your refund. 6. Prepare to itemize deductions. If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2013 may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. Each household's financial circumstances are different so it's important to fully consider your specific situation and goals before making large financial decisions. Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant |
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