Friday, January 25, 2013

Tax avoidance has doubled and we pay

Tax avoidance has doubled and we pay
There are now 70-plus “business-friendly jurisdictions,” as tax lawyers say, and they’re sheltering $21 trillion to $32 trillion, up from $11.5 trillion in 2005, according to the Tax Justice Network, a group of tax haven opponents that see no difference between tax avoidance and tax evasion.
We taxpayers will have to pick up the slack for these people. You need to shield your retirement nest egg from higher taxes and fees using the IRS’s own legal tax shelter, 26 USC § 408:

Does your student need a debit card without a bank account?
Now you/they can have a card when needed without the dreaded bank account fees or high balance. There are other fees to pay for the service if you/they need them. Pay as you go. Great for starting a business so all your records are in one place.

Which statements and forms do you need to take to your tax preparer?
In case you have not found doing taxes the easy way—online via FREE efilers
—you need to take the forms listed below to your preparer. You may want to compare what you submitted last year so find your 2011 return.
If your income is less than $51,000, IRS volunteers will do it for you.
The list of what you need is here: It is just a list. I don’t endorse any paid preparer.

Ever had a question on your taxes?
IRS says it has about 13,500 customer service representatives answering taxpayer calls and mail in 2011 and 2012, down from 15,000 in 2010. So even though the IRS has added more automated features to handle some calls, the average wait for a human grew to 17 minutes last year, from 9.5 minutes in 2010 and just 4.6 minutes in 2007, when 81% of callers got through to a human, before either becoming discouraged and hanging up or being cut off. (For the IRS, 81% is considered good service.)
My answer: write a letter and pay what you think you owe. When they reply you won’t be penalized for not filing on time and paying at least what you paid last year. I have called the big paid-preparers—Block, Jackson, etc—to get someone to help EARLY in March when they are idle. It worked. However, BOTH the IRS and preparers have been wrong: over 10 million words in code.

Hope for FL non-insured
Florida lawmakers considering how to implement the federal health care overhaul sought information from two economists on the Massachusetts initiative that served as the blueprint for the national plan.

Coastal community groups are forming homeowner insurance co-ops
Community groups along our coastal areas are going into the home insurance business. The major firms have left or raised premiums beyond reasonable limits. People are getting together to insure themselves against storms and everyday perils. It may be time to do your own research to save on homeowners:

Are variable annuities with Guaranteed Minimum Income Benefit right for you?
As interest rates continue at low levels, insurers are cutting the benefits on new products. Instead of 5% withdrawals, annuity owners can only take 4%. The withdrawal and roll-up rates appear to have hit a floor for now, but don't expect features to rise even if interest rates increase. MetLife, along with Jackson National Life Insurance Co. and Prudential Financial Inc., have dominated the variable annuities market. You have alternatives to the 4% income that can last for 30 years or more at less cost. Plus annuities are not refundable. The cost of the GMIB annuity is high compared with alternatives:

Annuity companies are now paying a cash bonus to agents to sell you!
This is the email agents just received from one of them:
“This offer may not be available in all distributions. This incentive is not available in New York.Contact your marketing area to confirm eligibility. Cash Bonus is non-cumulative and only paid to the writing agent.” Don’t let the sales person talk you into one before you know the facts.

Longevity Insurance
Is it right for you? Are there better alternatives?
Longevity insurance is expensive
If you die early, your family gets nothing
There are better alternatives
>>>>Do NOT buy a policy before you compare alternatives<<<<
Longevity policies are a great deal if you know you will outlive everyone else at your age. You pay $20,000 to an insurer at age 60 and you receive about $920 a month for the rest of your life, beginning at age 85. If you die before age 85, the insurer keeps your principal. Even if you don't use your entire premium, your family gets nothing. 
Dan Keppel is also the author of Long-term Care Insurance: Is it right for you?

ObamaCare supported by majority
A majority of Americans put the creation of state-based health insurance exchanges at the top of the priority list for health policy in their state this year, according to a survey. Smokers may have to pay more for same policy. Penalty increases with age. 49 million Americans do not have health coverage now. Buy only what you need:

Costco selling health insurance
Aetna is selling individual health benefit plans for individuals and families to Costco members inCalifornia, bringing to 10 the number of states where the insurer is going retail at the warehouse store chain. Other states where Costco members can purchase individual/family plans includeArizonaConnecticutGeorgiaIllinoisMichiganNevadaPennsylvaniaTexas and Virginia.Aetna expects to expand to other markets in coming months. More information is available at

SCAMS           “Deficits don’t matter” GOP grandfather Dick Cheney 2002

Fed gov warns we will pay for bank bad behaviors AGAIN
“I submit that these institutions, as a result of their privileged status, exact an unfair tax upon the American people,” Fed gov Fisher told his audience. “Moreover, they interfere with the transmission of monetary policy and inhibit the advancement of our nation’s economic prosperity.” Mr Fisher thinks big banks “believe themselves to be exempt from the processes of bankruptcy and creative destruction.”

Who owns your account now?
Aetna Inc. will sell a Missouri Medicaid business that manages care for more than 100,000 people to fellow health insurer WellCare Health Plans Inc. due to Aetna's pending acquisition of Coventry Health Care Inc

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, January 18, 2013

Raise your net pay

You can raise your net pay
Yes, it is possible to counteract the hike in payroll taxes. If you normally receive a tax refund each year, you have been paying for $3.2 billion refund to GE in 2010. You can pay only what you owe each paycheck by raising your exemptions by one or two points. Use form W4: You can recalculate your exemptions with p501:

Are you using these tax breaks? Use them before the GOP takes them away
There are 35,000 wealthy families who did NOT pay any income taxes. Isn't it your turn?
Employer contributions toward workers' medical insurance premiums and medical care are not taxed: $181 billion.
Retirement plan contributions and earnings are not taxed: $165 billion.
Mortgage interest deduction: $101 billion.
Lower tax rates on long-term capital gains and qualified dividends: $84 billion.
Deduction for state and local taxes: $69 billion.
Deduction for charitable contributions: $46 billion.
Social Security and veterans' benefits are not taxed for lower-income filers: $45 billion.
Interest on tax-exempt state and local government bonds is not taxed: $26 billion.
When someone dies, the capital gains on their investments are not taxed: $24 billion.
Income from some life insurance products is not taxed: $23 billion.
The largest of all tax breaks: owning a business. For instance, GE paid no income taxes in 2010 and actually got a tax benefit of $3.2 BILLION. 

Can you qualify for any of these tax credits?
Most of what we had in 2011 remains. Only high incomes had a change and most pay the AMT anyway. eFile starting January 30 using IRS approved sites. Take your credits:

Did you get a break on your insurance premiums?
Thirty-seven percent of Americans spent more on insurance over the past year while only 7% spent less, according to The only way to reduce your costs is to shop around. Members obtain 3 quotes on policies every 2-3 years because insurers don’t voluntarily cut your rates—We have to ask:

Do you work from your home? Deduct $1,500 with no form!
The Internal Revenue Service decided that people who work from home or run a small business from home and have a “qualifying home office” can deduct up to $1,500 a year. That's based on an allowance of $5 per square foot of home office space on up to 300 square feet. This option — easier than filling out the current 43-line Form 8829 that requires burdensome estimates of allocated expenses, depreciation and carryovers of deductions not taken in previous years — will be available beginning in the 2013 tax year. About 3.4 million taxpayers claimed the home office deduction in 2010.

Regulators warn investors chasing yield and using leverage
FINRA has sent a letter to brokers warning them that customers can be hurt by these activities in the markets. A study of what happens to winning stocks after they climb shows that the winners lose money and the losers become winners. Buying winners is a loser’s game. Use a better way:

Safe public-employment jobs now at risk
Sixty-one key cities across America have emerged from the Great Recession with a gap of more than $217 billion between what they had promised their workers in pensions and retiree health care and what they had saved to pay that bill. Don’t rely on the government completely. Make your own tax-FREE Pension in a Box

Flood insurance rates will rise on coast—no more free rides for water properties!
Many Coast residents will be paying higher flood insurance premiums soon. The increases, the result of the Biggert-Waters Flood Insurance Reform Act of 2012, will be based on individual circumstances, By August, subsidized flood insurance policies around the nation will be eliminated and rates based on risk will be implemented. FEMA plans to phase out grandfathering of insurance policies beginning in January 2014.
A policy's rates will then be based on a property's elevation and risk factors according to the flood zone maps for their areas.
Oceans are rising. In 2012, there were at least 3,527 monthly weather records for heat, rain and snow broken by extreme weather events that hit communities throughout the U.S.

Is your insurer trying to buy back your annuity?
The National Underwriter reports cash buyouts offered by variable annuity insurers for guaranteed living benefit or guaranteed death benefit riders may not be a good deal for us, the annuitant. The value for many annuitants exceeds the cash amount offered by the company. That makes sense since the insurers would not be willing to offer the buyouts if they were not in the company's best interest. 
Just say no!

Wealthy do not let advisors tell them what to do
For the wealthiest investors, the more assets they have the less likely they are to cede control over investment decisions to advisors says a new report. Our members act like the wealthiest so they become wealth by NOT giving up 40% of their earnings to advisor fees:

How much do you pay for mutual funds?
"In every single time period and data point tested, low-cost funds beat high-cost funds." Morningstar study. 

SCAMS           “Deficits don’t matter” GOP leader Dick Cheney 2002 

Banking excesses begin again with CDO derivatives and new bubble
Currently, the banks now tap into soaring demand for commercial real estate debt by selling collateralized debt obligations, securities not seen since the last boom. Sales of CDOs linked to everything from hotels to offices and shopping malls are poised to climb to as much as $10 billion this year, about 10 times the level of 2012, according to Royal Bank of Scotland Group Plc.
The rebirth of commercial property CDOs comes as investors wager on a real estate recovery and as the Federal Reserve pushes down borrowing costs, encouraging bond buyers to seek higher-yielding debt. The securities package loans such as those for buildings with high vacancy rates that are considered riskier than those found in traditional commercial-mortgage backed securities, where surging investor demand has driven spreads to the narrowest in more than five years.
“Investors are willing to go further afield in their quest for yield,” Ed Shugrue comments. “With demand rich,Wall Street is scouring the cupboards to find anything with a cash flow that can be securitized.”

MetLife caught overcharging MA drivers
MetLife will pay at least $50,000 in penalties and refund an undetermined amount of money to customers to settle allegations it imposed costly surcharges on Massachusetts drivers who were found not at fault in auto accidents.

Insurers caught overcharging MA motorcyclists
More than $2.8 million in insurance refunds have gone back to Massachusetts motorcycle owners, Attorney General Martha Coakley announced today. Since 2010, 17 insurance companies have settled with the AG's Office resulting in more than $42.8 million in refunds to Massachusetts motorcycle owners.

We are paying for bank mortgage settlement too—rewarding bad behavior!
Banks will take a tax deduction for their bad behavior in causing the recession of 2007-12. We will pay more tax to make up for their deductions for crashing the system and no one stops it.

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, January 11, 2013

How is your pension doing?

How is your pension doing?
Corporate pensions continue to enlarge the deficit of $412 billion--$74 billion higher than it was when 2011 ended. Analysts say this is due to low interest rates even though a good portion of pension assets are in equities, which returned over 15% in 2012. Perhaps your employer is short changing your pension on purpose. 44 million workers’ pension have been reduced and closed. Some employers have stopped matching 401k contributions. 
You can earn 10-12% a year by funding your own pension in a tax-FREE account you can’t outlive: 
Your Pension in a Box

Our representatives want to cut our SS and Medicare because they don’t need them!
HALF of our congress people are millionaires. They don’t need Social Security or Medicare. 47% of Congress Members are Millionaires. We continue to pay their salaries of $174,000 even when they do nothing. And they receive a healthy pension and medical in retirement—don’t need SS or Medicare! A member of Congress would be eligible for a pension payment of $84,645 per year.

Did you receive your death benefit yet?
Florida is seeking the rightful owners of $25 million in unclaimed life insurance benefits obtained through a settlement with American International Group.  Search for unclaimed property at --

Taxes don’t change for most wealthy in high-state-tax states
For example, if you are married with two children living in California with annual income of $475,000 from wages, $21,000 in capital gains, $11,000 in dividends and $60,000 in deductions, you would have owed about $123,000 in federal taxes if the tax cuts had expired. Now, your tax bill would be the same with the threshold set at $450,000 because of AMT liability. This is the shadow tax established to hit the wealthy that pay no income taxes.

Will you have to wait to file your tax return?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.
The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on Deduction amounts 2012,-Many-Tax-Benefits-Increase-Due-to-Inflation-Adjustments

GE’s long-term care insurance business at risk?
Shares of Genworth Financial Inc. fell after a Credit Suisse analyst on Tuesday downgraded the stock, saying a recent rally ignores the risks that Genworth faces in its life insurance businesses, particularly in long-term care insurance. Consider the alternatives

Are you still getting a government check?
The deadline is March 1 to switch to either direct deposit or the government's MasterCard debit card. The switch isn't optional. Since 2011, all new recipients have been required to get Social Security electronically. By March 1, remaining Social Security recipients must choose one of the two options.
If you are one of the 5 million holdouts, here's how to sign up:
  • Go to the website (It's not a .gov site because it's owned jointly by the Treasury Department and the Federal Reserve.)
  • Call toll-free: (800) 333-1795. To prove who you are, be prepared to tell the person answering the phone the check number of your latest check and its amount.
If you are choosing direct deposit, you'll need to know your bank's routing number and your account number. Generally, both are across the bottom of your checks with the routing number on the left and the check number on the right. Best bet:  Direct Express card if you don’t have a bank account.

Our Social Security and Medicare will be cut to prop up two whole countries
Why our deficit continues to grow--$200 BILLION in this year alone for ‘WAR’ against a dead guy
If the CRS and OMB figures for FY2001-FY2013 are totaled for all direct spending on the war, they reach $641.7 billion, of which $198.2 billion – or over 30% – will be spent in FY2012 and FY2013. This is anincredible amount of money to have spent with so few controls, so few plans, so little auditing, and almost no credible measures of effectiveness. We will end up paying $2.4 TRILLION through 2017 according to the CBO. CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq, or $6,300 per U.S. citizen.

Why not raise revenue by going after the BIG tax cheats?
A new Government Accountability Office analysis of the IRS' efforts to collect unpaid taxes from citizens and small businesses in 2007 and 2008 found that exams focused on those with an income of $200,000 or more produced “significantly more” direct revenue per dollar of exam cost. The government researchers concluded that by shifting about $124 million in enforcement resources away from lower-income returns to returns from individuals and small businesses showing income of $200,000 or more, the IRS could bring in about $1 billion more than the $5.5 billion it now collects with these resources.
The GAO analysis said exams of individual tax returns reporting income of between $200,000 and $1 milliongenerated $25.60 per dollar of cost and those reporting $1 million and more generated $47.20 per dollar of cost, the report said. Exams of tax returns for lower-income earners generated about $5.40 to $7.40 for every dollar spent. So going after the big money yields BIG money!  Duh.

Many hedge funds and money managers predicted the drop of the Euro and European stocks for 2012. Instead, the markets made over 15% in the US and 20% in non-US markets. 
Members don’t trust Wall Street for unbiased advice:

ObamaCare provisions you can already take advantage of:
1. Free preventative care for women
insurance plans are required to cover free annual physicals for women, HIV testing and counseling, HPV DNA testing, screenings for gestational diabetes, screening and counseling for domestic violence, breastfeeding medical support, counseling for sexually transmitted infections, and FDA-approved contraceptive products.
2. Insurance company rebates
insurance companies are required to spend at least 80 percent to 85 percent of their customer premiums on direct medical costs. If companies fail to do so, they must send the leftover cash back to customers in the form of a rebate. The average rebate across the nation is expected to be around $150.
3. Free mammograms and colonoscopies
Since September 2010, insurers have been barred from levying out-of-pocket costs on patients receiving mammograms and colonoscopies, two of the most widely used forms of preventative care. 
4. Staying on your parents' plan
Since September 2010, children have been allowed to stay on their parents' insurance plans until they turn 26.
5. Get insurance for kids with pre-existing conditions
Since September 2010, insurance companies have been banned from denying coverage to children with pre-existing conditions, which include heart disease, cancer, asthma, and high blood pressure. By 2014, the provision will extend to all Americans with pre-existing conditions. It is also illegal for insurance companies to terminate coverage for any other reason than customer fraud — and insurers are barred from capping the number of benefits a customer can receive in a lifetime.
You can find lower-cost policies at the exchanges later this year.

SCAMS           “Deficits don’t matter” GOP leader Dick Cheney

AIG’s former CEO Greenberg wants to sue those who bailed it out—what CHUTZPAH:
The ex-CEO said that the rescue cheated shareholders by diluting their stake in the company. The insurer needed help after it was unable to raise money in equity and bond markets to pay clients who had bought protection against losses on mortgage-related securities. He is biggest stockholder and was kicked out of AIG.
“The idea that AIG would have been better off by going bankrupt, for the shareholders is a very, very hard thing to sell, I think, to a judge,” Neil Barofsky, the former inspector general of the U.S. Troubled Asset Relief Program said Tuesday on Bloomberg.

Wealthy can still avoid taxes with planning
Congress made the estate tax at $5 million permanent. This means the 2% can continue to use the $5 million gift and generation-skipping transfer tax exemptions by making gifts into dynasty trusts. “All of our wealthy clients should continue to make these gifts,” one advisor said.
Also, Congress did not touch valuation discounts, grantor retained annuity trusts and other techniques. All of the tricks of avoiding tax are still intact so advisors will keep using them.
Romney will never have to pay tax on his $250 millions. We will have to make up the $100 million tax he avoids.

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, January 4, 2013

Double Your Wealth Power

Double Your Wealth Power
Use compounding of low-cost mutual funds and a tax-FREE account to double your power to build wealth. Even in 2012, with a slow economy, our members’ 10 Vanguard funds continued to earn over 11.5% averaged over the last 30 years. You avoid ALL taxes on accumulations now, and, even better, when you take the money out. You benefit from the two most important investment engines of all time—NO TAX and COMPOUND INTEREST. As Warren Buffett said, "My wealth has come from a combination of living in America, some lucky genes, and compound interest."

Did you consider these “Best public college” choices yet?

19 States To Have Own Health Care Exchange – check state map below
The exchanges set minimum standards for healthcare and allow those who don't have insurance through their employer to comparison shop for the plan they like best -- much like how travel websites allow comparison shopping for airline tickets.
The Obamacare law does not mandate a state create a health insurance exchange, but does hold that if an individual state does not create their own exchange or partner with the federal government to create one, the federal government will create one for them. Most Democratic states have moved to create their own exchange while most Republican-controlled states have resisted. Only four states with Republican-controlled legislatures have created the health exchange -- IdahoNevadaUtah and New Mexico -- the Times said.

Vanguard leads price reductions in the cost of stock ETFs
Most of Vanguard’s U.S. equity sector ETFs now charge 0.14%, which is down from 0.19% and well below the 0.18% charge for equity sector SPDR funds. This could mean an extra 50% in your nest egg over time. Low-cost stock funds beat high-cost funds over every time period, according to independent rating firm, Morningstar.

Have you made these common financial mistakes?  The experts make them
Even John Bogle, founder, Vanguard, made them.  Bogle tells how the investment industry changed from putting the customer first to putting the managers’ bonuses first. Video:

Has your company pension been shorted again?
A new study indicates that the aggregate pension funded status is estimated to be 75% at the end of 2012, compared to 78% at the end of 2011. Overall, pension plan funding decreased by $79 billion last year, leaving a deficit of $418 billion at the end of 2012. Results are from pension plan data for the 429 Fortune 1000 companies that sponsor U.S. defined benefit pension plans and have a December 31 measurement date.

Your Retirement Mutual Funds: 10 mutual funds to make sure your retirement income last as long as you!
Your investment plan assures you of income AND growth.
Your spending plan assures you of income for life.
Your Wealth ReserveTM provides TAX-FREE income for life.
Your tax-advantaged mutual funds grow at 10-12% per year.
Start today! Every year you delay costs you $100,000 later
Ten diversified mutual funds assure us of retirement income AND inflation-busting growth we can't outlive.

Watch out where you drive!
According to the Alabama Department of Revenue, 22 percent of drivers in Alabama do not carry mandatory liability insurance. Those records also show Alabama is the sixth-highest rate of uninsured drivers among the states. In Mississippi there are an estimated 28 percent of motorists uninsured. In New MexicoTennessee,Oklahoma and Florida, about one-quarter of drivers have no insurance. In New Hampshire you are not required to have insurance but 90% have it.

Safest cars 2013
Winners include the Acura TL; Dodge Avenger and its twin, the Chrysler 200 4-door; Ford Fusion; Honda Accord 2-door; Honda Accord 4-door; Kia Optima; Nissan Altima 4-door; Subaru Legacy and its twin, the Subaru Outback; Suzuki Kizashi; Volkswagen Passat and Volvo S60. The Acura TL and Volvo S60 are midsize luxury cars. The other models are midsize moderately priced cars.

SCAMS           “Deficits don’t matter” GOP leader Dick Cheney

Are any of the 2013 tax credits for your benefit?
New tax law includes 50 tax breaks including credits for race track owners, moviemakers, electric motorcycles. Our rep are digging a bigger hole

Insurers and Feds dragging out Sandy payment process
Hopes of getting the hardest-hit stretches of the Jersey Shore rebuilt by next summer are fading, as delays in insurance settlements mount and uncertainty hangs over federal aid. Insurers used the same tactic for Katrina repairs. Some are still unpaid.
More than 70,000 property owners have filed claims with the National Flood Insurance Program, according to FEMA. The agency would not say how many of those claims had been settled, but in communities up and down the Shore, property owners and local officials reported that only a small percentage of homeowners had seen flood insurance settlements two months after Sandy made landfall.
Some property owners filed with FEMA and were sent small business loan applications instead of receiving help. The application is longer than a new home mortgage app.

Why Sandy help was not approved—more Washington games
The Sandy bill contained pork—spending for projects that have nothing to do with Hurricane Sandy or the victims, including millions of dollars for tree planting in areas untouched by Sandy and a new roof for theSmithsonian Museum. Only $1 out of every $6 — $9 billion of the $60 billion will be spent in 2013. That means 85 percent doesn’t come until 2014 and beyond.
The bill also provides $336 million for Amtrak (10 times President Obama’s request of $32 million), $150 million for fishery disaster relief, for which recipients in Alaska and Mississippi will be eligible, $50 million for the National Park Service’s historic preservation fund (twice its annual funding), and $50 million for employee retraining programs.  According to the Heritage Foundation’s Matt A. Mayer, there is $28 billion for “future disaster-mitigation projects on the East Coast,” which is a large component of the 64 percent of the funding that will be spent after 2014.  Whether or not these unrelated spending initiatives are worthwhile, they deserve more scrutiny than they will receive as part of an enormous Sandy relief bill being rushed through a lame-duck session of Congress.

Who owns your account now?
Presidential Life to Athene Annuity & Life Assurance Company 

41 Watchung Plaza, B242
MontclairNJ 07042