Seven Step Process for Setting & Achieving Your Goals

Seven Step Process for Setting & Achieving Your Goals

• First, decide exactly what you want in each area of your life. Be specific!
• Second, write it down, clearly and in detail.
• Third, set a specific deadline. If it is a large goal, break it down into sub-deadlines and write them down in order.
• Fourth, make a list of everything you can think of that you are going to have to do to achieve your goal. As you think of new items, add them to your list.
• Fifth, organize the items on your list into a plan by placing them in the proper sequence and priority.
• Sixth, take action immediately on the most important thing you can do on your plan. This is very important!
• Seventh, do something every day that moves you toward the attainment of one or more of your important goals. Maintain the momentum!

Courtesy:   Brian Tracy, Best-Selling Author, Speaker and Success Coach

Tips for Detecting Scams

Tips for Detecting Scams 
New ways to fraudulently part you and your money seem to be springing up every day. The Cincinnati Better Business Bureau (BBB) recently reported that a “Wave of Telemarketing Scams Target Seniors” (Feb. 08, 2013), including pushy telemarketing calls from businesses trying to sell personal emergency alarm systems that guard against a long list of dangers, such as break-ins and medical emergencies. It claims that you can get an alarm system worth several hundred dollars installed for free and you’ll only be charged a monthly fee of about $30. Often these are phishing scams that seek credit card numbers and personal information. The Cincinnati BBB offers tips for detecting scams. Be suspicious if the offer:

• Tries to create a sense of panic. In this case, the call alarms seniors by describing a situation where they are incapacitated at home and cannot call for help. Also watch out for calls that push for immediate action.

• Promises something for free . . . that really isn't. Be wary of "free" offers that ask you to pay a handling fee or other charges.

• Implies an endorsement from a well-known organization. In this case, the call claims the alarm system is endorsed by the American Heart Association and the "American Diabetic Association," which is really the American Diabetes Association. Others claim a good Better Business Bureau rating, but this can be checked on BBB.org.

• Contains errors. Just as scam emails often contain misspellings and grammar errors, fraudulent calls refer to organizations, such as the "Diabetic Association."

• Doesn’t have a legitimate mailing address and website.

Ways to Avoid Being Scammed

Ways to Avoid Being Scammed
To avoid ploys to steal your money through prizes and sweepstakes, here are some tips:

• Ask to receive the offer in writing. Legitimate sweepstakes companies will give you written information about how a contest works, and reading it carefully and at your leisure will make the offer more comprehensible.

• Don’t rush a decision. So-called limited time offers should not require an immediate decision. A caller from a legitimate business will not rush you.

• Never pay to play. It's illegal for a company to require you to buy something or pay a fee in order to win or claim a prize.

• Buying something doesn't improve your chances of winning. It's illegal for a company to suggest that your chances will be better if you make a purchase.

• Never give personal information to someone on the phone unless you initiated the call and have confidence in the person or agency receiving the call. Legitimate business callers will not ask you for this information over the phone.

• Don't give the company money for taxes on your prize. Taxes will be deducted from your winnings or you will pay them directly to the government.

• Don’t pay shipping costs for claiming any prize. If the caller offers a free gift but you first need to pay a handling charge or pay taxes on the prize, that’s a red flag.

• Guard your credit card and bank account numbers. No legitimate sweepstakes company will ask for this information. If you win, your social security number may be required for tax reporting purposes, but you shouldn’t provide that information unless you're absolutely sure that you entered the contest and you know the company operating it.

• Be on guard for imposters. Some con artists use company names that are identical or very similar to well-known, legitimate sweepstakes operators. Tell them that you'll get back to them and contact the real companies to ask if there is any connection.

• Be wary of offers to send you an "advance" on your "winnings." Some scam operators send you a check for part of your winnings, instructing you to deposit it and then wire payment to them for taxes, bonding or some other phony purpose. After you wire the money, your check bounces because it turned out to be an elaborate fake.

• Don't be fooled by official-looking mail. It's not necessarily legitimate just because the envelope is marked "urgent" and the contents look impressive. One clue that you haven't really won is if the letter was sent at bulk mail rates. That means that thousands of other people are also “winners.”

• Be especially cautious about foreign sweepstakes companies. Many fraudulent sweepstakes companies that target U.S. consumers are located in Canada or other countries, which makes it much more difficult for law enforcement agencies to pursue them.

Other Types of Fraud
In addition to telemarketing scams, many other types of fraud are often directed against seniors, such as Medicare fraud, and bank fraud.

According to the FTC, nearly 25 million Americans are victims of consumer fraud each year. According to newspaper reports, senior scam victims in the U.S. hand over at least $2.6 billion to crooks every year, with as many as one in every five seniors losing money. Some of the more recent scams are listed below, courtesy of the Savvy Savings Seniors Scam Toolkit (from the National Council on Aging).

Charity scams: In one case, professional con artists ask the elderly to help the victims of a recent natural disaster by providing credit card information and other personal financial information, including bank account numbers and Social Security numbers. Most states require charities to register with the state, which reports how they use donations.

Counterfeit drug scams: Some online “pharmacies” advertise cheaper yet “more effective” medications than a reputable pharmacy provides, but when the drugs arrive, they are often useless imitations.

Magazine subscription scams: Scam artists offer “free” or “special” deals on particular magazines for “dollars a day,” but these subscriptions last for multiple years.

Jury duty scam: A caller claiming to be a jury coordinator says an arrest warrant has been made against you because you failed to show up for jury duty. If you protest that you never received a summons for jury duty, the scammer asks for your Social Security number and date of birth so he or she can verify the information and cancel the arrest warrant. The fraud has been reported so far in 11 states, including Oklahoma, Illinois and Colorado.

Sources:
National Consumers League
National Crime Prevention Council
Milestones e-news
South Carolina Lieutenant Governor’s Office on Aging
Scambusters

Nine Foods to Help Prevent Dementia

Nine Foods to Help Prevent Dementia
A new report from the Alzheimer’s Association says that one out of three seniors die with Alzheimer’s, although that is not necessarily the cause of death. While research is still ongoing about how to stave off Alzheimer’s and other forms of dementia, some research suggests that certain foods may help protect against mental decline and even prevent brain-wasting diseases. Alzheimer’s is identified with inflammation, so the thinking is that foods with anti-inflammatory properties may be able to delay age-related cognitive disorders. Nine commonly available foods could help prevent mental deterioration, and they even taste good.

1. Dark chocolate. Studies show that the flavonoids in cocoa increase blood flow to the brain and may help to protect against conditions that reduce cerebral blood flow, such as dementia and stroke.

2. Red wine. Drinking wine in moderation can protect cognitive function and decrease the risk of Alzheimer’s disease and dementia. This is due to the high levels of flavonoids and possibly other polyphenolics such as resveratrol in red wine.

3. Clams. It’s thought that when vitamin B12 levels are low, blood levels of homocysteine will raise, significantly increasing the risk for dementia, heart attack and other ailments. Clams contain 98.9 micrograms of vitamin B12 in just a 100-gram serving, or 1,648 percent of the recommended dietary allowance.

4. Asparagus. One study found that individuals who were deficient in folate, a form of vitamin B9, were 3.5 times more likely to develop dementia. One cup of asparagus will take care of nearly 66 percent of your daily folate needs.

5. Wild salmon. According to one study, an average of three servings of oily fish a week adds up to an almost 50 percent lower risk of Alzheimer’s disease and dementia. The reason is the omega-3 fatty acid and other nutrients such as vitamin D and B12 can help to prevent neurodegenerative disorders.

6. Walnuts. In moderation, walnuts were found to help improve motor and cognitive skills in older rodents, due, it is believed, to a combination of polyphenols, omega-3 fats and other bioactive substances.

7. Cherries. The antioxidant compounds, anthocyanins, which give cherries their bright red color, possess anti-inflammatory properties that could work like pain medications but without the nasty side effects.

8. Turmeric. A study found that curcumin in turmeric, commonly used in curry dishes, removes plaques from the brain. Plaques are thought to contribute to the degradation of brain cells and lead to Alzheimer’s disease.

9. Apples. The skins of apples contain quercetin, found to protect the brain from damages associated with Alzheimer’s disease, in studies conducted by Cornell University.

Adapted from the Conscious Life.

Newlywed or Recently Divorced

Newlywed or Recently Divorced
Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could cause your tax return to be rejected by the IRS.

For newlyweds, the tax scenario can begin when the bride says “I do” and takes her husband’s surname, but doesn’t tell the SSA about the name change. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the SSN.

Similarly, after a divorce, a woman who had taken her husband?s name and had made that change known to the SSA should contact the SSA if she reassumes a previous name.

It’s easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency’s Web site, Change a name on a Social Security card by calling toll free 1-800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.

IRS Intensifies National Crackdown on Identity Theft

The latest updates: IRS Intensifies National Crackdown on Identity Theft

Source: (excerpt from) irs.gov / IR-2013-17, 07 Feb 2013

The identity theft enforcement efforts and individual cases are available on  special Identity Theft Schemes page on IRS.gov.

More information on enforcement actions can be found on a DOJ Tax Division page.

Tax preparers should confirm the identity of their clients, and there are several forms of identification that will allow them to do so. Note that at least one should be a photo ID. 
Acceptable forms of ID:

• Driver's license
• Passport or passport card
• Military ID
• State ID
• College ID
• Birth certificate
• Social Security card
• Utility bill with cancelled postage
• Certificate of citizenship or naturalization

Evidence to support name change:

• Marriage certificate
• Divorce decree
• Adoption record
• Court order

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov. A map of Enforcement Actions Taken in January 2013 can also be found on IRS.gov.

Additional Resources:
FS-2012-8, Taxpayer Guide to Identity Theft
FS-2013-2, IRS Combats Identity Theft and Refund Fraud on Many Fronts
FS-2013-3, Tips for Taxpayers, Victims about Identity Theft and Tax Returns

FBAR Requirements--Foreign account compliance summary

FBAR Requirements--Foreign account compliance summary

(1) US citizen required to file form TD F 90-22.1 if max value of foreign account over $10,000 at any point during the year.  (This TD F 90-22.1 is a separate form from tax return. Filed separately, no later than June 30th with US Treasury. Not extendable).
• Financial accounts include:
 :: Securities
 :: Brokerage
 :: Savings
 :: Demand
 :: Checking
 :: Deposit
 :: Time deposit or other account at institution
 :: Person performing as financial institution

(2) File 1040 Schedule B (Ask the question - Foreign accounts? FBAR?) even if no interest or dividend income.

(3) File form #8938 if max value of account exceeds $50,000 at any point during the year. Must use US Treasury FMS website 
Treasury Reporting Rates of Exchange to calculate foreign currency exchange rate. 

Note: There's nothing wrong with having a foreign account, as long as it's not being used for fraud. Avoid "shades of UBS".

Advantages & Disadvantages of Business Forms

Advantages & Disadvantages of Business Forms
Choosing the Right Business Form
Overview:  There are three basic business forms available for most business owners:

• Proprietorship (Schedule C)
• Regular Corporation (C Corporation)
• S Corporation

The matrix on below provides an excellent overview of the differences.  This section highlights important strategies for the different forms of business.

Description	Schedule C Proprietorship	Regular Corporation	S Corporation
Reasonable salary*	Not an issue	Deductible	Deductible
Unreasonable (excessive) salary	Not an issue	Not deductible by corporation;  dividend to shareholder/employee	Generally, not an  issue for shareholder/ employees
Social security taxes	Self-Employment tax based on bottom-line Schedule C income	Taxed 50% to  corporation and 50% to employee	Same as regular corporation
Net income	Taxed at individual tax rates	Taxed at corporate tax rates	Taxed at individual tax rates
Net loss	Deducted on individual return against other income; unabsorbed losses may be carried back 2 years and forward 20 years	Net loss on corporate return is carried back 2 years and forward 20 years	Deducted and carried back  and forward  on individual  return up to shareholder’s  basis in stock and loans  to corporation
Medical insurance premiums on owner	Deduct 100% on front of Form 1040	Deducted on corporate return	Same as proprietorship including ability to deduct 100% on front of Form 1040
Disability premiums on owner	Not deductible	Deductible to corporation; taxable to recipient of benefits	Not deductible by corporation or individual
Group term life insurance premiums on life of owner	Not deductible	Deductible as a tax-free fringe benefit on first $50,000 of coverage	Not deductible
Retirement benefits	Basically same as corporation	Basically same as individual	Basically same as individual
Supper money for owner	Not deductible	Deductible	Questionable
Election required	No	No	Yes – strict time limits
Ownership	Individual	Stock can be more than one class	Only individuals, estates, and trusts restricted to one class of stock (voting rights can differ)
Liquidation of ownership	Assets are sold and individual is taxed	Sale of stock or sale of assets and liquidation of corporation (double-tax problem)	Sale of stock or assets, no double tax problem, except for “built in gains”
Liability	Individual	Corporate, except for professional   corporations  wherein  professionals  remain liable under malpractice statutes	Same as regular corporation
Asset expensing IRC §179	Up to $500K if assets placed in service total less than $2MM	Claimed on  corporate return  with same  limits that apply  to an individual	Reflected on S Corporation  return and claimed  on individual return
Paperwork	Simplest form	Two separate entities for income tax purposes… payroll taxes… corporate minutes	Same as regular corporation;  however, may involve  more complex  state filing requirements
Hiring child	No social security tax if child under 18	Social security taxes apply	Social security taxes apply (may gift stock to children and eliminate social security on distribution, in addition, can still benefit from shifting income).

* Reasonable compensation:  Services performed by shareholder/owners must be reasonable compensated.  Reasonable compensation is subject to wide discretion. (Roob v. Commissioner, 50 TC 891, 898 (1968).  See Radtke vs. US; 712F. Supp. 143; Aff'd 895 F.2d 1196 (1990) in which no compensation was paid).   It must take into account: 

• Services performed
• Responsibilities involved
• Time spent
• Size and complexity of business
• Prevailing economic conditions
• Compensation paid by comparable firms for comparable services
• Salary paid to company officers in prior years

General Rules of Thumb

1. High medical expenses -- regular corporation
2. High disability premiums -- regular corporation
3. Income $20,000 to $70,000 -- S-Corporation to save social security taxes
4. High liability exposure -- corporation
5. Hiring children -- Sole proprietorship
6. Gift/Leaseback -- any form, but assets must be owned individually to create benefits
7. Appreciating assets -- S-Corporation or proprietorship

Reference:  Botkin, Sandy, Tax Strategies for Business Professionals, The Tax Reduction Institute

Alimony? Taxpayer and ex-spouse agree to a lump sum settlement

Alimony? Taxpayer and ex-spouse agree to a lump sum settlement and terminate annual alimony payments......
There is a QDRO and a distribution from the payer's 401K. The ex-spouse will be receiving the 1099-R. Does this still get reported as alimony paid since a 1099-R will be issued?

The answer is:  No.

The payer does not get to claim the deduction if he never claimed the income. Since it is a 401K he did not pay tax on it when he earned it and if the 1099-R is going to the ex-spouse then he will not have taxable income on it now either. That is one basic tenant of taxes that holds true --  if it is not included in income, then it is not able to be deducted.  Ipso facto, no alimony deduction.

Generally, when there is a QDRO, the purpose of the getting the court to order this distribution is to equalize the sharing of marital assets. Sharing/splitting marital assets does not give rise to alimony at all.

Typically when the distribution is made pursuant to a QDRO, the distribution goes to the spouse who does not own that account. If the spouse rolls it directly into his/her IRA, the distribution is not taxable to anyone.

If s/he takes the money out, it is taxable to the recipient, not to the original account holder.

Read more about it here: Retirement Topics - QDRO - Qualified Domestic Relations Order  

You may want to read more about what is alimony, here Alimony

What the IRS does not include in their description here, but should, is the timing of alimony payments. They only include that information in the explanation about alimony recapture. Read here: Recapture of Alimony

There is no alimony unless it's cash paid to (or paid on behalf of) the ex-spouse as required by the settlement agreement.

How to Take the High Road

How to Take the High Road
You may have faced moments when you want nothing more than to react unnecessarily when someone tries to push your buttons. Taking the high road will keep the peace. It's the best way to handle conflict and maintain your own moral high ground. If somebody is giving you flack, here are a few tips to "stay Zen".

Step 1 of 6
Take a deep breath. In for five, out for five. Close your eyes to get the full effect. Repeat if necessary until you feel like you're back into control.

Step 2 of 6
Smile. Look the person directly in the eye and give them a knowing smile. Usually, people find this disarming and want to smile back. Sometimes, this is all it takes.

Step 3 of 6
Respond in a manner that will not escalate the situation. If somebody cuts in front of you in line, smile and say, "Oh, are you in line for the _____, too? I think it starts back there," and point to the rear of the line. Follow this up with a compliment. "Oh, I love your purse," or "Great t-shirt. That's so funny!" will generally disarm any potential hothead.

Step 4 of 6
Find some perspective, (look at the reality of things) even if it's hard. If this person has the audacity to simply glare at you and not give in to the request, resist any urge to rap them upside the head. Say to yourself, "will this possibly matter in five years?" If it won't, then grin and bear it. Don't let a jerk ruin your day over something trivial.

Step 5 of 6
Squeeze out an ounce of compassion. Really open your eyes and look at the person who is bothering you. Maybe they're having a truly awful day, or maybe they are in a hurry for a good reason. Try to assume that these possibilities are true, and then focus on something positive.

Step 6 of 6
Shake it off and play it forward if you still think you are likely to explode. Find a place in your day to do something nice for a someone. Open a door, compliment someone, pick up a piece of trash and throw it away. You'll get a great boost from any random act of kindness and you'll find yourself back on the high road once again.

Courtesy:  eHow