Watch Out For Tax Scams This Season

Tax scams, unfortunately, disproportionately affect the elderly, and can expose people to a number of different financial risks going forward. Around tax season these scams tend to increase, and could expose you to serious financial problems.

Being aware of telephone tax scams is on the of the most important steps to take to decrease your chances of being affected. Unfortunately many people are receiving a common tax scam that appears to come in the form of a phone call from the IRS mandating that payment must be made immediately or criminal prosecution will be pursued.

These phone calls tend to threaten criminal prosecution, lawsuits, and police arrest, however the IRS typically communicates with consumers directly through the mail and letters that come on IRS letterhead. A phone call demanding immediate payment could be a sign of a telephone tax scam.

And they should contact an affected person to schedule a consultation or to contact the IRS directly. Being aware of telephone tax scams is one of the best ways to protect your assets that you have worked so hard to accumulate over your life from being decimated by a fraudulent scheme.

When protecting your assets, you must have both an eye towards the future and a plan to address scams or fraudulent schemes in the present. Discuss your options with an estate planning lawyer in MA today to learn more.

Optimizing Your Retirement Planning Strategy for Taxes

Time for taxes with moneyLooking ahead to the future is critical for any individual who is in the process of saving for retirement. Setting aside enough money to handle increasing longevity concerns and the rising costs of long term care are two of the most common reasons why an individual will approach retirement planning and estate planning with the help of an experienced professional. However, it is also important to consider how you can optimize your retirement planning strategies for taxes as well.

Your retirement planning and estate planning needs often intersect, and leveraging the right professionals, such as a financial planner and a Massachusetts estate planning attorney, can help ensure that your comprehensive plans are working for your retirement as well as for the benefit of your estate.

There are several different steps that you can take to accomplish this goal, including:

  • Plan to take your Social Security benefits after reaching full retirement age. This allows you to tap into the best tax advantage income sources and will not allow for inflation degradation.
  • Consult with an experienced financial planner and estate planning attorney. Tapping into the power of professionals who have worked in this field for a number of years gives you an overview of the different types of strategies available and allows you to partner with someone who has extensive experience in the field.
  • Update your retirement planning program under an annual basis along with your estate planning. A lot will depend on your tax rates currently and how you will be taxed in the future.

Since tax laws can change every single year, it is important to look back at what actually happened to your investments over the year and how you can update your plan to make the most of it.

Why Tax Time is the Perfect Window for Reviewing Your Will

Time for taxes with moneyWhen you’re going through your financial paperwork for the last year and preparing to file your taxes, it’s a good idea to take a look at any other legal documents that you have to ensure that they are written properly and still carry out the wishes that you want.
What Should I Review at Tax Time?
Some examples could include beneficiary designations on life insurance policies and your will. Make sure that the individuals you have named in any official estate planning documents are still willing and available to help.
Life Changes and the Passage of Time Necessitate Review

Things might have changed in your life over the course of the past year and these changes should be reflected in your estate planning documents. For example, one common area that is overlooked after an individual goes through a divorce is updating all of the beneficiary designations and estate planning documents that name your former spouse as an authorized agent. Of course, after a divorce you will want to update these but this is not the only event in your life that warrants a significant change.
Accomplish All Your Review at Once

Getting all of your paperwork out of the way at the same time ensures that you don’t have to think about it for a while and gives you the peace of mind that you know your documents are there to protect you and your needs for the year to come. Set up a consultation with a Massachusetts estate planning attorney to talk more about making these changes to your documents.

Income Tax Benefits Available To Families With Special Needs Children

As the cost to care for children with special needs continues to rise, parents need all the help they can get. Unfortunately, as many as 15% to 30% of parents with a special needs child are not taking full advantage of tax benefits available to them, according to a recent article in the Journal of Accountancy. Hundreds, perhaps thousands, of dollars in tax benefits and deductions are going unclaimed by some families. Let’s take a look at some of the benefits available.

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(Photo credit: Wikipedia)

The Dependency Exemption
This exemption can be taken for a “qualifying child” or “qualifying relative.” In 2013, the exemption amount was $3,900. In addition, if the loved one with special needs is permanently or totally disabled, the exemption may be available regardless of his or her age.

Special School Instruction
Certain expenses associated with attending a special school can be deducted as medical expenses. These include lodging, transportation, and meals. Costs incurred for treatment, care, supervision, training, and more can also be deducted if the special school provides them.

Capital Expenditures
Capital expenditures to a residence that are undertaken to provide for medical care or assistance with physical limitations (such as an entrance ramp, railings, custom bathing facilities, etc.) may be deductible as medical expenses.

Conferences and Seminars
Registration fees and travel expenses to attend conferences and seminars dedicated to issues essential to the care of a special needs child may be deductible.

Impairment-Related Work Expenditures
If a special needs child gets a job later in life, some expenses related to maintaining his or her employment may be deductible.

These are just some of the income tax benefits available to families with special needs children. It is important to note that the rules governing eligibility for these tax deductions are extremely complicated and change over time. You can learn about them by reading the entire Journal of Accountancy article at

If you are caring for a child with special needs, you are not alone. I am always available to discuss special needs planning tools and strategies, including special needs trusts. Give me a call at your earliest convenience.

Why Create a Trust?

Due to changes that limited federal estate tax to only high valued estates, many people believe there is no reason to set up a trust to guard their assets. However, a recent article outlines five reasons that trusts might be the right choice even for smaller estates:

    1. Holding assets in trust may allow estates valued at over 1 million dollars to avoid significant Massachusetts tax liability.

    2. A trust will avoid the often long and costly, and always public, probate process, where the will, the accounting of the estate disbursements and revenue, and the probate asset inventory will all be available to the public.

    3. Allowing assets to be distributed through a trust will give parents the ability to moderate how much access a young child has to a house, life insurance, retirement assets, or cash, so that the children are not put in a position to misuse estate assets. It may also help where there is concern over poor money management skills, business liability, or creditor problems.

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    (Photo credit: MyTudut)

    4. A child’s eligibility for public benefits can be affected if the child receives an inheritance. Whereas, holding assets in trust for the benefit of the child will help ensure that the child remains eligible and that resources are there to provide care over the long term.

    5. A revocable trust also gives a person the ability to determine how he or she will be cared for and how decision will be made in the case of incapacitation.