Keeping Finances Separate Could Create Problems

Couples and spouses who live together but keep their finances separate could potentially run into problems further down the road. Keeping finances separate can be smart, considering the estate-planning advantages that occur when couples own separate properties, but there are also downfalls. The Wall Street Journal listed the following potential pitfalls of keeping finances separate:

1.      Assets owned separately might be distributed differently than the owner would like, should the owner pass away without making an estate plan. Experts suggest consulting with a professional to make an estate plan to avoid the confusion.

2.      Separate accounts may cause couples to lose communication with each other, especially in regards to finances. Communication about finances, especially retirement accounts, is very important. Just because accounts are separate does not mean that finances do not affect the other spouse or partner.

3.      Separately owned property holds a greater risk when it comes to bankruptcy or lawsuits. Property that is owned jointly is more secure, as only half of the property will be gained by a bankruptcy claim or lawsuit.

4.      Separate accounts can be problematic, especially when it comes to a partner or spouse passing away. When an account is not in your name, you cannot simply withdraw money or change the account.

There are pros and cons to keeping accounts separate. If you have questions or would like advice on managing your finances, please contact us.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS Warns of New Phone Scam

The Internal Revenue Service has issued a warning about a new phone scam that targets taxpayers, including recent immigrants. This phone scam involves scammers impersonating IRS agents to coax taxpayers to submit payments through pre-loaded debit cards or wire transfers. If the victims of the scam do not cooperate and submit payment, the scammers will threaten the victim with arrest, deportation and/or suspension of business or driver’s licenses. These scams are often hard to detect, as scammers will create fake badge numbers, call on toll-free numbers, and create background noise so the call sounds as if it’s coming from a call center. These scammers may even have your Social Security number and other personal information about you.

If you receive a call from someone claiming to be from the IRS, it is best to contact the IRS directly. The IRS will NOT ask for PINs, passwords, or financial information over the phone. Report any suspicious phone calls you may receive to the IRS at the phone numbers listed on the website here.

Tell us in the comments: Have you had scammers call you claiming to be from the IRS?

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

Myths about Credit Scores

If you are like most Americans, you are probably confused about your credit score. A good credit score can save you money in the long run, so it’s important to understand some basic facts about credit scores. The Huffington Post recently posted an article debunking the top 3 myths about credit reports and scores. Listed below are the top 3 myths, along with actual facts about credit scores.

1.      Myth: You have just one credit score.

Fact: You actually have many credit scores, from a dozen to a hundred. Different credit scores are given for different things. An auto lender will receive a different credit score than your mortgage lender. Although the scores can differ, they will all be in the same range. If you have a good credit score from one model, all scores are probably good.
 

2.      Myth: Checking your own credit hurts you score.

Fact: When you request copies of your credit score from an accredited organization, this is called a soft inquiry. When your credit score is requested for making lending decisions, this is called a hard inquiry. A soft inquiry will not hurt your credit, unlike a hard inquiry. You are also entitled to three free credit reports each year, so it’s easy stay informed about what your credit score is. The three major national credit bureaus that offer these reports are Equifax, Experian, and TransUnion.

3.      Myth: Closing your oldest credit card hurts your score.

Fact: Closing an old credit card account will not hurt your score, unless it’s your credit card with the highest limit. All accounts in your name, whether open or closed, will show up on your credit score for ten years. After ten years, credit bureaus will remove them from your credit report. Before you close a credit card, just be sure that all other credit card balances are low and not maxed out.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

New Form NC-4 EZs or NC-4s

A new law was recently enacted by the North Carolina General Assembly, and will go into effect January 1, 2014. Under House Bill 998, taxpayers can no longer claim a personal exemption for themselves, their children, their spouse, or any other qualifying dependents. Also, many tax credits and deductions that have an impact on North Carolina Withholding tax are no longer available, effective January 1^st. Because of this new law, employers must have employees submit new Employee’s Withholding Allowance Certificate (Form NC-4 EZ or Form NC-4). Recipients of pension or annuity payments must complete and provide to their payer a new Withholding Certificate for Pension or Annuity Payments (Form NC-4P).  The North Carolina Department of Revenue will notify employers and pension payers of the new law requirements by mail.

If you have any questions, please contact us. You can also contact the North Carolina Department of Revenue directly through a help number: 1-877-252-4487 (this phone number will only be available until February 28, 2014).

 

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

How to Avoid Fraud in the Workplace

International Fraud Awareness Week (November 3-9) relayed the importance of awareness, detection and prevention in regards to fraud. For International Fraud Awareness Week, the CPA Practice Advisor recently posted an article regarding how to avoid fraud in the workplace. In that article, the Association of Certified Fraud Examiners listed the top 5 tips that will help employers detect and prevent fraud:

1. Be proactive: Adopt a code of ethics for employees and management that must be followed, and make it known that unethical behavior will not be tolerated.
2. Establish hiring procedures: Every company should have formal employment guidelines that are strictly followed. Conduct thorough background checks and take ethical compliance into consideration during performance reviews.
3. Train employees: All employees should be trained in fraud prevention. Employees should know how to report suspicious activity and understand the warning signs of fraud.
4. Conduct regular audits: Surprise audits are the most effective and should be done routinely, especially in financial and inventory departments.
5. Call an expert: If fraud examination is not practiced by your business, hire an expert to conduct regular examinations.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

The New Minimum Wage

 

The current federal minimum wage is $7.25 an hour, but that number could be increasing soon. Last Thursday, the President announced his support of legislation that would increase the federal minimum wage from $7.25 to $10.10. According to the Huffington Post, the “federal minimum wage is actually worth $2 less today than it was in 1968”. As the cost of living goes up, minimum wage follows suit. The last minimum wage increase occurred on July 24, 2009, when minimum wage was increased from $6.55 to $7.25 an hour.

Some states have already begun the process of increasing minimum wage.  New York and Connecticut have approved measures that would increase the minimum wage to $9 an hour and organizers in South Dakota, Massachusetts and Idaho are working to get the same wage increase on their ballots for voting in 2014. California lawmakers have approved an increase of minimum wage to $10, which will take effect by 2016, and New Jersey residents have voted to raise minimum wage to $8.25 an hour. The CNN Money website reports that “as of January, New Jersey will join 19 other states and Washington, D.C., in having minimum wages that exceed the federal level”.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

Fewer Americans Expecting to Retire

USA Today recently posted an article regarding a study that shows 37% of people do not expect to ever retire. These findings come from a survey done by Wells Fargo. Survey respondents said that “paying monthly bills is their highest priority, and saving for retirement is a distant second”. On a good note, half of the survey respondents reported that they will have enough money to retire, which relays the importance of developing a retirement account as early as possible. But experts say it is never too late to start saving for retirement. To get a jumpstart on planning for retirement, open a savings account immediately and start depositing funds routinely. Try to cut your current expenses and utilize as many tax efficient retirement plans as possible (401k, Roth IRA’s, Traditional IRA’s). When it comes to planning for retirement, earlier is better, but it is never too late. If you have questions about planning for retirement, contact us!

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com