Include a Few Tax Items in Your Summer Wedding Checklist

by NFS | Jun 29, 2015 | Archives

If you’re preparing for summer nuptials, make sure you do some tax planning as well. A few steps taken now can make tax time easier next year. Here are some tips from the IRS to help keep tax issues that may arise from your marriage to a minimum:

Change of name. All the names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. The easiest way for you to get the form is to download and print it on SSA.gov. You can also call SSA at 800-772-1213 to order the form, or get it from your local SSA office.

Change tax withholding. When you get married, you should consider a change of income tax withholding. To do that, give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. The withholding rate for married people is lower than for those who are single. Some married people find that they do not have enough tax withheld at the married rate. For example, this can happen if you and your spouse both work. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information. You can get IRS forms and publications on IRS.gov/forms at any time.

Changes in circumstances. If you receive advance payments of the premium tax credit you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.


Change of address. Let the IRS know if you move. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can change your address online at USPS.com, or report the change at your local post office.

Change in filing status. If you are married as of Dec. 31, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your federal tax return jointly or separately each year. It is a good idea to figure the tax both ways so you can choose the status that results in the least tax.

For a FREE Life Guide on “Marriage & Money” from NFS, click here to request one. This guide includes help in pre-planning for your wedding including tips on “tying the financial knot”, a wedding budget worksheet, monthly budget organizer and a name/address change checklist.

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Supreme Court Rules in Favor of Same-Sex Marriage

by NFS | Jun 29, 2015 | Archives

In a 5-4 ruling, the Supreme Court held in Obergefell v. Hodges that the 14th amendment requires all states to license a marriage between two persons of the same sex, and to recognize same-sex marriages validly performed out of state.

Justice Anthony Kennedy wrote the majority opinion, and was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Chief Justice John Roberts filed a dissenting opinion, in which Justices Antonin Scalia and Clarence Thomas joined. Scalia, Thomas and Alito also filed their own dissenting opinions, in which other justices joined.

In reversing the Sixth Circuit Court of Appeals, Justice Kennedy wrote: “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions.  They ask for equal dignity in the eyes of the law. The Constitution grants them that right.”

“Today’s ruling will provide both same-sex and opposite-sex married couples with the same rights across all 50 states and the District of Columbia,” said Gail Cohen, vice president and general trust counsel for Fiduciary Trust Company International.

“The myriad of state and federal rights and privileges that are afforded to married couples will apply to everyone equally,” she added. “As advisers, we can now provide advice to all of our married clients in a manner that is consistent regardless of where the marriage takes place and regardless of where the married couple lives.”

“The decision affects fewer states than a ruling the other way would have done,” said Mark Luscombe, principal federal tax analyst for Wolters Kluwer. “Only four states were directly before the court, so the ruling technically only directly applies in Michigan, Ohio, Kentucky and Tennessee. Other states may decide to go along with the Supreme Court on this, or drag their heels and wait until a federal court with jurisdiction over them files a decision in line with this case.”

“There are 20 states in which same-sex marriage has been imposed by a court,” Luscombe observed. “Had the ruling gone the other way, it might have caused some of the 20 states to try to reverse.”

Rishi Agrawal, a state tax law editor at Bloomberg BNA, said the U.S. Supreme Court’s decision in Obergefell v. Hodges allows same-sex couples to now marry in all 50 states. “This right confers the same benefits to same-sex married couples that opposite-sex married couples already have in all states, including the ability to file joint tax returns and the right to inherit property from each other,” he said.

“Before the decision, same-sex married couples were already able to file joint tax returns at the federal level as a result of the 2013 U.S. Supreme Court case, U.S. v. Windsor. The 37 states that already recognized same-sex marriage generally require same-sex married couples to use the same filing status on their state returns as on their federal return. However, most states that did not recognize same-sex marriage required couples to file individually or as head of household. Some states even required same-sex married couples that filed jointly at the federal level to prepare pro forma individual returns for their federal taxes, creating an additional burden for those couples.”

“As a result of today’s decision, it is likely that states that did not recognize same-sex marriage before will follow the lead of other states and require same-sex married couples to use the same filing status on their state returns as on their federal returns,” he added. “We anticipate that states will soon issue tax guidance as a result of today’s decision on how same-sex couples can file joint returns and whether couples who were already married can file amended returns for 2014.”

“The U.S. v. Windsor decision in 2013 specifically addressed the fact that same-sex spouses may take advantage of the federal estate tax exemption for married couples when inheriting property,” Agrawal noted. “Following today’s decision, same-sex married couples will likely be treated identically to all married couples in all states with regards to estate tax and other inheritance issues.”

“The decision is the culmination of decades of litigation and the fastest shift in public opinion in American history,” said Nicole M. Pearl, a partner in the Los Angeles office of McDermott Will & Emery who has extensive experience in estate and tax planning for gay, lesbian and unmarried couples.

Those couples who live in states that don’t currently allow or recognize same-sex marriages will finally have the opportunity under federal tax regulations to:

• Make unlimited gifts to one other without having to worry about gift tax implications.
• Leave property to one another without the survivor needing to pay estate taxes.  
• Leave an IRA to the surviving spouse as a “rollover” IRA, which is treated much more favorably for tax purposes than an “inherited” IRA.  
• Qualify as a surviving spouse for purposes of determining Social Security benefits. For instance if a deceased spouse was receiving a higher Social Security benefit than the surviving spouse, the surviving spouse can generally qualify for the higher benefit.

Various state benefits will also accrue to such couples.  Pearl added that those who traveled to another state to marry but reside in a state that does not currently recognize their marriage may be able to take advantage of certain state rights afforded only to married couples, including:

• Rights to visit each other in the hospital, or act as guardian or conservator for an incompetent spouse. 
• Rights to file joint state income tax returns, thus saving money in many cases. 
• Rights to inherit property under a state’s intestacy statute, or to act as executor or personal representative of a deceased spouse’s estate, and importantly,
• Enable same-sex couples to end a marriage that did not work out. Most states allow anyone to obtain a marriage license—regardless of where a couple is living. However, a couple generally cannot file for divorce in the court of any state in which they do not live.

What to Do If You Haven’t Filed an Income Tax Return

by NFS | May 31, 2015 | Archives

Filing a past due return may not be as difficult as you think.

Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money.

Here’s What to Do When Your Return Is Late

Gather Past Due Return Information

Gather return information and come see us. You should bring any and all information related to income and deductions for the tax years for which a return is required to be filed.

Payment Options – Ways to Make a Payment

There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash.

Payment Options – For Those Who Can’t Pay in Full

Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise.

Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.

• A short-term extension gives a taxpayer up to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply.
• A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. In terms of how to pay your tax bill, it is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code. You should pay as much as possible before entering into an installment agreement.
• A user fee will also be charged if the installment agreement is approved. The fee, normally $105, is reduced to $52 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers.

What Will Happen If You Don’t File Your Past Due Return or Contact the IRS

It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions.

If you haven’t filed a tax return yet, please contact us. We’re here to help!

Last Day of Disability Insurance Awareness Month

by NFS | May 30, 2015 | Archives

Today is May 31st, the last day of “Disability Insurance Awareness Month”…Let’s end the month off with a story about Valerie King and how Disability Insurance Saves a Family—Twice.

When Valerie King transitioned from her medical residency to practicing as an emergency room physician, her group disability plan was going about to terminate so she converted her plan to an individual disability policy. Although Valerie never thought she would need it, a condition called ulcerative colitis made the decision for her. The disease and a series of surgeries made it impossible for her to carry out her duties, and she found herself unable to practice the profession she loved. It was her disability insurance that allowed her to survive financially and care for her three young daughters who she was raising as a single mother.

Life also had a second chapter for Valerie. She met and married Tim, also a divorced parent. They looked forward to raising their blended family together and sought the advice of insurance professional Larry Ricke, CLU, ChFC. In addition to the life insurance he had recommended, Larry made sure Tim understood the importance of disability insurance. Tim didn’t believe he’d ever need it, but with Valerie’s urging he finally agreed to get coverage.

“No one thinks lightening will strike twice,” says Larry, “but in this case it did.” Tim, who had a high-profile position in the printing business, came close to dying from an undiagnosed aneurism and valve issue with his heart. A risky operation saved his life but ultimately left him unable to return to work. Again, disability insurance made it possible for the family to go on financially. “We didn’t have to put a ‘for sale’ sign in the yard or make any drastic lifestyle changes that would have been forced on us without that coverage,” says Tim.

“Most people think, ‘It will never happen to me,’” says Valerie. “But the truth is it can—and does. Everything else goes away if you don’t have disability insurance coverage and you can’t work.”

You can watch the family video online here – Valerie King Video

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Think Disability Insurance

by NFS | May 28, 2015 | Archives

disability insurance, disability insurance awareness month, wrentham disability insurance, 

Safeguarding Your Income From the Impact of a Disability

by NFS | May 26, 2015 | Archives

Decades ago, the traditional family unit consisted of a husband and wife with 2.5 children. Most women were stay-at-home mothers, able to call on extended family members in case illness or injury affected their abilities to care for their children.

But these days, there is no longer a “traditional” family unit (and by extension, an extended support network), as the following figures attest:

• In 2010, 43.6% of all U.S. residents 18 and older were unmarried—more than half of them women—while the elderly comprised 16.5% of all unmarried and single people 18 and older.
• 45% of households nationwide were maintained by unmarried men or women, while number of single parents living with their children in 2010 reached 11.7 million. (Almost a third of grandparents are raising their grandchildren.)
• There were 6.5 million unmarried-partner households, which included 581,300 same-sex couples.
• Finally, the number of people who lived alone totaled 31.4 million in 2010, comprising 27% of all households—up from 17% in 1970.

What does this mean to you? Well, if you fall into one of the above categories—a single parent or grandparent raising a child, an adult living alone, or an unmarried couple—you need to do a little “worst case scenario” thinking. Specifically: should you experience an illness or injury that results in a disability (temporary or permanent), what type of impact will that have not only on your finances, but also on anyone who depends on you?

During Disability Insurance Awareness Month, educate yourself about the reality of the impact a disability can have on your budget—and your life.

Disability coverage facts

If you think you have your bases covered with health insurance, worker’s compensation or Social Security, the following information might change your mind.

• While health insurance will cover medical-related expenses, it won’t provide an income to cover your needs if you are unable to work even for a relatively short period of time.
• Worker’s compensation coverage only comes into play if the disability is job-related—which only happens in about 5% of the cases, according to the Council for Disability Awareness. (If you’re playing the odds, you might want to reconsider, since 30% of those entering the workforce today will be disabled for three months or more during their career, with the average long-term disability claim lasts 31.2 months.)
• While Social Security provides coverage, qualifying for benefits can be challenging (60% are initially denied) and, at a little over $1,100 a month, the average monthly payment is barely above poverty level.

In the meantime, bills keep mounting up and your financial situation becomes even more precarious. According to one study, more than 62% of bankruptcies in 2007 were due to medical issues—a significant increase from the 2001 figure of 46.2%.

Fortunately, you do have several options to help safeguard yourself and those who depend on you. Employer-sponsored coverage (short-term disability insurance, long-term disability insurance, or both) can replace a significant percentage of your income—possibly up to 40% to 60% of your pre-tax income. (In a few states, employees can also purchase additional short-term disability coverage on their own, paid for through payroll deductions.)

If you are self-employed or want a stronger safety net, an individual disability insurance policy is the best choice. Start by calculating the amount of income you would need to maintain your current standard of living in the event you’re unable to work. Then, look at your life and work situation. Do you have children, a spouse or an elderly relative who depends on you for support? Is there a cap on the benefits available through your employer—and are you getting close to that level? Finally, has your standard of living increased or you have taken on a significant amount of new debt?

Once you have a clearer picture of your “worst case scenario,” schedule a meeting with your insurance advisor to review your disability insurance purchase options: through your employer, a professional organization or on your own. This will help you make the best decision for your budget, your future and those who are part of your “family unit.” For more disability information, simply call our office today to see how we can help you get your protection today – 800-560-4637.

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