Taking advantage of fears surrounding the Coronavirus!

We were warned by the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) that scammers would try to profit from the public’s anxiety over COVID-19. They sent warning letters to seven companies allegedly selling unapproved products and making deceptive or scientifically unsupported claims that their products can treat or prevent the Coronavirus. The companies are advertising products like teas, essential oils and colloidal silver as able to treat or prevent Coronavirus and according to the FDA, these companies have no evidence to back up their claims as required by law.

The Seven Companies are:

• Vital Silver
• Aromatherapy Ltd.
• N-ergetics
• GuruNanda, LLC
• Vivify Holistic Clinic
• Herbal Army, LLC
• Jim Bakker Show

In the letters, these companies are required to notify the FTC within two days of the specific actions they have taken to address the agency’s concerns.  The FTC and the FDA will follow up with the companies that fail to make adequate corrections. Additionally both agencies will continue to monitor social media, online marketplaces and incoming complaints to ensure that those companies do not continue to market fraudulent products under a different name or on other websites.
​
The agencies recommend that, should you be tempted to buy an unproven product or one with questionable claims, check with your doctor or other health care professional first and stay informed by visiting the CDC’s FAQ page or the FDA to learn about the development and approval of treatments for COVID-19. Finally, if you see a product claiming to cure, treat or prevent Coronavirus, report it to the FTC at www.ftc.gov/complaint. 

MORE SCAMS: CORONAVIRUS Part 2

The Federal Trade Commission (FTC) is reporting more Coronavirus scams with steps we can take to protect ourselves, our personal information and our money.
Here are a few:

• Undelivered goods: Online sellers claim they have much-needed products like, cleaning, household, health and medical supplies. You place your order and never receive your shipment.
  • What to do: Investigate the seller (if they can be found) by searching online, by company’s name, phone number or email addresses, look for words like complaint, review, scam and always pay by credit card to have a record of the transaction. If you suspect price gouging in your area, contact New York City Department of Consumer Affairs (DCA) and go to naag.org for a complete list of State Attorney Generals to file a complaint.
• Fake Charities:  Scammers use major health emergencies like the Coronavirus to take advantage of people’s generosity by using names and logos that sound and look like real charities.
  • What to do: It is advised to engage in some research before giving and always do so safely by credit card to have a record of the transaction. Never use gift cards or wire transfers. There are organizations to assist you in researching reputable charities. They offer reports and ratings about how charitable organizations spend the donations and how they conduct business. Here are a few: BBB Wise Giving Alliance, Charity Navigator, CharityWatch and GuideStar. Also, the IRS’s Tax Exempt Organization Search tells you if your donation is tax deductible and you can find your state charity locator at www.nasconet.org because most states require the charity or its fundraiser to register before asking for donations.
• Fake emails, texts and phishing: Scammers use fake emails and texts to get people to share valuable personal information like Social Security numbers, account numbers or log in ID’S and passwords. They use that information to steal your money, your identity or both. They also use phishing emails to get access to your computer or network and when you click on a link, they can install ransomware or other programs that can lock you out of your data. Scammers often use familiar company names like, World Health Organization (WHO) or pretend to be someone you know and even create logos that resemble legitimate charitable organizations. They have also used real information to infect computers with malware. Malicious websites used the real Johns Hopkins University interactive Dashboard of Coronavirus infections and deaths to spread password stealing malware.
  • What to do:  Protect your computer by keeping your software up to date and by using security software, protect your cell phone by setting software to update automatically, your accounts by using multi-factor authentication and your data by backing it up.
• Robocalls: Scammers are using illegal robocalls to pitch scam Coronavirus treatments.
  • What to do: HANG UP! DON’T PRESS ANY NUMBERS!
• Misinformation and Rumors: Both scammers and well-meaning people share information that is inaccurate and hasn’t been verified.
  • What to do:  Do NOT pass on any messages or pay someone or share your personal information before fact checking by contacting trusted resources. For information related to the Coronavirus, visit What the U.S. Government is Doing and you’ll find links to federal, state and local government agencies.

For more information, go to:

• Coronavirus Scams: What the FTC is Doing at www.ftc.gov/coronavirus
• Centers for Disease Control and Prevention at Coronavirus Disease 2019 (COVID-19) www.cdc.gov​​

The IRS is warning taxpayers to avoid unethical tax return preparers, known as “ghost preparers”.

The Internal Revenue Service says that anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

There are many types of tax return preparers, including certified public accountants (CPA’s), enrolled agents, attorneys and others who do not hold professional credentials. However, you expect your chosen preparer to be skilled in tax preparation and be able to accurately file your income tax return. You are also entrusting that person with your most sensitive, personal information about your marital status, your income, your children, your family’s social security numbers and other details of your financial life. 

According to the IRS, most tax return preparers provide outstanding and professional tax service; however, each year, some taxpayers are damaged financially because they chose the wrong tax return preparer. We will share some tips from the IRS for choosing a tax preparer and how to avoid unethical “ghost” return preparers.

Ghost preparers do not sign the tax return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS and for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer. The IRS further states that dishonest and unscrupulous “ghost” tax return preparers try to make fast money by promising a big refund or charging fees based on a percentage of the anticipated BIG refund. The “ghosts” may also require:

• Payments in cash only and not provide a receipt
• Invent income to fraudulently qualify their clients for tax credits or claim fake deductions to boost the refunds
• Direct refunds into their own bank accounts instead of the taxpayer’s account

Taxpayers are cautioned to review their tax return carefully before signing and ask questions when something is not clear or confusing. And for direct deposit refund, taxpayers should verify that both the routing and bank account number on the completed tax return are correct.

The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Narrow your search by getting answers to a few important questions up front.

Q. What kind of tax preparer do I need?
A. Anyone can be a paid tax return preparer if they have an IRS Preparer Tax Identification number (PTIN).  The IRS Choosing a Tax Professional page has information about tax preparer credentials and qualifications and get information on the Volunteer Income Tax Assistance (VITA) program.

Q. How to check a tax preparer’s credentials?
A. Check the professional organizations many tax preparers belong to and those who hold an Annual Filing Season Program Record of Completion.

Q. What if I have a complaint about a tax preparer?
A. Tax preparer fraud is among the list of common tax scams and the IRS is committed to investigating paid tax return preparers who act improperly. To report abusive tax preparers to the IRS, use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, the taxpayer should file Form 14157-A, Tax return Preparer Fraud or Misconduct Affidavit.

FREE TAX RETURN PREPARATION FOR QUALIGYING TAXPAYERS:
The Volunteer income Tax assistance (VITA) program offers free tax help to people who make $56,000 or less, people with disabilities and limited English speaking taxpayers needing assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. Additionally, the Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, especially those age 60 and older, specializing in questions about pensions and retirement-related issues unique to seniors. These volunteers who provide tax counseling are usually retired individuals associated with non-profit organizations that receive grants from the IRS.

VITA and TCE sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations around the country. Call 800-906-9887 to locate the nearest VITA or TCE site near you and be mindful that a majority of TCE sites are operated by the AARP Foundation’s Tax Aide program. To locate the nearest AARP TCE Tax-Aide site between January and April, use the AARP Site Locator Tool or call 888-227-7669. At certain sites, taxpayers also have the option to prepare their own basic federal and state tax return for free using web-based tax preparation software with an IRS-certified volunteer to help guide taxpayers through the process.
​
Most IRS VITA and TCE sites are open from February through April though some are open through October.

If you are a victim of identity theft or suspect that someone is using your name or personal information to make purchases or get credit, act immediately to prevent or minimize the damage!

First Step: FILE A POLICE REPORT.
The Federal Identity Theft and Assumption Deterrence Act criminalizes fraud in connection with the theft and misuse of someone else’s personal data. Keep a copy of the report for submission to the credit card companies and other creditors for verification that a crime was reported. Call your creditors and explain that someone stole your identity and request that they close or freeze your accounts, then change your login information, passwords and PIN numbers.

Then…
Contact the three Credit Reporting Agencies/Credit Bureaus to place a fraud alert and get your credit reports. A fraud alert lasts one year and you’ll get a letter from each credit bureau confirming the fraud alert in your credit file which will make it harder for someone to open new accounts in your name.

• TransUnion (888-909-8872) and TransUnion.com/credit-help
• Experian (888-397-3742) and Experian.com/help
• Equifax (800-685-1111) and Equifax.com/personal/credit-report-services
• By mail: Trans Union Fraud Victim Assistance Department, P.O Box 6790, Fullerton, CA 92634
• Experian Consumer Fraud Assistance, P.O. Box 9554, Allen, TX 75013
• Equifax Consumer Fraud Division, P.O. Box 740256, Atlanta, GA 30374

Go to annualcreditreport.com to request free copies of your credit reports every twelve months or call 877-322-8228.

Get updates at IdentityTheft.gov/creditbureaucontacts
Review your credit reports and take note of accounts and transactions you do not recognize. Next, report the identity theft to the FTC (Federal Trade Commission) by going to IdentityTheft.gov or call 877-438-4338. IdentityTheft.gov will create your Identity Theft Report and recovery plan.

This report guarantees you certain rights which include:

• Placing a one-year fraud alert on your credit report.
• Place a seven-year extended fraud alert on your credit report.
• Get free copies of your credit reports.
• Get fraudulent information removed or blocked from your credit report.
• Dispute fraudulent or inaccurate information on your credit report.
• Stop creditors and debt collectors from reporting fraudulent accounts.
• Get copies of documents related to the identity theft
• Stop a debt collector from contacting you.

The Fair and Accurate Credit Transactions Act a/k/a “The FACT Act” provides consumer protections to assist victims of fraud and it includes: Fraud Alerts, Extended fraud alerts, Duty to Honor Fraud alerts, Block Trade Lines, Prevent Re-pollution, Prohibit Selling or Placing for Collection Identity Theft Debt, Notification Duties on Debt Collectors, Access to Business Records, Access to Credit scores, Notification of Negative Information to Customers, Time Restriction on Reinvestigations, Dispute Information with Reporters, New standards for Furnishers, Address Verification and Truncation of Numbers.

Then Repair…

CLOSE ALL NEW ACCOUNTS OPENED IN YOUR NAME AND CALL THE FRAUD DEPARTMENT OF EACH BUSINESS WHERE AN ACCOUNT WAS OPENED.
Explain that your identity was stolen, ask the business to close the account and send you a letter confirming that the fraudulent account is not yours, that you’re not liable for it and that it was removed from your credit report. Keep this letter for use if the fraudulent account appears on your credit report later on. Also, keep a record of who you contacted and the date of contact.

REMOVE BOGUS CHARGES FROM YOUR ACCOUNTS BY CALLING THE FRAUD DEPARTMENT OF EACH BUSINESS.
Explain that you are the victim of identity theft, tell them which charges are fraudulent and request that they be removed. Again request from the business, a letter confirming that the fraudulent charges are removed and keep the letter for use should the account re-appear on your credit report in the future.

CORRECT YOUR CREDIT REPORT BY COMPLETING “IDENTITY THEFT LETTER TO A CREDIT BUREAU” FORM AND MAILING TO THE THREE CREDIT BUREAUS.
Include with the letter a copy of your Identity Theft Report, proof of your identity, explain which information on your report is fraudulent and request that the information be blocked. Mail letters to:

• TransUnion Fraud Victim Assistance Department, P.O. Box 2000, Chester, PA 19022-2000
• Equifax, P.O. Box 105069, Atlanta, GA. 30348-5069
• Experian, P.O. Box 9554, Allen TX. 75013

REPORT A MISUSED SOCIAL SECURITY NUMBER BY CONTACTING YOUR LOCAL SSA OFFICE.

STOP DEBT COLLECTORS FROM TRYING TO COLLECT DEBTS YOU DON’T OWE.

REPLACE GOVERNMENT-ISSUED ID’S.
You may have to contact additional offices (e.g. Utilities, Telephone, Government Benefits, Checking Accounts, Student loans, Apartment/ House Rentals, Investment Accounts). Maybe even a fraudulent Bankruptcy filing.
​
Last Note: Go to OnGuardOnline.gov to learn how to avoid internet fraud, secure your computer and protect your personal information!

Can you benefit from the $575 million settlement?
Let’s find out!
September 2017, the announcement by Equifax that a data breach occurred exposing the personal information of 147 million people caused much anxiety in the financial industry and consumers in general. Subsequently, the company agreed to a global settlement with the Federal Trade Commission (FTC), The Consumer Financial Protection bureau (CFPB) and 50 U.S states and territories. It includes approximately $425 million to assist people affected by the breach.
How do you know your personal information was exposed? Go to the look-up tool to check https://eligibility.equifaxbreachsettlement.com/en/eligibility and you can file a claim.

Some benefits from the settlement
Free Credit Monitoring and Identity Theft Protection Services:
Up to 10 years of free credit monitoring or $125 if you decide not to enroll because you already have credit monitoring. The free credit monitoring includes (a) At least four years of free monitoring of your credit report at all three credit bureaus (Equifax, Experian and TransUnion) and $1,000,000 of identity theft insurance (b) Up to six more years of free monitoring of your Equifax credit report. Also, if you were a minor in May 2017, you’re eligible for a total of 18 years of free credit monitoring.

Cash Payments (capped at $20,000 per person)
For expenses you paid as a result of the breach, like: (a) losses from unauthorized charges to your accounts (b) the cost of freezing or unfreezing your credit report (c) the cost of credit monitoring (d) fees you paid to professionals like an accountant or attorney (e) other expenses like notary fees, document shipping fees and postage, mileage and phone charges.
For the time you spent dealing with the breach, you can be compensated $25 per hour up to 20 hours.

1. If you submit a claim for 10 hours or less, you must describe the actions you took and the time you spent doing those things
2. If you claim more than 10 hours, you must describe the actions you took AND provide supporting documents that show identity theft, fraud or other misuse of your information

For the cost of Equifax credit monitoring and related services you had between September 7, 2016 and September 7, 2017, capped at 25% of the total amount you paid.

Even if you do not file a claim, you can get:
Free Help Recovering from Identity Theft
For at least seven years, you can get free identity restoration services. And if you discover misuse of your personal information, call the settlement administrator at 1-833-759-2982. You will be given instructions for how to access free identity restoration services.

Free Credit Reports for All U.S. Consumers
Starting in 2020, all U.S. consumers can get six free credit reports per year for seven years from the Equifax website in addition to the one free Equifax report (plus your Experian and Trans Union reports) you usually get at annualcreditreport.com.

Please sign up for e-mail updates to get a reminder in early 2020.
THE CLAIMS PROCESS HAS STARTED. YOU MUST FILE BY JANUARY 22, 2020
Answers to some important questions:

1. The settlement administrator will NOT send out any benefits until they are allowed to do so by the court, which will be January 23, 2020 at the earliest.
   
2. For free monitoring, after final approval from the court, you will receive an activation code with instructions. You will be able to choose to receive this code either by e-mail or postal mail when you file your claim.
   
3. When you file your claim, you can choose to receive your cash payments by check or debit card which will be sent to your mailing address after final approval from the court.

FOR ADDITIONAL INFORMATION: WWW.EQUIFAXBREACHSETTLEMENT.COM OR CALL 1-833-759-2982.
BEWARE OF FAKE SETTLEMENT WEBSITES

To be sure you’re going to the right place, start at the (Federal Trade Commission’s) FTC’s page: ftc.gov/Equifax (https://www.ftc.gov/Equifax).

DO NOT PAY TO FILE A CLAIM FOR THESE BENEFITS. ANYONE CALLING TO TRY TO CHARGE FOR FILING A CLAIM IS A SCAMMER!!!
You can also sign up to get FTC email updates about the settlement: (https://public.govdelivery.com/accounts/USFTC/subscriber/new?topic id=USFTC 109)

If you were affected by the breach, you may also receive an e-mail notification after the court approves the settlement. Ftc.gov/Equifax (https://www.ftc.gov/enforcement/cases-proceedings/refunds/equifax-data-breach-settlment)

EASIEST WAY TO SUBMIT A CLAIM IS ONLINE AT WWW.EquifaxBreachSettlement.com OR COMPLETE AND MAIL THE CLAIM FORM TO THEIS MAILING ADDRESS:

EQUIFAX DATA BREACH SETTLEMENT
C/O JND LEGAL ADMINISTRATION
P.O. BOX 91318
SEATTLE, WA 98111-9418

June 1st begins hurricane season!
A weather emergency can force you to leave your home without money, ID’s, debit or credit cards and other important items, so here are some practical steps to begin your financial recovery.

• You’ll need money and may be able to use checks, ATM’s, credit and debit cards or wire transfers from family and friends in other locations, however, if your cards or ATM are stolen, go to (https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards). Call the card issuer ASAP to report the loss and get new cards. If you don’t have the card issuer’s phone number, call 1-800-555-1212. Remember federal law protects you from loss for unauthorized use of your credit and debit cards
• It’s important to stay in contact with your employer. Verify that you’ll continue to receive a paycheck and health insurance and for how long. If you’re displaced and not able to access your direct deposit pay, you can ask to have it re-directed to a bank location closer to where you are.
  
  • To contact your retirement company, Social Security Administration or other benefits office, call: 1-800-772-1213 (http://www.ssa.gov/emergency/).
    
  • To contact The Veterans Benefits Administration (http://benefits.va.gov/benefits/), call: 1-800-827-1000. Tell the offices your new location and find out if benefit payments are made available by check, direct deposit or payment card.
    
  • To contact The Department of Labor, call: 1-866-4-USA-DOL works with state and local governments to issue unemployment insurance and other assistance.
    
• CREDIT: If you have lost your financial records and need help identifying your creditors or need to verify whether your accounts are being tampered with, get your free credit reports from annualcreditreport.com, (http://www.annualcreditreport.com) or call 1-877-322-8228. Credit card companies, lenders, financial institutions, landlords, utilities and others may offer help to people affected by disasters. CONTACT THEM AND ASK FOR HELP! They may be willing to: defer payments or offer extended payment plans, extend grace periods, waive late fees, raise credit limits, refrain from reporting delinquencies and may even postpone collection, repossessions and foreclosures.
  • Ask your creditors for short term loans for living expenses, increase in your credit limits or cash advance until you begin to receive insurance or other disaster relief funds.
  • If you applied for home repairs money, ask your homeowner insurance or mortgage company about the status of your application. While your loan is in process or approved, find out how much money will be released and how frequently to make the necessary repairs. If your home is so severely damaged that you believe repairs are unnecessary, ask if available home insurance funds can be used to pay off your mortgage and/or cover personal property. Review your mortgage loan documents and insurance contract for details also.
  • Contact your utility companies, cell phone companies and financial institutions and report that you have lost your belongings in a natural disaster. Ask them to waive late fees and defer your payments or consider a different payment schedule.
  • Contact your bank or credit union. Ask them to waive ATM fees, overdraft fees and reporting to the credit bureaus. Also, ask them to waive any penalties on early withdrawal of CD’s (Certificate of Deposits).
  • Contact your credit card companies and ask to change your billing address to your temporary address. Ask to defer or skip payments in the short-term, waive late fees, over-the-limit fees, reduce interest rates and increase credit and cash advance limits.
  • For Mortgage, car and other loans and leases, ask to defer your payments for a few months or until you’re back on firm financial footing.  
• WHO TO CONTACT FOR LOST OR DAMAGED DOCUMENTS:

1. Deeds and recorded real estate documents: County’s Recorder of Deeds
2. Mortgages and other credit: Lender or financial company
3. Leases: Landlord or financial company
4. Insurance policies: Insurance company/agent 
5. Wills: Attorney (If the will is destroyed, you’ll need another one)
6. Checks, Savings documents and Investment materials: Bank, Investment Company or Broker 
7. Car Title, Driver’s License: Secretary of State or DMV 
8. Birth Certificate: Vital Statistics Office form the county where you were born 
9. Social Security Card:  local Social Security Administration Office 
10. Tax Returns: IRS Center 
11. Other documents like contracts or divorce judgments: Your Attorney or the courts

For more information, see Replacing Your Vital Documents (http://www.usa.gov/citizen/topics/family-Issues/Vital-Docs.shtml) and visit Dealing with Weather Emergencies (https://www.consumer.ftc.gov/feature-0023-weather-emergencies)

• MORTGAGE INSURANCE FOR DISASTER VICTIMS:
  • FHA 203(h) Loans for Disaster Victims are open only to those in federally declared disaster areas. This loan can be used to purchase a replacement home, rehab an existing home or as a refinance loan. The borrower must live in the property and must make application for the 203(h) within one year of the date the federal disaster area is declared. The borrower must have a minimum FICO score of 500 to qualify for this program.
  • FHA 203(k) insurance enables home buyers to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. Insurance for rehabilitation is authorized under Section 203(k) of the National Housing Act (12 U.S.C 1709 (4k). Program regulations are at 24 CFR 203.50. For more information, contact the FHA Resource Center.

​According to Credit Builders Alliance, “consumer protection took a big hit in 2018. With a focus on deregulation, rules to protect consumers have been rolled back or delayed and investigations into financial firm’s anti-consumer practices have been slashed, leaving consumers more susceptible to scams and misleading deals.”

To this end, the Federal Trade Commission reports that scammers pretending to be from the federal government are scaring international students into paying them money. The callers typically know the foreign student’s immigration status and the school or program the student is attending. The pretend government official will say there’s a problem with the student’s immigration documents or visa renewal and then will demand immediate payment, often thousands of dollars, for a fee or bogus immigration bond. These callers make threats, including arrest or deportation, if the students do not pay and ask to be paid in cryptocurrency, like Bitcoin or gift cards, like Google Play or iTunes).

The FTC warns that these are scam calls. The federal government do not make such calls, do not make such threats and do not ask for such payments. If you’re concerned about your visa or immigration documentation, call USCIS’s National Customer Service Center at 800-375-5283 or go to ftc.gov/complaint (http://ftc/complaint) if a scammer has contacted you or someone you know.

Additional Consumer Tips for Immigrants
Safe and affordable savings and checking accounts:

• NYC Direct Deposit: Open a free checking account to directly deposit your paycheck. This account has no monthly fees, no overdraft option for debit card purchases or ATM withdrawals, no or low minimum balance requirements, free online banking and bill pay and free in-network ATM withdrawals.
• NYC SafeStart Account: This account has no overdraft fees, no monthly fees if you meet the required minimum balance which is $25 or less depending on the bank and ATM or debit cards are available. Go to https://www1.nyc.gov/site/dca/index.page or contact 311 for more information about these accounts.

Features of a safe, affordable checking account;

1. Monthly maintenance fees of $3 of less
2. Free use of in-network ATM’s
3. No fees to use your debit card
4. No overdraft option for debit card purchases or ATM withdrawals
5. Low opening deposit and monthly minimum balance ($25 or less)
6. Free options for checking account status (online, phone, text or ATM)
7. No monthly fees for ordinary transactions (ATM use, direct deposit etc.)

 

• Money Transfers: Money Transfer Agents are not always the cheapest option, so compare prices. Research prices, fees and exchange rates across financial institutions, money transfer companies and online transfer services to find the best way to send money back home including how and where your family will receive the money.
• Rent-to-own businesses: Avoid using these businesses to buy household items. Customers who rent items long enough to own them pay a 70% annual percentage rate (APR) over the listed cash price. Shop around for the best deal!
• Pre-paid Debit cards: A pre-paid debit card may help but be aware of hidden fees and these cards do not build your credit.
• Payday loans: Pay Day loans are illegal in New York!!! Payday loans are short- term loans usually due and payable on your next payday and are offered at very high interest rates and fees. Interest rates can skyrocket up to 400%. If you receive an offer for a payday loan, please report it to the New York State Department of Financial Services by calling 800-342-3736 or visiting https://dfs.ny.gov/.
• Check Cashers: A check casher can cost an average of $475 in fees annually. Open a bank account or credit union share account which have much lower fees than check cashers.
• Control debt: Out-of-control debt can pile up quickly and become unmanageable. Bad debt will damage your credit and limit your ability to rent an apartment, finance a car, to buy a home, in some cases, your ability to secure a good job and more. Free professional help is available including one-on-one financial counseling at NYC Financial Empowerment Centers by calling 311 to schedule an appointment or visiting https://www1.nyc.gov/site/dca/index.page. Also visit www.annualcreditreport.com to download free copies of your credit reports every twelve months from Trans Union, Equifax and Experian for your review or by calling 877-322-8228.
• Citizenship or Immigration loans: These loans are supposed to help cover the cost of the naturalization application and legal fees. However, if you’re considering this type of loan, be sure to compare terms, conditions and rates from several banks and credit unions. You can also receive free legal help with Citizenship applications through NYCitizenship, calling 311 and say “citizenship appointment” or the NYCitizenship hotline at 212-514-4277.
• Predatory Lending: Used Car loans, Blessing Scam, Lending Circle scam, Fortune Telling scam. BEWARE!

​Free Business courses:  Available in Spanish, Chinese, Russian, Korean, Haitian Creole, French, Bengali and Arabic through NYC’s Immigrant Business Initiative at https://www.nyc.gov/immigrantbusinesses or call 311 and ask for Business Services for Immigrants.

​It’s tax season, folks! You know what that means, right? There have been some significant changes that will affect individuals and businesses beginning after December 31, 2017. This month’s blog will review some of these updates.

"The Tax Cuts & Jobs Act” is the biggest federal tax law change in over 30 years. As a result, people are understandably apprehensive and some of us are even a little confused. Before getting started, let’s review some terms to remember:

AGI = Adjusted Gross Income
AMT = Alternative Minimum Tax
HOH = Head of Household
MFJ = Married Filing Joint
MFS = Married Filing Single
NOLs = Net Operating Losses
PSCs = Personal Service Corporations
QW = Qualified Widower
SMFS = Single or Married Filing Separate

For Individuals:
Tax Provisions that were eliminated:

• Personal exemption deductions are suspended.
• Phase-out of itemized deductions based on adjusted gross income (AGI) is suspended.
• Itemized deduction for home equity interest, except acquisition debt, is no longer allowed.
• Itemized deduction for miscellaneous itemized deductions (e.g. investment expenses, unreimbursed employee business expenses, tax preparation fees), subject to the 2% floor are no longer allowed.
• Personal casualty loss and theft deductions are eliminated unless the loss is incurred in a federally declared disaster area.
• The moving expense deduction and income exclusion is allowed only to members of the Armed Forces and their spouses or dependents.
• No charitable contribution deduction is allowed for a payment to a higher educational institution in exchange for the right to purchase tickets or seating at an athletic event.
• Alimony is not deductible by the payer nor included in income by the recipient for agreements entered after December 31, 2018.
• Effective 2019, the shared responsibility payment under the Affordable Care Act (Obama Care) for not having minimum essential health insurance coverage is zero.

Tax provisions that were reduced:

• The threshold for deducting medical expenses is 7.5% of AGI for all taxpayers for 2017 and 2018.
• The home mortgage interest deduction debt limit is reduced to $750,000 ($375,000 MFS) with certain exceptions.
• The itemized deduction for state and local taxes is limited to $10,000 ($5,000 MFS). This limit includes both state and local income taxes and real property taxes.

Tax provisions that were increased:        
The 2018 standard deduction is:

• SMFS is $12,000
• MFJ or QW is $24,000
• HOH is $18,000

Additional standard deduction applies for a taxpayer 65 or older or blind, per person, per event

• MFJ, QW or MFS is $1,300
• Single or HOH is $1,600
• The Child Tax Credit increased to $2,000 per qualifying child and the phase-out threshold increased.
• There is a new Family Tax Credit of up to $500 for dependents who are not a qualifying child for purposes of the Child Tax Credit
• For the Charitable contribution deduction, the percentage of AGI limitation for cash to public charities and certain other organizations increased from  50% to 60%.
• The estate and gift tax exemption amount increased to $11,180,000.

Tax provisions that were changed:

• The long-term capital gain and qualified dividend income maximum tax brackets no longer follow the tax brackets for regular income tax purposes.
• The parent’s rate is no longer used to calculate the kiddie tax. Instead, taxable income attributable to net unearned income is taxed at the estates and trusts tax rates for both ordinary income and net capital gains.

​For Businesses:
Tax provisions that were eliminated:

• There is no longer a separate tax rate for personal service corporations (PSCs).
• The two-year carry-back provision for net operating losses (NOLs) has been eliminated except for certain losses.
• There is no meals and entertainment deduction for membership dues or activities generally considered to be entertainment, amusement or recreation.
• AMT for C corporations has been repealed.

Tax provisions that were reduced:

• All taxable income of a C corporation is taxed at a flat rate of 21%.
• The 70% dividends received deduction is reduced to 50% and the 80% dividends received deduction is reduced to 65%.
• The net operating loss deduction (NOL) is limited to 80% of taxable income.

Tax provisions that were increased:

• An individual taxpayer generally may deduct 20% of qualified business income from a partnership, S corporation or sole proprietorship. For partnership or S corporation, the deduction applies at the partner or shareholder level. The deduction is disallowed for specified service trades or businesses when taxable income exceeds the threshold amount.
• Special (bonus) depreciation is increased to 100% of property acquired and placed in service after September 27, 2017, with a new phase-down schedule for years after 2022. The new law allows special depreciation for both new and used property.
• The Section 179 deduction is increased to $1,000,000 and the phase-out threshold amount increased to 2,500,000.
• The new law expanded the definition of Section 179 property to include certain property used predominantly to furnish lodging.
• The depreciation limitations for luxury automobiles have been increased.

THESE ARE THE FACTS AND FIGURES, PLEASE CONSULT WITH YOUR TAX ATTORNEY OF PREPARER FOR ADVICE REGARDING THE TAX EFFECTS OF THE “TAX CUTS AND JOBS ACT” ON YOUR PERSONAL FINANCIAL PORTFOLIO!

​Have you been affected by the U.S. government shutdown? Are you experiencing financial difficulties? If this is your case, then read through the various solutions to manage through this difficult time. 

Some Solutions:

1. Forbearance: A temporary remedy is available to protect your credit when you’re unable to pay your debts due to the government shutdown. Forbearance is a period of time during repayment when a borrower is allowed to temporarily postpone their monthly debt payments. The debts are not forgiven but regular monthly payments are suspended for a future date. This is an option when borrowers are experiencing temporary financial difficulties. Lenders can offer reduced payments, interest-only payments or no payments for a specified period of time.
2. The Budget: A budget is essential to financial health.  Immediately track your daily spending to be able to design a realistic household budget or develop a spending plan. You need to first know how much you’re actually spending.  Cut expenses where you can as quickly as you can! People with budgets are likely to spend less and more likely to have emergency funds. Seek free financial counseling and assistance from your local non-profit organization or job center related to budgeting and effective bill paying if needed.
3. Manage bills and debt wisely: When paying your monthly bills, if you think you’ll be late with a payment, contact your lender immediately to discuss the matter and request assistance like forbearance or other hardship solutions that may be available at your bank or credit union. Be sure you understand clearly what you are committing to and request the new financial arrangement in writing.
4. Borrow carefully: Tough financial times sometimes result in costly borrowing decisions. Avoid Payday loans and other high interest rate debt (e.g.) R.A.C (Rent-A-Center), R.A.L (Refund Anticipation Loans). Contact first local banks and credit unions, explain your financial hardship and ask for their best loan offers (good credit is a plus). If borrowing from family and friends, it’s best to keep this loan as a business transaction by coming to the table with the amount you need, the reason for the loan and a plan for payback. The agreement should be in writing, dated and signed by both parties. 
5. Unemployment Insurance: Each state operates its own unemployment insurance program and many require you to file for unemployment benefits online while some provide toll-free numbers and other ways to access help in filing for these benefits. Remember to take advantage of your state’s employment services which includes employment opportunities and other beneficial resources. 
6. Protect yourself from financial & Job-search scams: News reports are already circulating about fraudsters trying to cheat federal employees hurting by the extended government shutdown, enticing them with free loan offers and phony job search ads. These scams often seek to gain access to personal and financial information for use in fraudulent schemes. During financial stress, people are more susceptible to financial fraud with promises of quick returns or risk-free riches. Use FINRA’s (Financial Industry Regulatory Authority) Scam Meter to check if a financial pitch carries some of the warning signs or red flags of fraud.

 
Should you consider accessing funds from your 401(k) plan during a financial emergency through a loan or hardship withdrawal to help solve an immediate need, be aware of consequences that can affect your long-term financial security. Let’s look at a few:

401(k) Loans
Many plans permit loans that you repay through payroll deductions as long as you remain employed. You’re borrowing your own money. Normally the term of a 401(k) loan is five years unless the money is used for the purchase of a primary residence, then some plans will allow borrowing for a 25 year term.

Advantages and disadvantages of borrowing from your 401(k) account.

The plus side:

• You usually don’t have to explain why you need the money and how you intend to spend it
• You may qualify for a lower interest rate than you would at a bank or other financial institution, especially if you have a low credit score.
• The interest you repay is paid back into your 401(k).
• Because you are borrowing instead of withdrawing money, no income tax or potential early withdrawal penalty is assessed.

The negative side:

• The money you withdraw will not grow if not invested.
• Repayments are made with after-tax dollars that will be taxed again when you eventually withdraw it in retirement or reach age 59½.
• The interest is never tax deductible even if you use the money to buy or renovate your home.
• Maybe the biggest risk you run is leaving your job before the loan is repaid. If this happens, you’ll have to repay the outstanding balance within 90 days (3 months) of your departure. Should you fail to repay, you’re considered in default and the remaining loan balance is considered a withdrawal and income taxes are due on that amount. Additionally, if you’re younger than 59½, you may also owe the 10 percent penalty.   

Hardship Withdrawals
The IRS allows withdrawals from the 401(k) for certain financial emergencies. However, it’s up to your employer to determine the specific criteria for a hardship withdrawal. These circumstances are:

• Out-of-pocket medical expenses;
• Down payment on the purchase or repairs on a primary residence;
• College tuition and related educational expenses
• Threat of mortgage foreclosure or eviction;
• Burial and funeral expenses.

You should consider a withdrawal from your 401(k) as a last resort!
Companies often prohibit contributions for at least six months after taking a withdrawal and those hardship distributions permanently reduce your account balance. Please remember that taxes are due on the amount you withdraw and will incur the 10 percent penalty if you’re under age 59 1/2. Additionally your plan administrator may follow up after the withdrawal to verify that the funds were used for the purpose indicated on your application.

Finally, you cannot be forced to use your 401(k) money to pay state and local income taxes, property taxes or other taxes, however, a court may order you to withdraw money from your 401(k) to pay child support, alimony and federal income taxes owed.
​
State and federal laws differ, so seek legal advice to determine which will apply.