SHEEPSHEAD BAY'S ONLY INDEPENDENT NEWS BLOG

401(K) via Flickr

It looks like the city may have screwed thousands of New Yorkers out of a tax break that benefits condo and co-op owners, according to a report by Crain’s.

The confusion came about when tens of thousands of New York condo and co-op owners received letters from the Department of Finance telling them that a change to an existing tax abatement that was passed by the legislature this past January disqualified them from collecting the break.

The problem is that the new legislation disqualifies secondary residences – but the department erroneously sent the letters to thousands of primary residences, which still qualify for the full tax break.

The financial implications are huge, as those incorrectly excluded from break could lose out on an extra $1,000. Who or what to blame for the screw up was not entirely clear:

“Some people have been in their homes, 20, 30 or 40 years and are getting these letters,” said Mr. [Warren] Schreiber, [co-president of the Co-Op and Condo Council in northeast Queens]. “I think what happened is that the Department of Finance’s records are out of date, but it’s causing a lot of confusion and chaos.”

And it’s not the first time a mistake like this has happened. Nearly two years ago, Finance Commissioner David Frankel acknowledged the department had erred on 15,000 property bills the city mailed that July because of a “computer glitch.”

But in this case, a Department of Finance spokesman said the agency had used available data to determine which of the city’s 360,000 condo and co-ops would qualify for the abatement, and automatically enrolled 230,000 of them. In instances where there was not enough information, the agency sent out 130,000 of the letters to homeowners saying they were not eligible for the tax break.

Still, all hope is not lost for those who incorrectly received the letter disqualifying them from the break. The letter does inform residents to fill out a form by April 1 and mail it back to verify that their address is indeed their primary residence.

The Department of Finance stated that the letter was useful for updating their records, but it hasn’t stopped residents, especially the elderly, from getting anxiety that their financial planning may be out of whack.

Do you own a condo or a co-op and incorrectly receive a letter from the Department of Finance? Let us know. Oh, yeah, and let the DOF know, too.

Is that you under all those papers, Joe Reisman? Do you need a hand? *claps loudly* Source: Picstopin.com

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

Note: While our venerable tax and financial matters columnist, Joseph P. Reisman, finds himself inundated beneath miles of piles of tax returns, I’ve culled through his newsletter to bring you more weekly helpful hints and sound financial wisdom. And, hey, you should sign up to receive that newsletter, too, because he also posts fun stuff that someone like me could appreciate, like a YouTube video for — what else? — “Taxman” by George Harrison.

Continue Reading »

Source: ZoofyTheJinx (Penny Mathews) / Flickr

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

In my last article, I summarized four credits that New York State offers. Those were the Child and Dependent Care Credit, the College Tuition Credit, the Earned Income Credit, and the Empire State Child credit. Here are a few more many of you can take advantage of:

• Noncustodial parent earned income credit
• Real property tax credit
• Long-term Care Insurance Credit
• Nursing Home Assessment Credit
• Volunteer Firefighters’ And Ambulance Workers’ Credit
• Tuition and Fees Deduction
• New York City credits
• Beer Production Credit

Continue Reading »

Source: 401(K) via Flickr

With the threat of climate change and redrawn flood zone lines leading to skyrocketing insurance rates, you’d think the only thing that is certain to rise along the Southern Brooklyn waterfront would be encroaching flood waters and not property taxes. Well, property taxes have been hiked for Manhattan Beach, Sheepshead Bay and other coastal areas like Coney Island and the Rockaways, according to a report by the New York Post.

The rise in property taxes comes as a cruel blow to homeowners who have already shelled out thousands on home-repair following Sandy. According to the Post, the news of the tax hikes doesn’t sit well with local residents:

“This is totally insensitive and heartless,” said Ira Zalcman, president of the Manhattan Beach Community Group, which has received more than 30 complaints from residents about the hikes.

“We just sustained one of the worst national disasters in our nation’s history, and now the city is delusional, claiming our property values went up.”

Zalcman said that since Sandy, he has spent roughly $100,000 repairing the basement of his Dover Street oceanfront home, for which he pays more than $7,000 a year in property taxes.

Hooray! Moneeeeey! Source: 401(K) 2013 / Flickr

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

Most of us concentrate on lowering our federal taxes, but most states, including New York, have a number of important credits you don’t want to miss either. Here are a few of the New York credits:

• Child and dependent care credit
• College tuition credit
• Earned income credit
• Empire State child credit

Continue Reading »

Tax Season is upon us. Feh. Source: UNLV Rebel Yell / Flickr

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

If you enjoyed playing a game as a child of jumping through hoops, you’ll really enjoy the rules to claim a charitable contribution on your tax return. In this area, unlike others in the tax code, the rules have been etched into law with no wiggle room.

The first thing you should do is verify that the charity is an authorized exempt organization. Go to www.IRS.gov, and type “Pub. 78 data” into the search box.

Cash Contributions

Under $250 (Cash):

Under audit, you need:

• A cancelled check, payroll withholding stub, or a credit card statement, or
• A written receipt or letter from the charity showing its name, address, the date of contribution, as well as the amount.

Continue Reading »

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

In 2009, more than 26 million people received nearly $59 billion in earned income credits. Nice, right? Now, what if I told you that around 33 percent of the $59 billion distributed was fraudulent?

Due to this, the IRS is requiring tax preparers to verify, much more closely, that you are eligible for this credit. The tax preparer is subject to a penalty of $500 for each incorrectly prepared return; you are subject to governmental correspondence, and migraines, as well as having to return the money with interest and penalty, as well as not being able to claim the credit in the future.

Continue Reading »

Source: Understoodbackwards.net

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

These are a few myths I hear during the tax season:

Students Don’t Have To Pay Taxes: Wrong. Anyone who works has a possible obligation to pay tax. Depending upon the amount earned, there may not be any tax, but just know that a student is not in a special ‘no-tax’ category. A summertime employer may incorrectly classify a student as an “independent contractor,” sending a 1099-Misc form at year-end. If this is received, and the amount is more than $400, there will be social security tax of 15.3 percent due on that amount.

Continue Reading »

Photo by Erica Sherman

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

I have received a number of phone calls after my first article on the tax aspects of Hurricane Sandy. Here are the questions asked most:

Business Property, Including A Rental House: I stated in my earlier article that a personal casualty loss is subject to a $100 and 10 percent-of-AGI subtraction before any loss is allowed. If your loss is to business property, however, neither of these subtraction rules apply. You can claim the loss on your 2012 or your amended 2011 tax return.

Involuntary Conversion Gain: This applies whether you are a homeowner, renter or business. If the insurance company pays you more than the tax basis of your home, or vacation home, you might have a taxable gain. (Tax basis is usually your original cost, plus improvements, minus depreciation.) For example, if your vacation home cost $100,000, but the insurance company gave you $150,000, you have a $50,000 gain. The gain, however, is not taxable if you repair or replace the property with the proceeds, including the gain, and make a special tax election for the gain deferral.

For business property, these expenses must occur by the end of the second year of having the gain. For your principal residence — your main home for at least two years — you have four years to make the repairs or replace the property.

Continue Reading »

The IRS. Yikes. Source: alykat / Flickr

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

1. Prevent theft of your refund. Millions of Americans are victimized every year, and many of those have their tax refunds stolen. If a thief has your Social Security number, a false tax return can be prepared in your name and a refund issued to them before you file. Once you have your paperwork, file immediately. If your Social Security number and refund have been stolen, it will take months to get your money. At an accounting meeting several months ago, every tax preparer said that at least one of their clients was a victim last year.

2. Reduce your stress. What will you owe? Many taxpayers wait until April to file because they owe, or think they owe. If you have a balance due, you will have time to gather the funds you need to pay. Tax law doesn’t demand you pay immediately. You can still wait until April 15 to pay (although you may be hit with a penalty). You can even prepare your return and tell your preparer not to file it until April 15. And don’t be so sure you owe, or what amount it might be. Several of my clients who were sure they owed, to their surprise, actually had refunds.

3. Need money? If you have a refund, you’ll have it much sooner. For example, if you haven’t funded your IRA, you can file early, and take the refund for your IRA. Remember, you have until April 15 to make that 2012 IRA contribution. Or you can use the refund to pay off that December credit card bill.

Continue Reading »