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Burlington, VT office 802.540.0529
Hanover, NH office 603.643.6072
Rutland, VT office 802.773.3822
Woodstock, VT office 802.457.9492

March 4, 2010 Newsletter Archive

Is Long Term Care Insurance For You?

Perhaps we should have subtitled this month's newsletter Your Money and Your Life? Today we bring you both a "tax corner" just in time, and a new monthly segment called The Well Lived Life. Our philosophy is that our best life is a combination of living smart and living well, taking care of business, and most importantly, taking care of you. Please let us know what topics you're interested in. We'll do our best to incorporate them in future newsletters.

Your Money: Tax Season is Upon Us

As our personal tax filing date quickly nears we decided to provide you with a tax corner this month touching upon three tax related matters.

    1. How to find and select a tax preparer

    2. What to do if you can not pay your income tax owing

    3. Having filed your return how long should you retain your records

How to Find and Select a Tax Return Preparer?

There are a variety of individuals who prepare tax returns. Some research into your preparer's background is vital so that you get the best sense if that individual is best suited to your needs. Often you should consider an accountant that is more than a tax preparer. A tax planner may be able to help you take advantage of tax changes for the up coming year.


Whether you use a phone book or you search on line, looking up accountants in the Upper Valley will yield dozens of names. You may have great interview questions but cold calling each of the names from a large list will be time consuming and may ultimately not generate the best accountant for you. On the other hand, word of mouth is still one of the most effective and efficient ways in which to narrow your search. Your attorney, your banker or financial advisor are all good resources, particularly if they are aware of your special needs, such as the level of your wealth or whether you are a small business owner.

Use National or State Accounting Organizations

The American Institute of Certified Public Accountants has a number of useful consumer tools and referral resources

New Hampshire Board of Accountancy

Vermont State Board of Accountants

Interview Questions for Those Seeking Advice for Individual Tax Preparation and Planning:

What to Do if You Cannot Pay Your Income Tax?

Effects of the current economy show in your bank account and on your brow. You're still trying to figure out how you're going to get through this year when it arrives: a tax bill from the IRS. First you need to assure that the bill is correct. If it is correct and you simply do not have the money to pay your bill in full, you have several options:

Ask for more time. If you are temporarily unable to pay your tax liability, you may be eligible for a short-term-up to 120 days-extension. You pay nothing extra for this request, which you can make online.

Make regular payments. If another 120 days still isn't enough time, you can request an installment agreement. If you owe less than $10,000 in the tax alone (not including penalties and interest), and you meet the IRS's strict qualifications, you may be able to pay off your liability in monthly installments. If you owe $25,000 or less and can pay your liability within 60 months, you may qualify for a "streamlined" installation agreement. Finally, you can apply for a more traditional type of installment agreement, which requires extensive financial disclosure and a detailed financial analysis.

Make an offer. Called an "offer in compromise," the IRS may allow you to provide less than full payment. Grounds for acceptance of your compromise are stringent, and the penalties can be long term.

Declare hardship. If you can show that collection of the tax debt would cause a financial or other hardship for you or your family, the IRS may suspend collection of your debt for one year, at which time it will reexamine your situation. Penalties and interest, however, will continue to accrue during the suspension period.

Declare bankruptcy. Filing for bankruptcy could halt IRS collection actions. However, filing bankruptcy has serious consequences and should be considered carefully.

How Long Should you hold Tax Records?

Filing your taxes isn't just a once-a-year endeavor. Maintaining good records throughout the year-and disposing of old ones when appropriate-not only provides you with greater confidence now when you prepare your tax return, but it also provides you with documentation you may need down the road.

Lucky number six. One of the most common questions we are asked is, how long should one keep tax returns? Although you can get away with keeping them only three years, We recommend that you keep all federal and state income tax returns and supporting documents for a full six years.

Why so long? Once you've filed your returns, the IRS has up to three years to assess additional taxes. However, it can take up to six years to make a tax assessment if it determines that you omitted a substantial amount of income from your return. You may believe your returns are accurate and all-inclusive, but the IRS may feel differently.

Be sure to file your U.S. Postal Service or electronic mailing receipts with your returns, too. If your return is ever lost or misplaced, having a receipt showing the date the return was submitted will save you from penalties.

File it, but don't forget it. Some events produce documentation that should be kept permanently: settlement records from all of your home purchases and sales, investment purchases, divorce agreements, etc.

But just because an event ends doesn't mean that the documentation process should. Before you move your records to the attic, remember that regularly filing "updates"-home improvement receipts, records that show a return of capital on your investments, estate and gift tax returns under which you received property, etc.-will help to compute your gain/loss when you sell.

There are other situations in which you would benefit from keeping records, including any nondeductible contributions you have made to an IRA or Roth IRA.

Review your personal and financial history with a professional to ensure you have all your bases covered.

The Well Lived Life: Managing Stress

Now switching gears with the hope of de-stressing your life from all of your tax filing worries we want to touch upon the importance of living well. After all there is more to life than death and taxes!

We will continue such conversations from time to time to bring you pieces that we hope will inspire you, enlighten you, or simply provide you with ideas of living well. Sometimes we will bring you a bit of culture, perhaps from beyond our borders, and other times we will share thoughts about health and safety.

Today we consider stress creep. Even the coolest characters experience stressful events sometimes. Although we often hear about the stresses of working, we enjoy our work and often wonder about the stresses of care giving to children or parents, the stresses of being a teenager in our media saturated world, the stresses of accumulating, retaining and managing wealth. We may not all agree on the exact same stressers but we can agree that now and then, we all get stressed.

What can you do to manage your stress? There are several ways to cope and below we will provide you with some of them.

Exercise - We know that exercise decreases the level of stress hormones like cortisol while stimulating the release of endorphins and other chemicals associated with feelings of well-being, like serotonin and dopamine. That said, unless you are so inclined, you do not have to go out and ski a twenty-four kilometer Olympic race to get your heart pumping. Remember, doing what you love will make exercising the right kind of fun for you. Even though it's chilly, snowy and wet, walking is one way to truly bust stress and get in some movement. In fact, walking your dog may be some of the best exercise we get because it is consistent and our furry friends demand that we be there for them regularly.

Yoga - Everyone seems to be taking a yoga class these days, and for good reason. Yoga practice combines the stress busting exercises of deep breathing, exercise and stretching, guided imagery and meditation. It's accessible to almost everyone. Yoga may lower your heart rate and improve your blood pressure.

Music - We are not sure that listening to Mozart really makes you smarter, but it does calm you down, and when you are calm you think more lucidly. Music is known to calm brain waves, slow breathing and heart rate, lower blood pressure, release muscle tension, reduce anxiety and create a more positive frame of mind. Play any music you enjoy, at home, in your car, and at work if and when you are able.

Guided Imagery - Calm your mind by getting into a different frame of mind. Negative feelings can distract us from the joy of every day living. Sit quietly in a calm place, breath deeply and imagine yourself in the place you most want to be. Tap into all your senses to describe this place. The way it smells, the way it feels, the sounds.

Laugh, Laugh, Laugh - Sometimes when we are very anxious we forget about laughter. But it is no secret that someone coined the "laughter...best medicine" phrase. Laughter increases your oxygen intake, stimulating your heart, lungs and muscles, and elevating your mood.

Participate - The most joyous times, and therefore the most stress free times are when we gather with our family and friends, go dancing, to the theater, to a basketball game, or play basketball ourselves. Take an art gallery tour and then engage in your own art project at home. When we are active life opens up possibilities.

The next time the world's got you down recall these ideas, and come up with more, to chase down that stress and make your corner of the universe a more peaceful, joyous place.

Call us today with your estate planning, life care planning, real estate and tax matters.

Melendy Moritz PLLC is a client centered boutique firm. We focus on your unique needs by providing the individualized legal counseling and advising tailored to your specific situation.

We concentrate on the planning that matters to you.
Call us at 603.643.6072 or 802.457.9492


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