nesli o hare's Entries

In 2009, many tax credits were augmented and created. Tax credits can help you lower your total tax bill and increase your chances for a tax refund. Below are some of this year's most important tax credits. Some are new, some changed, and some became part of the American Recovery and Reinvestment Act (ARRA).

For those of you who are unsure of the difference between a tax credit and a tax deduction, a tax credit lowers your total tax bill directly, whereas a tax deduction lowers your taxable income (indirectly taxes dollar for dollar), sometimes placing you in a different income tax bracket.

Consumer Energy Tax Credit
This tax credit is a good one. If you have made repairs to your home (non-business) to improve energy efficiency you will be able to get up to 30% back from that investment but no more than $1,500. This would include better insulation through the installation of more efficient windows, doors, roofing and even the installation of water heaters, solar thermal technologies, natural and oil furnaces and so on. If you are unsure whether your recent energy efficiency investment qualifies, contact a CPA or the IRS directly.

American Opportunity Tax Credit
The old Hope Tax Credit was expanded for 2009 with the new American Opportunity Tax Credit. As a parent, for each student in college now, you can save up to $2,500 in taxes. There are income limitations with this credit though. Once you start to make over $80k as a single parent (or $160k for married couples), the credit begins to phase out. Realize though that you cannot claim the Hope Tax Credit and this credit in the same year for one student.

Home Buyer Tax Credit
This credit applies to new home buyers and even existing home buyers that meet certain guidelines. First time home buyers who purchased after January 1st, 2009 and before April 30th, 2010 can take up to $8,000 ($4,000 if married and filing separately) off of their tax bill. This tax credit is completely phased out once you make over $145k (individual) or $245k (for a married couple).

For existing home owners, who moved primary residences, the credit is $6,500 (individual) or $3,250 (if filing jointly) but you must have lived in the home for five consecutive years. Furthermore, it only applies for homes purchased after November 6th, 2009.

Making Work Pay Tax Credit
With this credit, you can claim up to 6.2% on earned income from wages but no more than $400 for individuals or $800 for married couples filing jointly. However, this really only applies to those that are self-employed as your employer should have reduced withholding for this during the year. Realize that does not apply to those receiving a pension, or unemployment.

Electric Motor Vehicle and Electric Plug-In Vehicle Tax Credits
These tax credits differ slightly in a few different ways if you went "green" in 2009.
* The Electric Motor Vehicle tax credit ranges from $2,500 to $15,000 depending on the capacity of the battery and how heavy the vehicle is.
* The Electric Plug-In Tax Credit is 10% of the vehicle cost capped out at $2,500. To take advantage of this your vehicle had to go into service after February 17th, 2009.

Adoption Tax Credit
This tax credit increased to $12,150 for 2009 but the tax credit is only applicable if the adoption expenses were paid this year (unless they are a special needs child).

Government Retiree Credit
This tax credit is $250 ($500 if filing jointly) for 2009 if you received a government pension payment or annuity in 2009. Realize though this credit becomes invalidated for you if you took an economic recovery payment.

Earned Income Tax Credit
This credit applies to low-wage earners and it had a few changes in 2009. One change is that the credit increased for individuals with 3 children or more and for married couples filing together. Also the income limit to qualify for this credit has increased as well.

For more details on any credit, visit IRS.gov.

Bonus: Use Your Tax Refund To Buy US Series I Savings Bonds
By utilizing some of these tax credits above you can increase your refund or your chances of getting a refund. Starting this year, the IRS is you purchase US Savings Bonds with your refund. Although these US bonds offer low rates of return during these economic times, they are great investments.

The IRS for this year's filing will allow you to take up to $5,000 of your tax refund to buy U.S. Series I Savings Bonds in multiples of $50 by selecting this on Form 8888.

If you purchase more than $250, the denominations of the bonds should get larger. Anything over $5k or that be divided by a multiple of $50 will need to be deposited into a savings/checking account. 

With the Federal government spending at all time highs, and with my belief that inflation is on the horizon, US savings bonds can be a very attractive hedge against inflation. Taxes on these bonds are due when redeemed but you will not be responsible for state or local taxes with these bonds. One drawback to these bonds is the fact that they cannot be redeemed until a year has passed from their issuance so be sure to check with your investment adviser.

This is a guest post by Manny Davis of Back Taxes Help.

Stereotypical accountants need not apply!

 We are looking for a PART TIME staff accountant who has experience reviewing financial records, identifying problems and fixing them. 

 The following is required (if you don't have these, don't waste your time applying):

• Bachelors in accounting (or associates and comparable experience)
• Job costing
• General ledger
• Accounts payable
• Accounts receivable
• Bank/account reconciliation
• Payroll and payroll taxes (no using ADP doesn't count)
• Sales tax
• Property tax
• Month end closing and financial reporting
• QuickBooks experience
• Experience working with on-line banking
• Flexibility
• Ability to multitask
• Ability to work in sometimes chaotic environment
• Communication skills (training experience is a plus)
• Ability to work with various types of people
• Understanding that even though it's accounting, it's not always black and white
• MOST IMPORTANT - Positive attitude, desire to grow and develop and a sense of humor

 If you meet these requirements, please continue reading this ad.

 We are Foster Results (http://www.fosterresults.com/).  We provide bookkeeping services to small business, personal money management to individuals and families, QuickBooks training, and part-time Controller/CFO services.  We are a fast growing business in Westfield.

 PLEASE NOTE:  We do not currently offer insurance benefits or a 401(k) plan.  Position offers a competitive salary, bonus potential based on performance and paid time off.

 If you're interested in being a key member of a team that works hard, has ambitious goals, understands the importance of family and has fun, submit your resume to hr@fosterresults.com (in Word format please.)

WASHINGTON - Want to keep IRS auditors away? Keep your earnings under $200,000 and they won't bother you 99 percent of the time. IRS enforcement numbers, released last week, show that returns under that amount have a 1 percent chance of getting audited.

Returns showing income of $200,000 and above have a nearly 3 percent audit chance. The percentage jumps to more than 6 percent for returns showing earnings of $1 million or more. The percentages apply to both individual and joint returns.

The number of audits jumped 11 percent from 2008 to 2009 for returns with earnings of $200,000 or more, but rose 30 percent for returns showing earnings of $1 million or more. For those under $200,000 the number of audits remained steady.

 The IRS conducted 1.4 million audits in the financial year ended Sept. 30, with more than 1 million conducted through correspondence with the taxpayer. The others were conducted through face-to-face meetings with IRS auditors.

The IRS does not do random audits, but does conduct "research audits" that will test compliance in business tax categories. In 2010, the target will be payroll taxes, according to Steve Miller, deputy commissioner for enforcement.

By Larry Margasak, Associated Press 

BY THE NUMBERS: IRS AUDITS OF TAX RETURNS

- The number of audits jumped 11 percent from 2008 to 2009 for returns with earnings of $200,000 or more.
- The IRS conducted 1.4 million audits of individual returns in the financial year ended Sept 30.
- The total revenue collected from IRS enforcement actions, $48.9 billion in 2009, is a drop from $56.4 billion in 2008.

The IRS has released the 2010 optional standard mileage rates to be used by employees, self-employed individuals and other taxpayers to compute deductible costs of operating an automobile (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes. The 2010 rates for business, medical and moving purposes are slightly lower than last year's rates, reflecting the generally lower transportation costs compared to a year ago.  The 2010 standard mileage rates will be:

• 50 cents per mile for business miles
• 16.5 cents per mile for medical or moving purposes
• 14 cents per mile for charitable purposes

QuickBooks Online Users beware: A recent notice from Intuit suggests that the phishing continues.

Intuit continues to receive reports of different versions of the phishing email we alerted you about on 11/12/ 09. They continue to investigate the fraudulent emails that were sent to some QuickBooks Online and Intuit Online Payroll users. The email requests users to download a plug-in or windows update to secure your data.

Intuit did not send this email and QuickBooks Online and Intuit Online Payroll will never use emails to request personal information or update security of our service.

What should you do?
To protect yourself from fraudulent emails and websites, here’s what you can do:
    •Do not click any links in a suspicious email.
    •Do not download any plug-ins or tools from an email
    •Be suspicious of any email that asks for personal information, requires you to download anything or 
     requests your authentication information to access your online account.
    •Delete any suspicious email from your inbox and your trash bin immediately.
    •You can report any incidents, see examples of phishing emails, get more security information and
     recommendations on securing your computer at http://security.intuit.com/.

If you think you’ve provided personal information such as your login name and password through a fraudulent website, or if you have recently downloaded the plug-in or windows update suggested in the mail below, here’s what you should do:
    •If you have downloaded the tool, please delete it. You should scan your system using an anti-virus
     program from a respected Security vendor, for example Trend Micro, McAfee, Symantec or Microsoft, to
     remove any viruses that may now be on your computer. Several of these vendors also offer free online
     security tools.
    •Change your password to prevent unauthorized users from logging into your account.

If you have any questions, please don’t hesitate to contact us.

Accounting outsourcing services performs a significant function in finance and accounting. Business managers are under incredible pressure to trim costs of finance and accounting departments to boost productivity, increase profitability and assign strategic value to it. Now there is enough demand in the market for accounting outsourcing services.

The enormous volume of workload on businesses has created a unique position for outsourcing. Outsourcing is becoming one of the most successful tools in solving business problems. To address the excess workload on maintenance of accounts, outsourcing has often been the direction taken. This then allows staffs to have more time to control and monitor accounts properly.

Most companies consider outsourcing as an adjunct to their business. One can definitely design a strategy for a company to outsource accounting activities at best prices. They will also be able to attain the desired quality in the work and turn-around time. Many companies have generated huge savings from this feature. And more and more companies are heading towards this service for their company's growth.

There are many companies who are geared up to meet companies' outsourcing requirements. They provide not only customized business solutions but also bring flexibility and cost-effectiveness to a company's business services thus helping it simplify resources and maximize time and money.
There are various services provided by these companies. Some are accounts payable / receivable services, bookkeeping outsourcing, tax return preparation services to accountants and accounting firms.

About the Author

Richard Eldridge is a well known and highly respected outsourcing specialist and consultant. He is the co-founder of Infinit-O, a boutique BPO company that specializes in assisting Small and Medium sized businesses realize the full benefits of outsourcing.

Intuit, makers of Quicken, QuickBooks and TurboTax, will shut down its free Quicken Online personal  finance site in six to nine months and put all its chips in with newly-bought Mint.com.

The company closed on its $170 million acquisition of Mint yesterday. That made Mint founder and CEO Aaron Patzer the new vice president and general manager of Intuit's Personal Finance Group, heading up Mint.com, Quicken Online and Quicken desktop products.

His first decision? Quicken Online must die.

"Over the next 6 to 9 months," he said to TechCrunch, "we will end-of-life Quicken Online and their customer's data will be migrated over to Mint."

That's a startling reversal for a company that bashed Mint before acquiring it. It's also a shock that a new Web 2.0 upstart so definitively trumped an established brand with far more customers.

But like the acquisition, the move is smart. Quicken and Mint couldn't coexist for too long because they serve the same purpose. Quicken has about 1.5 million users, but only 100,000 are active each month. In comparison, Mint's got 1.7 million users, and 700,000 are active each month.

So Quicken's throwing in the towel on its brand extension and going with the more engaging site.

The question remains how the company will manage two brands that are distinct from each other. Mint has a very glossy, light feel; Quicken's very red-and-gray, with style to match.

But it makes sense - Mint took off thanks to adoption by young professionals who weren't scared of putting financial data into the cloud. Quicken Online only bulked up after seeing Mint fly past it.

So what should users expect? Like Quicken Online, Intuit can cross-promote Mint from its Quicken desktop products and TurboTax software. But some customers still want their finances on their desktops, so Mint may explore how to store data locally for that group.

But leveraging the personal finance software with Intuit's tax software is where the move really shines: TurboTax may eventually suggest tax deductions to you based on what you've entered in Mint (401k, stocks, etc.).

Expect to see more moves on the mobile front, too. Mint's popular iPhone app will continue development, and perhaps we'll see desktop apps and mobile apps on other platforms. With Intuit's backing, there's also much more hope for international scaling, including Canada, which has been left out of Mint, much to Canadians' disappointment.

November 5th, 2009
Posted by Andrew Nusca @ 8:03 am http://blogs.zdnet.com/BTL/?p=26936

Lenders have a number of ratios and formulas they use to evaluate credit applications, to set ongoing debt covenants, and to review renewals.
 
I find two of them are most critical.  They are intertwined, and if you can meet them, the rest of the covenants and ratios tend to take care of themselves.
 
First ratio:  Debt to Earnings.  More specifically this formula would be total debt divided by earnings before interest taxes, depreciation and amortization (EBITDA). 
 
There are refinements to it.  For example, if the company routinely carries high cash balances, they can be used to offset the debt in the formula.  But, that's not usually an adjustment made for small and mid size companies, because cash balances are usually pretty thin.
 
Most mid market companies are either subchapter S or LLC companies under the tax code.  So, the company does not pay taxes.  But, the bankers will want some acknowledgment of the distributions necessary to the owners to pay their personal share of the taxes.
 
And, the earnings number in the denominator needs to be reduced for capital expenses (CAPX).  An easy assumption is that depreciation will equal CAPX, so no adjustment for either in the formula.  But, if CAPX is much different than historical depreciation, it needs to be recognized.
 
There are a few other tweaks that can be made to the ratio:  annual minimum property tax payments, rents, lease commitments, and some others, but the big ones are the debt, the projected earnings and depreciation.
 
What's the target?  One senior commercial lender recently told me his bank's range for this ratio was 3.0  to  3.5.  Meaning:  the ratio of debt to earnings should be no higher than 3.0 to one, but must not be higher than 3.5 to one.
 
Second ratio:  Fixed Charge Coverage.  This is EBITDA (same number as in the first ratio, so you can see how interrelated they are) divided by next year's fixed charges.  The fixed charges are interest, principal reductions on installment loans, and maturities.
 
Again, some adjustments to the fixed charges may be needed, like CAPX, minimum repairs above routine maintenance, taxes, leases, and so forth.  Each client is a bit different, depending on their business model.
 
Maturities in the next year can really cause this ratio to fall, especially lines of credit, so some adjustment is typically made to recognize that the routine lines of credit for receivables and inventory are rolled over. 
 
What's the target?  Same banker said 1.0 to 1.5.   So, the bank would like to see the ratio above 1.5, but it must be above 1.0.  As you can imagine, losses ruin both of these formulas.
 
An example:  Total debt $1,000,000.  EBITDA of $350,000.  Fixed charges (interest and principal maturities) of $180,000.  The debt ratio is thus 2.85 ($1 million divided by $350,000) and the fixed charge coverage is 1.94 ($350,000 divided by $180,000).  Targets met.  But, if you move the base numbers just a bit, you can see how quickly the ratios change and blow the targets.
 
From time to time, depending on credit conditions, banks move these targets around.  But, the interplay continues because interest and principal payments in the fixed charge ratio are driven by the debt balances, and both the debt ratio and the coverage ratio include earnings in the base.  To improve these ratios, earnings need to be higher, debt levels lower (typically meaning higher equity in the business) and interest rates lower.
 
They are two good ratios for any business to monitor.

Written by Randal Suttles CPA B2B CFO®

Employee theft is something that no business owner wants to experience. Unfortunately, the culprit is often a trusted employee who has never complained about working overtime and without vacations. If you notice a combination of the following warning signs, it will be well worth your while to start investigating.

• There is an unusual drop in your profits.
• Your records are disorganized.
• There are unexplained changes in your accounting records.
• There are unusually large or numerous credits to a particular customer.
• An employee works late, on the weekends and refuses to take vacations.
• An employee's standard of living changes to a degree that is inexplicable based on her salary.
• Documents are missing.
• Bank deposits delayed.
• Customers are complaining about having already paid a bill.
• There are too many increases in past due accounts receivable.
• Check amounts are altered.
• Duplicate payments are made.
• Bank reconciliations have too many outstanding checks.
• Too many payments are being made to individuals with the same name or address.
• Vendors' addresses are the same as an employee's address.
• Bank reconciliations are late.
• Accounts receivable and payable don't balance.
• The petty cash fund is disappearing.

Several of our largest clients utilize our service because they know they are protected.  In each of their cases, they had a trusted employee steal from them and they don't want to experience it again. 

Foster Results insures our customers against theft, as well as errors and omissions.  We want our clients to be secure in their business' financial health.

A truck driver who let his girlfriend stay at his house rent-free as long as she kept the books for his business is now suing her for embezzling $50,000.  Sioux Falls resident John S. Townsend, 44, who drives his own truck and operates as Townsend Transport, let 45-year-old Ramona Haase move in with him in September 2007, according to court documents.

The pair had an understanding that Haase would not pay rent but rather perform the bookkeeping duties associated with the business. In March of 2008, Townsend authorized Haase to draw checks on his business account to pay expenses.

When the relationship ended in August, Townsend hired a new bookkeeper who noticed a discrepancy of around $50,000.

The complaint filed last week in Minnehaha County also alleges that Haase failed to provide accurate, timely information to Townsend's accountant, an act that resulted in the late filing of his 2008 tax return.

The civil case asks for monetary damages and charges Haase with fraud, negligence and breach of contract.

No criminal charges have been filed against Haase.

Written by John Hult  October 21, 2009  ArgusLeader.com

At Foster Results, we take every precaution to ensure that your finances are protected.  In addition to extensive background checks for each employee, every bookkeeping client recieves a Certicate of Insurance up to $1 million dollars worth of loss. 

October 14, 2009 by The Wise One 

Business is composed of a set of interrelated systems that ensure the smooth flow of business processes and convert capital to revenue efficiently. It is important for a business owner to consider each component as if it is just the existing system inside the process. Thus, utmost importance and consideration must be given to each process component, which includes the accounting process.

That is why we have tax lawyers. That is why we have public accountants. That is why we have financial managers.

It is because of the accounting process.

It is the measurement and the disclosure of essential financial information that will help public accountants, financial managers, tax authorities, investors, and other decision-makers to effectively allocate their financial resources to each business process, thus maximizing the conversion of a business' working capital to huge revenues.

Accounting involves processes in which important financial information of a particular business is recorded, summarized, evaluated, and interpreted. Furthermore, since money is one of the biggest factors that may affect the existence of a business in a certain market, accounting is given utmost attention and consideration at all times.

In accounting alone, there are several aspects that a business owner must consider. There you have the cost accounting, the cash-basis accounting, financial accounting, internal fund accounting, management accounting, project accounting, and others.

And the list continues to expand.

In other words, you might conclude that accounting is a serious and a critical matter that must be handled by a group of people who have the technical expertise in dealing with the accounting as well as financial issues. Realizing this reality, more and more business organizations hand the accounting aspects of their business process to third-party organizations, or most commonly known as accounting outsourcing.

Accounting outsourcing is considered to be one of the more effective management tools, thus many companies often incorporate outsourcing as one of their strategies in business planning. As a matter of fact, the Outsourcing Institute reported that the concept of a CRO (Chief Resource Officer), a professional outsourcing executive manager, is widely-acceptable in larger corporate organizations.

However, you need not be a large corporation to benefit from accounting outsourcing. Even small and medium-sized enterprises can provide better service and produce high-quality products in a more cost-efficient way if they outsource their non-core business processes. This includes the accounting aspect.

By decreasing the demands on your administrative personnel, you will be able to free them from additional responsibilities and they will be able to support areas directly to your sales, clients, and to the marketing task of your business.

Accounting outsourcing firms can execute your accounting and bookkeeping tasks in all frequencies (monthly, quarterly, and annually) or can supplement your present administrative staff to lessen the responsibility. Here is a summary of the services you can acquire from outsourcing your company's accounting process:

- Preparing cash disbursement checks;
- Preparing input credits and bank deposits;
- Preparing company payroll;
- Preparing tax deposits and bank reconciliation;
- Preparing financial statements;
- Preparing payroll tax returns; and
- Evaluation and review of financial results on different frequencies.

With accounting outsourcing, you will be able to see the benefits of having a cost-efficient business operation. With your accounting process at the hands of outsourcing professionals, you can focus to the core of your business and convert every cent of your working capital into hundreds to thousands of dollars in generated revenues and profits.
Premier solution for outsource graphics, marketing and web services

Source:  http://www.wisdompost.com/2198/outsource-accounting-to-boost-your-bottom-line-5/

Monday, October 12, 2009 
Written by IBJ Staff

- The non-partisan Indiana Fiscal Policy Institute this morning released a new study exploring the ramifications of expanding the state's sales tax to include services.

In its last fiscal year, Indiana raised $5.7 billion from its 7-percent sales tax, which applies to the sales of most tangible goods, with exemptions for items such as prescription drugs, groceries and newspapers.

According to the IFPI study, Indiana could raise as much as another $6.76 billion annually if it extended its sales tax to include all service transactions. Even if Indiana exempted medical and legal services, Indiana could raise almost $4.5 billion from an expanded sales tax, according to IFPI.

Such figures are sure to appeal to legislators in Indiana's General Assembly, who struggled mightily over recession-driven spending cuts this spring. A special session of the Legislature was ultimately necessary to craft a two-year state budget.

Indiana government's economic picture hasn't improved much since then. On Oct. 8, Gov. Mitch Daniels revealed Indiana's revenue for the quarter ended Sept. 30 was $254 million less than previously predicted, despite the fact that Indiana's revenue forecast has been repeatedly revised downward.

New revenue could help fill such gaps. But an expansion of Indiana's sales tax has many potential drawbacks, which the IFPI study details.

For starters, Indiana's 7-percent state sales tax is already the highest in the Great Lakes region. Extending it might prompt Indiana residents to seek services elsewhere. Indiana is currently tied with Mississippi, New Jersey, Rhode Island and Tennessee for the second-highest sales tax in the nation. Only California's 7.25 percent tax is higher.

The IFPI study points out that the effective sales tax rate is actually higher in some regions because of local sales taxes tacked onto state sales taxes. Alabama, for example, has a 4-percent sales-tax rate, but certain localities there have their own 6-percent sales taxes, creating a 10-percent total tax.

Most states, including Indiana, already tax a few services, such as public utilities, hotel-room rentals and stadium admissions, according to IFPI. But only a handful, such as South Dakota, West Virginia, Hawaii, New Mexico, Delaware and Washington, tax more than a handful of services.

Indiana currently ranks 39th among states for the number of services it taxes, taxing 24 of 168 services surveyed by the Federation of Tax Administrators.

The logistics of expanding the sales tax to additional services would be challenging for some businesses. IFPI points out it could be difficult for many businesses to levy such a tax. Businesses that already sell some goods would have an easier time than pure-service providers. For example, a cosmetologist that now collects taxes on the shampoos and conditioners its sells while exempting styling services, would simply have to stop segregating taxable and nontaxable sales.

But other businesses that sell no tangible goods would find they suddenly must establish a relationship with the Indiana Department of Revenue and maintain a whole new type of record. The cost could be significant, IFPI points out, particularly for small businesses.

"Of the major sources of revenue available to the state, broad-based taxation of services is the only one yet to be tapped by the State of Indiana," wrote the IFPI report's author, Earl Ryan. "The revenue possibilities are great, and it would bring a degree of equity to the tax system. At the same time, defining the base would be difficult, both conceptually and politically, and the cost of collecting the tax on the part of both the state and the taxpayers would be significant.

Study: Taxing services could yield state $6.8B Peter Schnitzler   -  pschnitzler@ibj.com 

We will review your 2009 QuickBooks file for errors, discrepancies, and missing information.  We will present you with a report outlining our recommendations for corrections you need to make before your tax return can be prepared.

Benefits
- Save money on tax preparation
- File your taxes on time because your file is ready for your tax preparer (get your tax refund faster)
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- Accurate financials for the first three quarters of the year (you will have time to make changes and adjustments to your business to improve your profitability before Dec. 31, 2009

Limited time offer $100 
 
Offer expires October 31, 2009

Written by Matthew S. Lewis

In Indiana, there are two (2) main ways a person can be legally given the authority to act on behalf of someone else.  They are a Guardianship proceeding or a Power of Attorney.

A Guardianship is a court proceeding in which an individual asks the court to appoint someone to be responsible for the physical and/or financial care of another (the ward).  Anyone with an interest in the matter must be notified (including the ward), and if people disagree during the proceeding, it can get ugly.  It is easy to imagine the fight a ward could give should he feel he did not need a guardian.  Of course, this is often why the proceeding is necessary.  A Guardian can be needed even when the ward does not think it necessary.  The downside of the proceeding is the ward's lack of choice as the guardian is appointed by a third party (the Court).  What if the ward wanted a different guardian?  Would the guardian know how to handle the wards finances or health care decisions?  The Court appoints the guardian and may or may not take the ward's opinions into account.

Unlike a Guardianship, a POA is a way to assist with decision making without depriving that person of his ability to choose.  In Indiana, the POA statute lists roughly twenty (20) broad powers an individual (the principal) can assign to someone else (the attorney-in-fact) to act on their behalf.  Powers included are the right to deal with banks and insurance companies, conduct business transactions, buy and sell real estate, make gifts, buy and sell stocks, and make health care decisions.  While these are the same types of powers a guardian has at his disposal, the difference is control.  In the POA, the principal chooses the attorney-in-fact, which gives the principal the ability to prospectively discuss his wishes with the attorney-in-fact.  Before writing a POA, a person should speak with his lawyer about possible consequences because the broad powers granted under the statute open the door to the possibility of abuse by the attorney-in-fact.  It is important for the principal to understand when the POA comes into affect, and the powers he is giving the attorney-in-fact. 

Obviously, these issues are far more complex than as presented in this article.  This was not written to provide specific legal advice or form an attorney-client relationship, so if you have questions about your situation, you should retain a licensed attorney of your choosing.

Matthew S. Lewis, attorney with J.D. Walls and Associates, P.C. in Carmel, Indiana
mslewis@jdwalls.com
http://www.jdwalls.com

• Many elderly do not retrieve their mail from their mail boxes on a daily basis.  Some reasons include: Illness, bad weather, lack of mobility, hospitalizations.
• They wait on a caregiver or neighbor to pick up their mail.
• Mail theft from home mailboxes is a common problem.
• Lost mail and the trouble/cost of following-up on check replacement is stressful and time-consuming.

• "Only 52 percent of caregivers receiving Social Security payments on behalf of the person they care for say they use direct deposit."
• "Last year alone, more than 480,000 Social Security checks were reported lost or stolen and had to be reissued, while $64 million in Treasury-issued checks were fraudulently endorsed."

• Sign up for direct deposit of Social Security, SSI or VA Compensation and Pension payments.  You can sign up online, by phone or though mail.
• If you have no checking account, you can choose to sign up for a  prepaid debit card to which your  Social Security and SSI payments will be credited.