Monthly Archives: April 2016

How your tax dollars are spent

By Bankrate

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

Last week, most Americans completed their annual tax filing duties. If you’re like me, when you finish your 1040 you are painfully aware, even when you get a refund, of how much of your money goes to the U.S. Treasury.

So what exactly is Uncle Sam doing with our dollars?

Based on previous years’ government expenditures, more than half of it is heading to Social Security, Medicare and other social safety net programs. Another big chunk goes to defense programs.

The Center on Budget and Policy Priorities, or CBPP, took a look at the $3.7 trillion federal budget for fiscal year 2015 and found that those areas accounted for 75% of spending.

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High cost of health programs

Last year, notes the Washington, D.C.-based nonprofit, 25% of the budget, or $938 billion, paid for 4 federal health insurance programs. The money went toward Medicare, Medicaid, the Children’s Health Insurance Program, or CHIP; and Affordable Care Act, also known as Obamacare, tax subsidies.

Medicare was the costliest program in this group, accounting for nearly two-thirds of the expenditures, or $546 billion, to provide health coverage to 55 million people who are at least age 65 or who have disabilities.

Social Security’s big benefits

Next up in the government ledger was $888 billion, or 24% of the budget, that paid for Social Security.

That money, points out CBPP, goes to a variety of payments, including monthly retirement benefits to millions of retired workers, their spouses and children, as well as survivors’ benefits and payments to disabled workers and their eligible dependents. Another 10%, or $362 billion, supported other safety net programs that provide additional help to individuals and families facing hardship.

Many military expenditures

Defense and security-related international activities accounted for another 16% of fiscal 2015 spending. The bulk of this $602 billion, says the CBPP, reflects the underlying costs of the Defense Department.

While U.S. defense spending comes in 3rd in the U.S. budget, the amount that we allocate for this category far outpaces other nations’ military expenditures.

The Stockholm International Peace Research Institute, or SIPRI, estimates that global military spending in 2015 was around $1.68 trillion.

We’re number 1!

Although SIPRI’s figure is slightly less than the CBPP amount, the United States still topped last year’s military expenditures list at $596 billion, according to the international armaments research institute. And that amount is more than what is spent by the next 7 countries combined.

Following America in shelling out for defense programs were China at $215 billion; Saudi Arabia at $87.2 billion; Russia at $66.4 billion; the United Kingdom at $55.5 billion; India at $51.3 billion; France at $50.9 billion; and Japan at $40.9 billion.

Those 7 nations spent a combined $567.2 billion on their military programs in 2015. That still was almost $29 billion less than the United States alone spent that year in this category.

Are you surprised by the U.S. budget? What bothers you more, the amounts spent or what the money is spent on?

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

 

Retirement Planning Means Peace of Mind in Boca Raton

Herman Boca Blog

Boca Raton offers beautiful beaches, world-class shopping, amazing restaurants and warm weather all year round, what’s not to love? That’s why, when thousands of Americans retire every year, many move to sunnier climates in Florida to enjoy the relaxation that comes with retirement. In a fluctuating economy, however, retirement planning doesn’t end on your last day of work. The expert team at Herman & Company CPA’s, PC offers unparalleled planning services to make your retirement even easier. For our clients enjoying sun and sand in Boca Raton, Florida, the team at Herman & Company CPA’s, PC provides integral support to ensure the relaxation and peace of mind that you deserve.

Retirement planning for Boca Raton

Herman & Company CPA’s, PC offers accounting services for both retirees and those planning for retirement. Wise retirement planning is all about preparation and taking stock of your portfolio! We have a well-deserved reputation for saving clients money and looking to the future to ensure optimal returns every year. As trusted financial advisors, we work with our clients to create individualized strategies to safeguard their portfolios. We take pride in navigating the complex world of taxes to save our clients time, money and undue stress.

Bright futures for Florida retirees

How you manage your investments and savings will determine the quality of your lifestyle after your retire. However, these decisions don’t need to be made alone; with offices in New York and Florida, Herman & Company CPA’s, PC is committed to helping our clients afford a lifetime of financial stability. With our personalized touch, advanced accounting tools, and up-to-date knowledge of economic trends and policy changes, we help our clients protect their savings and investments.

Retirement planning should be easy, but the complicated world of financial policy can cause unnecessary stresses and lost savings. With over thirty years of experience, the team at Herman & Company CPA’s, PC has successfully guided hundreds of clients through annual taxes and wise financial planning decisions, always with the same mission: to provide our clients with personalized support and financial stability. 

Congressman shares tax ID theft story

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Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

No one is safe from tax identity theft, not even the lawmakers who help write the country’s tax laws.

Another member of the House Ways and Means Committee has become a victim. During a hearing of the committee’s Oversight Subcommittee on April 19, Rep. Jim Renacci, R-Ohio, told his colleagues about having his identity stolen and a fake tax return filed in his name.

Rep. Jason Chaffetz, R-Utah, a former chair of the Ways and Means Oversight panel, also was a tax identity theft victim.

Fake return seeking ‘significant’ refund

This week Renacci shared his tax identity theft experience as part of a hearing on the just-completed filing season.

“Last May, I received a notice from the IRS stating that they had some questions for me about my 2014 tax return,” Renacci testified. “I found this troubling because I had not yet filed.”

Renacci contacted the IRS and learned that his personal information had been stolen and was used to e-file a fraudulent tax return. The filing, said Renacci, included a fake W-2 from the U.S. House of Representatives and claimed a significant refund.

The false return instructed the fraudulent refund be sent to a bank account outside the United States. Fortunately, the IRS spotted some red flags on the filing and didn’t issue the refund check.

E-filing makes ID theft easier

“As a taxpayer and tax preparer for almost 30 years, it is apparent to me that identity theft is real,” Renacci said.

And one of the conveniences of filing — submitting a return electronically — can also cause significant issues related to identify theft, he told the subcommittee.

“Let me be clear, I don’t want to return to paper returns and checks, but the ease of electronic filing and payments have exacerbated the problem. I know, now more than ever, we need additional safeguards to protect taxpayers,” said Renacci.

To address his and other tax identity theft victims’ concerns, Renacci has introduced the Stolen Identity Refund Fraud Prevention Act of 2015. During his testimony, he urged his fellow Ways and Means members to act on the bill.

IRS making progress against identity theft

IRS Commissioner John Koskinen also testified at the hearing, telling subcommittee members that his agency is making progress against tax identity theft and refund fraud.

“We have improved the filters that help us spot suspicious returns before they can be processed,” Koskinen said. “Using those filters, we stopped 1.4 million returns last year that were confirmed to have been filed by identity thieves.”

The filters helped the IRS prevent issuance of around $8.7 billion in fraudulent refunds, according to the commissioner.

The IRS also is working with tax ID theft victims. Last year, said Koskinen, the agency worked with affected taxpayers to close more than 700,000 fraud cases.

$119 million in fake refunds stopped

Koskinen also reiterated the efforts of the Security Summit, created last year to coordinate tax identity theft and fraud prevention efforts across state governments and the tax services industry.

“Our collaborative efforts are already showing concrete results this filing season,” Koskinen said. “Through mid-March, leads from industry partners directly resulted in the suspension of 27,000 returns on which a total of $119 million in refunds was claimed, up from 8,000 returns claiming $57 million during the same period last year.”

If you find yourself in the same situation as Renacci and other identity theft victims, don’t rely on just the efforts of the IRS and its tax industry partners. Secure your personal data as soon as you suspect or discover it’s been compromised.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.