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Introduction to estate planning

Geraldine Clahar - Monday, July 24, 2017



What is an estate?


An estate is the accumulation of everything that one owns – real and personal property.Some estates are small others are large.The following are assets that are part of your estate:

(a)Home(s) and contents

(b)Art collections

(c)Coin collections



(f)Investment property – rental property

(g)Life insurance proceeds

(h)Pension plans


(j)Bank accounts

(k)Investment accounts

(l)Investment value of a business

(m)Revocable trusts



Who has an Estate?



The first time one owns something, the estate is created and grows until death.So, the estate could be created at birth assuming the child is given gift of money or other assets.In effect, everyone has an estate.Hence everyone should be concerned about what happens to that estate in the event of death.


How long does the estate exist?


The estate is created the first time one acquires an asset.Since a dead person cannot have an estate, at death the estate of the deceased must be distributed to others and once the distribution is complete the estate dies.


How is the estate disposed of?


The old adage goes “You can’t take it with you.”Everything you own at death has to be transferred to someone or something else within a short time of death.You might not have an estate tax issue, but there will be an issue of transfer of ownership of assets.How the asset is transferred can impact the tax base of the recipient, so serious consideration should be made when transferring assets from one individual to another.


There are several ways that the assets of a deceased can be passed or distributed to others:

(a)Will or trust


(c)Probate proceedings

(d)Operation of Law


These assets can be given away during that person’s life time (gifts) or at death (bequests). Maximum that can be gifted to any individual each is currently  $14,000 per year.


Spousal Exemption and Portability:


Each person is allowed to accumulate a certain amount of assets free of estate tax: exemption - $5,459,000 (federal) and $5,250,000 (NYS).The asset value in excess of the exemption amount is subject to estate tax – 40% federal tax rate. The exemption that one spouse does not use can be ported over (transferred) to the surviving spouse.This is added to the surviving spouse’s exemption amount allowing a greater exemption upon that spouse’s death.This is at the federal level only.Portability is not available in New York State.


Portability is an election! To make the election a Form 706 must be timely filed – No later than 9 months after date of death.This is a very exact calculation!That is, start counting from the date of death, not the month of death!!



 3 Reasons to file Form 706 even if no tax is due:



1.To make the portability election

2.To notify the IRS of valuations made to appreciable assets that have been passed on

3.To establish the fair market values of assets at the date of death



Geraldine Clahar - Wednesday, June 14, 2017


Governor Cuomo recently signed into law a new benefit that must be offered by non-governmental companies with employees in New York State.The family leave benefit will become effective on January 1, 2018.Full-time employees become eligible for benefits after at least 30 days of employment in a calendar year.Part-time employees are eligible after 175 days of employment.Employees are guaranteed job protection while they are utilizing this benefit as well as continuation of health insurance coverage.





This benefit called “Paid Family Leave” will allow an employee to take time off from work with pay for the following reasons:

1.To care for new-born child

2.To care for a seriously ill family member

3.To assist employees when family members are called to active military service


The cost of this benefit will be paid for by employees via payroll deductions.The deduction will be .126% of weekly earnings up to a maximum of $164.55 weekly, based on the average weekly state wage of $1305.92.The average weekly wage will be re-calculated each year, so the maximum deduction will change yearly.





The paid family leave benefit will be phased in over the next 4 years.


# weeks allowed                      % of earnings paid

YEAR 1                                              8                                                   50

YEAR 2                                            10                                                   55

YEAR 3                                            10                                                   60

YEAR 4                                            12                                                   67





Family leave benefits will be paid directly to the employee by your NYS disability insurance carrier.The cost of coverage will be charged to the employer in increased disability insurance premiums.The family leave deductions withheld from employees will reimburse the employer for increase in premiums created by the family leave benefit.


For more information you may visit the following websites:

New Overtime Rules

Geraldine Clahar - Tuesday, September 13, 2016

Effective December 1, 2016 overtime rules are changing.  The change affects only salaried employees.   Under the new rules a salaried employee must earn at least $47,476 per year or $913 per week to be exempt from overtime pay. 


If you have employees in this salary range and you need the details of the new rules you may visit the Department of Labor website at


You may contact our office at 516-483-3851 for further assistance.





New Partnership tax filing deadline

Geraldine Clahar - Friday, August 26, 2016



The tax filing deadline for Partnerships and LLC's filing as Partnerships is no longer April 15th. The new filing deadline is March 15th.  This change is effective with the tax filing for 2016.  So all Partnership returns must be filed by March 15th, 2017.  Keep this in mind.  If you cannot make the deadline for some reason, you can still obtain an extension.  Your new extension deadline will now be September 15th, six months from the due date of the return.

Notifying SSA, IRS and States of a Change of Address

Geraldine Clahar - Thursday, July 21, 2016


The Internal Revenue Service, Social Security Administration and the State taxing agency need to have current address information for all taxpayers at all times.When you change your address remember to inform these agencies as quickly as possible.


To notify the IRS use:

a. Form 8822 for Individuals, Estate and Trusts


b. Form 8822-B for business entities


To notify NYS use:

a. Form DTF-96 for businesses

b. Individuals are requested to make address changes online on the New York State website.


For other States log onto the State’s website and search for the Change of Address form or simply Google the form


To notify the Social Security Administration (SSA):

(a) Log into your My Social Security Account and make the change there, or

(b) Call the Social Security Administration at 1-800-772-1213 or

(c) Contact your local Social Security Office in person


You do not have to update addresses with the SSA unless you are receiving benefits such as Medicare, SSI or Social Security.


Be careful to use the proper forms and mail or hand-deliver the information in to the various agencies.With the increase in online scams relating to the theft of personal information, it is not recommended that this type of information be submitted online or over the phone.




NB: Individuals who have a name change (divorce, marriage, adoption etc.), be sure to inform the Social Security Administration of the change immediately.This can have a significant impact in accessing benefits to which you are entitled.


To report a name change use Form SS-5 or go online at may also call 1-800-772-1213 or go directly to your local Social Security office.


If you would like additional information or assistance, please contact us by email at or phone at 516-483-3851. We will be more than happy to assist you.


Tax Scams

Geraldine Clahar - Wednesday, July 20, 2016


The Internal Revenue Service (IRS) has reported a 400% increase in the incidences of tax scams since the beginning of this year.The scams come in various forms:

1. Regular mail

2. Phone calls

3. Emails


5. Social media services


Be advised that the IRS DOES NOT make initial contact with taxpayers by phone calls, emails, texts or social media.Information received through the mail that appears usual in any way should be checked out before responding to anything.You can speak with your tax preparer or call the IRS on one of their approved numbers (1-800-829-1040) to verify the authenticity of the mail.


Calling the IRS can be time consuming, but “it is better to be safe than sorry”.

If you would like additional information or assistance, please contact us by email at or phone at 516-483-3851. We will be more than happy to assist you.


Affordable Care Act - Premium Tax Credit

Geraldine Clahar - Friday, January 29, 2016


During the 2014 tax filing season I noticed that a number of taxpayers who obtained health coverage through the Marketplace and received healthcare premium credits did not qualify for those credits.I wondered why this occurred. The taxpayers had to repay most if not all of the credit received.Needless to say, it was very unpleasant news for these taxpayers.Even though the IRS was willing to work with the taxpayers in structuring installment repayment agreements, none was too happy to have to make the repayment.     

The Premium tax credit allowed is calculated based on:

  • 1.The total household income  
  • 2.The number of individuals in that household. 

The household income is not only the income received from wages, but ALL income that is reported on page 1 of the Form 1040 less federal adjustments (adjusted gross income), plus the foreign earned income exclusion, tax exempt interest and the portion of social security benefits excluded from taxable income.

From my observation, it appears that taxpayers considered only their W-2 income in estimating their earnings for the coming year.Most of them had income from other sources and when those earnings were added to their W-2 income, they were deemed to be ineligible for all or part of the credit and had to repay the portion for which they were not eligible.

To avoid having to repay any premium credit for which you are not eligible:

  • (a)Make sure that you have considered all your income sources as reported on your prior year’s tax return and any new sources you anticipate for the coming year.
  • (b)If you have already given your income estimate to the Marketplace and now realize that you might have underestimated your household income, contact your Marketplace representative, report the correct estimate of your household income and have them adjust the premium credit accordingly.

NB: If your household income decreases significantly you may be eligible for a larger premium tax credit reducing the portion of the insurance premium that you have to pay out of pocket each month.


Remember that the actual amount of premium credit you are entitled to, is calculated when your tax return is prepared.Your tax preparer is required to complete certain tax forms that assess your eligibility and calculate the amount, if any, of credit you should have received.Any overpayment of the credit will have to be repaid, but an underpayment will result in a refund from the federal government.

If you have questions or concerns about your eligibility for the premium tax credit, feel free to contact us through our contact page; call us at 516-483-3851 or email us at would be our pleasure to be of service to you.


Important Documents Needed For Your tax Returns

Geraldine Clahar - Thursday, December 31, 2015


The Internal Revenue Service is requiring that tax preparers be more vigilant in ensuring that taxpayers do have proper documentation for all income and expense items claimed on their returns.While we are not expected to audit returns, we should insist on being provided with original documentation that support what is being claimed.


Any item not supported by such documentation should be in writing and signed by the taxpayer.The following are some of the documentation that will be needed to properly prepare a return:

1.  Forms 1099-MISC (Miscellaneous income); 1099-DIV (Dividend income); 1099-INT (Interest income); 1099-S (Income –Sale of real estate); 1099-B (Income from sale of investments); 1099-C (Cancellation of Debt); 1099-K (Credit Card Information reporting); 1099-R (Pension distributions); 1099-SSA (Social Security benefits);

2.  Form W-2

3.  Form 1098 (Mortgage Interest statement)

4.  Form 1098-T (Tuition expense)

5.  Letters from donees of charitable contributions and copies of checks or proof of online payments

6.  Tax receipts or copies of checks for payment of real estate taxes paid by taxpayer

7.   Copies of check or cash receipts and invoices from doctors for all medical expenses

8.   Log of business and personal mileage for business use of personal vehicle

9.   Log of medical and charitable miles for the year

10. Log of gambling activities showing winnings and losses per event.Log must include who was with you at each event.

11.  Print-out from pharmacy of out of pocket prescription costs

12.  Invoices, checks and receipts to support all other expenses, business and personal that are claimed for tax purposes.

If you are not sure if a particular piece of documentation is needed, play it safe, bring it along with all your other tax documents.If you need any additional information or clarification, please contact our office.We will be more than happy to assist you.


What's Your USP?

G A Clahar - Friday, May 29, 2015

That question was posed to me by a consultant a few weeks ago. I was stumped!! I had never been asked that question before, so I had no idea how to answer. I have since learned that our USP is our Unique Selling Proposition or Unique Selling Point. It is that quality of service or product potential that sets our business apart from all others of its kind.


As a small CPA firm, we have always marketed ourselves as providing “quality, professional, personalized and affordable services” to all our clients, small or not so small. We offer the level of service normally seen in a larger firm, but without the ‘large firm’ price tag. That is how we have represented ourselves to our clients and that is how we present ourselves both in our appearance and the quality of the work we do. Our work must be thorough, complete and neat.


So, what is our USP? Having carefully thought about our unique qualities as a firm and studying the USP of other successful companies (Head and Shoulders: “You get rid of dandruff”; FedEx: “When it absolutely, positively has to get there overnight”, etc.) we will state our USP as follows:


“Large firm quality; Small firm price”

This is the image we portray to our clients and will continue to do so. It is a win/win for our clients and our firm.


Experience our USP. Call for an appointment and let us be of service to you.

What You Need to Know About ObamaCare

G A Clahar - Tuesday, October 01, 2013

The Patient Protection and Affordable Care Act (PPACA), aka: ObamaCare, was passed into law on March 23, 2010. The Act has been in the process of implementation since then and will continue to be implemented through 2022. The law was enacted to help millions of Americans obtain health insurance coverage, improve access for others, remove the burden that healthcare cost have become, and make the healthcare system more patient-oriented instead of industry-oriented.

Major plan benefits that have been improved or added by ObamaCare

1. Children may now remain on their parents’ health plans until they attain 26 years of age

2. After 2014 no one may be denied coverage or penalized because of pre-existing conditions.

3. Life-time limits have been eliminated

4. There will no longer be any out of pocket costs for preventive care

5. Insurance companies must justify large increases in insurance premiums and must control the amount of premium dollars that is spent on administrative costs

6. The waiting period for entry into a plan can no longer be more than ninety (90) days.

To improve access to services ObamaCare will, through the federal or state government, establish a Marketplace (Exchanges and SHOPs) where individuals, families and businesses who need insurance coverage may shop for, and compare plans and benefits offered by various carriers then select the plan that best suits his/her/its needs and pocketbook. Plans should be in place on January 1, 2014. Open Enrollment begins October 1, 2013 and ends March 2014. In subsequent years open enrollment will be October 15 thru December 7.

Large employers (50 or more full time equivalent employees) must offer health benefits to all full time employees or face a “pay or play” penalty, aka: employer shared responsibility payment. The enforcement of this penalty has been deferred to 2015. Individuals and families that neglect to obtain health coverage will be subject to penalties. These penalties go into effect in 2014.

All employers (whether you offer health insurance coverage or not) must provide employees with the ‘New Health Insurance Marketplace Coverage’ notice by October 1st, 2013. This notice informs employees of their health insurance options – through the employer or the Marketplace.

Certain employers must report the cost of group health insurance cost on their employees’ W-2’s beginning in 2012 per IRS regulations.

Tax Credit.
An Advanced Premium Tax Credit will be available in 2014 to individuals and families to assist with the cost of health insurance premiums. To utilize the credit individuals/families must meet the following criteria:

1. File a tax return

2. Enrolled in a plan offered through an exchange - No employer subsidy

3. Lawful resident

4. Not be eligible for any other acceptable coverage, eg. Medicare, Medicaid etc.

5. Household income less than 400% of the Federal Poverty Level (FPL)

6. Not enrolled in an available employer sponsored plan because it is unaffordable

7. Other eligibility rules may apply

Businesses (for profit and not for profit) with twenty-five (25) or fewer full time equivalent (FTE) employees may be eligible for a federal tax credit of up to 35% of premiums paid. See instructions to Internal Revenue Service Form 8941 for directions on how to obtain the credit.

The Exchange/Health Insurance Marketplace

The exchange is a pool of insurance carriers that will work cooperatively to offer health insurance plans to individuals, families and businesses. Offerings will range from very economical to Cadillac plans. Purchasers will be able to compare and contrast available plan options both inside and outside the Marketplace and choose the plan that fits the budget and need. Carriers in the Marketplace will accept qualifying tax credits in payment of premiums. The Marketplace will begin accepting online applications in October 2013.


G.A. Clahar, CPA  ·  1188 Village Ave., Baldwin, New York 11510  ·  Phone: (516) 483-3851