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Tri-County Sentry
Friday
JANUARY 24, 2014
Questions to Ask When Shopping for a Tax Professional
(NewsUSA) - Although you may not have received all of your tax documents yet, it's not too early to start looking for someone to prepare your tax return. Remember, not all tax preparers are created equal. So, when shopping around, ask yourself a few important questions: 1. What kind of tax preparer should I look for? Enrolled agents (EAs), certified public accountants (CPAs), commercial firms and seasonal tax preparers are popular choices for tax preparation. However, only EAs, CPAs and attorneys can represent a taxpayer before the IRS. The money you may save using an unqualified preparer could be overshadowed by the tax you may pay if the unqualified preparer is unfamiliar with current, legitimate tax deductions and credits. Many states have no special licensing laws for tax preparers, but enrolled agents receive their authority from the federal government. They are "agents" because they are authorized to appear in place of a taxpayer in dealing with IRS audits, collections or appeals. Enrolled agents earn their credential by passing a comprehensive exam administered by the IRS that covers the broad range of tax issues that affect individuals and businesses, and how to represent clients before the IRS.
2. Is the tax preparer knowledgeable and up to date? Members of the National Association of Enrolled Agents (NAEA) are required to complete 30 hours of continuing professional education each year to maintain membership. This surpasses the IRS licensing requirement of 24 hours per year. Continuing education ensures that EAs keep abreast of constantly changing tax laws and regulations. Many EAs are also experienced in tax and financial planning, estate and trust services, small business consultation and more. 3. Is the tax preparer bound by any ethical standards? Enrolled agents are required to abide by U.S. Treasury Department Circular 230, which details the standards of professional conduct. EAs who violate the provisions of
Finance experts are elated as Joya O. Johnson, CEO of Positive Minded Sisters (PMS) Financial Services, LLC has finally rolled out her much anticipated Business Finance Suite to help AfricanAmerican owned business-
es obtain funding. Positive Minded Sisters (PMS) Financial Services, LLC has released a first of its kind cash and credit access system which provides business owners easy access to financing options of all kinds for their busi-
Preserving the American Dream of Homeownership By Charlene Crowell
Make sure your tax preparer has been trained properly. Circular 230 may be suspended or disbarred from practice. EAs are also subject to vigorous background checks before they receive their licenses. 4. What are your needs? Are you sure that you are getting all of the eligible deductions or tax credits? Perhaps it's been a while since you filed a tax return. Maybe you are one of the millions of Americans who started their own business, and this is the first time you are filing a business return. Enrolled agents prepare millions of tax returns each year and are an excellent resource for anyone seeking up-to-date information on all tax-related issues! Call NAEA's toll-free referral line at 1-800-4244339, or go to NAEA's website at www.naea.org to find a qualified EA in your area.
Financial Consultant to Help Black-Owned Businesses Obtain Funding
Joya O. Johnson, CEO of Positive Minded Sisters (PMS) Financial Services, LLC nesses. The Business Finance Suite has thousands of financing sources, and more access to money than any other stand-alone system in the world. The finance suite also provides the access to the largest supply of financial products that is available today. “Access to money has always been one of the biggest challenges a business owner faces,” Johnson says. “Through the finance suite entrepreneurs can quickly access the cash and credit they need to grow their business.” The Business Finance Suite provides unprecedented access to money for business owners. Virtually every type of known legitimate financing source is available through the suite. Positive Minded Sisters (PMS) Financial Services, LLC has coaches who help business owners access the cash and credit they need to grow their businesses. These advisors commonly have two decades or more experience in helping business owners obtains capital and build credit. CONSULTANT, See page 12A
Although many economists claim the recession is over, millions of Americans are still reeling from its financial effects. In particular, communities of color continue to be disproportionately affected by billion-dollar losses in family wealth. New mortgage rules, effective this month, offer a strong foundation to begin rebuilding what has been lost. These new rules will provide protections for consumers whether they are struggling with troubled mortgages, looking to buy a home or seeking access to credit. Summarizing the reasons for the new rules, Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) recently said, “Consumers want – and need – someone to stand on their side and provide safeguards against bad mortgage deals that ruin their credit, cost them their homes, and saddle them with additional problems. . . .No debt traps. No surprises. No runarounds. These are bedrock concepts backed by our new
common-sense rules that take effect on January 10.” A central part of the new rules is a new designation of a Qualified Mortgage (QM) that sets standards that apply to all lenders and covers about 95 percent of loans currently in the marketplace. QM loans are restricted from having the kind of risky features that caused the financial crisis. QM loans must be fully amortization, meaning that loan balances cannot increase as payments are made. Other key QM characteristics require that: • Loan terms cannot exceed 30 years; • Lenders are required to determine a borrower’s ability to repay the loan, reviewing consumer income and assets against debt and other obligations beyond an initial teaser rate; • Points and fees for the total loan amount are capped at 3 percent with an adjusted threshold for smaller loans; and • Lenders offering adjustable rate loans cannot use teaser rates to underwrite these loans and are to use the maximum rate
during the first five years of the loan. Another CFPB rule bans “yield-spread premiums,” the financial incentives formerly paid to brokers for steering borrowers into higher cost loans rather than those that were cheaper and for which they qualified. It is important to note that none of these new rules affects the required amount of a mortgage down payment. Secondly, these rules apply to new mortgages applied for after the January 10 effective date. For borrowers with existing mortgages, as well as future borrowers, other rules will now affect mortgage servicing, i.e. how house payments are collected and managed. Loan servicers must now provide borrowers with a monthly statement that shows the interest rate, loan balance, escrow account balance DREAM, See page 12A
U.S. Postpones 2014 Hike in Mortgage Fees
By Les Christie NEW YORK -- Planned fee increases that would have added to the cost of millions of mortgages will be postponed. Currently, borrowers seeking loans backed by Fannie Mae and Freddie Mac are set to pay higher upfront fees starting April 1. The fees, ordered by the Federal Housing Finance Agency, are meant to help safeguard banks against risky borrowers who might default. But housing experts say they will add thousands of dollars to the cost of all mortgages insured by Fannie and Freddie, with the biggest hits taken by borrowers with less than perfect credit histories. The new chief of the FHFA, Mel Watt, said he intends to postpone the fees -- and perhaps even cancel them -- until more analysis is done. The FHFA oversees Fannie Mae and Freddie Mac. Watt, a former Democratic member of Congress, has been confirmed to his post by the Senate and took office on January 6. In a statement, Watt said he intends to “evalu-
ate fully the rationale” for the fees and their impact on Fannie and Freddie and the “availability of credit.” The mortgage industry has been bracing for substantial increases in the price of loans in 2014. “If these [policies] had been implemented, it would have increased borrowing costs dramatically,” said David Stevens, CEO of the Mortgage Bankers Association. The hit for individual borrowers would depend on the amount of the home purchase being financed, according to Brian Koss, executive vice president at Massachusetts-based lend-
The latest Housing Scorecard from the Obama Administration shows progress on several fronts—notably home prices—but continues the familiar cautionary language in describing the recovery. The scorecard evaluates housing data from December 2013. The majority of such scorecards provided by the administration this year utilize the word "fragile" to describe the market, and this month's report follows the trend. “December’s Housing Scorecard shows that we
are continuing to make progress helping struggling home owners get back on their feet,” says Edward J. Szymanoski, associate deputy assistant secretary for economic affairs. “Since the beginning of 2012, the number of home owners underwater has declined by 5.7 million and homeowners’ equity has risen by 55 percent to $9.7 trillion. There remains more work to do to address the 6.4 million home owners who remain underwater; nevertheless, these are encouraging signs that the housing market recovery
New housing finance chief Mel Watt says he will postpone fee increases set for April.
er Mortgage Network. Borrowers would have paid a fee when they took out the loan, or they could have effectively rolled the higher fees into their interest rate, raising monthly mortgage payments by as much as a quarter percentage point. Even with the reversal, however, mortgages will probably get more expensive over the next few months anyway as the Federal Reserve cuts back on its purchases of mortgage backed securities, a program designed to keep interest rates low. Stevens, the mortgage industry representative, said the proposed increases made little sense. Defaults on mortgages made in recent years have been much lower than on those made before the housing crash. As a result, Fannie and Freddie are flush with profits, so much so that they have already returned almost all of their $187 billion taxpayer-funded bailout. “The GSEs are making a lot of money,” said Stevens. “There’s no rationale for the increases.” To top of page
White House Still Calling Housing Recovery 'Fragile'
is providing millions of American home owners with more economic security.” Each month, the report highlights how the Making Home Affordable program is performing. As of December 2013, nearly 1.3 million home owners have received permanent loan modifications through the Home Affordable Modification Program (HAMP). The report also showed that home values are on par with prices in early 2005, according to data from the Federal Housing Finance Agency.