FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER
Volume 3, Number 15, April 10, 2006
April is Financial Literacy Month, and a recent survey released by the Federal Reserve underscores the need to promote financial and economic education in our state, and across the nation. The survey revealed that high school seniors correctly answered only half of the survey questions on personal finance and economics.
Over the last two years, the Department of Financial Services has been actively involved with groups such as the Florida Council on Economic Education and Florida Jumpstart to do more than 60 presentations in high schools across the state to improve students’ financial knowledge and money management skills. Our department is also sponsoring a statewide essay contest for high school students, and has received nearly 500 entries.
While promoting financial literacy is critical among our young people, Floridians of all ages and economic levels deserve access to information they can use to make financial decisions, whether they are buying a car or a home, saving for a child’s college education or planning for retirement.
That is why I created http://www.yourmoneyyourlife.org – a one-stop resource center that offers high-quality information on a wide range of financial topics.
They say the two most important things you do in life, you don’t learn in school—how to be a parent and how to manage your personal finances.
There isn’t anything we can do about the former – waking up at 3 a.m. to feed a ‘bundle of joy’ is something everyone has to experience and learn for themselves – but we can arm Floridians with information they can use to make wise financial decisions.
-- Tom Gallagher
GALLAGHER: VICTIMS OF 2005 HURRICANES URGED TO TAKE ADVANTAGE OF SPECIAL TAX RELIEF
Nearly 116,000 Floridians Could Also Be Owed $162 Million In Refunds From 2002
TALLAHASSEE – Tom Gallagher, Florida’s chief financial officer, urged Floridians victimized by the 2005 hurricanes to make sure they are not missing out on favorable tax treatment for lost or damaged property. Free tax assistance is now available to determine if hurricane victims have a qualifying tax loss along with assistance preparing their tax returns. The program is available to those impacted by Hurricanes Katrina, Rita or Wilma.
“I’m urging hurricane victims to take advantage of every tax benefit available to help them rebuild their lives and homes, and improve their finances,” said Gallagher. “Tax benefits available this year could help Florida families at every income level.”
Volunteers at the IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites are now able to refer hurricane victims with relatively complex tax issues to participating members of the American Institute of Certified Public Accountants (AICPA) or the American Association of Attorney-Certified Public Accountants (AAA-CPA) for free assistance preparing tax returns.
The VITA and TCE sites originally were only staffed to help low-income and elderly Floridians prepare simple tax forms. This assistance has now been expanded to also help hurricane victims determine if they have casualty losses or to amend prior returns. To find the nearest VITA/TCE site call 1-800-829-1040.
Gallagher reminded victims of Hurricanes Katrina, Rita or Wilma wishing to claim disaster-related losses on their 2004-year federal income tax returns that they will have until October 16, 2006, to make this choice rather than the original April 17th deadline. “Often declaring losses on the prior year’s return can lead to a larger deduction,” he said.
Unreimbursed property losses caused by the hurricanes can be claimed on either 2004 or 2005 tax returns. Eligible losses include but are not limited to insurance deductibles, spoiled food caused by a power outage, or trees and landscaping that were replaced. Losses to homes, automobiles or property that were not fully covered by insurance may qualify for special tax treatment.
Other options that could result in a larger tax refund are special rules for victims of Hurricanes Katrina, Rita and Wilma that will ease the eligibility requirements for the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC).
Hurricane victims who made withdrawals from their retirement programs to pay for storm losses may be eligible for special treatment by the IRS, including waiving early withdrawal taxes. There is also a temporary suspension of limits on qualified charitable contributions made between August 28, 2005, and the end of 2005.
Gallagher said a tax break is available to Good Samaritans who took in victims of Hurricane Katrina for at least 60 days. A $500 exemption is available for each guest, up to a maximum of $2000.
Gallagher also encouraged Floridians to make sure they are not missing an opportunity to collect refunds on their 2002 federal taxes. To be eligible to collect these unclaimed refunds a 2002 tax return must be filed with an IRS office no later than April 17, 2006.
“Approximately 116,000 Floridians are eligible for unclaimed refunds on their 2002 federal taxes,” said Gallagher. “That’s $162 million that is sitting in the U.S. Treasury rather than working here in Florida boosting our economy.”
Many of the people who are due a refund had taxes withheld from their wages or paid tax on self-employed earnings, or had too little income to require them to file a return. There is no penalty on late- filed returns that are due a refund.
The IRS has issued a publication explaining changes to the tax law and relief provisions available to those affected by Hurricanes Katrina, Rita and Wilma. Floridians can access Publication 4492 by logging on to www.irs.gov or find it where IRS forms are distributed. The IRS has also set up a special help line to assist hurricane victims at 1-866-562-5227.
STATEMENT FROM TOM GALLAGHER REGARDING
LEGISLATION TO PROTECT SENIORS
The Senate Health Care Committee unanimously approved a bill that protects Florida seniors who purchase long-term and home health care insurance from sudden rate hikes and arbitrary claim denials.
The legislation, SB 2290 by Sen. Mike Fasano, would extend the same protections to seniors that Gallagher obtained for consumers who purchase health insurance from out-of-state group insurers during the 2003 legislative session. Specifically, the bill would protect policyholders from the practice of insurers that close blocks of coverage to avoid spreading the risk among a pool of insured seniors and then hike rates on the smaller, closed block.
“Seniors who responsibly purchase coverage to prepare for potential illnesses in future years should be protected from exorbitant rate increases and arbitrary claim denials, especially at a time when they need their coverage the most,” said Gallagher, who successfully obtained protections for consumers when purchasing health insurance during the 2003 legislative session. “I applaud state lawmakers for approving this important legislation for Florida seniors and their families.”
SB 2290 now heads to the Senate General Government Appropriations Committee. Its House companion is HB 1349.
OKEECHOBEE BATTLEFIELD TO BE PRESERVED
The debate may continue over who won the Battle of Lake Okeechobee, but the war was won recently when the governor and Florida Cabinet agreed to purchase a portion of the battlefield, designated as one of 11 most endangered historic sites in the United States. After 169 years, the Seminole Tribe and many others who have been fighting to preserve the site can enjoy an historic victory.
Gov. Jeb Bush and the Florida Cabinet unanimously agreed to spend $3.2 million to purchase 145.5 acres where Seminole and Miccosukee Indians and runaway slaves fought hand-to-hand with the U.S. Army on Christmas Day in 1837.
``The Battle of Okeechobee was the largest battle of the Second Seminole Indian War, and purchasing this land is an important step in preserving Florida history,'' said CFO Tom Gallagher after the Cabinet vote.
Preservationists have been worried that rapid growth in the city of Okeechobee would turn the site into a subdivision or shopping center. It is already situated between a community of homes and a commercial area..
The battlefield will become a state park. The Rowland Foundation is selling the site to the state through the Florida Forever program, which is designed to preserve endangered lands.
Future plans include living history events such as reenactments of the battle and public access to the park. The site will serve as an educational resource for the community and a heritage destination for tourists.
NATIONAL VOLUNTEER WEEK
Florida Department of Financial Services: Stepping Up and Stepping Forward
April 23 through 29 is National Volunteer Week. The theme for the week is “Inspire by Example” and the Department of Financial Services (DFS) is stepping forward to effect change in Florida communities. Volunteering is an ongoing opportunity to assist our fellow citizens, and raise the awareness that an individual can positively impact the lives of others.
DFS has answered this call with energy, time and money in a variety of ways. Service projects include mentoring young people and assisting in school tutoring programs, participating in the Relay for Life race to raise money for cancer treatment and awareness, participation in the Guardian ad Litem Program which helps at-risk children, and hosting blood drives for the American Red Cross.
Volunteerism is a year-round commitment. Our department's most recent accomplishment was participation in the United Way’s Florida State Employees' Charitable Campaign, which allows employees to contribute to various charities and organizations through payroll deduction. In 2005, the Department of Financial Services contributed more than $200,000 to the United Way. The department was honored to win the Leadership award for the highest percentage over goal for state agencies with more than 500 employees. The money raised from the campaign will support hundreds of local, state, national, and international charitable organizations.
"The employees of the Department of Financial Services are pacesetters and value their roles as public servants by giving of their time, money, and energy for the benefit of others," said CFO Gallagher, who oversees the department.