January 7, 2017
From time to time, clients will ask me to check out investment opportunities. And for avoidance of doubt, I do so not to recommend an investment and certainly not to sell investments. I am not a financial advisor. But being in the finance professional industry, it's shop talk.
So let's talk about Richardson Electronics. RELL is its stock quote symbol....
January 3, 2017
Now is the time to seize the day. Okay - maybe we are a few days too late. If your head has been under a rock for the past two months - let me fill you in.
We have a Republican as president elect. We also have Republican majorities in the House and Senate. The top legislative agenda topics I have heard are to repeal Obamacare (Affordable Care Act) and to...
February 17, 2016
Believe it or not, even the IRS can have compassion in your more desparate times. The Offer in Compromise process allows taxpayers who truly have no chance of paying off their tax debts in a reasonable (six years) period of time. The general premise is that the IRS will settle debt outstanding, but it's not quite like what you see on television. While I guess it's possible...
January 27, 2016
Most people who purchase life and/or disability insurance policies have excellent intentions. They want to protect their loved ones, lessen estate/gift taxes, enhance retirement income and lower income and capital gain taxes, among other reasons. Unfortunately, after they make the initial purchae, they put those policies in a file cabinet and the annual statements end up in the...
January 26, 2016
Having done this since 2011, I have compiled a list of tips, in no particular order, for your consideration during our time together. This list is not based off of some internet forward. This list is unique to me. Admittedly, I have some pet peeves. I am also a very direct person. Perhaps it’s the New Jersey, but I figure that it may be helpful to disclose...
January 1, 2016
Happy New Year and welcome to 2016!
This new year brings forth an amazing new tax extenders bill passed just before the Christmas holiday. Of specific interest to many of my clients, the key provisions included:
- keeping the section 179 expenses and making them permanent. At least now we have consistent guidance for us to plan. For the past few years,...
December 10, 2015
Using the unusual venue of an e-mail, IRS has sought to assure charitable organizations that proposed regs issued in September wouldn't make mandatory changes to the way donees currently acknowledge charitable gifts of $250 or more. The proposed regs would merely implement an optional donee reporting procedure, authorized by Code Sec. 170(f)(8)(D), for substantiating such charitable...
December 2, 2015
The Employment Development Department (EDD) reminds employers that they must provide employees with a federal Wage and Tax Statement (Form W-2) by January 31 (unless the due date falls on a Saturday, Sunday, or legal holiday, in which case the due date is extended to the next business day) pursuant to Cal. Unemp. Ins. Cd. § 13050 . Failure to provide a Form W-2 to each employee, or...
November 10, 2015
Periodically, folks will ask me investment oriented questions. My first response is that I'm a tax advisor. I make tax specific recommendations and I avoid making specific investment recommendations. Sure, I'll tell a younger person that they shouldn't keep their money under the mattress or a person on social security that they should scale back their emerging market...
November 6, 2015
Less than a day after winning the post recently vacated by Paul Ryan (R-WI), new Ways and Means Committee Chairman Kevin Brady (R-TX) was called on by major industry groups to address the currently expired temporary tax provisions known as extenders. This article provides an overview of extenders and some background on Chairman Brady that may shed some light on how he will choose to address...
November 5, 2015
U.S. pharmaceutical company Pfizer Inc. and Irish Botox maker Allergan Plc have publicly indicated that they are engaged in “friendly” merger talks, reflecting Pfizer's second major attempt in as many years to shift its headquarters out of the U.S. in a so-called corporate inversion. Although IRS issued administrative guidance last year in efforts to make it more difficult for...
November 4, 2015
Living in Southern California, you'd think that we wouldn't talk about the weather. Wrong. We talk about the weather all the time. When it's 82 degrees, it's too hot. When it's 78 degrees, it's too cold. We need the rain, but as soon as it gets cloudy, we get cranky and ask for the return of Apollo. I digress.
Our forecasters have had something to...
October 30, 2015
If for everything there is a season, then November is planning season. In my practice, November is the time in which I begin planning how I want my next tax season to go. In fact, I'll spend much of this week at a conference learning about the upcoming rule changes and more. When I'm out of the office for a few days, it becomes remarkably easier to think about the buisness I...
October 30, 2015
What would a presidentail election cycle be without idealistic candidates preaching the values of a flat tax and to throw away the Internal Revenue Service and the Internal Revenue Code. While I am fully aware of the complexities of the tax code and some of the potentially questionable behavior of the folks at the Service, there are a couple of things to consider before you buy into the...
October 23, 2015
The Internal Revenue Code has long since included a provision that you are taxed on your WORLDWIDE income - from WHATEVER source derived. In fact, it was the IRS that brought Al Capone because of tax matters (failure to report income). To facilitate "voluntary" compliance, Congress passed FACTA which imposes all kinds of gnarly penalties for folks stashing money offshore and...
October 23, 2015
When I'm asked a question three times in a week, it's time to do a blog post about it. 529 plans take their name from the section of Internal Revenue Code that governs their use. Officially, they are called Qualified Tuition Programs and they allow for the prepayment of higher education costs on a tax-favored basis.
There are two types of programs: prepaid plans,...
October 20, 2015
Year end is tax planning time. For those taxpayers that make more than $250,000 ($200,000 if you're single), you may have some exposure to a 3.8% net investment income tax. This tax is assessed on your passive investments (i.e. bank interest, dividends, annuities, royalties, etc). Real estate has other rules that MAY apply depending on whether or not you're actively...
October 19, 2015
So you open up your mail and you see three words that drive fear into even the most honest people – Internal Revenue Service. The letter reads something like – your return has been selected for examination – as if you’ve won a prize. They let you know that you have rights, which are indeed important. After you pick yourself off the floor –...
August 10, 2015
The recently enacted “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (P.L. 114-41) contains significant changes to filing deadlines and extensions for certain business and special entity tax returns. Tax practitioners can use the following letter to provide clients with information about those changes.
On July 31, 2015,...
July 31, 2015
I admit, I ever have been a fan of Boston teams. I wouldn't even lay claim to being a sports enthusiast. But Boston teams can just rot - Bruins, Pats, Red Sox - rub me the wrong way. So, to hear that the NFL commissioner upheld his 4-game suspension and fined the Pats a $1 million, actually brightened my day. The notion that Kraft was wrong to trust the NFL or that...
July 29, 2015
I recently attended a seminar hosted by MFS Mutual Funds. The presentation reviewed some of the top IRA planning mistakes. I've added a couple based on my experience as well.
- Not taking advantage of the Stretch distribution option or not establishing it properly. The Stretch IRA is a way for each IRA beneficiary to maximize payouts over his or...
July 24, 2015
12 TIPS: HOW TO LOCATE PROPERTY WITHIN CALIFORNIA
How to Make the Right Choices when Acquiring New Assets.
1. Distressed properties. These offer the best opportunities for creating value. Be sure to avoid floor-plan obsolescence and structural problems. Analyze the property as if you were going to live in it. Be aware of properties with major structural problems....
July 16, 2015
The following is a summary of important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
July 16, 2015
In her midyear report to Congress, National Taxpayer Advocate (NTA) Nina Olson reviewed the 2015 filing season and identified a number of priority issues the Taxpayer Advocate Service (TAS) will address in the upcoming fiscal year. Key areas highlighted in the report are IRS's long-term strategic planning, tax-related identity theft, and administration of the Patient Protection and Affordable...
June 26, 2015
The Supreme Court, in a landmark 5-4 decision, has ruled that same-sex marriage is a right guaranteed by the 14th Amendment and that a States are thus required to both license a marriage between two people of the same sex and recognize a lawful same-sex marriage performed out-of-State. (Obergefell v. Hodges)
The majority opinion, written by Justice Kennedy and joined by Justices...
June 12, 2015
One key provision from the ARRA of 2009 included a 30% tax credit for installing solar panels for both businesses and homes. So, if you take an average home installation of $30,000, that means, the taxpayer would get a non-refundable credit of $9,000 on their tax return. A nonrefundable credit means that if you don't have a $9,000 tax bill, then your credit is suspended until next...
June 10, 2015
On June 9, I changed up the format of my newsletter. Scott Robertson, who heads up Robertson Communications, who happens to be on distribution, cared enough to send some kudos to me on changing up the format. He was also kind enough to share some tips in terms of blog writing that I thought were solid tips.
- Make certain that your contents who you are.
June 10, 2015
Many clients have approach me regarding the merits of self-directed IRAs. These accounts allow normal folks to pick and choose the investments of a retirement account. Most commonly, a self-directed IRA will take a position in real estate, like owning an apartment building. Some folks have gone out to invest in new business ventures. Say, you've worked and mustered up...
June 1, 2015
As you may have heard by now, the IRS issued a statement in which it announced that criminals gained unauthorized access to information on approximately 100,000 tax accounts through IRS's “Get Transcript” application. The data included taxpayers' Social Security information, date of birth, and street address.
It's important to realize that perpetrators gained...
May 19, 2015
Here are ten strategies you can deploy to manage your tax bill:
- Max out retirement plan contributions - both define benefit and defined contributions
- Consider a Roth IRA conversion
- Review highly appreciated assets
- Give increased attention to buy-and-hold strategies
- Augment your tax-advantaged investments with muni...
Quick poll - how do you feel about your tax bill?
May 1, 2015
We have seen an increase in the number of CP2100A letters issued by the IRS. This is the letter issued when the social security number listed on an information return, such as a 1099-MISC or a W-2, doesn't match the name per the social security administration.
The letter is cryptic, hard to read and hard to know the right thing to do. Kind of like the rest of...
April 30, 2015
While I still advocate for captive insurance in the right circumstance, one of the key elements of a captive insurance company is that it has to actually be a real insurance company. Real insurance companies have multiple policyholders and claims. Insurance companies take on risk (and then sometimes offload said risk by way of reinsurance). And barring really bizarre events,...
April 29, 2015
So many of my clients did well in the market this year. Quite frankly, I was impressed. However, some folks were less than impressed with the governments share. Since it can be a shock to the system, let's take a look at how you can mitigate the tax burden. Keep in mind that a gross rate of return is great - but how much of it are you taking home. It can be confusing to parse it all out, but it's your money. Fight for it. My friend and colleague Andrea Casaw had some interesting thoughts on the matter.
April 10, 2015
If I look up the definition of Capital Loss Carryover, I get the definition below:
The net amount of capital losses that aren't deductible for the current tax year but can be carried over into future tax years. Net capital losses (total capital losses minus total capital gains) can only be deducted up to a maximum of $3,000 in a given tax year. Any amounts...
April 8, 2015
Higher income taxpayers, particularly wage earners are now subject to Clinton-era phaseouts of itemized deductions. Please read on to learn more.
US Tax Court
April 8, 2015
US Tax Court involving MBA tuition - Blair v. Commissioner
April 8, 2015
Thank you for the opportunity to be of service to you. When sending in your tax documents, please be sure to consider the following:
- Social security number(s) and date(s) of birth for everyone that will appear on your tax return
- Amount of any alimony paid and ex-spouse's full name and social security...
April 1, 2015
Income State Summary by State
March 25, 2015
In this world, nothing can be for certain except death and taxes. Oh Uncle Ben - if you only knew!
Wage earners have little choice in terms of withholdings. Their employer, in accordance with federal and state law, in conjunction with how you've completed Form W-4, will withhold and make estimated tax payments on your behalf throughout the year. It's prety straight...
March 25, 2015
While this sort of plan is likely not appropriate for most of my client base...today...my sneaky suspicion is that it will become quite relevant in the coming years. A CLAT (more formally known as a charitable lead annuity trust) is a trust that allows your to contribute to your favorite charity in a very efficient manner. What do I mean exactly? Read on.
March 25, 2015
From a colleague of mine off of a new clients pre year's return
General Footnote to Form 1040
Over the years, we have found it a best practice to provide information about certain deductions and situations to the IRS with the return so the IRS doesn't have to come and ask. This approach has been tailored to the IRS concerns and taxpayer needs for understanding and...
March 13, 2015
Every year while reviewing consolidated broker statements, I go through an exercise of reviewing all of the stock transactions. As a result, every now and then, I'll see a code "W". Now, code "W" on a broker statement means a wash sale. Now taking a bath on a stock is never a good thing - including in wash sales.
Under these rules if you sell stock for a loss...
March 5, 2015
As part of the MBA tuition deduction, which represents a good chunk of my tax practice, folks will ask whether or not they qualify. This really hinges typically on one key point -- does the MBA qualify the student for a new trade or business.
It is a great question that is asked many times each year. In general, education is not deductible if it is part of the minimum skills...
March 5, 2015
It was indeed pretty cool that in 2005 my brother and I became parents just a few months apart. After all, with a four year age difference, we were always one step apart in life's events. I entered high school, he went to college. I entered college, he graduated, etc. For the first time, we went through life's events at the same time.
There was, of...
March 5, 2015
Some of the lovely things I hear in my practice - entertaining, but not true.
February 19, 2015
Flimmakers, Video Makers and Animators: Use this list to help organize your film tax, video tax, and animation tax preparation.
This is a basic list of typical expenses incurred by film and video makers and animators. You may have others.
January 12, 2015
Recently, President Obama announced his proposal to make community college education free for those willing to work for it (https://www.youtube.com/watch?v=d-QDfEMXAgk). Now, of course, details are preliminary about who would be covered and how the government would pay for the program. And, we can argue about the need...
January 5, 2015
Nowack is excited to announce the recent launch of our firm’s new website. We’ve been working very hard to enhance our website and give our firm a fresh look. We’ve also continued to research and identify the latest and greatest technologies to improve the services we provide and ensure we continue to meet your needs.
Take a moment to look around our new website and...
December 5, 2014
Within every industry, there are expenses that employees incur that are seldom reimbursed by their employer. Some fitness instructors are employees, while others are independent contractors. This article isn’t to debate the difference between an employee versus an independent contract. However, it is an article of commonly incurred expenses that you should take to your tax professional...
November 11, 2014
To comply with California and Federal requirements, small nonprofits (less than $25k in receipts for California nonprofits) can file a “postcard.” We would need the following data points:
California Corporation number
November 6, 2014
1. Welcome to the accounting department, where everybody counts.
2. What does CPA stand for? Can’t Pass Again.
3. It’s accrual world.
4. It’s 4:04. Do you know where your auditor is?
5. Where do homeless accountants live? In a tax shelter.
6. A fine is a tax for doing wrong. A tax is a fine for doing well.
7. How do you know...
October 30, 2014
In 2015, Various Tax Benefits Increase Due to Inflation Adjustments
October 30, 2014
As if the process of getting married isn’t complex and difficult enough, prospective spouses also need to take income tax considerations into account before tying the knot. That’s particularly true for those who plan to marry late this year or early next year. From a federal income tax standpoint, those marrying next year may come out ahead by deferring or accelerating income,...
October 11, 2014
The IRS has seen a recent increase in local phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims.
October 6, 2014
Most folks know that when you make a charitable contribution that keeping receipts is important. One taxpayer found out the hard way of when keeping receipts isn’t enough. The tax court recently ruled against a taxpayer who had claimed about $27,000 worth of charitable contributions. The deduction was disallowed because he did not obtain an appraisal as required by for contributions...
October 3, 2014
Congratulations! You are a newly minted college graduate! The world is your oyster. You are finally earning above minimum wage. Dare I say you are finally earning money and now you’re financially independent.
Okay, let’s not get crazy. You might not be financially independent. But before you start spending yourself to oblivion, let’s go over basic...
October 2, 2014
Year-end tax planning is especially challenging this year because Congress has yet to act on a host of tax breaks that expired at the end of 2013. Some of these tax breaks may be retroactively reinstated and extended, but Congress may not decide the fate of these tax breaks until the very end of this year (and, possibly, not until next year). These breaks include, for individuals: the option...
September 30, 2014
So, here we are again. The White House is saying that corporations that pursue an off shore tax inversion strategy are unpatriotic and taking away from hard working Americans. It’s a populist statement. But here’s the problem…it’s absolutely legal and part of the Internal Revenue Code. Let’s think about that. A law was passed that made tax inversions an...
September 27, 2014
As the final quarter of the year approaches, more season taxpayers need to keep a careful eye on their required minimum distributions (RMDs) for the year, as a stiff penalty applies to those who don’t withdraw enough from their retirement accounts. This article explains the rules that apply and offers a strategy for those older taxpayers who would be interested in using the qualified...
April 17, 2014
Last week, I received a call from a client. Let’s call him Bill. It’s not his name, but that’s okay. Anyway, Bill calls and says he received a letter from the Internal Revenue Service saying that they have a refund check ready to send to him in the amount of over $8,000. That night, I go onto the Internal Revenue Service website and pull down the transcript. It doesn’t...
February 27, 2014
Kathryn Stockett got 60 NOs in her pursuit to get her novel ‘The Help’ published! Her passion for the book drove her to obsessive behaviors as she described in a recent MORE Magazine blog post on Shine. She describes how she at first shared her goal with friends and family – great for accountability. Then...
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