Newsletter Topics

2019 Charitable Donations

on .

Taxpayers aged 70 1/2 (and older) can make Donations of up to $100,000 DIRECTLY from an IRA to a 510(c)(3) charity.
You don't get your hands on the money... it goes DIRECT.
This QCD (Qualified Charitable Distribution) is NOT TAXABLE but it DOES COUNT toward RMD (Required Minimum Distribution).

2018 Can Unreimbursed Employee Expenses be Deducted?

on .

Can unreimbursed employee expenses be deducted?

            No, not for a W2 employee. Any of the 2017 expenses and years prior that were subject to a 2% of AGI limitation are no longer deductible.

            Yes, for independent contractors.

            Yes, for Statutory employees.

The best example of a Statutory Employee is an outside insurance agent.

Statutory Employees | Internal Revenue Service

Apr 23, 2018 · Statutory Employees. An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done. A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors,...

I have never seen a mortgage agent classified as a statutory employee.

Now, what if you are both a W2 employee AND an independent contractor?

            No for employee expenses.

            Yes for independent contractor expenses.

BUT we are talking about the same business field. It would be fair if unreimbursed expenses should are pro-rated……

i.e. W2 $80k       Form 1099 Independent $5k

Expenses $4k

$80 + $5 = $85k

$4k/85k = 4.7%

4.7% x $4k expenses = $188 Sch C expenses to reduce the $5k F1099.


SEVEN states have no income tax... one more soon

on .

Tennessee may soon have NO income tax.
Now it taxes only interest from notes and bonds and dividends.
Recently the new law lowers the tax rate to 5% (from 6%) for 2016 and drops further
until the tax is gone at the end of 2021. 
There are SEVEN states with no income tax:
  •      Alaska
  •      Florida
  •      Nevada
  •      South Dakota
  •      Texas
  •      Washington (state)
  •      Wyoming


on .

Something BIG has changed effective Jan 1, 2015.
Old law... you could rollover each IRA once in a 12 month period.
New law... Limited to one rollover per 12-month period, regardless of the number of IRA accounts. (US Tax Court in Bobrow v Commissioner).

Primary Residence Sale after Death

on .

The rules about investing in a home of greater or equal value within a certain period of time after the sale are long gone (1997).
The current rules... if you lived in the home 2 our of the last 5 years from the date of sale, your GAIN can be up to $500,000 (married filing joint) or $250,000 (single)...
But what about if a spouse dies at the end of 2014, and the home is sold by the remaining spouse in 2015?
There is a special rule that allows the surviving spouse to use the $500,000 exclusion IF THE SALE OCCURS WITHIN 2 YEARS OF THE DATE OF DEATH.