Stu chats TAX Reform with Win Damon on FM 96.3 Joppa radio

Tax reform is front and center these days as potential plans for reform are being pushed and are in ASAP mode.  As usual there are so many stories and claims to this extremely huge issue.  After reviewing dozens of articles I am hard pressed to find any that say that reform as it is currently being debated is going to be good for America.

The one argument the GOP continues to use is the “trickle down” theory which says cut tax on the richest and the fruits of the tax cut will trickle down to the masses.  This I find to be unequivocally untrue and in fact it did not work under Reagan or Bush and will fail again if enacted.  The rich and big corporations will get richer, the poor will get poorer, and the middle class will continue to shrink.  The cut will stimulate little job creation, will not repair our crumbling infrastructure, and will most certainly lead to vital cuts for programs such as medicare and social security as well as ballooning the already massive deficit.

In fact, I have not found one article advocating for these cuts that uses any “theory” besides trickle down.  See the articles below among many others that show how amazing these cuts are for the top 1/2 of 1%.  In fact the “pass through” tax break will provide massive tax cuts to the super wealthy.  Please read for yourself below.

http://www.businessinsider.com/trump-gop-tax-plan-middle-class-effects-tpc-analysis-2017-11

https://www.cbpp.org/research/federal-tax/republican-leadership-tax-plans-pass-through-tax-break-would-provide-massive  (From the Center on Budget and Policy Priorities)

I hope I am wrong but all the intellectual studies back up my claims.  Trickle down will fail and cause far higher inequality in America.  Again, I hope i am incorrect.

 

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About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Erock Tax lets plan for the 2016 Tax filing Season

Well folks it’s that time of year again:  Dreaded Tax Season.   Lot’s to think about as a new administration takes over.  Will tax cuts benefit you and your family or will the middle class get caught in the middle again in regards to taxes?

For you personally and professionally, it is always best to stay organized throughout the year when planning for your taxes.  Even if you do not open up all the envelopes that arrive each day in the mail it’s ok.  You can simply get a large 10 x 13 envelope and put all your tax documents in it when they come in.  When you are ready we will review all your pertinent forms, get your 2016 returns filed, and start planning for 2017 and beyond!

You see taxes are not about just filling in the forms and forgetting about it.    The planning process is often overlooked but it really is the most important part of the tax filing process, especially if you are self employed and/or pay estimated taxes.  If you plan correctly, you won’t get a huge refund or you won’t owe too much unexpected money come tax payment time.

Please reach out when you have questions; do not wait until you have all your tax documents! Do not let financial and tax issues stress you out.  Get the answers you need in a timely fashion.  You will be glad you did!

Stu has quick video message about the beginning of tax season

https://youtu.be/IHm4cagAF30

Listen below as Stu and morning guy Win Damon chat up this topic on WNBP FM Radio 106.1 in Newburyport, MA and streaming live at WNBP.com .

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

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April 15th! Tax Paying deadline, NOT the filing deadline!

Erock photo - Tax dayAs April 15th rapidly approaches, I see more and more tax folders and faxes and client documents come through my office.  With all of us leading more “complicated” lives, our tax returns have become more complicated as well.  But here is the main catch:  Do you know when your tax return is due?  If you said April 15th, you are wrong!

See, our world is filled with media over indulgence.  When one thing happens we see it all over the place in every news source over and over again.   It’s no different for the tax deadline so to speak.  April 15th is not the deadline to file your taxes. It never has been and never will be.  But, this is all you will hear from every newscaster and internet reporter from sea to shining sea. Not from me!

So what is this mystery day anyway?  April 15th is the day we need to settle up with Uncle Sam (and the state) for the previous year.  What does that mean usually?  Well it often means completing 80+ % of your tax return to see approximately what you owe.  Just the money is due, and often with one form that does not even have to be signed!  I put a form or 2 on my clients’ secure portal, they print the form(s) and mail to government with the amount due.  That is our only requirement for April 15th

So, why do people run to the post office on the 14th or 15th by midnight to file returns?  Because they are getting incorrect advice.  They are putting unnecessary stress on themselves to get something filed that they really don’t have to!  I am sure the lousy, hastily filled out forms that get filed that day have more mistakes and get questioned more than any other returns filed at different times of the year

“But I am going to get audited if I extend my return.”  FALSE. This is never been true.  The word extension makes people feel nervous and it has negative connotation in an area that already causes so much anxiety for many people.  So, let’s not use the word extension or extend.  Let’s use a new word, continue. You as a taxpayer can “continue” your return until October 15th, as long as you settle up with payment due on April 15th. Yes, continue is a much better word!

Listen below to Win Damon and I review this very topic on WNBP, FM 106.1 and WNBP.com every Tuesday at 8:20 AM

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Erock CPA Tax Tips – IRS Form 2106 Unreimbursed Business Expenses

erock - photos - expenses

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

IRS Form 2016 is used if you have expenses that you incur while working as an employee of a firm and you do not get reimbursed by your employer for these expenses.  These unreimbursed expenses can include auto and truck expense, unreimbursed business or office supplies, education, if needed to maintain your career, and business use of your telephone or computer.  There are complicated rules for employees who work out of their homes as well, so please seek competent advice when filing.  Once all expenses have been totaled, you still need to exceed a floor of 2% of your adjusted income before you can take any of these expenses as deductions.  Also, you may have these expenses limited by the alternative minimum tax (AMT) but that’s a story for a different blog!

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Erock CPA Tax Tips – IRS Form 2441 – Child Care Credit

erock - photos - childcare

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

 Anyone who has ever had to pay for child care realizes the overwhelming cost.  The IRS shares a little break to us with this cost by allowing us a credit on IRS Form 2441.  This item is a credit and is a direct reduction in total tax.  The care must be provided by a qualified caregiver and the total credit is limited to $1200 for two or more kids.  Most states take the deduction as well so there is usually a little savings on the state end, in addition.  While this is not a huge credit, it still helps families struggling with the rising cost of child care.  With more and more families with two working spouses or single parents, it is not a surprise the cost has skyrocketed!

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Erock CPA Tax Tips – Donating to Charity

you can help

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

Using the Schedule A of IRS form 1040, taxpayers are allowed to write-off cash and items donated to qualified charities.  The deduction is limited to 50% of Adjusted Gross Income and other items are subject to a 30% limit.

Donating non-cash items to charity has increased in recent years. Donating these items can clear out the clutter in your home without diminishing your cash on hand.  In fact, it would increase your cash as your tax bill will decrease from the additional tax deduction.  Donor Advised funds have also gained popularity, with the donor getting an immediate tax deduction for the donation while retaining the authority to determine how the money is donated from the fund over time.

For tax purposes, gifts to charity for over $250 have to be documented individually and the copy of the check needs to be included with the timely filed tax return.  Non-cash gifts over $5,000 generally need to be independently appraised and appraisers often get booked up as year-end approaches so please be aware of this time restriction when donating.  Non-cash gifts greater than $5,000 must be carefully detailed on IRS form 8283.  Be careful as this form has a higher potential of being audited.  IRS data shows that 60% of taxpayers do not comply properly with this part of the charitable law.

I have a client who recently hired a third party to help them analyze and appraise their artwork.  They will have to be careful when applying the deduction to their 2013 tax return.  If they donate the artwork and it is used by the donor organization, they get the fair market value of the donated item.  If they make the donation and the artwork is not used and is subsequently sold by the donee organization, the original owner of the artwork would get the lesser of the sales price or the fair market value of the art.

Donating appreciated investments to charity is a valuable money savings tool as well.  Many have portfolios or assets that have increased dramatically in value over the years.  Donors of these items or accounts get the full value of the deduction AND avoid paying taxes on the investment gain.  With the IRS, this is one of the best deals going!  Be careful with losing investments.  It is best to sell these first, thus harvesting the tax loss individually before donating to charity.

There are other complex trusts and investment vehicles that can be set up to donate to a charitable organization, so please explore these options with your advisor before making a hasty decision!

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Erock CPA Tax Tips – IRS Form Schedule E Rental Income & Expense

erock - photos - rentals

 Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

I have always said that there are two kinds of people, there are real estate investors, and everybody else!  Anyone who invests in real estate or has flow-through income from Corporations, Partnerships, or Trusts will use IRS form Schedule E to report their gains and losses.

On page one of schedule E, we report royalty and rental income as well as all expenses incurred while producing the real estate income.  Expenses include auto and travel to check on your property, materials and repairs, mortgage interest, taxes and utilities paid, as well as landscaping and snow removal, to name a few.  Depreciation is calculated as a write-off and is an extremely complicated part of the tax code so please be sure you amortize this expense properly.  There are also limits to the amount of loss you can take in the current year and this is called passive activity.  Be sure to consult your local tax advisor with help on this area of the tax return.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Erock CPA Tax Tips – Schedule D Capital Gains and “A Year and a Day”

ROI - return of invertelment concept in word tag

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

 We use IRS form Schedule D to track capital gains, both long and short.  There is a big difference between long and short when it comes to taxes, thus the term a year and a day.  Here is how it works:  First, we report the transaction by listing the number of shares, the name of the investment, when it was bought and for how much, as well as, when it was sold and for how much.  A gain or a loss is computed.  If the gain is short term, meaning the investment was held less than 1 year,  it is taxed at the ordinary income rate, which could be as high as 39.6%, + the potential 3.8% ACA surtax bringing the total tax paid on the item to 43.4%.  Then the state has to get factored in!

However, if the asset is held to a “year and a day”, than far more favorable long term gains tax rates are used and the top tax rate would be 23.8% including the ACA tax.  The 20+% potential tax savings makes the “year and a day” planning very prominent in many taxpayers lives.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Erock CPA Tax Tips – IRS Form Schedule C – Profit or Loss from Business

New business owner

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

 IRS form Schedule C is used for non-incorporated entrepreneurs to report their income and expenses.  It is a very detailed form and it is most important to consult with a trusted advisor who has experience with the self-employed individual or small business.  Here at Erock Tax we have done thousands of these returns over the years and can help you navigate the world of income and deductions.

Some of the key deductions on the form include advertising, car and truck expenses, legal and professional, office, meals and entertainment, telephone, and education expenses, if they are incurred to maintain your career, not to advance it.  These are just a few deductible items, and it is best to get set up to track your expenses as early in the calendar year as possible.  Budgeting is far too often overlooked by the small business entrepreneur, which can lead to more tax due come tax time!

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Erock CPA Tax Tips – IRS Form Schedule B Interest & Dividends

erock - photos - interestdividends

Tax Tips from Stu Steinberg – CPA, National Speaker & Financial Advisor

“Celebrating 25 Years in the Business”

 Schedule B is really one of the easiest forms of the whole bunch.  It includes interest and dividends earned on investments, i.e. unearned income.  Be sure to understand the difference between ordinary dividends and qualified dividends as the tax rate on the particular investment  can be affected.  New for 2013 returns:  This unearned income will also face an additional 3.8% tax if you are married and make more than $250,000 or you are single and make more than $200,000.  This is due to the Affordable Care Act.

 

 

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

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