Tax Deductible Teacher Expenses

With the school year now in full swing, teachers often pay for various expenses for which they don’t receive reimbursement. Fortunately, they may be able to deduct them on their tax returns. However, there are limits on this special deduction, and some expenses can’t be written off.  What are tax deductible teacher expenses? For 2019, qualifying educators can deduct some of their unreimbursed out-of-pocket classroom costs under the educator expense deduction. This is an “above-the-line” deduction, which means you don’t have to itemize your deductions in order to claim it. Tax deductible teacher expenses: eligible deductions Here are some details about the educator expense deduction: For 2019, educators can deduct up to $250 of trade or business expenses that weren’t reimbursed. (The deduction is $500 if both taxpayers...

Chris Martenson on the Economy

As  posted to the GoldSilver YouTube Channel on 10/9/19,  10/10/19 and 10/11/19 Chris Martenson on the economy from his home in Massachusetts with Mike Maloney of GoldSilver.com: Part 1 - End of the "Everything" Bubble In this first of a series of three videos, they discuss the general state of the economy since the last time they spoke together, and the importance of being prepared for "something big". (Run Time: 5 min, 09 sec) Part 2 - Silver & Gold as Portfolio Core . . . But What Else? In the second of this three-video series, Mike Maloney and Chris Martenson reveal that there is one asset apart from gold and silver that they are both looking to accumulate. What could it be? At what valuation will they trade gold...

Health Care Fraud is Alive and Well in America

Even if you haven’t heard much about it lately, know this: Health care fraud is alive and well in America. Here’s a roundup of recent stats, law enforcement initiatives, common fraud schemes and how you can help prevent these crimes. Just the facts During fiscal year (FY) 2018, the Health Care Fraud and Abuse Control Program (a government initiative that coordinates federal, state, and local law enforcement) won or negotiated over $2.3 billion in health care fraud judgments and settlements. During the same period, the Department of Justice (DOF) opened 1,139 new criminal health care fraud investigations. In addition, the DOJ filed charges in 572 criminal cases. What does this mean for you? The National Health Care Anti-Fraud Association estimates that health care fraud costs the nation at...

Tax Implications of Company Cars

The use of a company vehicle is a valuable fringe benefit for owners and employees of small businesses. This benefit results in tax deductions for the employer as well as tax breaks for the owners and employees using the cars. (And of course, they get the nontax benefits of driving the cars!) Even better, recent tax law changes and IRS rules make the perk more valuable than before.  But what are the tax implications of company cars? Tax implications of company cars: here’s an example Let’s say you’re the owner-employee of a corporation that’s going to provide you with a company car. You need the car to visit customers, meet with vendors and check on suppliers. You expect to drive the car 8,500 miles a year for...

Taking Traditional IRA Distributions

If you’re like many people, you’ve worked hard to accumulate a large nest egg in your traditional IRA (including a SEP-IRA). It’s even more critical to carefully plan for taking traditional IRA distributions. Knowing the fine points of the IRA distribution rules can make a significant difference in how much you and your family will get to keep after taxes. Here are three IRA areas to understand: Taking early distributions. If you need to take money out of your traditional IRA before age 59½, any distribution to you will be generally taxable (unless nondeductible contributions were made, in which case part of each payout will be tax-free). In addition, distributions before age 59½ may be subject to a 10% penalty tax. However, there are several ways...

Should You Elect S Corporation Status?

Operating a business as an S corporation may provide many advantages, including limited liability for owners and no double taxation (at least at the federal level). Self-employed people may also be able to lower their exposure to Social Security and Medicare taxes if they structure their businesses as S corps for federal tax purposes. But not all businesses are eligible — and with changes under the Tax Cuts and Jobs Act (TCJA), S corps may not be as appealing as they once were.  Should you elect S corporation status? Compare and contrast The main reason why businesses elect S corp status is to obtain the limited liability of a corporation and the ability to pass corporate income, losses, deductions and credits through to shareholders. In other words,...

Beware Pump and Dump Schemes

When the value of a stock skyrockets, its investors may think they’ve hit the jackpot. But if the stock in question is part of a “pump and dump” scheme, investors may, in fact, lose their shirts. Here’s how to avoid getting taken by this type of investment fraud. Beware pump and dump schemes! A penny for your stocks In the typical pump and dump scam, a fraud perpetrator buys shares in an inexpensive, relatively illiquid stock (often referred to as a “penny” stock) whose price will react dramatically when trading volume increases. Then the crook makes false or misleading statements to encourage people to sink their savings into the stock and drive up its price. When it hits a certain dollar amount, the fraudster sells, locking in...

A Poorly Worded Apportionment Claus

Federal estate tax liability is no longer an issue for many families, now that the gift and estate tax exemption stands at $11.4 million for 2019. But there are still affluent individuals whose estates may be subject to hefty estate tax bills. If you expect your estate to have significant estate tax liability at your death, it’s critical to include a tax apportionment clause in your will or revocable trust.  That's because a poorly worded apportionment clause, or no apportionment clause can upend an estate plan. An apportionment clause specifies how the estate tax burden will be allocated among your beneficiaries. Omission of this clause, or failure to word it carefully, may result in unintended consequences. How to apportion estate taxes There are many ways to apportion estate...

Innocent Spouses May Get Tax Relief

When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can come after either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes any tax deficiency that the IRS assesses after an audit, as well as any penalties and interest. (However, the civil fraud penalty can be imposed only on spouses who’ve actually committed fraud.)  So, if you’re married and file a joint return, what happens if your spouse doesn’t disclose all of his or her income or otherwise doesn’t pay the correct tax owed? You’re generally liable for the full amount, but...

Steps to Take if an SSA No-Match Letter is Received

What should you do if an SSA no-match letter is received by your business? In the past few months, many businesses and employers nationwide have received “no-match” letters from the Social Security Administration (SSA). The purpose of these letters is to alert employers if there’s a discrepancy between the agency’s files and data reported on W-2 forms, which are given to employees and filed with the IRS. Specifically, they point out that an employee’s name and Social Security number (SSN) don’t match the government’s records. According to the SSA, the purpose of the letters is to “advise employers that corrections are needed in order for us to properly post” employees’ earnings to the correct records. If a person’s earnings are missing, the worker may not qualify...