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Tax Tip of the Week | No. 413 | Learning From Prince’s $250 Million Mistake June 28, 2017

Posted by bradstreetblogger in : Deductions, General, Tax Planning Tips, Tax Tip, Taxes , add a comment

Tax Tip of the Week | June 28, 2017 | No. 413 | Learning From Prince’s $250 Million Mistake

Finally, over a year after the date of his death, a judge confirmed Prince’s six siblings to be his rightful heirs – after more than 45 people had come forward claiming to be his wife, children, siblings or other relatives.

Last year, the legendary musician passed away, leaving behind not only a legacy of unparalleled music, but also a $250 million fortune – with no will or estate plan to be found. With the long-anticipated announcement that his siblings will inherit his fortune, we’re reminded again of the importance of planning ahead and hiring trusted experts to carry out your wishes.

Whether you have people clamoring after your money or not, it’s important to consider hiring an expert to sort through the, at times, very complicated process of estate planning. There are DIY websites and software packages that may seem attractive (and cheap!), but more often than not, you get what you pay for. More complicated life situations, such as children from a prior marriage, children with special needs, or capital gains from property appreciation, require the hands-on insight of an expert.

It is important to have an unbiased third party look over your documents. Even U.S. Supreme Court Chief Justice Warren E. Burger, who died in 1995, should have relied on estate planning experts to prepare his estate plan – but instead he took it upon himself, and his family paid over $450,000 in taxes because of his errors.

To be better prepared than Prince and Chief Justice Burger, seek out the assistance of an attorney or a CPA to draft a will and do estate planning, respectively. An attorney will help you navigate a will, and a CPA is best positioned to help with more complicated estate planning.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 412 | Social Security Earnings Amount Increases June 21, 2017

Posted by bradstreetblogger in : Deductions, tax changes, Tax Planning Tips, Tax Tip, Taxes , add a comment

Tax Tip of the Week | June 21, 2017 | No. 412 | Social Security Earnings Amount Increases

For 2015-2016, the maximum wage amount subject to social security tax was $118,500.  For 2017, the maximum wage amount subject to social security withholding will be $127,200.

If you are an employee, this will be the wage amount shown in Box 3 of your W-2.

If you are self-employed, you will be subject to social security tax up to $127,200 of your net business income.

There remains no earnings limit subject to Medicare tax withholdings.  Any earnings for employees over $127,200 will still be subject to a 1.45% Medicare tax (2.90% Medicare tax if self-employed).

Especially for those who are self-employed, you may need to adjust your quarterly estimated payments.  As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 411 | Ohio Business Gateway Update June 14, 2017

Posted by bradstreetblogger in : General, Tax Tip, Taxes , add a comment

Tax Tip of the Week | June 14, 2017 | No. 411 | Ohio Business Gateway Update

The following is a recent article from the Ohio Society of CPAs on user improvements when using the Ohio Business Gateway—-

Ohio Business Gateway update: Improved Help & Case Management

The Gateway Modernization Project is not only focused on transforming the way transactions are completed on the Ohio Business Gateway, but also creating new features and functional enhancements to improve the Gateway’s user experience, reliability and efficiency.

One of the features that Gateway users identified as a major pain point was the Gateway’s help and case management functionality. Thus, the modernized Gateway will feature an entirely new help and case management system that will make finding and requesting help on the Gateway simpler.

Gateway users will now be able to request help, be presented with knowledge articles and open an individualized help case from anywhere on the Gateway, at any time.

Automated routing is also a component of the modernized Gateway’s case management system. For example, if a Gateway user opens a help case while completing a Commercial Activity Tax transaction, that help case will be automatically routed to a customer service representative with specific knowledge related to CAT.

Help case status updates will also appear automatically within the modernized Gateway. This will allow Gateway users and customer service representatives to correspond from within the Gateway. The conversation can be tracked and the case status updated accordingly.

Offering new and expanding existing ways to access help resources will decrease the amount of time Gateway users spend on activities not directly related to doing business. A revitalized and expanded case management system puts the Gateway Modernization Project one step closer to fulfilling its mission of making doing business in Ohio easy and efficient by providing e-government services that are simple and secure.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 410 | You Make The Call – Home Basis June 7, 2017

Posted by bradstreetblogger in : Deductions, General, Tax Preparation, Tax Tip, Taxes , add a comment

Tax Tip of the Week | June 7, 2017 | No. 410 | You Make The Call – Home Basis

You Make the Call is a monthly format of questions and answers our office faces on a daily basis.  We hope you will find these tips to be a quick and fun read.

QUESTION: Albert walks into our office and tells us that he bought a house from his parents. The house is worth $350,000, but his parents only made him pay $200,000. His parents paid $100,000 for this house a few years ago. After making several improvements, their adjusted basis in the home was $150,000 when they sold it to Albert. He did not assume any mortgages on the home. What is Albert’s basis in the home?

ANSWER: This is a part gift, part sale. Albert’s parents sold it for $200,000, and they gave him a gift of $150,000 ($350,000 FMV (fair market value) less $200,000 sales price). In a part gift, part sale, Albert’s basis is the greater of the amount he paid for it ($200,000), or his parent’s adjusted basis in the home ($150,000) at the time of transfer. Thus, his basis is $200,000.

Please note that the question and answer provided does not take into account all options or circumstances possible.  Call us if you find yourself in a similar situation.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.