Every person has a death tax allowance or exemption of $5,490,000 this year. If you die with total assets (net of any debts or liabilities) of less than $5,490,000, there is no death tax to pay. If the husband dies first and his total assets (net of debts) are only $1,490,000, his unused exemption is $4,000,000 and it can be …
Let’s Think About Funerals – By John R. Bullis
First a little background. One of my grandfathers started a mortuary in Hardin, Montana just over a hundred years ago. It is still run by family, currently one of my cousins. My father had many occupations, including being a mortician. When we begin planning for a funeral, one of the first decisions is a choice of wanting burial or …
What is the 3.8% Medicare Surtax? – By John R. Bullis
IRS Code Section 1411 charges 3.8% additional Medicare tax on unearned income of high earning taxpayers. That surtax is called earned income Medicare contribution tax or the Net Investment Income Tax. It is in addition to the regular income tax. The tax applies, in certain situations, on investment income such as interest, dividends, annuities, royalties and rents-unless it is …
Organize Your 2017 Tax Files – By John R. Bullis
It is can be easy to accumulate and save information that will help when your tax return is prepared. Here are some thoughts and suggestions that will save time for you in the future. First, put all tax related items in one place as the year goes by. It could be a drawer or a folder or a box or …
Thoughts on Gifting – By John R. Bullis
It is easier to give than to receive gifts. Depending on your circumstances and those of your children or grandchildren, maybe it is time to consider doing some special gifts. The gift tax ‘Annual Exclusion’ gifts are not taxable for gift tax purposes. That means the gift does not reduce the death tax exclusion (the amount you can leave behind …
Wife Held Not Liable for Fraud Penalties for Husband’s Illicit Business – By John R. Bullis
Bradley Ballard operated a sole owner business named Quik Copy. He specialized in the unauthorized duplication of copyrighted works. He concealed his piracy by dealing mostly in cash, not keeping any financial or business records except he had numerous bank accounts. IRS audited his 2008 and 2009 returns and did a bank deposit analysis. Total bank deposits were income unless …
Maybe it is Best to Keep Your 401(k) Account – By John R. Bullis
When someone changes jobs, or retires, they need to decide whether to keep the retirement savings account they have with the old employer, commonly known as 401(k). They do have the option or ability to “roll it over” or transfer to a new or an existing IRA account. Depending on the age and the goals and circumstances, it might be …
IRS “Offers in Compromise” – By John R. Bullis
A recent Tax Court case shows a little how Offers in Compromise work and don’t work. Denise Lloyd was the owner of an insurance brokerage business. The employment taxes were not paid for 2.5 years, a total owed of about $100,000. IRS can compromise (reduce) the tax liability in some instances. Doubt about the collectability that can be a reason …
If You Got This, You Owe Tax On it! – By Kelly J. Bullis
I thought it would be fun, while you’re nursing yourself back to normal health after last night’s celebration, to get some laughs at some of the stupid quirks in our current tax law. So, if any of these items below happened to you in 2016, congratulations! You owe tax on it! YOU GOT A GIFT CARD OF MORE THAN $25 …
Is It An Investment or A Business? – By John R. Bullis
Mr. and Mrs. Boree had a real estate business in Florida in 2002. They bought 1,892 acres of vacant land, borrowing most of the money to make the purchase. They did various development actions and requests for changes in zoning and subdivided the land from Jan. 2003 through 2006. They got planning approval to divide the land into 10 acre …