Berdon Blogs

SALT TALK: Every Day I Hear Knock, Knock, Knock - Oh and it's You

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Dec 11, 2017 11:43:00 AM

The year 2017 is accelerating to its end and, as usual, I’ve spent a good part of the year looking at everything through the thought-bending prism known as state and local taxes. Hence the reason for my thoughts to turn paranoiac while hearing one of my favorite songs from the band Spoon. I can guarantee that upon hearing “Knock, Knock, Knock” most others would not have the image in their mind of the state taxing authorities knocking on the front door of your home or business with their hand out.

Fortunately, I’ve been assured everything is ok, since paranoia is characterized by delusions of persecution. And based on what has been happening in the world of state and local taxes, there have been no delusions.

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TAX TALK: First Quarter 2018 Deadlines for Businesses and Other Employers

Posted by Michael Eagan, J.D., LL.M. on Dec 11, 2017 9:18:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2018.  Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

January 31

  • File 2017 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
  • Provide copies of 2017 Forms 1099-MISC, “Miscellaneous Income,” to recipients of income from your business where required.
  • File 2017 Forms 1099-MISC reporting nonemployee compensation payments in Box 7 with the IRS.
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Topics: TAX TALK

T&E TALK: Second Marriage? Time to Update your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Dec 11, 2017 7:03:00 AM

If you’re in a second marriage or planning another trip down the aisle, it’s vital to review and revise (if necessary) your estate plan. You probably want to provide for your current spouse and not inadvertently benefit your former spouse. And if you have children from each marriage, juggling their interests can be a challenge. Let’s take a look at a few planning tips.

Take Inventory

Have you updated your will, trusts, and beneficiary designations to name your current spouse where desired? Bear in mind that the terms of your divorce may require you to retain your former spouse as beneficiary of certain pension plans or retirement accounts.

Next, assess your financial situation and think about how you want to provide for various family members. For example, do you want to provide for all children equally? Will you favor biological children over stepchildren?

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Topics: T&E TALK

SALT TALK: Nexus Gone Crazy - Feds Need to Tell States to Put Down the Cookie (Ducky) [1]

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Dec 4, 2017 1:39:38 PM

Being a state and local tax practitioner has always been a stressful job. Stress eating is certainly understandable, especially around the holidays. But lately, it appears, some states have been trying to force cookies down our throats. Not the baked kind, but the electronic variety. 

As avid readers of my blog know, the states have been very creative in attributing the more than de minimus physical presence required by the U.S. Supreme Court in Quill [2] to internet retailers, so as to create sales tax nexus and require the retailers to collect sales tax.  Some of these approaches, especially those attributing the presence of a representative or agent to an otherwise out of state retailer, certainly seem to make sense, and if the Supreme Court were ever to decide to review agency-type nexus in the context of internet sales, my bet is the state taxing authorities would prevail.

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TAX TALK: Higher-Bracket Taxpayers can Take Advantage of 0% Long-Term Gains Rate

Posted by Michael Eagan, J.D., LL.M. on Dec 4, 2017 9:18:00 AM

We’re in the giving season, and if making financial gifts to your loved ones is part of your plans — or if you’d simply like to reduce your capital gains tax — consider giving appreciated stock instead of cash this year. Doing so might allow you to eliminate all federal tax liability on the appreciation, or at least significantly reduce it.

Leveraging Lower Rates

Investors generally are subject to a 15% tax rate on their long-term capital gains (20% if they’re in the top ordinary income tax bracket of 39.6%). But the long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate.

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Topics: TAX TALK

T&E TALK: Make the Holidays Bright with Annual Exclusion Gifts

Posted by Scott T. Ditman, CPA/PFS on Dec 4, 2017 7:02:00 AM

As the holiday season approaches, gift giving will be top of mind. While gifts of electronics, toys, and clothes are nice, making tax-free gifts of cash using your annual exclusion is beneficial for both you and your family. Even in this potentially changing estate tax environment, making annual exclusion gifts before year end can still benefit your estate plan.

Understanding the Annual Exclusion

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Topics: T&E TALK

SALT TALK: Year End Planning Tips – Taxing Reasons Not To Visit Your Relatives for the Holidays

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Nov 27, 2017 11:40:00 AM

The drive is too far and the traffic is horrendous.  Did you see those outrageous airfares?  I have a major deadline at work.  Didn’t we come to you last year; this year I have to go to the in-laws?  While all members of the Berdon SALT team are anxiously looking forward to traveling both to spend the upcoming holidays with our respective families, we know that some of our clients may not be as enthusiastic.  Our holiday gift to our readers is two-fold: firstly an excuse (at least a new one) not to attend that family function, and secondly, potential tax savings for using our excuse.

The excuse:  I can’t spend another day in (fill in the appropriate tax jurisdiction) because I will be taxed as a resident and owe an additional (please fill in the appropriate dollar amount) in personal income tax. Even worse, the House and Senate are currently weighing changes to state and local tax law so I’m not even sure where I stand!

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T&E TALK: Tax Reform and Estate Planning - What’s on the Table?

Posted by Scott T. Ditman, CPA/PFS on Nov 27, 2017 10:30:52 AM

As Congress and President Trump pursue their stated goal of passing sweeping new tax legislation before the end of the year, many taxpayers are wondering how such legislation will affect them. One area of particular interest is estate planning; specifically, the future of gift, estate and generation-skipping transfer (GST) taxes.

Potential Estate Tax Law Changes

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Topics: T&E TALK

TAX TALK: RMDs May Be On your Year End to-do List

Posted by Michael Eagan, J.D., LL.M. on Nov 27, 2017 9:20:00 AM

As the end of the year approaches, for taxpayers “of a certain age” with a tax-advantaged retirement account, as well as younger taxpayers who’ve inherited such an account, there may be one more thing that’s critical on your year end to do list: Take required minimum distributions (RMDs).

Risking a Huge Penalty

After you reach age 70½, you generally must take annual RMDs from your:

  • IRAs (except Roth IRAs), and
  • Defined contribution plans, such as 401(k) plans (unless you’re still an employee and not a 5%-or-greater shareholder of the employer sponsoring the plan).
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Topics: TAX TALK

SALT TALK: Republicans Insist SALT is Detrimental to our Health

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Nov 20, 2017 10:21:43 AM

Even though a 2017 study of Russian cosmonauts concluded that everything we thought we knew about salt might be completely wrong, the House and Senate are poised to pass tax legislation taking away our daily dose of SALT.  While salt (NACL or Sodium Chloride) is completely different from SALT (state and local taxes), I love them both and don’t want anyone other than my internist to limit my intake.  Neither the cosmonauts nor my internist have denounced science as of yet, so both opinions are still highly valued.

Now that the House of Representatives has passed their version of “tax reform” the extinction of the state and local tax deduction seems closer to reality.  As passed, the House Bill completely eliminates any deduction for state and local income taxes, but still allows property tax deductions up to $10,000.  The Senate version, still working its way to a vote, goes even further by eliminating the $10,000 window for property tax deductions.

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About Berdon Blogs

Our experts examine the latest trends, economics, business conditions and industry issues to provide timely information you need to maximize your tax advantages and meet your financial goals.

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T&E TALK: Gain insights into how changes in tax laws, shifts in the financial markets, and regulatory concerns will impact assets and affect preserving and transferring wealth.

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