Berdon Blogs

T&E TALK: Who Should Own Your Life Insurance Policy?

Posted by Scott T. Ditman, CPA/PFS on Oct 30, 2017 7:00:00 AM

If you own life insurance policies at your death, the proceeds will be included in your taxable estate. Ownership is usually determined by several factors, including who has the right to name the beneficiaries of the proceeds. The way around this problem is to not own the policies when you die. However, don’t automatically rule out your ownership either.

It’s important to keep in mind the current uncertain future of the estate tax. If the estate tax is repealed (or if someone doesn’t have a large enough estate that estate taxes are a concern), then the inclusion of your policy in your estate is a nonissue. However, there may be nontax reasons for not owning the policy yourself.

Plus and Minuses of Different Owners

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Topics: T&E TALK

TAX TALK: Two ACA Taxes that May Impact Your Executive Compensation

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 23, 2017 12:19:09 PM

If you’re an executive or other key employee, you might be rewarded with restricted stock, stock options, or nonqualified deferred compensation (NQDC). Tax planning for these forms of executive compensation is generally more complicated than for salaries, bonuses, and traditional employee benefits. And planning gets even more complicated if you could potentially be subject to two taxes under the Affordable Care Act (ACA):

1) the additional 0.9% Medicare tax, and

2) the net investment income tax (NIIT)

These taxes apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers.

Additional Medicare Tax

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Topics: TAX TALK

SALT TALK: Traps in Transactions - Don’t Stumble Over a Good Deal

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 23, 2017 12:07:29 PM

At Berdon, we promote a culture within the Firm and with clients to be up-to-date regarding what our clients are planning for themselves and their businesses. This ensures that we assist in maximizing the efficiency of a given transaction, and safeguards against some common mistakes that can be prevented if addressed upfront, can be prevented.

These common foot faults span the gamut of all types of taxes. What might be a mistake in one state could be the optimum result in another.

Let’s consider real property transfer taxes.

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Topics: SALT TALK

T&E TALK: A Crummey Trust Can Preserve the Annual Gift Tax Exclusion

Posted by Scott T. Ditman, CPA/PFS on Oct 23, 2017 7:00:00 AM

Traditionally, taxpayers have looked for ways to make the most of the $14,000 annual gift tax exclusion, and using a Crummey trust is one way to do that. But with the federal gift and estate tax exemption currently at an inflation-adjusted $5.49 million and the possibility of an estate tax repeal, it may seem that the annual exclusion is less relevant than ever before. Or is it?

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Topics: T&E TALK

SALT TALK: Counting Days - The Sun May Actually Rise in the West

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 16, 2017 10:15:21 AM

While most of us think of a day as the interval of light between two successive nights, taxing jurisdictions that look to the statutory residency test certainly had something much shorter in mind.  While the New York statutes don’t bother to define what constitutes a day for purposes of the count, the regulations clearly state that “presence within New York State for any part of a calendar day constitutes a day spent within New York. . .”

Despite the broad reach of the regulations, two very limited exceptions are carved out. 

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Topics: SALT TALK

TAX TALK: Accelerate Your Retirement Savings with a Cash Balance Plan

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 16, 2017 9:18:00 AM

If you are a business owner, you may not be able to set aside as much as you’d like in tax-advantaged retirement plans. Typically, you’re older and more highly compensated than your employees, but restrictions on contributions to 401(k) and profit-sharing plans can hamper retirement-planning efforts. One solution may be a cash balance plan.

Defined Benefit Plan with a Twist

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Topics: TAX TALK

T&E TALK: Tax Law Uncertainty Requires Estate Plan Flexibility

Posted by Scott T. Ditman, CPA/PFS on Oct 16, 2017 7:00:00 AM

Events of the last decade have taught us that taxes are anything but certain. Case in point: Congress is again mulling abolishing estate and generation skipping taxes as part of tax reform. So how can people who hope to still have long lifespans ahead of them plan their estates when the tax landscape may look dramatically different 20, 30, or 40 years from now? The answer is by taking a flexible approach that allows you to hedge your bets.

Conflicting Strategies

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Topics: T&E TALK

SALT TALK: Life Coaching, GPS or Tax Planning

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 9, 2017 11:36:44 AM

What do these three items have in common?  Depending on whom you ask, they can all help you find your way.  Not knowing much about life coaching, and as a male being devoid of the gene to ask directions (even from an inanimate object), I tend to be most helpful providing direction in the form of tax planning.

In an earlier blog, I discussed the trend towards single factor apportionment formulas.  Today, we will address its first cousin, market-based or customer-based sourcing.  In the old-world manufacturing economy, it was easy to “find your way.” You sent thingamajigs[1] to your customer in Ohio and (very) generally speaking, receipts would be sourced to the thingamajigs’ destination, Ohio. So a New York- based manufacturer would get the benefit of apportioning a percentage of his or her tax base outside of New York and either to Ohio (if there was nexus in Ohio, a topic for at least another 100 posts) or possibly to nowhere. 

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Topics: SALT TALK

TAX TALK: Consider Bunching Your Medical Expenses for 2017

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 9, 2017 9:19:00 AM

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only if they exceed that floor. Typically this is a specific percentage of your income. One example is the medical expense deduction.

Because it can be difficult to exceed the floor, a common strategy is to “bunch” deductible medical expenses into a particular year where possible. If tax reform legislation is signed into law, it might be especially beneficial to bunch deductible medical expenses into 2017.

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Topics: TAX TALK

T&E TALK: An HSA can Benefit Your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Oct 9, 2017 7:05:00 AM

One health care arrangement that has been soaring in popularity in recent years has been the pairing of a high-deductible health plan (HDHP) with a Health Savings Account (HSA). The good news is that not only does an HSA provide a tax-advantaged way to pay for health care costs, but it also can help you achieve your estate planning goals.

How does it Work?

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Topics: T&E TALK

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.

SALT TALK: Hear an insider’s perspective on the business issues, legislative updates in state and local tax, and tax aspects behind today’s headlines.

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.

TAX TALK: Get an all-inclusive perspective on regulatory changes, industry issues, and trends from our team of multidisciplinary tax professionals – many of whom also hold J.D. and LL.M degrees.

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