SALT TALK: Independence Brings Growing Pains

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Dec 10, 2019 10:39:45 AM

One would think it’s so easy. Create a business model where your “workers” are required to buy the assets used to run the business. If not having to tie up your own funds wasn’t enough, you can also lend the workers the money to buy said assets and earn a little interest income to boot.

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TAX TALK: What Medical Expenses Qualify for a Tax Deduction?

Posted by Hal Zemel, CPA, J.D., LL.M. on Dec 9, 2019 7:05:00 AM

As we all know, medical services and prescription drugs are expensive. You may be able to deduct some of your expenses on your tax return but the rules make it difficult for many people to qualify. However, with proper planning, you may be able to time discretionary medical expenses to your advantage for tax purposes.

The Basic Rules

For 2019, the medical expense deduction can only be claimed to the extent your unreimbursed costs exceed 10% of your adjusted gross income (AGI). You also must itemize deductions on your return.

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Topics: TAX TALK

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

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Dec 2, 2019 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 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.

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TAX TALK: Know Your Taxpayer Filing Status

Posted by Hal Zemel, CPA, J.D., LL.M. on Dec 2, 2019 9:20:00 AM

For tax purposes, December 31 means more than New Year’s Eve celebrations. It affects the filing status box that will be checked on your tax return for the year. When you file your return, you do so with one of five filing statuses, which depend in part on whether you’re married or unmarried on December 31.

More than one filing status may apply, and you can use the one that saves the most tax. It’s also possible that your status options could change during the year.

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Topics: TAX TALK

T&E TALK: Avoiding or Minimizing Probate – It’s All About Planning

Posted by Scott T. Ditman, CPA/PFS on Dec 2, 2019 7:00:00 AM

The word “probate” may conjure images of lengthy delays waiting for wealth to be transferred and bitter disputes among family members. Plus, probate records are open to the public, so all your “dirty linen” may be aired. The reality is that probate doesn’t have to be so terrible, and often isn’t, but both asset owners and their heirs should know what’s in store.

Defining Probate

In basic terms, probate is the process of settling an estate and passing legal title of ownership of assets to heirs. If the deceased person has a valid will, probate begins when the executor named in the will presents the document in the county courthouse. If there’s no will — the deceased has died “intestate” in legal parlance — the court will appoint someone to administer the estate. Thereafter, this person becomes the estate’s legal representative.

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Topics: T&E TALK

SALT TALK: Inferences, Conclusions, Relationships, and Residency Audit Traps

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 25, 2019 1:51:50 PM

There are two very disparate pursuits in which I have partaken for almost 30 years; marriage and residency audits. While the burden of proof in relationships and audits may be different, inferences drawn and conclusions reached hastily can be a disaster for both. While no one knows the rules for lasting relationships, readers of my blog know that many jurisdictions use a two-pronged approach to determining whether an individual taxpayer is a resident for state tax purposes.

First and foremost is domicile. With certain exceptions, if an individual is domiciled in a state, they will be a tax resident of a state. The so-called statutory residency test looks to whether one has a permanent place of abode in the jurisdiction and whether more than 183 days have been spent in the jurisdiction. I have blogged extensively about the intricacies of these tests and browsing through the previous blogs at is highly recommended.

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TAX TALK: Use Your 401(k) to Save this Year and Next

Posted by Hal Zemel, CPA, J.D., LL.M. on Nov 25, 2019 9:20:00 AM

You can reduce taxes and save for retirement by contributing to a tax-advantaged retirement plan. If your employer offers a 401(k) or Roth 401(k) plan, contributing to it is a taxwise way to build a nest egg.

If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year end. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions sooner rather than later can have a significant impact on the size of your nest egg at retirement.

With a 401(k), an employee elects to have a certain amount of pay deferred and contributed by an employer on his or her behalf to the plan. The contribution limit for 2019 is $19,000. Employees age 50 or older by year end are also permitted to make additional “catch-up” contributions of $6,000, for a total limit of $25,000 in 2019.

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Topics: TAX TALK

T&E TALK: Choosing a Guardian For Your Child

Posted by Scott T. Ditman, CPA/PFS on Nov 25, 2019 7:00:00 AM

If you have minor children, arguably the most important estate planning decision you need to make is choosing a guardian for them should the unthinkable occur. If you haven’t yet made this decision, formalize your choice as soon as possible.

When it comes to choosing the best candidate, you probably already have a short list consisting of members of your immediate family. This is an excellent start, but don’t forget about extended family members and trusted friends.


There are many issues you’ll need to consider in making your decision. Perhaps the most important issue is whether you and your guardian choice share similar values, such as parenting philosophy, religious and moral beliefs, and educational views.

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Topics: T&E TALK

SALT TALK: Refund Claims – Don’t Make a Leap of Faith on What Difference a Day Makes

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 18, 2019 11:40:00 AM

Buzzing through the tax dailies every morning, one can’t help but notice the sad but frequently repeated stories of taxpayers being denied refund claims because of late filed returns. Usually I skip over them. Who wants to read about clerks testifying about mailing procedures, postmarks, blurred envelopes, and the like. As if Civil Procedure weren’t tedious enough, Tax Procedure adds an additional layer of monotony to the mix. I can’t get the image out of my head of a room full of tax attorneys and accountants counting days on their fingers and toes to make sure a refund claim is timely.

Something however made me stop and look at one particular New York City Tax Appeals Tribunal Opinion[1] addressing the timeliness of a Real Property Transfer Tax refund request. First, this is one of the most onerous taxes around, second, we deal with it frequently at Berdon, third it’s a Tax Appeals Tribunal decision (citable as precedent) and fourth, the statute of limitations to request a refund is only one year, while virtually every other tax provides a three year time frame.

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T&E TALK: In An Unpredictable Estate Planning Environment, Flexibility is Key

Posted by Scott T. Ditman, CPA/PFS on Nov 18, 2019 7:00:00 AM

The Tax Cuts and Jobs Act (TCJA) made only one change to the federal gift and estate tax regime, but it was a big one. It more than doubled the combined gift and estate tax exemption, as well as the generation-skipping transfer (GST) tax exemption. This change is only temporary, however. Unless Congress takes further action, the exemptions will return to their inflation-adjusted 2017 levels starting in 2026.

What does this mean for your estate plan? If your estate is well within the 2019 exemption amount of $11.40 million ($11.58 million for 2020), the higher exemption won’t have a big impact on your estate planning strategies. But if your estate is in the $6 million to $11 million range, it’s important to build some flexibility into your plan to address potential tax liability after 2025.

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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.

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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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