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Hal Zemel, CPA, J.D., LL.M.

Hal Zemel, CPA, J.D., LL.M.
Hal Zemel, a Tax Principal at Berdon LLP, has more than 20 years in public accounting and advises businesses in the real estate, service, and manufacturing sectors.
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TAX TALK: Business owners - When it comes to IRS audits, be prepared

Posted by Hal Zemel, CPA, J.D., LL.M. on May 30, 2017 11:50:00 AM

If you recently filed your 2016 income tax return (rather than filing for an extension) you may now be wondering whether it’s likely that your business could be audited by the IRS based on your filing. Here’s what every business owner should know about the process.

Red Flags

Many business audits occur randomly, but a variety of tax-return-related items may raise red flags with the IRS and lead to an audit. Here are a few examples:

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Topics: TAX TALK

TAX TALK: Are You a Real Estate Professional? Why it Matters

Posted by Hal Zemel, CPA, J.D., LL.M. on May 22, 2017 11:40:00 PM

When you rent property, the IRS automatically considers the income and losses from the activity as passive. However, if you are a real estate professional, the income and losses will not be considered passive. The main consequences of passive activity are that:

  • Passive income is currently subject to the 3.8% net investment income tax (NIIT), and
  • Passive losses generally are deductible only against passive income, with the excess being carried forward.

One note, the NIIT is part of the Affordable Care Act (ACA) and might be eliminated under ACA repeal and replace legislation or tax reform legislation. But if/when such legislation is passed and signed into law is uncertain. Even if the NIIT is eliminated, the passive loss issue will still be an important one for many taxpayers investing in real estate.

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Topics: TAX TALK

TAX TALK: Don’t Give the IRS an Interest Free Loan

Posted by Hal Zemel, CPA, J.D., LL.M. on May 15, 2017 7:00:00 AM

Each year, millions of taxpayers receive an income tax refund when they file their income tax returns. While receiving a refund from the IRS of a few thousand dollars can be a pleasant influx of cash, the reality is that you essentially gave the government an interest-free loan for close to a year. This is not the most efficient use of your money.

Fortunately, there is a way to begin collecting your 2017 refund now: You can review the amounts you’re having withheld and/or what estimated tax payments you’re making, and adjust them to keep more money in your pocket during the year.

Reasons to Modify Amounts

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Topics: TAX TALK

TAX TALK: Tax Implications of C Corp’s Buy-sell Agreement

Posted by Hal Zemel, CPA, J.D., LL.M. on May 1, 2017 11:50:00 AM

Private companies with more than one owner should have a buy-sell agreement to spell out how ownership shares will change hands should an owner depart. For businesses structured as C corporations, the agreements also have significant tax implications that are important to understand.

Buy-sell Basics

A buy-sell agreement sets up parameters for the transfer of ownership interests following stated “triggering events,” such as an owner’s death or long-term disability, loss of license or other legal incapacitation, retirement, bankruptcy, or divorce. The agreement typically will also specify how the purchase price for the departing owner’s shares will be determined, such as by stating the valuation method to be used.

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Topics: TAX TALK

TAX TALK: Individual Tax Calendar: Key Deadlines for the Remainder of 2017

Posted by Hal Zemel, CPA, J.D., LL.M. on Apr 24, 2017 11:50:00 AM

While April 15 (April 18 this year) was the main tax deadline on most individual taxpayers’ minds, there are others through the rest of the year that are also important. To help you make sure you don’t miss any important 2017 deadlines, here’s a look at when some key tax-related forms, payments and other actions are due. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you.

Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them.

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Topics: TAX TALK

TAX TALK: Avoid Late-Filing Penalties

Posted by Hal Zemel, CPA, J.D., LL.M. on Apr 17, 2017 10:46:00 AM

Because of a weekend and a Washington, D.C., holiday, the 2016 tax return filing deadline for individual taxpayers is Tuesday, April 18. The IRS considers a paper return that’s due April 18 to be timely filed if it’s postmarked by midnight. But dropping your return in a mailbox on the 18th may not be sufficient.

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Topics: TAX TALK

TAX TALK: Tax Benefits of Home Ownership

Posted by Hal Zemel, CPA, J.D., LL.M. on Apr 11, 2017 11:59:00 AM

Currently, home ownership comes with many tax-saving opportunities. Consider both deductions and exclusions when you’re filing your 2016 return and tax planning for 2017:

Property Tax Deduction. Property tax is generally fully deductible for regular tax purposes. However, property taxes are not deductible if you are subject to the alternative minimum tax (AMT). You can claim a deduction on every property that you own.

Mortgage Interest Deduction. You generally can deduct interest on up to a combined total of $1 million of mortgage debt incurred to purchase, build, or improve your principal residence and a second residence. Points paid related to your principal residence also may be deductible.

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Topics: TAX TALK

TAX TALK: Reminder - 2nd Quarter Deadlines for Businesses

Posted by Hal Zemel, CPA, J.D., LL.M. on Apr 3, 2017 10:04:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the second quarter of 2017. 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.

April 18

  • If you are a calendar-year C corporation, file a 2016 income tax return (Form 1120) or file for an automatic six-month extension (Form 7004), and pay any tax due. If the return isn’t extended, this is also the last day to make 2016 contributions to pension and profit-sharing plans.
  • If your are a calendar-year C corporation, pay the first installment of 2017 estimated income taxes.
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Topics: TAX TALK

TAX TALK: Are You Eligible to Claim the American Opportunity Credit?

Posted by Hal Zemel, CPA, J.D., LL.M. on Mar 27, 2017 12:50:00 PM

College costs are high and increasing every year. The federal government offers a credit to help defray the costs of a college education. If you have a child in college, you may be eligible to claim the American Opportunity credit on your 2016 income tax return. However, the credit’s income limitations may preclude your ability to qualify for the credit. If you earn too much to take the credit, your child may be eligible to claim the credit.

Credit Limitations

The American Opportunity credit equals 100% of the first $2,000 of qualified expenses, plus 25% of the next $2,000 of such expenses. The credit is capped at $2,500 per student, per year for the first four years of postsecondary education.

The American Opportunity credit begins to phase out when modified adjusted gross income (MAGI) exceeds $160,000 for joint filers ($80,000 for others) and is completely eliminated when MAGI exceeds $180,000 for joint filers ($90,000 for others)

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Topics: TAX TALK

TAX TALK: There is Still Time to Make 2016 IRA Contributions

Posted by Hal Zemel, CPA, J.D., LL.M. on Mar 20, 2017 11:00:00 AM

You have until the original due date for filing your federal 1040 to make a contribution to your individual retirement account (IRA). This year, due to Patriot’s Day, the IRS has moved the due date for filing to April 18, 2017 (normally it is April 15).  Depending on the type of IRA, you may receive a federal tax deduction for the contribution.

Other Benefits

Tax-advantaged retirement plans like IRAs allow your money to grow tax-deferred — or, in the case of Roth accounts, potentially tax-free. However, the annual contributions to the IRAs are limited, and any unused limit can’t be carried forward to make larger contributions in future years. The 2016 limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on December 31, 2016). If you make smaller contributions before the deadline, you will not be able to make additional contributions after the deadline to reach the annual limit.

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Topics: TAX TALK

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