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taxes

01.17.2017

2016 tax exemptions numbers you’ll need to do your taxes

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLP Photograph 047 by Lauren Mancke found on minimography.com Each year, the IRS sets dollar amounts for specific types of exemptions. Usually, these don’t change much - $100 here, $50 here, etc. You’ll need these numbers as you do your taxes this year. The personal exemption amount for 2016 taxes is $6,300 for an individual or for a married couple filing separately (so that’s per person). As you’d expect, married filing jointly is twice that at $12,600. Head of households can claim $9,300, and surviving spouse $12,600. For anyone who takes the standard deduction and doesn’t itemize, that is the amount you’ll claim. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.) Forbes published an extensive piece that goes into more detail, including tax tables, which you can read here. Read More

01.10.2017

Adoption tax credit is available for families

If you’ve adopted a child recently or plan to adopt a child soon, congratulations! We help families adopt as part of our family law practice. Expanding your family through adoption is joyful, and we’re thrilled to be a part of it. Adoptive parents may have some tax advantages that could help now that it is time to start preparing 2016 taxes. One big advantage is the federal adoption tax credit, which allows many adoptive parents to receive a credit to recover some of the costs of adoption. One note, though: the tax credits are not extended to step-parents adopting the child of their spouse. The tax credits are only available if you are adopting a child under the age of 18 or a child who is physically or mentally unable to care for himself or herself. Read More

12.09.2016

How to give money without getting a tax headache: Part 1

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLP It’s a generous time of year. There are donations making their way to non-profits, and checks being written in lieu of gifts to family members. If you prefer to give money rather than gifts to children, grandchildren or others on your list, there are a few things you need to know before you write that check. We’ll address just giving to your children in this blog post; we’ll address giving to charities in part two later this month. The main point: your gift can trigger your obligation to file a gift tax return if you aren’t careful. We’ll walk you through who you can give to, how you can give and how much you can give. Here’s the official information from the IRS. Read More

11.22.2016

Business owners need a solid succession plan for the future

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley Owning a business is the American dream for many. It’s building something from your own hands that you’ve shaped and created. It’s long hours, and a labor of love – but in the end – it’s yours. And that’s a fantastic feeling if you’ve got an entrepreneurial streak. But that feeling of ownership is what keeps a lot of business owners from planning for the future. It’s hard to envision a time when your business will go on without you. Your failure to plan for that inevitability is your biggest vulnerability as an entrepreneur, and can rob you of the equity you’ve built over the years of business ownership. The best succession plan is one that you make before you need it. It’s on the shelf, ready to go, should something happen to you or other key business owners or managers. It is also a living plan, though, that you should review at least annually and update as needed, just as you would with any other estate documents such as a will or trust. Even if you don’t see yourself ever leaving your business, creating a plan is a good exercise in thinking about the strategy and purpose of your business, your role in it and the importance of having key people to help you execute your vision. You may find this article from the Small Business Administration on how to exit your business helpful. Read More

10.04.2016

A new rule from the IRS on IRA rollovers

By Nathan Vinson The IRS recently enacted a new IRA rollover rule that’s actually good for consumers, and something that can really help you – but it is a lot more complicated than it appears on the surface. Essentially, the IRS is now giving you a year to roll your old retirement account into a new account or IRA, but only if you’ve faced difficult circumstances that delayed you from making the transaction. In the past, once you leave a job, you may have received a check for the balance of the funds in your 401(k) (or 403(b) or 457 plan, which are used by non-profits and government agencies, respectively). Once the check is in the mail, you’ve traditionally had 60 days to roll that money into an IRA or other qualifying retirement account. The administrator of the retirement plan is required to withhold taxes plus a penalty from your check, and will report that to the IRS. You won’t see the withheld money again, unless you roll over the funds within that 60-day time period. The basic concept is that Uncle Sam wants you saving for retirement, and penalizes you if you don’t keep up with it. Plus, 401(k) money goes into the account pre-tax, so it’s their chance to tax the money – and as we all know, the government never misses a chance to grab some dollars. Read More

08.23.2016

Athletes’ medals come with a tax bill

By Nathan Vinson, attorney English, Lucas, Priest and Owsley, LLP An interesting question popped up in social media during the 2016 Summer Olympics: will U.S. athletes taking home a medal be taxed on the value of it – particularly those who win the gold? News accounts have confirmed that yes, U.S. medal-winning athletes will be taxed, but not on the value of the medal itself. It’s the cash prize that comes with each medal that is taxed. Swimmer Michael Phelps, who has broken all kinds of records this year, may owe the government $55,000 in taxes for the cash prizes that go along with his five gold medals and one silver medal, reports USA Today. Each gold medal is accompanied by a check for $25,000, while each silver earns $15,000 and each bronze $10,000. If Phelps is taxed at the highest income tax rate of 39.6 percent, he would owe around $55,000, the newspaper reports. I checked the math, and yes, that’s about right. Ouch. Read More

07.28.2016

Getting ready for 2017 tax time

By Nathan Vinson, attorney English, Lucas, Priest and Owsley, LLP This time of year is nice, isn’t it? It’s warm and pleasant out, and maybe a little bit more laid back at work. Tax time is behind you (yes!) and it’s not time to think about next year’s taxes. OR IS IT? Well, we hate to break it to you, but yeah, it is time to think about it NOW. It’s July. More than half of the year is gone. If you haven’t set up a good filing system for your receipts and other tax-related information, you need to – and soon. If you’ve got a giant pile of paperwork and receipts, hey, you’re not alone – but don’t let this linger. Read More

06.02.2016

Manipulating emotions often cause elderly people to buy into fraudulent schemes

By Nathan Vinson Between our phones and our e-mail, everyone in America (and likely around the world) is hit with scams every day. We’re promised millions by the wife of a dead African dictator, or told that the caller is from the IRS and needs payment of back taxes immediately. Door-to-door sales people tell us there is something wrong with our roof. Insurance flyers attempt to scare us into thinking that something horrible will happen if we don’t buy their insurance. Most of us brush this stuff off without a thought. We hang up on the scammers, delete those spam e-mails and move on. But for the elderly, it’s hard to tell the difference between a genuine offer that needs our attention and fraud. While we all fear looking stupid or gullible, what’s truly frightening for an elderly person is the prospect of looking dumb in front of someone we love and trust. Asking for help as you get older is difficult. Scammers know this – and push the elderly into it by insisting their offer is for a limited time or that dire consequences can result if they don’t act right now. Read More

05.03.2016

Win big at the track? Congratulations! Now pay your gambling taxes

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLP We’ve written previously about gambling taxes, highlighting this issue mainly because of the affection Kentucky has for horse racing. And as you well know, we’re in the midst of horse racing season. Keeneland had its spring meet, and Churchill Downs is now open for the season, with the Kentucky Derby set for May 7. This will be followed by the Preakness in Baltimore and the Belmont Stakes in New York, and the Breeder’s Cup in November in California. Lots of us love to put a little dough (or a lot!) down on a horse at the track. There was some talk earlier this year of lowering the threshold at which tracks were required to report winnings to the IRS, but that never moved forward, so far as we can tell. Read More

03.29.2016

What to do when you get a letter from the IRS

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLP We’ve heard more than one report of people getting called by scammers pretending to be the IRS, wanting money for back taxes or claiming that the IRS is going to sue you. Make no mistake: the IRS will not call you. This time of year, as many people are working on tax filings, anticipating returns and otherwise crunching numbers, the IRS is top of mind, and the scammers know it. Read More