Our Blog

People who earn more than a certain amount and who are enrolled in Medicare Part B or Medicare Part D, or both, will face additional premiums, called The Medicare Income-Related Monthly Adjusted Amount (IRMAA). IRMAA “surcharges,” which is a replacement word for a tax, are based on income earned two years prior to the coverage year. So, for example, a client enrolling in Medicare in 2023 would pay an IRMAA surcharge based on their 2021 tax return. Generally there are two types of people that pay IRMAA surcharges: Those who might be affected and those who will always be affected. Because it is income based, people with an unusual income event may only be affected once, while people with higher incomes may always...

Click here to view the full article on Tax What If Doctor.

We talk a lot about people not doing tax planning and not spending more time creating the tax outcomes they want. We urge people to understand that it’s within their own control and that tax outcomes can be legally and ethically manipulated. We go on and on about the benefits.  But…we understand why it’s so rarely done! It is because almost nothing in people’s lives has more constant change than taxes, and keeping up with all the changes can be an overwhelming challenge. What if every four years your banking rules changed, “Oh I’m sorry John, we no longer pay you interest, now you pay us interest to keep money here.” Or “Now you have to send in your mortgage payment daily,...

Click here to view the full article on Tax What If Doctor.

Many people have the intention of doing a better job of “tax planning” in order to start having more favorable outcomes, but busy lives and life interruptions can leave them little time.  If this is you, you’re not alone.  Time flies even in normal times, but with the current stressful environment, everyone is scrambling even more, so you look at the calendar and think, “I can go see my accountant or financial advisor, or I can get my shopping done”, and the next thing you know it, it’s Thanksgiving and the end of the year is upon us. Most advanced tax planning requires communication about concepts, takes reams of paperwork and time to submit to custodians, so it would be...

Click here to view the full article on Tax What If Doctor.

We use the term “tax planning” often, but we are aware that many people are not sure what it really is. Some people think “That means off shore accounts and citizenship shell games ending with jail time. No thank you!”. That’s not tax planning; that’s tax evasion, and it’s not at all what we recommend. Others think only the wealthy need a tax planner, and for regular folks it can mean paying a 30 year mortgage off 12 years early or having a college fund with enough in it to actually pay for college.   Tax planning is not just for the wealthy, though. It can be a useful tool for anyone who is aware of the opportunities. Our tax...

Click here to view the full article on Tax What If Doctor.

Sometimes “tax planning” can be easy: “Open an IRA and it reduces your taxable income.” Other times it can be quite complex: “Cost segregation” on a building means hiring an engineering firm and having a structure broken down into its many components on paper, with each value separately listed; the frame, wiring, heating systems, etc., and taking write-offs, generally much faster than simply taking a standard approach. These are both ways to lower federal or state taxes.   For the people who have made large amounts of money or have larger estates, the year to year tax bill is not as much of a concern as the “Death Tax Bill.” Planning for them can be simple or complex as well,...

Click here to view the full article on Tax What If Doctor.

Most business owners in any five year period can answer yes to at least one of these life event questions that would cause them to need to know what their company is worth. 1. Are you contemplating the sale of your business? 2. Are you working with or bringing in a partner? 3. Are you contemplating or currently going through divorce proceedings? 4. Are you potentially going to have to defend yourself or your company in court? 5. Are you looking for financing? There are other possible reasons of course, but the point is that there are many times a business owner finds himself or herself needing to obtain a proper business valuation for their company. Unfortunately, it’s often an...

Click here to view the full article on Tax What If Doctor.

Ask anyone if they “pay too much income tax” and the knee jerk reaction is almost always, “Yes!” and without much hesitation. Why do we call that a knee jerk reaction? Because if you then follow the question up with two more questions, “What did you pay in federal tax last year? And/or what bracket are you in?” they almost as quickly say, “I don’t remember, or I’m not sure.” Or they might guess at a bracket percentage, but usually not correctly. We’ve even had people profess the pain of paying too much in tax only to discover that not only did they get back all of their withholdings, but they were given tax credit refunds of money they did...

Click here to view the full article on Tax What If Doctor.

This is the time of year when people often start taking personal inventory of how fortunate they are and start considering charitable contributions as a way to “give back” a little. For some, it’s an automatic budget item in their day to day lives, but for others it’s a new activity. For many years the IRS has helped people give by allowing charitable contributions to be deducted on schedule A when they file their taxes. The tax deduction value of those gifts changed with the Trump tax code simplification, as many people no longer need to file a Schedule A due to the higher standard deduction. Many people are still ingrained in their old charitable giving habits and aren’t aware...

Click here to view the full article on Tax What If Doctor.

It may sound odd when you say it out loud, but after considering all the facts, it’s quite true. It’s an emotional but understandable reaction to think you always want to lower your tax bill as much as possible. However, except in the case of death, the tax code is basically a case of “tax me now or tax me later.” In many cases, to lower your current tax bill means that income avoided or deductions taken now are going to come back into your life at some later point. One example would be an IRA. You put money in an IRA and lower today’s tax bill, but those dollars will need to be taxed at some point. When you...

Click here to view the full article on Tax What If Doctor.

In October, as Halloween approaches, the fall wrap up begins around the house. Any remaining lawn chairs, storm windows, etc., all go into place ahead of the first storm. Sure, for some places, like Arizona, winter is just a nice break from the heat. But, for a majority of the country that lives in the snow belt, November means batten down the hatches. The same is true for finance and tax planning. People start looking at their holiday shopping budgets and looking at their end of year projections (if they’re financial goal setters) to see where they are at. We often talk about tax planning, but the 911 calls start in early December, and there’s a lot that still can be...

Click here to view the full article on Tax What If Doctor.