The Fred Knows Blog

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Tue, 11 Feb 2020 17:07:00 +0000

The new 2020 W-4 Form. What shall we do?

Now that tax season is underway we may find a few of you may need a bit of adjustment to your W-2 withholding. So just like always just give your employer a new W-4 form and change the number of exemptions and your filing status. Right? No Wrong!

IRS has radically changed the W-4 form. No more exemptions. Simpler? Kinder? Easier to fill out? No. In fact extremely confusing. The good news is if you already have a job and like your withholding the way it is, you can keep it (shades of Obamacare).

The problem is what if you want to decrease your withholding to get less of a refund or increase it so that you have more tax withheld because you owed tax on this year's return. Or what if you take a new job? All bets are off and "if you like it you can keep it withholding" is out the window and you have to start from scratch.

Step 1 is the easiest part of filling out the form: note your filing status which will determine your withholding, Single, Married, or Head of Household. Keep in mind that we have have already advised some of our married clients to use the Single status anyway as there withholding was always short.

Step 2 Sends you to a multiple jobs work sheet because just like Cheech Marin you must have three jobs or well, at least a spouse that works too.

Step 3 Identifies whether you think (Yes? No? Maybe?) you'll be entitled to the $2,000 child credit and $500 credit for other dependents.

Step 4 Is probably the most sensible part of the form all together.

a) What other income do you have? Interest,? Dividends? Uber?
(OK we'll try and withhold on that too!)

b) Deductions - this is messy. This line attempts to ask you if you are itemizing and if so how much will it be in excess of the standard deduction. Too much thinking is required for this line I think. If you have to fill out a new W-4 form, maybe it's better to just leave this blank for many of you.

c) Yes please withhold extra. Oh this is a good idea, especially if you owed money last year or there is some extraneous circumstance. Our concern is if you are filing the W-4 to just do this it will not work as it will through your "if you like it you can keep it withholding" from your job into a tailspin. Thus the job withholding will start on the new system from scratch.

One more thing. If you think this is just too hard to fill our on your own, IRS has a web application that will estimate your withholding needs and fill out the W-4 form for you. We've tried it ourselves and find it difficult to use and we feel it could mess you up even more. Hopefully we've gotten it right last year and you won't need to change anything.

Call us if you are a client and have any questions.

Huh! Why Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 may matter to you

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Tue, 11 Aug 2015 22:13:00 +0000

The recently enacted “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (P.L. 114-41) contains significant changes to filing deadlines and extensions for certain business and special entity tax returns.

On July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” Although this new law was primarily designed as a 3-month stopgap extension of the Highway Trust Fund and related measures, it includes a number of important tax provisions, including revised due dates for partnership and C corporation returns and revised extended due dates for some returns. This provides an overview of these provisions, which may have an impact on you, your family, or your business.

Revised Due Dates for Partnership and C Corporation Returns
Domestic corporations (including S corporations) currently must file their returns by the 15th day of the third month after the end of their tax year. Thus, corporations using the calendar year must file their returns by Mar. 15 of the following year. The partnership return is due on the 15th day of the fourth month after the end of the partnership's tax year. Thus, partnerships using a calendar year must file their returns by Apr. 15 of the following year. Since the due date of the partnership return is the same date as the due date for an individual tax return, individuals holding partnership interests often must file for an extension to file their returns because their Schedule K-1s may not arrive until the last minute.
Under the new law, in a major restructuring of entity return due dates, effective generally for returns for tax years beginning after Dec. 31, 2015:

Partnerships and S corporations will have to file their returns by the 15th day of the third month after the end of the tax year. Thus, entities using a calendar year will have to file by Mar. 15 of the following year. In other words, the filing deadline for partnerships will be accelerated by one month; the filing deadline for S corporations stays the same. By having most partnership returns due one month before individual returns are due, taxpayers and practitioners will generally not have to extend, or scurry around at the last minute to file, the returns of individuals who are partners in partnerships.
C corporations will have to file by the 15th day of the fourth month after the end of the tax year. Thus, C corporations using a calendar year will have to file by Apr. 15 of the following year. In other words, the filing deadline for C corporations will be deferred for one month.

Keep in mind that these important changes to the filing deadlines generally won't go into effect until the 2016 returns have to be filed. Under a special rule for C corporations with fiscal years ending on June 30, the change is deferred for ten years — it won't apply until tax years beginning after Dec. 31, 2025.

Revised Extended Due Dates for Various Returns
Taxpayers who can't file a tax form on time can ask the IRS for an extension to file the form. Effective for tax returns for tax years beginning after Dec. 31, 2015, the new law directs the IRS to modify its regulations to provide for a longer extension to file a number of forms, including the following:

Form 1065 (U.S. Return of Partnership Income) will have a maximum extension of six-months (currently, a 5-month extension applies). The extension will end on Sept. 15 for calendar year taxpayers.
Form 1041 (U.S. Income Tax Return for Estates and Trusts) will have a maximum extension of five and a half months (currently, a 5-month extension applies). The extension will end on Sept. 30 for calendar year taxpayers.
The Form 5500 series (Annual Return/Report of Employee Benefit Plan) will have a maximum automatic extension of three and a half months (under currently law, a 2½ month period applies). The extension will end on Nov. 15 for calendar year filers.

FinCEN Report Due Date Revised
Taxpayers with a financial interest in or signature authority over certain foreign financial accounts must file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Currently, this form must be filed by June 30 of the year immediately following the calendar year being reported, and no extensions are allowed.
Under the new law, for returns for tax years beginning after Dec. 31, 2015, the due date of FinCEN Report 114 will be Apr. 15 with a maximum extension for a 6-month period ending on Oct. 15. The IRS may also waive the penalty for failure to timely request an extension for filing the Report, for any taxpayer required to file FinCEN Form 114 for the first time.
I hope this information is helpful. If you would like more details about these changes or any other aspect of the new law, please do not hesitate to c

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Thu, 15 Jan 2015 15:23:00 +0000

Happy New Year 2015 from these guys!

Its 2015 and well another year has past us by and have we posted here on our blog? No. Oh Horse feathers! There's nothing new here at all in quite a while as you can see but possibly in the future. But read on my friend.

Visit Fred N Boehm CPA & Associates Facebook page.

But all is not lost. Head over to our Facebook page which is regularly updated. No it is not updated by that cool kid in the picture, a third party service, but actually by Fred N Boehm CPA himself. Click this link and we'll take you there: The Fred N Boehm CPA & Associates LLC Facebook Page.

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Wed, 20 Feb 2013 18:00:00 +0000

Have you been over to our Facebook page.

We are posting a lot of great information over there on Facebook as we find out about it and want to let you know. And of course if you have not already done so, Please Like our Facebook fan page and you will automatic ally receive updates in your stream.

We're Tweeting, Facebooking and Blogging

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Wed, 16 Jan 2013 00:58:00 +0000

Welcome to the Fred N. Boehm CPA Social Media Party!

We're Tweeting, Face-booking, and hopefully Blogging right here too! When will you find the time for all this you might ask? I'm not sure I said to our cute new little Maltese who is named Lulu. She's sitting patiently by my side as we are composing this new blog entry on our formerly dormant Blogger site.

Winter is here and Tax Season is 2 weeks away. Watch out for dangerous curves on the road and in the new tax laws!

Sure we send our our monthly email newsletter as we've been doing for years. But there is so much information out there I'd love to start getting it over to you as soon as I discover it. So now I can Tweet it out from my IPod, Post a link to a PDF article on Facebook, and who knows what else. Only the future will tell. Stay tuned!

The State tax elevator Going Up !

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Wed, 01 Jul 2009 16:08:00 +0000

States are increasing income and other taxes this year in the face of the dragging economy. In California, Governor Schwarzenegger has increased income taxes, sales taxes, and car license taxes.

California's budget and it's deficit are bigger than the entire budget of many entire countries. It's deficit, originally pegged at $41 billion (Yes billion!).

Closer to home, New York's Governor Paterson has also signed a budget which adds a 7.85% bracket for high income taxpayers, and 8.97% for taxpayer earning over $500,000. Itemized deductions for those making more than $1 million dollars are now disallowed completely. Want a flat tax, here it is!

There's also an MTA Tax on employer's based on the amount of wages paid to employers in NYC and MTA surrounding suburbs. This tax also applies to self employed people.

Here in our home state of New Jersey, the tax increases just keep on coming. Governor Corzine signed the budget bill a day early, June 29, 2009. Time to change our license plates from "The Garden State" to "The Income Tax State". Congratulations, we've got the highest marginal rate in the country now. But not necessarily the highest income taxes on an effective basis, probably New York or California still hold that title!

Income tax rate increases. Here's the new added brackets:
$400,000-$500,000 8%
$500,000-$999,999 10.25%
over $1,000,000 10.76%
The old prior year brackets topped out at 6.375% up to $500,000 and 8.97% over $500,000.

Property tax deductions are limited to:
$10,000 if your income is under $150,000
$5,000 if your income is under $250,000
$0 if your income is over $250,000

Homestead Rebates are limited to those making $75,000 or less and will be less than in prior years. If you are a senior citizen or disabled, the income limit is $150,000. No Rebates for renters this year unless you're over 65 or disabled.

Increases to the taxes on cigarettes, liquor, and insurance companies. The evil doers of the world. And by the way, forget about trying to win the New Jersey Lottery! Previously not taxed, all winnings over $10,000 are now subject to state income tax and withholding. So the left hand giveth, the right hand taketh away.

If Mr. T lived here, he might say, Pity the fool who runs for governor!

Two Camels for President Obama?

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Mon, 02 Feb 2009 03:39:00 +0000

Our new President is hot on the tail of jump-starting the economy. He has asked our Congress to craft an economic stimulus plan including some strategically placed tax incentives, and to have it on his desk by mid-February. It's called "The American Recovery and Reinvestment Bill" The real question is who will get the bill (Is that Al Franken I hear laughing)?

What will Congress send President Obama?

A camel of course! A Camel by definition is a horse built by a committee. When too many people are involved, what you intended to accomplish becomes so confused and mired, the result is often an odd and unusual creature.

Committees: Our Congress has lots of committees, 435 House Representatives, 99 Senators, and one Comedian waiting to be seated.

If you'll recall your grade school education: Think of the Congressional process like a giant grinder. Bills (tax) are proposed. They are sponsored by particular members of Congress, who advocate them (both in the House of Representatives and Senate). They are discussed, debated, argued, and extolled. If the two branches of Congress can agree separately to pass the bill, a committee then reconciles the two bills into one piece of law, and sends it off for the President's signature. What comes out the bottom of the grinder is often unrecognizable from what went in, kind-of like a piece of sausage.

I can tell you what is supposed to be in the bill, but not what will fall out the bottom of the grinder. Here's what's under discussion right now.

A $500 tax credit for working singles, $1,000 for working married couples, and a $300 credit for retired Seniors and the disabled. Is it a rebate like last year? No, right now it's a credit that will allegedly be passed on to you via immediate lower withholding. Oh wait! There is word that this will be as a payroll tax cut, not an income tax cut. Huh?

A $2,500 higher education credit. A $7,500 non-repayable tax credit for first-time home buyers (for houses bought until July 1).

Senator Grassley has proposed an increase in the rate of the standard mileage rate for charitable work. It has been stuck at 14 cents a mile since 1984. I'm not sure how this helps the economy. Maybe they think people wealthy people will buy more cars, so the can drive them around and get more deductions? Were you wondering? Yes Grassley is a Republican.

A Separate act called "The FREEDOM Act of 2009" (as in energy freedom) has tax credits for plug in electric vehicles and plug in conversions. Right now you can get your Prius converted to plug in if you live in San Francisco, elsewhere good luck. Factory Plug-in vehicle from auto makers are only pretty Autoshow cars at this point and not yet available for sale.

Tax increases? Thursday the Senate passed a 65 billion dollar 10 year increase in Tobacco taxes to fund State Children's Health Insurance Programs.

Stay tuned for more.

It's been a busy year and it's almost over

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Sat, 20 Dec 2008 22:11:00 +0000

Well so much has happened this year, and we last blogged you in June. I'm sorry, so just throw a shoe at me. I'll try and make up for it with a longer than normal entry here that covers a lot of ground.

While we're only about 30 days from President Bush leaving office, the economy has yet to completely collapse, but it's come close.

After last week's President Bush incident in Iraq and in honor of the recent DVD release of Get Smart, The Secret Service has announced that they will all be carrying the next generation in protective & communications devices. The sneaker phone. It is a cellular phone connected via Bluetooth to the earpiece the agents wear. It can also be thrown as a short range tactile weapon and detonated remotely from the ear piece.

They are made in Mexico and in accordance with NAFTA will not set off the airport detectors as you enter Canada. I'm told the President likes them just for plain old jogging, and his dog Barney likes to chew on them. Barney was of course a gift from New Jersey's own former Governor Christie Whitman.

Now that you've been warmed up with my politically dark excuse for humor. Let's talk about some important financial stuff. Where should we start first?

Interest rates are always a fun subject. With the economy the way it is, the Treasury and the Federal Reserve have conspired this past week to send interest rates even lower via a federal funds rate pegged between 0% and .0025%. Huh? this is like free money. Yes, and that's what the banks need right now. However, many of them continue to horde it rather that lend it out to you.
The government's plan doesn't work so well if that happens. Banks and institutions are supposed to be lending that money so that people buy cars and other items and get the economy moving again. So if you need a new car, get out that and buy one. We hope you'd consider buying an American car and support our country and its workers.

A friend of ours recently traded his Ford Fusion in for a newer model, figuring the deals were great right now, he'd get a good number for his 3 year old trade in, and he'd support our workers.

I congratulated him on his purchase and in supporting the Mexican economy as the vehicle is made in Hermosillo, Mexico. Hopefully it at least has some American-made parts in it. I know it's at the tops of vehicle reliability as are most Fords, something generation X & Y choose to ignore. If you don't want to believe me, check with Consumer Reports, their annual April Auto issue is the bible of auto reliability ratings. It contains historical real world data coming directly from owner/subscribers. It has little good to say about the overall reliability reports of GM & Chrysler Products . But I certainly wish them well and hope someone buys their cars too.

Dealer's business (including non-U.S. brands) have been severely impacted by the credit crunch. You can't sell or lease cars if buyers can't finance them. At the same time, those of you with money in the bank (or any viable investments left) face the implication of Fed-induced low rates of return. Maybe it's time to look at some fixed annuities with insurers who's A.M. Best financial strength rating hasn't been totally trashed. Sometimes I think that putting your money under the mattress will return as a fad. Besides, they fit so nicely in tight parking spaces where those SUV's can't go.

There is a positive downside to the lower interest rates. You may be able to refinance your home at historicallly low rates, at or below 5% for a conforming 30 year mortgage. Don't wait, we don't know how long this sale will last. And of course, before you take such a step, be sure to check your credit report with the big three credit reporting agencies. Citizens in many states are entitled to do this once a year for free. Visit annualcreditreport.com. Don't be fooled by other sites that sound similar and NO, you don't have to pay for this or buy any money costing extra services.

On to taxes. Year end advice: If you have stock or mutual fund losers outside your tax sheltered retirement accounts , you can sell them at a loss and offset any gains for 2008. You can write off up to $3,000 more than your gains (married filing joint or single filing status).

As we let a few of you know already, AARP was on Congress's case to suspend the 2008 required minimum distributions (RMD) from retirement plans and IRAs. This was a great idea since investment values have crumbed and the amount to be distributed is based on the prior year's end total account balance. The result being that some retirees would have to take out a big chunk of what's left. Congress tried, but they fumbled the ball (just like the automaker bailouts). They made 2009 the year they would freeze the distribution requirement. Sorry Congress, too late and wrong year. Thanks for nothing. In fact, they may have made it worse. If you forgo the 2009 distribution, you may have to distribute more in 2010. As for the fear about next year's tax rates being higher under President Obama, it looks like that is on hold with the current economic situation. Current Bush reduced tax rates implode in 2010 anyway when the old tax law re-assert themselves automatically.

Happy wishes in the Holiday Season for a better economy in 2009, more jobs, and a Congress and President that can get the simple things right, and tackle the hard ones without coming out looking like bumbling fools.

So I haven't Blogged you lately

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Mon, 02 Jun 2008 17:13:00 +0000

Well our blog got off to a rousing start in early 2008, but as the tax season progressed the postings seemed to drop off, kind of like a race horse that stopped to eat the grass after the first turn.

Well not completely true. Rather I penned three articles for the The Record. The regional newspaper in North Jersey. The articles appeared in the Friday Business section over the Winter. If you'd like to read them, click the linked text below to go to the article on The Record's website.

The first was on getting the most from your business's financial accounting/reporting. Kind of an essay on how useful you business's accounting information can be if you take the time to understand it and ask your CPA for the right services for you.

The next was on how to compute the cost basis of your stock investment in a rather obscure company called Overseas Partners Ltd. This was a Bermuda company spun-off from UPS (United Parcel Service) that liquidated in 2007. Since some of our clients work(ed) for UPS, I know the rather obscure and complex answer to this question.

The last article to appear was on the tax implications of moving your life out of the New Jersey/New York area to sunny Florida. Just in case you're thinking about it, it can get quite complex and the important points in the article apply to individuals as well as business owners.

So now that summer is almost upon us, I hope to be blogging you all a little more often, so stay tuned. If you haven't heard yet, we have many new exciting financial services to offer you. Coming soon to an email box near you. I can't wait to tell you about them, but I have to since a few components are still being finalized.

Let's talk about something else...

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Sun, 02 Mar 2008 10:45:00 +0000

Are you tired of talking about taxes? Yes me too. So let's talk about something else you many not want to talk about, the economy.

Our economy seems somewhat messed up. The real estate market in most of the country has cycled down, in some areas worse than others. The Federal Reserve Board was previously hiking interest rates, they are now aggressively lowering them in a effort to fend off a recession. Job losses and layoffs continue to mount, and our currency has devaluing verse most European currencies. Other countries seem to dislike our governments policies, and Exxon has declared war against Venezuela and Hugo Chevez.

The Canadian dollar (known as the loonie) is now amazingly worth a tad more than our greenback. Just a few years ago one CN dollar was worth only 65 cents US.

So with the US Economy lost in innerspace, pay attention to what your next Presidential candidate has to say about what he or she plans to do about it.

What's a good way to keep track of the all this economic thrall? One of my favorites is the weekly email newsletter that you can subscribe to for free from HSH Associates, a financial publisher coincidentally located in our home state of New Jersey. HSH sells statistical data to banks, mainly on mortgages. Their weekly Friday email newsletter update mortgage rates and gives some excellent general economic commentary worth reading. If you're looking for impartial consumer friendly mortgage advice or want to keep an eye on interest rates and the economy, HSH is one of the best sources of information out there. Visit their homepage too, most of the content is very useful, consumer oriented, and absolutely free of charge.

You can't win if you don't play...

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Fri, 15 Feb 2008 12:13:00 +0000

No I'm not talking about the Lottery, just more on the Federal Economic Stimulus Rebates. Seniors, the disabled, and low income filers who collected more than $3,000 in wages, social security, or veterans disability benefits are entitled to get the rebates.

There's only one problem. Some of these people are not required to file a federal tax return. So the IRS advises that they must file a return regardless and show their taxable and nontaxable income in order to get the rebate.

So if this applies to your parents, aunt, uncles, friends, enemies, etc., you might want to spread the word around. Free money is available for the asking. $300 for singles, and $600 for couples. You just have to file a 2007 Form 1040.

Congress passes tax rebate bill!

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Sat, 09 Feb 2008 21:50:00 +0000

Congress passed the President's tax rebate plan yesterday. It's on it's way to W who is expected to sign the bill next week. Married couples making up to $150,000 will get a rebate check of $1,200. Individuals making up to $75,000 will get a $600.00 rebate. There is also an additional per child rebate of $300.00 each. People with incomes slightly higher than those amounts will get a partial rebate. Seniors and the disabled have been included to some extent.

We have been advised that rebate checks are expected to go out some time in May. I'm told that if you do not file your tax return by April 15, 2008, your rebate could be delayed until December. Hint: call Fred today and schedule your tax return appointment or mail in your information.

There are no revenue enhancements as part of this tax bill. Translation: charge that to the Big Red, White, and Blue Master-Deficit card! The incentives are being funded with a $150-$200 billion increase in the federal deficit. The estimate of the amount of the deficit increase seems to vary depending on the source of the information.

Businesses are also included in this tax bill. According to currently release information on the bill. They get a $250,000 1st year #179 write off for new equipment in addition to a 50% 1st year bonus depreciation write off. This is designed to stimulate the commercial side of the economy and encourage capital item purchases of big ticket items.

Groundhog exits burrow, Fred goes in...

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Sun, 03 Feb 2008 13:56:00 +0000

Yesterday February 2nd: Punxatawney Phil saw his shadow (thus 6 more weeks of winter). He made no comments about the state of the economy or any pending recession.

Tax filers have even longer, until April 15th as Fred will be hibernating in his office Monday through Saturday until then.

The Federal Reserve Board cut the discount rate again this past week. What does this mean to you? It's a great time to consider refinancing your mortgage or other loans. Contact your local lender, check the newspapers and visit the consumer friendly hsh.com for mortgage rate information.

Does the IRS owe you a refund of $102.38?

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Fri, 01 Feb 2008 05:12:00 +0000

We've received numerous emails from clients over the last couple years asking about an official looking email from the IRS saying they are due a refund, usually a dumb amount like $102.38.

Q: : Does the IRS know your email address? Yes or No?

A: No, they definitely do not. How could they, you never gave it to them. They do not generally correspond by email anyway. These emails are fake, they are spam, they are phishing in an attempt to get your personal information such as social security number, bank account numbers, etc in hopes of getting your money, identity theft, and fleecing you dry.

Under no circumstances should you click the link or reply to these emails.

The latest is a scam related to the forthcoming recession preventing rebates that Congress and President Bush are discussing. They claim they need your bank account information so they can electronically deposit it into your account.

NO! NO! NO! Please ignore these phishing emails.

Welcome to The Fred Knows Blog

noreply@blogger.com (Fred N. Boehm, C.P.A.) — Fri, 01 Feb 2008 04:27:00 +0000

Welcome to Fred N. Boehm CPA's "The Fred Knows Blog" at Blogger.

As my wife Dawn has a habit of saying:

"Fred, How come you know everything?"

My response back is: "Well sometimes I do, but that's my job".

If you are a client, prospective client, or a friend of our firm, it is my job is to let you know important stuff going on in the tax, finance, and accounting worlds that affect you.

We sometimes have done this in the past via email, but a blog allows us to do this really fast, provide you hot links to information on the web, and maybe even some relevant photos. It's a great business tool, and hey, it's very hip to blog these days.

It's possible to subscribe to this Blog and receive it on every update via email or an RSS reader". Please click on either word link here or at the top left of our Blog.

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