Tax Update and the Coronavirus

With fears of COVID-19 changing our lives at the present moment, it is easy to let something like taxes fall by the wayside. While Congress is considering extending the deadline, it actually pays to get moving on your return sooner rather than later, especially if you are due a refund. With all the financial uncertainty during the crisis, it is better to have that money in your pocket now more than ever.

On Friday, March 13, 2020, President Trump declared a national emergency over the coronavirus, setting the stage for the Treasury and IRS to offer administrative tax relief. Some of the solutions being discussed include extending deadlines for tax return filing and tax payments, waiving penalties for late payments and interest, and expediting amended tax return processing.

In addition, the House and Senate are voting on a bill to provide tax cuts for employers offering emergency sick leave. It does not include the payroll tax cut sought by the President, but it does require insurers to cover coronavirus testing, and it provides enhanced unemployment benefits and increased food aid for children, among other things. The Senate is expected to pass the bill this week, and a Presidential signature after that is all but certain.

The President has announced that he will instruct the Treasury to allow individuals and businesses that are negatively affected by the coronavirus to defer their tax payments beyond the April 15 deadline. Individuals and businesses will have an extra 90 days to pay the IRS if they owe additional income tax for 2019.   Please note that I did not say additional time to FILE!  This is tax law we are dealing with.  Laws are subject to both interpretation, as well as clarification.  Remember, 2020 is a leap year; therefore, 90 days would actually be July 14th, not July 15th!  There’s a lot of “noise” out on social media and a lot of misinformation being delivered by the media.  As a tax professional – Enrolled Agent, Certified Tax Planner, and Certified Tax Coach – it is my goal to put before you TAX FACTS and provide you with reliable information.

Normally, taxpayers owe any balance of tax due by April 15.  As part of the government’s response to the coronavirus, individual and small business filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million — without incurring interest or penalties. Please be aware, this is not an extension of time to file tax returns or filing a request for an extension, but does provide some relief for those who owe tax.  It has always been my practice to schedule balance due debit amounts (as a payment convenience for the taxpayer) when filing returns for our clients to be paid by April 10th in order to avoid the mass rush and overload on the IRS computer systems (which have happened in the past) and we will continue to offer that option.

If you feel that it is necessary for you to delay the payment of your taxes beyond that date and choose to take advantage of the 90-day payment deferral, we will provide you with a payment voucher as part of your tax return.  It will be your responsibility to decide “when” you send in the payment.  For taxpayers who may have already filed their returns and scheduled a delayed payment to the IRS, you do have the option of contacting the IRS directly at 888-353-4537 to cancel your electronic payment.   You will then need to make arrangements to either mail your payment in, or reschedule your payment directly with the IRS using their Electronic Federal Tax Payment System (EFTPS).  The IRS has indicated that all penalties and interest “should” be waived if the payment is timely received.  Since this is a new process, only time will tell as to whether or not you will receive IRS correspondence regarding the delayed payment.

Also, please keep in mind that the current tax payment deferral announcement made by U.S. Treasury Secretary, Steven Mnuchin, made NO mention of any delay in the payment of quarterly estimated tax payments, payroll taxes, estate taxes, or gift taxes.  So for now, we are recommending that all of those tax payments be made according to their regularly scheduled due dates.

It is important to remember that all bills must pass both the House of Representatives and the Senate and be signed into law by the President. There are many things being discussed in the media (such as the $1,000 stimulus payment) that have not yet become laws. Until they do, the current laws stand, including the due dates for tax returns and extension requests.

As stated by the U.S. Court of Appeals’, Judge Learned Hand,  on July 14, 2009, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Here at Lynco Financial & Tax Services, Inc., we serve and guide our clients under the spirit and direction of that ideology.

Our goal is to help people KEEP more of what they make and SAVE more of what they keep.  We help people make smart choices about their money and finances so they can pursue their goals and what is important to them.  We do this by helping people get their entire financial house in order, and we help them keep it that way for life.

We will continue to keep you informed about changes that directly impact and benefit you. In the meantime, be well and stay healthy. If you have any questions regarding taxes, finances, or any other planning issues, please don’t hesitate to contact me!

Paying Too Much in Taxes? (Part 2)

Time is Running out to Lower Your Taxes for 2019

Year-End Moves that Can Help!

Part II of III Part Series

Think you are paying too much in taxes today?  Do you realize that we are at the lowest tax rates we’ve had in 100 years!  Yes, in 1917 the top tax rate was 67%; in 1918 it went to 77%.  Too far back? Okay. How about 1936 – 1940 at 79% where it remained until 1942-1943 when it went to 88%?!  Still not high enough? Okay. How about 1944-1945 at Nostalgic Pay Your Taxes Here94%? Throughout the 1960s, 1970s and until 1980, the highest rate capped out at 70%.  It wasn’t until the early part of the 1980s that we saw rates drop to an upper level of 50% for the maximum tax rate.  Along came the 1986 tax act and the top marginal rate dropped to 38.5%.  Throughout the rest of the 1980s, 1990s and up until today, our maximum tax brackets have ranged from 35% – 39%.  So what changed?  The spread between the brackets and the levels of income that are taxed at some of the lower rates.  For 2019, a married couple can have taxable income up to $321,449 and still be in the 24% tax bracket ($160,724 for a single taxpayer).  Now that’s a sweet rate compared to history!  Are you planning to maximize your opportunities?

  • Feeling Charitable AND you are 70 ½ or older? You know where this is going….yes, your Required Minimum Distributions (RMDs). Do you need all of the money you are required to withdraw from your IRA each year?  If not, taxpayers who are 70½ or older can transfer up to $100,000 from a traditional IRA tax-free to charity each year, as long as they transfer the money to the charity directly.  No, you don’t have to do the entire $100,000. You can do any amount up to that, including your annual RMD.

The Qualified Charitable Distribution (QCD) will count as your RMD without being added to your adjusted gross income, which can be a real bonus if you were going to take the standard deduction instead of itemizing. (You can’t itemize charitable contributions that were contributed via a QCD). The transfer could also help keep your income below the threshold at which you’re subject to the Medicare high-income surcharge, as well as, hold down the percentage of your Social Security benefits subject to tax. WOW!  This is a savings idea in so many ways if you were already making charitable contributions!

Funds must be transferred directly from your IRA custodian to the qualified charity. This is accomplished by requesting your IRA custodian issue a check from your IRA, payable to the charity.  Be sure to allow plenty of time to complete a QCD prior to year-end, because the money has to be out of the account and to the charity by December 31.

  • Still Feeling charitable? Can those contributions really make a difference on your Make a Changetax return this year? Maybe!  Are you giving at roughly the same level each year but not really taking advantage of the tax savings – maybe because you are not itemizing?  You have options. Consider either bunching your contributions or using a donor-advised fund.

With the “bunching” concept, you would actually contribute your current year amounts AND next year’s amounts all prior to the end of the current year.  Then, next year, you would skip your contributions (since they were already done this year).

Another option is consider using a Donor Advised Fund.  Putting your money or other assets, such as stocks or personal property, in a donor-advised fund allows you to deduct the entire contribution in the year you make it and decide later how you want to dole out the funds to the charities of your choice.  Contributing one lump sum this year may help lift your deductions above the standard deduction amount and allow you to itemize. Obviously, in order to take advantage of either of these strategies, you have to have the cash on hand to do so, but applying these strategies can save you a bundle in taxes. You can couple the above by also cleaning out your unwanted household items.  Yes, you could have a garage sale, but really, are you going to?  Donating clothes, kitchenware or furniture you no longer need can also boost your deductions while helping a worthy cause.  Your deduction is based upon the donated item’s “fair market value” (or what it might sell for at a thrift or consignment shop). I have provided a number of useful tools for your use on my WEBSITE.

You will need a written acknowledgment from the organization if you are claiming a contribution of $250 or more. We also recommend taking photos of the donated items for your records and as documentation to support your deduction. For donated items valued at more than $5,000 (very large donations, art, antiques), you will be required to have a written appraisal by a qualified professional.

  • Are you taking full tax-advantage of your Retirement Savings Plan? MAX it out! As the year comes to a close, you may be able to squeeze a little more money from each paycheck for your retirement savings. Limits for 401(k) contributions are up to $19,000 and you can contribute another $6,000 in catch-up contributions if you’re 50 or older.

Unless you elect to contribute to a Roth IRA (which is NOT a bad idea either), pretax contributions will lower your take-home pay and reduce your tax bill. If your employer offers a Roth 401(k), you can make contributions that won’t lower yourCoins Spilled from Jar taxable income now but withdrawals will be tax-free in retirement. If your employer offers both types of plans, you can direct new contributions to the Roth 401(k) rather than the pretax 401(k) at any time during the year.

Don’t have a 401(k) plan at work?  No problem, consider contributing to an IRA for you and your spouse.  The contribution limits for 2019 are $6,000 each.  If you are age 50+, then you can contribute an additional $1,000.  Doing so for each of you can add up to some tax savings.

Don’t like the State of Taxes? If you are living in a high income tax state, you could move.  It may seem like a sarcastic comment; however, there can be significant differences in the levels of state income tax from one state to another.  States like California, Hawaii, Oregon, Minnesota, New Jersey and the Washington DC have some of the highest rates of tax in in the nation, while other States such as Alaska, Florida, Nevada, South Dakota and Texas (there are seven in all), have no state income tax.

The other thing you can do is PLAN!  Get help from a qualified tax professional.  Although using off the shelf software can be inexpensive, it can’t help you think through and analyze your personal situation like a qualified tax planner can.  If you are a business owner, have had changes to your family dynamics during the year, experienced a significant fluctuation in your income, are planning for or in retirement or earned money from several different sources, hiring a qualified and experienced tax planner may be worth the cost to ensure that you are NOT overpaying your taxes!

At Lynco Financial & Tax Services, Inc., we rescue our clients from paying thousands of dollars in unnecessary taxes every year. Lynn is proud to have earned the special designations of Certified Tax Planner & Certified Tax Coach, which means she is an expert in tax planning strategies and has the ability to identify tax credits, deductions, and loopholes that the average CPA, accountant, or tax preparer does not know how to find or is simply too busy to even look for.

Our goal at Lynco Financial & Tax Services, Inc. is to help YOU, Your Family and Business Owners – KEEP more of what you make and SAVE more of what you keep!  We help people just like YOU  make smart choices about your money and finances so you can pursue YOUR goals, CUT YOUR TAXES and spend more time on what is important to YOU.

Call our office today at 863-295-9895 if you would like to STOP overpaying your taxes and for more information on how we can help you!

 Lynn A. Schmidt, EA, CTC, CTP, CFS, CSA, ARA

Enrolled Agent, Certified Tax Planner & Certified Tax Coach

Tax & Financial Strategist

What Happens in Vegas…

…Isn’t going to stay in Vegas – this time, at least!

At the end of June, Lynn, Babs and CJ all got a chance to take a trip to Vegas.  Lynn was able to attend a tax workshop packed with 16 hours of continuing education – find out more here.  Then, CJ joined Lynn to attend the annual HD Vest Connect conference to learn some financial strategies – you can read more about it here.

In their “down time,” they were all able to enjoy the sights and sounds of Vegas – whether it was taking in a show, watching a movie, relaxing by the pool, or, of course, playing some machines!  They wanted to be able to share their great time with all of their clients back home, so please enjoy the pictures provided below.

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The HD Vest Connect2017 conference was held here, at the Wynn/Encore hotel.

sugar ray
One of the keynote speakers of the conference was Sugar Ray Leonard – he was very inspiring!

ST-BAM-Background
After the conferences were all over, Lynn, Babs, and CJ spent the weekend relaxing at Sam’s Town – a hotel with a casino, buffet, multiple restaurants, indoor movie theater, waterfall light show and much more!

 

So there you have it – a little glimpse into our recent time at Vegas.  What about you?  Have you ever been to Vegas?  If so, what was your favorite part of it?  Let us know in the comments – we’d love to hear from you!

Hurricane Preparedness – Sales Tax Holiday in Florida

Hurricane 01

Florida Residents – Don’t miss out on your opportunity to be prepared, arm yourself with some supplies, and $ave $ome $ales Tax Dollar$! During the holiday period of June 2-4, 2017 (that’s THIS week!) qualifying items related to hurricane preparedness are exempt from sales tax. This holiday does not apply to sales in a theme park, entertainment complex, public lodging establishment, or airport, or to the rental or repair of any of these items.

A list of qualifying items and more details are available at http://floridarevenue.com/DisasterPrep/Documents/tip17a01-05.pdf.

Qualifying Items

Selling for $10 or less:Candle 06
• Reusable ice (reusable ice packs)

Selling for $20 or less:
• Any portable self-powered light source, battery-powered flashlights, battery-powered lanterns
• Gas-powered lanterns (including propane, kerosene, lamp oil, or similar fuel) and candles

Selling for $25 or less:
• Any gas or diesel fuel container (including LP gas and kerosene containers)

Selling for $30 or less:
• Batteries, including rechargeable batteries and excluding automobile and boat batteries (Eligible sizes: AA, C, D, 6-volt, 9-volt)
• Coolers and ice chests (food-storage; nonelectrical)

Selling for $50 or less:
• Tarpaulins (tarps), visqueen, plastic sheeting, plastic drop cloths, and other flexible waterproof sheeting
• Ground anchor systems, tie-down kits, bungee cords, ratchet straps
• Radios and two-way radios (battery-powered, solar-powered, or hand crank)

Selling for $750 or less:
• Portable generators that will be used to provide light, communications, or to preserve food in the event of a power outage

NOTE: Eligible battery-powered or gas-powered light sources and portable self-powered radios qualify for the exemption even though they may have electrical cords.

 

Remember, our goal at Lynco Financial & Tax Services is to help YOU KEEP more of what you make and SAVE more of what you keep! We help people like YOU make smart choices about your money and finances so you can pursue YOUR goals and what is important to YOU.

History Behind the Holiday: April Fools’ Day

Our annual calendar is filled to the brim with holidays we celebrate, many of which we do not truly know the origins. So in honor of April Fools’ Day, we thought we’d do a little history lesson to inform those who may not know the real meaning or history behind the holiday (and educating ourselves a little bit in the process).

April FoolsWhen & Where Did It Begin?

The tradition of “April Fools’ Day” was popularized in England on April 1, 1700 by playing practical jokes on each other. However, this day is believed to date back as far as the late 1500’s.

How Did It Begin?

The exact origins of April Fools’ Day is unknown, however, there are a few theories as to where and when it originated. In 1582, France switched from the Julian Calendar (which had the New Year beginning in late March or early April) to the Gregorian Calendar (used today in which the New Year begins on January 1st). This change was called for by the Council of Trent in 1563. Those who were late in getting this information or who simply did not believe it continued to celebrate the new year at the end of March/beginning of April, and they became the recipients of many jokes and hoaxes.
Other possible origins of April Fools’ Day are Hilaria, an ancient festival celebrated in Rome at the end of March which involved people dressing in disguises, and the vernal equinox, which is the first day of Spring in the northern hemisphere described as when Mother Nature tricks people with fickle weather.

How It’s Celebrated TodayApril 1

Obviously, there are many pranksters who participate in April Fools’ Day on an individual basis, but did you know that newspapers, radio and TV stations participate as well? For example, in 1957, the BBC ran a news story about Swiss farmers who were having a record-breaking spaghetti crop. In 1996, Taco Bell falsely announced its plans to purchase the Liberty Bell and rename it the “Taco Liberty Bell.” Another fast-food conglomerate, Burger King, advertised a “Left-Handed Whopper” in 1998, resulting in many confused orders being placed.

How We Celebrate

Here at Lynco, April Fools’ Day unfortunately pales in comparison to the upcoming tax return deadline, which is on Tuesday, April 18th this year. However, since a client once thought the amount of tax she owed was actually an April Fools’ joke, Lynn has decided to no longer tell a client how much tax they owe or how big their refund in on April 1st!

So, did you know the history behind April Fools’ Day? And how do you celebrate it? Let us know in the comments below!

How to Save A Life

jigsaw-people

I received some shocking news from my mother yesterday.  First of all, let me preface this by saying that I live with my mom in a condo located in a retirement community in central Florida (i.e., you have to be at least 55 years old to own a condo there, and your kids can live with you as long as they’re pre-approved).  Anyway, after my mom got home from work, she informed me that our 70-something year old neighbor had passed away in his home.  The people who found him weren’t sure how long he’d been there or what had caused him to pass away.  I could tell my mom was racked with guilt – what if, in his final moments, he’d made some kind of noise we might have heard and disregarded that could have saved his life?  I told her not to feel bad – there was nothing we could have done – but it did bring to mind a life lesson to be learned.  How many elderly people do my mom and I know who live alone?  They need people (friends or family) to check in on them periodically to make sure everything’s okay.  That way, accidents that can be prevented or addressed in a timely manner ARE addressed in a timely manner.

For example, my mom’s parents moved out to New Mexico when they retired.  They were miles away from any family, and as they grew older, they had less and less ability to reach out to friends on a daily basis.  However, next door to my grandparents moved a young family that immediately took my grandparents under their wing.  They were there, checking on them, offering to give them rides to the doctor or hospital when needed, making them food when they couldn’t cook for themselves – simple things that went a long way toward ensuring my grandparents lived a longer, more fulfilling life.  I will never forget the kindness they showed my grandparents, and I will be forever thankful.

It’s up to us, the children and the grandchildren (and even neighbors), to ensure our elderly friends and loved ones are looked after and checked up on a regular basis.  Our website at www.LyncoFinancial.net has an “Info for Seniors” page packed with articles and other helpful tips for family members of seniors to know.  Please visit the page to arm yourself with the knowledge you may need to one day, possibly, save a life.

Helpful articles on the “Info for Seniors” page:

 

-Written by CJ Volpe, Client Services Manager at Lynco Financial & Tax Services, Inc.

Family Fun this Fall!

Just in case you’re sitting at home wondering what to do with your family in Polk County this Fall, we’ve got you covered!

Pioneer Days in Lake Wales

When:  October 29-30, 2016  (Times Vary)
Where:  On the Shores of Beautiful Lake Wales
More Info:  Call 863-678-4182 or visit http://www.cityoflakewales.com/555/Pioneer-Days

Harvest Holler corn mazeHarvest Holler in Polk City

When: Fridays, Saturdays & Sundays thru November 13, 2016  (Times Vary)
Where:  Off of Hwy 33 at 950 Tavares Rd, Polk City, FL 33868
More Info: Call 863-326-7910 or visit www.harvestholler.com

CornFusion Crop Maze & Fall Festival

When: October 28-30, 2016  (Times Vary)
Where: 13444 Moore Road, Lakeland, FL 33809
More Info: Email info@CornFusionMaze.com or visit http://www.smithranchlakeland.com/cornfusion-crop-maze-and-fall-festival.html

Polk County Sheriff’s Haunted Jail Tour

When: October 28-29, 2016  (6-11 PM)
Where: PCSO jail, 255 N. Broadway Avenue, Bartow, FL
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

Rocky Horror Picture Show

When: October 28-29, 2016  (Part begins at 9 PM; Movie at midnight)
Where: Polk Theatre, Lakeland
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

Mel Brook’s Young Frankenstein

When: October 28-30, 2016  (Times Vary)
Where: Lakeland Community Theatre, 121 S. Lake Ave, Lakeland
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

costume-pumpkinPumpkin Safari

When: October 29-30, 2016 (1-6 PM)
Where: Safari Wilderness Ranch, 10850 Moore Road, Lakeland
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

Brick-or-Treat at Legoland

When: October 29-31, 2016  (10 AM – 8 PM)
Where: Legoland, Winter Haven, FL
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

St. Joseph’s Annual Fall Carnival

When: November 4-6, 2016  (Times Vary)
Where: St. Joseph, 210 West Lemon Street, Lakeland
More Info: Visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

The Shallow Grave

When: Fridays & Saturdays thru November 5  (Times Vary)
Where: 701 42nd St NW, Winter Haven
More Info: http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

For more single-date events going on in Polk County, please visit http://lrcpolk.com/2016-fall-festivals-halloween-events-polk-county/

 

Well, there you have it!  So let’s get outside this weekend and have some fun with our families!  Where are you going this Fall?  Let us know in the comments!

 

Do You Feel Lucky? | Lynco Financial & Tax Services, Inc.

In honor of St. Patrick’s Day!

Recent changes in estate tax laws could affect the strategy you have in place.

Source: Do You Feel Lucky? | Lynco Financial & Tax Services, Inc.

Announcing the Winner!

Last week, we had a book signing for Lynn’s recent best-selling book, “The Tax Detective: Uncovering the Mystery of Tax Planning,” and we also had a sign-up sheet for our monthly e-newsletters.  We proposed that every person who signed up to receive our newsletters would get entered into a drawing for the chance to win a complimentary 30-minute tax planning consultation with Lynn.

Well, thank you to every who came to the book signing and made it such a special day!

We had our staff accountant, Michelle, do the honors of drawing our winner.

Tax Planning Consultation - Drawing the winner
Here Michelle is, about to draw the winner.

Tax Planning Consultation Winner
Congratulations, Rhonda!

Congratulations to Rhonda for being selected as the winner!  We can’t wait to see you for your complimentary 30-minute tax planning consultation with Lynn!

Thank you again to everyone who stopped by the book signing as well as those who bought books and signed up to receive our newsletters.  Have a wonderful day, and remember, our goal is to help YOU keep more of what you make and save more of what YOU keep!  Call us today at 863-295-9895 and let us help you.

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