In the recent case, Estate of Baral v. Commissioner (137 T.C. No. 1), the United States Tax Court held that payments of almost $50,000 made to an elderly woman's caregivers qualified as deductible medical expenses under the Internal Revenue Code because the expenses were not compensated for by insurance and the services constituted qualified long-term care services as defined in section 7702B(c) of the Code.

The background of the case was as follows: Lillian Baral, now deceased, was diagnosed by her physician as suffering from dementia. The physician determined that she required round-the-clock assistance and supervision for medical reasons. Ms. Baral's brother, acting under a power of attorney, hired two unlicensed caregivers to provide 24-hour care, and the cost of that care was deducted as a medical expense on Ms. Baral's income tax return. The IRS disputed the deduction but was ultimately overruled by the Tax Court, which held the deduction to be a legitimate medical expense.

Worried about red flags? Want a second opinion? Let Kenneth Hoffman review the return you’ve prepared.

If you would like to purchase my Tax Review Package, the first thing that you need to do is to contact me or call me at 954.591.8290 to schedule your Tax Return Review.

Once your Tax Return Review is scheduled, you will confirm and reserve this date by paying for the package.

Details about the Tax Return Review are:

Companies typically go public to raise money to expand. But Facebook doesn't really need cash from an IPO. The company made nearly $4 billion in advertising revenue in 2011. So why go public?

Well, companies also go public to let founders and early investors cash out. Mark Zuckerberg, Facebook's 27-year-old founder, is already a "paper" billionaire, ranked #14 on the Forbes 400 list of richest Americans. (Not many entreprenuers find themselves richer than Scrooge McDuck while still at an age that they watch Scrooge McDuck.) But Facebook's IPO will give Zuckerberg and fellow early investors liquidity, converting paper wealth into cash for the houses, charitable gifts, and other spending that new dot-com millionaires historically indulge in.

The IPO will also stick Zuckerberg with a historically large tax bill. (You knew that was coming, right?) In fact, one of the big reasons the company is going public in the first place is give Zuckerberg a way to pay taxes when he exercises options to buy even more stock.

Here's how it works. For tax purposes, the value of most stock options is treated as compensation and fixed the day you exercise them -- whether you actually sell them or not. Let's say you pay $5 to exercise a share of your employer's stock, on a day when that stock is worth $25. Your company gets a deduction for that $20 per share, even though there's no cash outlay. That's great for the company. But at the same time, you'll owe immediate tax on $20 of income, even if you hold the stock in hope of future appreciation. (If the stock tanks before you actually sell, you still owe tax on that gain.) That may notbe so great for you!

Zuckerberg currently owns 414 million shares of Facebook. He also has options to buy another 120 million shares for -- get this -- just six cents each. Zuckerberg has announced plans to exercise those options and sell enough shares to cover his taxes. We don't know yet what Facebook shares will trade for. However, private-market trades have valued shares at $40 each. If Zuckerberg exercises all 120 million options when shares are valued at that price, his taxable gain will be nearly $5 billion. He'll owe 35% to the IRS, plus 10.3% to the state of California, for a total tax bill of over $2 billion. That's right, billion with a "b." Can you imagine signing a return with a billion-dollar tax bill? How about signing a checkfor that much -- payable to the IRS!

The important thing to realize here is that Zuckerberg's tax bill came as no surprise. It's actually the result of careful planning. Remember, Zuckerberg's pain is Facebook's gain. The strategy will probably give Facebook enough deductions to wipe out the entire tax on its 2011 profit, plus refunds from 2009 and 2010, plus even more to carry forward.

Think about that the next time you click the "Like" button on your computer. And remember, we're here to bring the same sort of smart tax planning to yourbusiness.

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form. 

Driscoll petitioned the Tax Court, which held that Driscoll could exclude from income amounts used to provide his second home.  The Tax Court reasoned that singular terms in the Code also include their plural forms, and, therefore, the language in section 107 of the Code referring to “a home” could include more than one home. 

The 11th Circuit held that the “singular-to-plural” provision should only apply if the context of section 107(2) of the Internal Revenue Code supports such an application.  The 11th Circuit looked at the definitions of the word “home” and concluded that the word “has decidedly singular connotations.”  In support of the court’s decision, the legislative history of section 107(2) was examined and words such as “the” or “a” always preceded the word “home”; therefore, the court held that “home” was always intended to mean one home.

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form. 

If Congress can't agree on a way to extend the payroll tax cut, a relatively simple issue, there's little hope of them coming to gripes with an extension of the Bush tax cuts. That's going to be far more difficult.

But higher taxes won't be the end of the consequences. Those higher taxes are almost sure to put a damper on economic activity. We might be treated to the worst of both worlds--higher taxes and a second recession. While it's still early, recent history does not bode well for a compromise before the end of the year.

Contact us TODAY for your tax plan.

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form. 

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form. 

For example, the paving of a dirt road to your home or business. You can add them to the basis of your property if they increase the value. On the other hand, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements.

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form. 

We'll be doing some different things this year to deliver greater options to you and seriously increase the value we deliver in the preparation of your tax return.

Value and Transparency

You will have four options to chose from as we serve your tax return needs: Gold, Silver, Bronze and Basic. We want these to bring transparency in what we will do for you while allowing you to choose the value you perceive in each option. You get to choose your price according to what YOU need and value. Here are the details:

Under the Gold Tax Package, we will deliver your completed return to you within 4 days of you delivering all of your tax information to our office and your tax return price payment. We will also review your last 3 years tax returns looking for mistakes and missed opportunities. We will also include our IRS Letter Notice service, that is, we will respond to any IRS Notice for the tax returns we prepare at no additional charge. Our IRS Letter Notice does not include audits. Additionally you have unlimited access to us via telephone or email for any tax questions you may have throughout the year. If your tax questions require additional research, you will enjoy a 50% discount off our normal rate. Lastly, we will provide tax planning in the fall and you will enjoy a 25% discount on any services we provide to you. This package will be 80% higher than our normal tax preparation rate.

Under the Silver Tax Package, we will deliver your completed return to you within 8 days of you delivering all of your tax information to our office and your tax return payment. We will also include our IRS Letter Notice service for a 50% discount off our normal rate. That is, we will respond to any IRS Notice for the tax returns we prepare. Our IRS Letter Notice does not include audits. Additionally you have unlimited access to us via telephone or email for any tax questions you may have throughout the year. If your tax questions require additional research, you will enjoy a 25% discount off our normal rate. This package will be 40% higher than our normal tax preparation rate.

Under the Bronze Tax Package, we will deliver your completed return to you within 14 days of you delivering all of your tax information to our office and your tax return payment. We will also include our IRS Letter Notice service for a 15% discount off our normal rate. That is, we will respond to any IRS Notice for the tax returns we prepare. Our IRS Letter Notice does not include audits. This package will be 15% higher than our normal tax preparation rate.

Under the Basic Tax Package, we will extend your tax return to be completed during non-busy season hours, to be completed within one month after the tax deadline filing date. But you will receive a 10% LOWER price off our normal tax return rate.

Now you have total choice! For those that value a quick turn around time and premium added services, we've provided that option for you. And for those of you who value lower prices more than a quick turn around time, you get to have your way too! We know you will have questions about these options, so feel free to contact us and ask questions.

What to do next? Once you tell us which package you want to choose, all you have to do is provide your tax information to us after January 15th, make your deposit payment, and we'll do the rest!. All Tax Return Packages require a deposit of $150 before we begin. You can pay your deposit securely online by check or credit card HERE.

Please note, our normal tax return consists of one IRS Form 1040, Schedule A, one state return if required and e-filing. Additional forms and schedules incur additional costs. For the 2011 tax season our normal tax return preparation fee is $225, and our IRS Letter Notice service is $150. Please contact us for your custom price quote.

All tax returns must be paid-in-full before e-filing. 

Thanks for letting us serve you.

One of the ways I want my clients to leverage me as a resource is to share my knowledge with them so they don't have to do it themselves. This includes providing them with answers to questions they didn't even know to ask.

At least once a week I am asked the question, "What type of entity should I form for my business?"

With a few follow up questions, most tax advisors will answer this question and the client will be happy with the answer.

Then what usually happens is the client starts to learn more things as they progress in their business. These may be things they should have been doing or should not have been doing, but they are all things they wished they would have known sooner.

This is why I don't just answer the specific question at hand; I anticipate what the client doesn't know to ask. I have tremendous experience in the long-term implications of a tax strategy, which includes forming an entity, and I want to share my knowledge and experience with my clients so my clients can avoid common mistakes (that sometimes can set their business or investing back by years).

Even though the client has come to me with one specific question, I typically find myself asking the client many more questions that cover bookkeeping, tracking expenses, business or investing operations, additional goals they have, estate planning and exit strategy (to name a few).

Eventually most people learn these details, but usually it is not until they are at a point where they wish they had known about them sooner. This goes back to that question I hear when talking to prospects - "Why didn't my accountant tell me that?"

 If your current accountant or tax advisor has not brought you any tax saving ideas, contact us TODAY! I will review your last three years tax returns looking for mistakes and missed opportunities that may be costing you thousands of dollars in taxes.

 If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form.