Bruce Jones

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Christmas Greeting 2017

Tax Planning Easy for 2017 - More Challenging for 2018

December is a time to look forward to the holidays and take a bit of a break from business.  However, for real estate and business owners, it is also the time to look at the next fiscal year and forecast likely revenues and expenses. But because the tax laws have a good chance to dramatically change soon it is important that, while we keep a watchful eye to the future, we take full advantage of the laws currently on the books to maximize the income we can keep while we transition into next year.

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Have a Wonderful Thanksgiving Weekend!

It has been a crazy year, hasn’t it? With all the political turmoil across the nation, you would think the United States was on the brink of collapse. On the contrary, outside the political cocoon, our economy is actually doing rather well, with 4% unemployment and annualized growth close to 3%, and in my view, likely to grow even more.

Within those numbers, of course, there really are structural inequities that do need addressing, tax reform among them. But, as a nation we have a lot for which to be thankful, and we all need to stop and remember that the underpinnings of the USA are strong and will endure. 

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Why Does Our Government Allow Tax Deferral?

It is not uncommon when I present a tax deferral or tax elimination plan to a client, that they stop me and with a puzzled look ask, “how is this possible?” Or, “this sounds too good to be true.” These are typical reactions because many taxpayers are not aware that there is much in tax law that can be used to eliminate, reduce or defer taxes.  Instead, they only assume that the government is desperate for cash, and looks for every reason to extract from us as many dollars in tax as they can get away with. People can't believe that tax law gives as often as it takes!

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Do You Owe Back Taxes? Tackle Them Head On - Today

People fear the IRS. Even if you file and pay your taxes promptly every year, there is a lingering feeling that the Big Bad Bureaucracy could find some small error you made and hammer you with an audit.

That fear turns into real stress and anxiety, though, if you truly are behind in filing returns and paying taxes you owe. Let’s try to relieve the stress and reduce that anxiety by stripping the ominous packaging away and look at what the IRS is really trying to do.

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Trump Tax Plan - More Than It Appears, Or Less?

By Bruce Jones | Oct 03, 2017 | Tax Planning, Trump Tax Plan

All the headlines in the tax planning industry press last week focused on the Trump Administration’s second release of information about their tax reform push. What his tax team gave us was an improvement over the previous release earlier this year, in that it expanded from a one-page outline to a nine-page document.

But details were scant in the Trump Tax Plan, aside from a wish list of revisions to simplify the tax code by eliminating a raft of deductions, reducing the number of tax brackets and doubling the standard deduction, among other interesting ideas. Difficult decisions about where to place the tax bracket breaks, for instance, or whether a fourth bracket for very high-income taxpayers, were all left to Congress.

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Selling Appreciated Assets – Can You Shrink the Tax Hit to Zero?

The U.S. tax code is complicated and now stands at a daunting 70,000 pages, giving some taxpayers pause, as they assume every section contains a landmine that is going to trigger audits, payments and penalties.  Not true.  A more accurate perspective to take about tax law is to instead view it as the bridge to a significant amount of tax relief.  Congress through the years has created laws specifically to do just that.

Caution, of course, is always appropriate, but the code is packed with benefits to be captured. Thinking creatively about how you apply all the different pieces of the law allows a taxpayer to seize significant amounts is tax savings, while remaining completely within legal bounds.

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Mid-Year Tax Planning – Time to Reset Your Thinking?

As we hit the mid-point of 2017, we have six months of experience under our business belts, and six more months left to make the most of our yearly plan. Many of you may have adjusted your original business plan for the year considering unexpected events, good or bad. Perhaps you may also be contemplating some business restructuring to take advantage of new market conditions.

Regardless of your experience so far, you likely have a much clearer view about how 2017 is going to shake out fiscally for you. Consequently, now is the time to take a mid-year time-out to assess how you stand, and what moves you need to make to restore operational order to your enterprise and ensure you end up in the black on December 31!

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Selling the Family Business? You Have Options; Each Has Tax Implications

For me, the end goal of tax planning not just how much tax savings can be gained. It is how those tax savings can be used to benefit the client in the most meaningful ways possible. A project I had recently illustrates this real value of proactive tax planning for taxpayers.

A man contacted me wanting to sell his family farm and retire. During all his years of farming he had thought the built-up equity in his farm would provide the bulk of what he would need to fund retirement. Unfortunately, that was not the case. To simplify it quite a bit, at a sale price of $2,250,000, and after the sale costs and debt he owed were paid, he would have no amount left at all on which to retire. Worse, he would have to pull more than $600,000 “out of pocket” to pay the rest of the $1.2 million in taxes he would owe. He was deeply worried.

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Warren Buffett Emphasizes Tax Deferral Above Avoidance

If someone offered you an interest-free loan to buy a house, and the offer was legitimate, you would take it. As Warren Buffet has said more than once, using active tax planning to defer taxes is exactly that: An interest-free loan from the government.

Buffett usually makes these remarks in the context of how he manages his portfolio of assets.

When he “buys” or “sells” a company, subsidiary or division, it usually involves a swap of assets or stock between the entities involved, avoiding a sale that involves the exchange of actual cash. Taxes on the appreciated value of any asset swapped would only become due when the assets acquired in the exchange are ultimately sold. As Buffett holds stocks seemingly forever (‘the best time to sell a stock is never,’ he has said), those taxes may never come due!

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