Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for February, 2016

Tax returns have larger audience than normal…

Posted by taxguru on February 26, 2016

It’s not just presidential candidates who have their personal tax returns opened up for public scrutiny.  When we send IRS our private and confidential financial and tax data, we now have no way of knowing how many people are going to have access to that info.  IRS has had to admit this fact, while still requiring us to disclose absolutely everything to them.

Cyberattack total is more than twice previously disclosed: IRS

With the same security geniuses in DC “protecting” our medical info via ObamaCare, that data is just as safe from prying eyes as our tax data is.

UpdateIRS’s Official Explanation of the problem

Posted in IRS | Comments Off on Tax returns have larger audience than normal…

Visiting State Income

Posted by taxguru on February 15, 2016

I couldn’t care less about the Super Bowl, but there is an income tax angle that warrants repeating once again. 

Having a tax home in a tax free state, such as here in Florida, is a common tax savings technique, especially with professional athletes and entertainers.  However, unless they do every single bit of their income earning work inside the borders of their home state, they may be required to file income tax returns and pay taxes to other states in which they played.

For Cam Newton, Adding Super Tax Insult to Super Bowl Injury

Taxman Coming for Super Bowl Champion Broncos

Posted in StateTaxes | Comments Off on Visiting State Income

Let the finger-pointing begin…

Posted by taxguru on February 11, 2016

IRS chief: Blame rotten customer service and data hacks on Obamacare

Posted in IRS, ObamaCare | Comments Off on Let the finger-pointing begin…

Gift Tax Reporting

Posted by taxguru on February 11, 2016

From a Reader:

Subject: 709 form question

Hi, If my husband and I want to both gift the max ($14000) to our child and we both write separate checks, do either of us need to file a 709 ? Thank You


My Reply:

As long as either of your total gifts to your child for the year, not counting the exempt types (medical & education), don’t exceed $14,000 for the calendar year, neither of you will need to file a 709.

This is important to be aware of because if you each give him/her $14,000 this early in the year, additional gifts later in the year could push the total for 2016 over the $14,000 threshold and 709s may end up being necessary.

I have attached a short flyer that explains the gifting rules in a little more detail.

Good luck.  I hope this helps.



Follow-Up Q:

Hi Kerry,

   One last follow-up … Do the checks need to be written out of separate accounts that belong solely to myself and my husband ? Meaning, not joint accounts.



Follow-Up A:

It really doesn’t matter which accounts the money comes from.

It can all come out of a joint account and you can claim that half of the gift is made by each of you.

Likewise, all of the money can come out of a separately owned account and using the IRS approved concept of Gift Splitting, the gift can be attributed to both spouses.

I have attached more info on this from one of my main tax reference services, TheTaxBook.

I hope this into is useful.



Final Q:

Thank you!  But as long as both checks are under 14k , we do not need to file the 709, is that correct?

Final Reply:

You may have missed my point from the previous email about joint gifts.

The gifts don’t have to be in separate checks or from separate accounts. 

They can be in one or a dozen checks.  All you need to worry about is that the total given to your child during the year is less than $28,000.

I hope this info helps.


Final Comment:

Ok, thanks again !  appreciate the return !!

TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!

Posted in Gifting | Comments Off on Gift Tax Reporting

Corp tax rates by State

Posted by taxguru on February 7, 2016

Tax Foundation has an interesting look at the different tax rates that the various states levy on corporations

State Corporate Income Tax Rates and Brackets for 2016 

It has long been a common tax savings technique to shift income from high tax states to those with low or zero State income tax rates.  When we were in California, we helped clients shift a lot of income from that state’s high rate corp tax to zero tax states, such as Washington and Nevada.

There are a number of requirements to do this legally and avoid problems with the high tax state agencies who obviously don’t like this strategy; so anyone considering doing this should work with an experienced professional tax advisor and not try this technique on their own.  

Posted in corp, StateTaxes | Comments Off on Corp tax rates by State