Mike Butler shows you why he has selected Investor Carrot Websites as
The Absolute BEST website for Real Estate Investors
This short video shows you how Brain Dead Simple and it is to make this your Absolute MUST have resource for all serious investors. Investor Carrot website have “built-in SEO” to ensure you get great placement on search engines like Google.
Seriously, take a chill pill, s-l-o-w down and invest 60 minutes of your precious and valuable time to see how this website will be your best ever marketing machine – driving motivated sellers, tenants, buyers, lenders and more to your website.
And Best of All, Mike will show you how you can get your Investor Carrot website for FREE!
CLICK THE PLAY BUTTON BELOW – Then Click Lower Right Corner for Full Screen 61 minute video
Federal PATH ACT Provides Planning Opportunities withPermanent Extensions of ManyTax Incentives
After years of routine temporary extensions, Congress has made permanent a number of previously temporary tax breaks for individuals and businesses as well as extending others. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law by President Obama in December, opens the door to new planning opportunities.
Permanent Extensions for Individuals
Incentives for individuals extended permanently, and in some cases modified, by the PATH Act include:
American Opportunity Tax Credit
Deduction for certain expenses of elementary and secondary school teachers
Parity for exclusion from income for employer-provided mass transit and parking benefits
Deduction for state and local sales taxes
Reduced earnings threshold for additional child tax credit
Modification of the earned income tax credit
Tax-free distributions from individual retirement plans for charitable purposes for individuals age 70 ½ and older
Special rule for qualified conservation contributions
For some of the incentives, the modifications are significant. For example, the deduction for qualified expenses of elementary and secondary school teachers has been modified to include professional development expenses. Please contact our office for more details.
Permanent Extensions for Businesses
The PATH Act makes permanent, and in some cases modifies, many popular tax incentives for businesses, including:
Research tax credit
Enhanced expensing under Code Sec. 179
Charitable deduction for contributions of food inventory
Tax treatment of certain payments to controlling exempt organizations
Extension of basis adjustment to stock of S corporations making charitable contributions of property
Employer wage credit for employees who are active duty members of the uniformed services
Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
Treatment of certain dividends of regulated investment companies
Exclusion of 100 percent of gain on certain small business stock
Reduction in S corporation recognition period for built-in gains tax
Military housing allowance exclusion for determining whether a tenant in certain counties is low-income
Extension of RIC qualified investment entity treatment under FIRPTA
As with the individual incentives, some of the modifications to the business incentives are significant. The research tax credit is not only made permanent, it is enhanced for small businesses. Expensing under Code Sec. 179 is made permanent at generous dollar and investment limitations. Previous limitations for the employer credit for activated reservists are relaxed. For more details, please contact our office.
More Incentives Extended
The PATH Act did not leave out the rest of the traditional extenders. However, lawmakers did not make these remaining tax breaks permanent. Extended for several years (in some cases through 2019, in other cases through 2016) are:
the Work Opportunity Tax Credit (WOTC),
the higher education tuition and fees deduction,
energy incentives, the Indian employment credit,
special expensing rules for television and film productions,
Because the extensions are not uniform, as mentioned, some tax breaks are extended through 2019 and others are extended through 2016, careful planning is vital.
J. Michael Grinnan, CPA.CITP Certified Public Accountant 9900 Corporate Campus Drive, Suite 3000 Louisville, KY 40223 Office 502-657-6333
Unanimous decision for 0.25% raise (Source: Federal Reserve)
The Federal Open Market Committee announced in its December meeting that it is officially raising the federal funds rate for the first time since June 2006.
In a statement released Wednesday by the Federal Reserve, the FOMC said that it will gradually raise the federal funds rate to a range of 0.25% to 0.50%
“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the committee decided to raise the target range for the federal funds rate to 0.25% to 0.50%. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2% inflation,” the FOMC said in a statement.
Moving forward, the FOMC said, “In determining the timing and size of future adjustments to the target range for the federal funds rate, the committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2% inflation.”
All FOMC members voted unanimously.
According to the economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, the federal funds rate is projected to grow from 0.4% in 2015 to 3.4% in 2018.
During the October meeting, the Federal Reserve said that it would not raise the federal funds rate at that time, citing the fact that the country’s economy still had not met the targets laid out by the FOMC.
However, since that meeting, Fed Chair Janet Yellen has said in a Congressional committee hearing on the U.S. economy that the current outlook and the flow of data since the central bank’s last meeting in October are “consistent” with the rate hike criteria spelled out by U.S. policymakers.
And in November, in a speech before the House Financial Services Committee, Yellen formalized the possibility of a rate hike in December, telling the Committee that a rate increase in December was a “live possibility.”
Recent housing news also supported a rate hike, with the November jobs report showing that job creation increased by 211,000 for the month. Consumer spending echoed that, recording solid growth in November.
Last-minute tax planning strategies to consider as the 2015 tax year closes
In between preparing for the year-end holidays, school vacations, travel, work, and so on, tax planning should not be on the back burner. Although 2015 is quickly coming to a close, there is still time, with careful planning, to execute some last minute tax strategies. In many cases, these strategies can help minimize the tax burden. Of course, every individual’s situation is different, so please contact our office for specific details about a year-end tax planning strategy customized to you.
For many taxpayers, one of the most significant questions looming over 2015 returns is will they be able to claim all the deductions, credits and incentives that were available in 2014? Many of these incentives are grouped in a package known as the tax extenders. If you have taken in 2014 (or in a prior year) the state and local sales tax deduction, higher education tuition deduction, teacher’s classroom expense deduction, IRA distribution to charity, among others, you enjoyed the benefit of a tax extender.
Under current law, these popular tax breaks expired after 2014. That means they are no longer available for 2015, unless they are renewed by Congress. At this time, it is highly likely that Congress will vote to extend the extenders at least for 2015. Congress could approve a two-year extension. A vote is expected before January 1, 2016. However, Congress could delay the vote until early January. Uncertainty is never far from the extenders, but the best approach is to develop a year-end planning strategy that reflects both an extension of the extension and develop another plan that does not.
For example, qualified taxpayers contemplating making a gift to a charitable organization should take into account renewal of the tax break for gifts to charity from an IRA. If all the requirements are met, this may be a valuable tax break. However, there are other avenues for gifts to charity that can help maximize tax savings if you do not qualify for the deduction or the deduction is not renewed. Also, keep in mind the rules for substantiating gifts to charity. You do not want to lose the tax benefit of a generous gift to charity because these substantiation rules were not followed. Our office can explore these strategies with you.
While taxpayers wait for action on the extenders, tax bills already passed in 2015 could be valuable. The Defending Public Safety Employees’ Retirement Act expands the exemption from the penalty for early retirement withdrawals to include certain federal law enforcement officers, federal firefighters, customs and border protection officers, and air traffic controllers. The Surface Transportation Act of 2015 provides that a veteran’s eligibility to contribute on a pre-tax basis to a health savings account (HSA) is not affected by receipt of medical care from the VA for a service-connected disability.
The roster of traditional year-end tax planning strategies is lengthy and often involves methods to shift income between 2015 and 2016. To postpone income to 2016, taxpayers can consider delaying plans to sell appreciated assets, redeem U.S. savings bonds, completing Roth IRA conversions, and so on. If possible, it may be worthwhile to postpone any bonuses until after 2015. In contrast, some taxpayers may want to accelerate income into 2015. This can be particularly valuable if a taxpayer expects to be in a higher tax bracket in 2016 compared to 2015.
When considering traditional year-end techniques, keep in mind the 3.8-percent net investment income (NNI) tax. The NII tax applies to the lesser of (1) an individual’s net investment income (NII) or (2) the excess of the individual’s modified adjusted gross income (MAGI) over the threshold amount. The thresholds are $250,000 for married taxpayers filing a joint return and surviving spouses; $125,000 for married taxpayers filing a separate return; and $200,000 for all other taxpayers.
Gift-making is an important year-end tax strategy that can be overlooked. The Tax Code allows taxpayers to give away up to an “annual exclusion amount” per recipient per year free of gift tax. For 2015, the annual exclusion amount is $14,000. If property is given instead of cash, the value of the gift is the fair market value of the property. If spouses consent to split all gifts that are made by either one of them during any year and each spouse is also a U.S. citizen or resident, then the gifts can be deemed as having been made one half by each spouse. As a result, spouses who consent to split their gifts can transfer twice the annual per-recipient exclusion amount each year, free of gift tax ($28,000 for 2015).
These are just some of the tax strategies to consider before year-end. Please contact my office for more details.
Message from Mike Butler
“Are you looking for a real estate investor expert CPA? Did you know my CPA, Mike Grinnan can prepare your tax returns?… anywhere in the U.S.A. – his 5 Star software makes this. FYI, Mike Grinnan has been doing a superstar Chicago investor’s tax returns for over 10 years now. Mike Grinnan is one of America’s 5 Star CPAs for real estate investors”
J. Michael Grinnan, CPA.CITP Certified Public Accountant 9900 Corporate Campus Drive, Suite 3000 Louisville, KY 40223 Office 502-657-6333
The approach of year-end 2015 makes it tax planning season. Tax law developments in 2015 can affect, for example, the deduction of costs and expenses, the treatment of contributions to tax-favored accounts, and the inclusion of certain benefits in income. Traditional year-end planning techniques for investments and retirement are also important. Small businesses also have some tools for year-end tax planning. Although it may seem early to contemplate year-end planning, the remaining weeks of 2015 will pass quickly and taxpayers need to be proactive.
Taking inventory of gains and losses at this time to map out a year-end buy, sell or hold strategy later makes particular sense. Investors should note that immediate losses in the stock markets do not necessarily translate into tax losses. The fact that assets purchased several years ago may still yield taxable gains because of low basis, and the existence of the wash sale rule if a stock is purchased within 30 days before or after a sale, should be considered in assessing current tax positions.
Taxpayers should also remember the higher tax rate environment that is now in its third year. Not only has the top rate jumped to 39.6 percent for ordinary income (and short-term capital gains) but the rate for long-term capital gains and qualified dividends has increased from 15 to 20 percent. Furthermore, a 3.8 percent net investment tax applies to taxpayers with income above a non-inflation-adjusted threshold ($250,000 for married taxpayers filing jointly; $125,000 for married taxpayers filing separately; and $200,000 for all other taxpayers).
Saving for retirement
Although most IRA contributions for a particular year may be made until the filing date for that year, other deadlines are at year end, such as contributions to 401(k) plans and Roth conversions and re-conversions. Required minimum distributions for retirees and those over age 70 ½ also generally carry a year-end distribution date beyond which a penalty applies. One exception allows an individual turning age 70 ½ to delay starting distributions until April 1 of the year following the year in which the individual turns 70 ½.
Many small businesses have relied on the generous Section 179 deduction, which is now up for renewal as part of the extenders legislation, to gain an immediate write-off for equipment, rather than follow depreciation schedules. One alternative now available to many businesses is the de minimis safe harbor threshold amount under the final so-called “repair regs.” Currently, a de minimis safe harbor under the repair regulations allows taxpayers to deduct certain items cost $5,000 or less (per item or invoice) and that are deductible in accordance with the company’s accounting policy reflected on their applicable financial statement (AFS). IRS regulations also provide a $500 de minimis safe harbor threshold for taxpayers without an applicable financial statement.
New tax laws
So far this year, Congress has passed and President Obama has signed several tax bills. Two new laws impact tax planning for public safety officers. The Don’t Tax Our Fallen Public Safety Heroes Act clarifies that both federal and state benefits for public safety officers fallen or injured in the line of duty are treated the same in the tax code and are not taxable. The Defending Public Safety Employees’ Retirement Act affects retirement planning. Generally, taxpayers who receive an early distribution from a qualified retirement plan are subject to a 10 percent penalty, unless an exemption exists. The Defending Public Safety Employees’ Retirement Act expands the exemption to include certain federal law enforcement officers, federal firefighters, customs and border protection officers, and air traffic controllers.
Late last year, Congress passed the legislation creating A Better Life Experience (ABLE) accounts. States are now enacting enabling legislations, which along with federal law, will allow ABLE accounts to be set up for qualified individuals with disabilities (who became disabled before age 26) for tax years beginning after December 31, 2014. Contributions in a total amount up to the annual gift tax exclusion amount, currently $14,000, can be made to an ABLE account on an annual basis, and distributions are tax-free if used to pay qualified disability expense
One bill that has not yet passed is legislation to extend the so-called tax extenders. The Tax Increase Prevention Act of 2014 (TIPA) only extended these popular but temporary tax breaks for 2014. The expired extenders include the state and local sales tax deduction, higher education tuition deduction, transit benefits parity, research tax credit, the work opportunity tax credit, and many others. The extenders are likely to be renewed for 2015 but Congress may wait till December to pass a bill. Our office will keep you posted of developments.
If you have any questions about year-end tax planning, please contact our office. We can develop a personalized year-end tax planning strategy.
BEST Screening tool for Landlords: Housekeeping Check
After working up their application on paper and on the phone – get out of the office!
Ride by and see where they live. If it is ugly, tall grass, cars in the yard, no need to stop. If it looks okay from the street, then stop and knock on the door.
You MUST verify they actually live in this pretty home.
I explain my company sent me over and it is one of the final steps in their application process.
This almost final step is “Our way of verifying you live here and to see how you take care of your home.”
If you feel safe enough to eat a bologna sandwich then it looks like you might have found a good tenant. Many times I have stopped by and knocked on the door only to discover the applicant does not live there but is a relative or friend who asked for a favor.
Managing tenants effectively builds our wealth and begins with screening tenants properly when they submit an application. Most landlords use applications for a fee. My objective here is to give you a smorgasbord of screening tips allowing you to select items of your choice to work into your system.
Application: first of all, make sure your application is proper and legal and does not violate any fair housing laws or local laws. On the back, include a section with a few lines allowing the applicant a place to write comments. Also include a small section of text briefly detailing your qualifying standards and permission for the landlord to check all sources in evaluating their application for tenancy. Also include a phrase stating an “false or incomplete application” is a reason to be disqualified or not approved. Their signature line is below this small bit of text.Click Here for Full Video/Article (Members Only)
National REIA Applauds US District Court Ruling Upholding Fourth Amendment that Protects Property Owners from Unnecessary Gov’t Harassment
Cincinnati, Ohio) The National Real Estate Investors Association (National REIA) issued a statement today applauding the U.S. District Court’s (Southern Ohio) recent decision stating that the city of Portsmouth’s (Ohio) occupational licensing requirements, which are imposed upon landlords violates the Fourth Amendment to the United State Constitution.
Charles Tassell, Chief Operating Officer of National REIA said “Today’s ruling laid bare the excuses used by local governments to steal the freedoms of property owners.”
He further added that “The 4th Amendment is still alive and well, and citizens should NOT be forced to have their homes intrusively ‘inspected’ by warrantless searches. Every local government should take note that warrantless searches are STILL illegal and unconstitutional.”
Regarding the ruling itself, Tassell said “The ruling won by the 1851 Center For Constitutional Law was a victory for freedom against a tyranny with which the Founding Fathers were all too familiar. Citizens of the United States have an expectation to live without local, state or federal inspection of their home based on flimsy excuses disguised as law.”
Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows: “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections. It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
Copyright MMXVII AskMikeButler.com • 4012 Dupont Circle, Suite 203 • Louisville, KY 40207
(502) 896-2595 DISCLAIMER: Per the current FTC guidelines, AskMikeButler.com and MikeButler.com are in the process of collecting results data in order to be able to define the
"typical" or "average" experience of our clients. While we collect this data, we are sharing of potential results based on theoretical numbers for illustrative purposes only and should not be considered income claims. None of these stories in any way represent the "average" or "typical" experience. In fact, as with any product or service, we know some members purchase our system but never use it, and therefore get no results whatsoever. Therefore, the client stories and testimonials neither represent nor guarantee the current or future experience of other past, current, or future 5mWebinars.com clients. Rather, their stories and testimonials represent what is possible with trainings and products. Each of these unique stories and/or testimonials, and any and all results reported by individuals, are the culmination of numerous variables, many of which AskMikeButler.com and our clients cannot control, including pricing,
target market conditions, product/service quality, offer, customer service, personal initiative, and countless other tangible and intangible factors. The information provided on AskMikeButler.com has been prepared with our best efforts, but cannot be warranted for effectiveness in every situation or against change.