Monopoly Money

In 1935, Americans were mired in the depths of the Great Depression. Gross domestic product had shrunk from $103.6 billion in 1929 to $73.3 billion. Unemployment stood at a horrendous 20.1%. Even the suicide rate was higher during those dark years. And on February 6th of that year, the Parker Brothers company started selling an escape from all that misery: a family-friendly board game that anyone could afford, called Monopoly.
When most of us picture the Monopoly board, we see the familiar rows of streets, named after those in Atlantic City: Boardwalk, Park Place, and all the rest. (Some contrarian always says that lowly Baltic Avenue, priced at just $60, is their favorite. That someone always goes bankrupt first.) Some players prefer “Chance,” “Community Chest,” or taking a ride on the Reading Railroad. And if someone tells you their favorite squares are the Luxury Tax (pay $75) or Income Tax (pay $200 or 10%), you give them a funny look and wonder what went wrong in their childhood.

But how many of you know that Monopoly was originally created back in 1903 to illustrate a theory about taxes?

Elizabeth “Lizzie” Magie was a stenographer, writer, comedienne, actress, and engineer. In 1903, she patented The Landlord’s Game to reveal the evils of “land monopolism” — basically, profiting from the rent you can charge for the use of land. (Evil, right?) Her solution was the philosopher Henry George’s “single-tax” theory, which holds that people should own the fruit of their own labor, but that land and natural resources should be shared equally by everyone. George believed that taxing land value is the fairest form of tax, and a properly-administered land-value tax can help society reduce taxes on labor or other investments.

“Georgism,” as it’s now called, may sound downright Marxist to contemporary ears. But economists argue that a land-value tax is more efficient than income or sales taxes because it doesn’t reduce productivity. Adam Smith advocated for a land-value tax in The Wealth of Nations. And Milton Friedman, certainly nobody’s idea of a commie pinko, called it the “least bad tax” that government can impose.

Ironically, Monopoly’s “income” tax — 10% of your assets, capped at $200 — isn’t an income tax at all. It’s a wealth tax. And it takes the exact opposite approach of the President occupying the White House at the time the game debuted. The Revenue Act of 1935 applied a special 75% rate on income above $5 million, although just one lucky winner — Standard Oil heir John D. Rockefeller, Jr. — actually paid it.

(As high as Roosevelt’s depression-era taxes sound to us today, he wanted to go even further after Pearl Harbor. He argued in 1942 that in a time of such grave national danger, “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year (about $350,000 in today’s dollars). Roosevelt’s simple solution? A 100% top rate on anything above that amount!)

Today, of course, “Monopoly money” has become synonymous with worthless paper. And paying your taxes is about as fun as landing on Boardwalk, with a hotel! But paying less is no game. It takes careful work and planning. So call our tax preparers on 773-728-1500 when you’re ready to play — do not pass Go!

What Would You Do for a Klondike Bar?

In 1982, Unilever came up with a catchy jingle to sell Klondike bars, a sort of Eskimo pie without a stick: “What would you do for a Klondike Bar?” The challenges weren’t especially grueling. Would you make monkey sounds? Act like a chicken? In one spot, a boneheaded dudebro actually listened to his wife talk (about painting the foyer yellow) for five seconds to get his hands on the creamy treat.
Now wallethub.com, a personal finance website, has updated the question, if not the actual jingle. But WalletHub doesn’t care what you’d do for dessert. They surveyed 500 Americans to discover what you would do to avoid taxes. The answers might surprise you!
  • What would you do to avoid paying taxes for the rest of your life? 20% would get an “IRS” tattoo. 16% would move abroad. 10% would give up talking for six months. 4% would sell a kidney. And 2% would spend a year in jail!
  • Who do we like more than the IRS? Former President Barack Obama took home the gold with 56%, with Pope Francis bring home the silver at 50%. Justin Bieber got 15%, Kim Kardashian got 13%, and even OJ Simpson placed at 7%. (You’ve really got to detest the IRS to like OJ Simpson more!)
  • What would you rather do than prepare your taxes? 73% said laundry, 56% said cut the grass, and 50% said teach their children to budget. Ok, those sound easy enough — except maybe the “budget” part. But 40% said they’d rather change a baby’s diaper, 30% would rather talk to their kids about sex, 12% would rather spend a night in the pokey, and 9% would rather break their arm!
  • Would you hide money offshore? 81% said no, even if they knew they wouldn’t get caught. Of course, that leaves a full 19% we apparently need to look out for!
  • What scares you most about taxes? 32% said identity theft, which seems well-founded these days. 30% said making a math mistake. 20% feared not having enough money to pay. And 18% worried about getting audited. (The actual audit rate is sitting at a historic low of 1%.)
  • What’s your favorite government institution? The Department of Veterans Affairs came in at number one, with the Department of Education, FBI, CIA, Federal Reserve, and White House all beating the IRS. Only Congress came in even lower.

GoBankingRates.com also asked a group of Americans what they would do to avoid taxes. 32% would stand up and perform five karaoke songs in front of their co-workers. 18% would go without wifi for a year, which wouldn’t be much of a sacrifice to the 90% of humanity that lived before wifi was even a thing. 13% would gain 20 pounds, 11% would let their web browsing history be made public, and 6% were willing to smell like a skunk for six months!

Why go to the depths of such unpleasantness? We can’t promise you a tax-free future, and tax prep won’t ever be fun. But we can tell you it doesn’t have to be as hard. You just need a plan to pay the minimum amount allowed. And that’s where we come in. So call our tax preparers on 773-728-1500 and we promise it’s easier to sit down with us than it is to waste money on taxes you don’t have to pay!

Batter Up!

Baseball is back! On April 2, the Tampa Bay Devil Rays spanked the visiting New York Yankees, 7-3, to kick off the 2017 season. Later that day, the defending World Series champion Chicago Cubbies fell to their usual last place in the National League Central. And Cincinnati Reds fans are still bitter that they don’t get to host the season’s first game like they did for so many years.
Everyone loves baseball, even the IRS! We realize that when you think of baseball stats, you think of batting averages, slugging percentages, and “wins above replacement.” But the nation’s tax collectors have some baseball stats they love to share, too. So let’s take a quick look:
 
Opening Day team payrolls topped $4 billion for the first time ever this year. The league minimum is out of the park at $535,000, which is enough that the IRS scoops up 39.6% of those dollars. Throw in paychecks for managers, coaches, trainers, and front-office employees, and we’re talking easily more than $1.5 billion in income taxes, plus millions more in payroll taxes. And that doesn’t begin to count taxes on the billions more that players earn in endorsements.
 
Players aren’t the only ones watching their incomes climb. Total team revenue from ticket sales, broadcast rights, and licensed apparel approached $10 billion last year. And while owners don’t publish their own stats the way they publish their players’, Forbes estimates the average team is worth $1.3 billion.
 
Television networks pay billions for the rights to broadcast games. Then they turn around and sell advertising to pay for those rights for billions more. The difference between the revenue and the rights winds up taxed at corporate rates of up to 35%.
 
What’s a ball game without peanuts and Cracker Jack? (Or beer, at a price per cup that’s more than a six pack at your local store?) The usual fan spends about $20 in concessions per game, which yields millions more in sales taxes, excise taxes, and income taxes on those ballpark markups.
 
Baseball has generated its fair share of quotable quotes over the years. There are even a few tax quotes lurking in that lore, although we’re not sure Yogi Berra ever said anything about the IRS:
 
“Baseball is a skilled game. It’s America’s game — it, and high taxes.”
Will Rogers
“Look, we [baseball team owners] play the Star Spangled Banner before every game. You want us to pay income taxes, too?”
Bill Veeck (Owner, Chicago Cubs)
 
While we’re on the topic, how does your game plan looking this season? Have you even stepped up to the plate? Or are you still warming the bench? Remember that we’re here to help with a complete roster of infield and outfield plays. So call our tax preparers on 773-728-1500 and we’ve got the depth and experience you need to hit the home run you want this April 15!

Rich as Rockefeller

Last week marked the end of an era as David Rockefeller, the last grandchild of Standard Oil baron John D. Rockefeller, died at age 101. Rockefeller, whose name was once synonymous with “wealth,” symbolized the eastern establishment in all its glory. His death marks a last living link to an age of robber barons-turned-philanthropists whose fortunes still shape our nation.

Patriarch John D. Rockefeller launched the family fortune before Uncle Sam launched the income tax, which gave “Senior” a big head start. He started out in 1855 as a 16-year-old assistant bookkeeper in Cleveland, Ohio, with a 10-week accounting course under his belt. By 1911, he controlled 90% of America’s oil refining. The Supreme Court eventually broke his company into 34 separate pieces. But much to Rockefeller’s delight, those pieces became worth more than the original whole. By the time he died in 1937, he was worth the equivalent of $340 billion in today’s dollars.

Rockefeller had always been generous. He gave away six percent of his earnings even at age 16. But his fortune helped him really ratchet up his giving. He endowed the University of Chicago with a nondeductible gift equal to $2 billion in today’s dollars. (That’s because there wasn’t any tax to worry about then.) He founded Rockefeller University and made major gifts to Central Philippine University and Spelman College.

Rockefeller’s son, John D. Jr, wasn’t quite so lucky. In 1923, when the IRS published everyone’s tax bills, he ranked #1 in the country, paying $7,435,169. In 1924, he ranked #1 again. And when the Wealth Tax Act of 1935 applied a special rate on income above $5 million, there was only one American who paid it — Rockefeller. Junior diversified the family’s holdings, financing the 16-building Rockefeller Center complex in midtown Manhattan and helping make Chase Manhattan Bank the world’s largest.

By then, Junior was taking advantage of charitable deductions for his own philanthropy. He gave $537 million to charity over his life, more than the $240 million he gave to his own family. He donated the land for New York’s Museum of Modern Art and the United Nations headquarters, and gave generously to renovate Colonial Williamsburg in Virginia.

David Rockefeller might have become like those spoiled rich brats you see on Instagram and reality television. He grew up in an eight-story house, the biggest ever built in New York. (Seven stories are for peasants, right?) He and his brothers roller-skated down Fifth Avenue, trailed by a limousine in case they got tired, and vacationed at the family’s 107-room cottage in Maine. But as an adult he expanded the family portfolio internationally, cutting banking deals with the Soviets, Chinese, and various oil-rich dictators. He was active in the Council on Foreign Relations and the Trilateral Commission. (If the Illuminati are real, you probably could have found David Rockefeller lurking somewhere near the center of it all.)

Time, taxes, and 150+ descendants have whittled down the Rockefeller fortune. Forbes magazine estimates the family is worth “just” $11 billion today. Ironically, two of the family’s charitable funds have announced that they will be selling all their fossil fuel investments as part of their commitment to fight climate change.

We realize you don’t have Rockefeller riches to protect. But we know you value what you have, and we know that smart tax planning is one of the best ways to preserve it. So call our tax preparers on 773-728-1500 when you’re ready to pay less!

I, Robot

For decades now, governments across the world have struggled with where to impose taxes to raise the revenue they need to offer modern services. Should they simply raise rates? Should they broaden the base by eliminating loopholes and deductions? Should they sock it to smokers, drinkers, or other disfavored groups? How about entirely new levies designed to influence behaviors, like a carbon tax or soda tax? The smartest minds in politics and economics have grappled with these questions. Not only have they failed to make everyone happy, they’ve failed to make anyone happy.

At the same time, writers and filmmakers have worked to populate our imagination with a variety of more-or-less human robots. These have included the Laurel and Hardy-esque R2D2 and C3PO of Star Wars fame, the seductively human replicants of Blade Runner, and the self-aware killers of Westworld.

Sooooo . . . how long did you think it would take for some mad genius to make a mashup of taxes and robots? Well, today is that day, and Microsoft founder Bill Gates is that genius. His proposal is exactly the sort of thing you’d expect from a guy who dropped out of college to lead the personal computer revolution. Forget trying to squeeze more taxes out of people — let’s just tax the robots!

“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

At first blush, taxing robots might sound like science fiction. But robots don’t mind paying taxes. They don’t feel pain at the thought that their hard-earned money is going to pay for government spending they might not support. They don’t sweat late nights wrestling with W2s, quarterly estimates, or tax forms. And, at least as far as we know, no robot has ever opened a secret bank account or shell corporation in some sunny Caribbean tax haven.

Of course, robots can’t really pay taxes. In practice, taxing Team Robot would mean taxing the businesses that own the robots and use them to replace human labor. It’s really just a shift from taxing labor to taxing capital. Taxes could likely be calculated on a per-head basis, or an amount based on the revenue the robot helps produce, and be paid to wherever the robot lives.

Taxing robots can also help make up for the money government loses by not being able to tax the workers the robots replace. Right now, there are 3.5 million truck drivers hurtling down America’s highways, along with 220,000 taxi drivers and 160,000 Uber drivers. The driverless car revolution is sure to replace some of those jobs. That will torpedo taxes and be a real windfall for businesses that no longer have to hire human workers. Taxing the robots can help restore the current balance.

If taxing robots works, there’s no limit to where we can turn next. Taxing smartphones? Taxing video games? Taxing the Muppets? It’s all fun and games until somebody tries to tax you. Good thing you’ve got us! We’re here to give you the plan you need to pay less . . . so call our tax preparers on 773-728-1500 and you can focus on important things like the robot takeover!

Monkey Business

In Roman mythology, the hero Hercules used his divine strength to smash through the mountain that used to be Atlas. This created the Straits of Gibraltar, linked the Atlantic and the Mediterranean, and forged the famed Rock of Gibraltar. The so-called “rock” is an enormous limestone monolith, rising 1,398 feet nearly straight up from the sea, and making Gibraltar a key strategic crossroad. It’s also a natural paradise. It’s home to over 500 species of plants, as well as the famed Barbary macaques, which are the only wild monkeys living in all of Europe.

Admiral George Rooke seized Gibraltar from Spain in 1704, and the Treaty of Utrecht ceded it to the British in 1713. But the treaty didn’t specify a border, and the Spaniards are still bitter bumblebees about the whole thing. Local legend holds that when the monkeys leave, so will the British. Winston Churchill took that legend seriously enough that during World War II, when the population had dwindled to just seven, he issued an order to keep the population at no less than 24. (More about the monkeys in a bit.)

The territory today covers 2.6 square miles, including the Rock. That’s barely a tenth the size of Manhattan. It’s a bustling port and popular tourist destination. But there’s little industry to speak of, and no agriculture at all. So how does a dinky little flyspeck of a state like that make a living? Well, there’s new money coming in from online bookies and casinos. And like many territories clinging to the remnants of the British empire, it’s become a tax shelter.

Gibraltar has no VAT tax. No sales tax. No wealth tax. No tax on interest, dividends, or capital gains. No gift or estate tax. Personal rates are capped at 26.25%. There’s now a flat 10% tax on most corporations. Does that make for a true “tax haven”? Not necessarily — the government is proud to comply with OECD tax standards and our own Foreign Account Tax Compliance Act, which strong-arms foreign banks into identifying Americans with accounts topping $50,000. Gibraltar proudly calls itself a low-tax zone, and even sued a Spanish newspaper for calling it a “tax haven.”

Still, the friendly tax regime has made Gibraltar home to 30,000 people and 30,000 corporations. That’s quite a ratio! Data nerds will appreciate that Gibraltar has the second-highest number of “Big Four” accounting offices per capita (behind only the British Virgin Islands) and twelfth-highest number of banks. Conspiracy theorists will note that Mossack Fonseca, the law firm at the heart of last year’s Panama Papers revelations, kept an office overlooking the harbor before closing it down in the wake of the story.

Gibraltar even has some natural tax collectors. We’re talking about those macaques, who live in troops on the upper Rock. They share 99% of our DNA, which makes them curious and intelligent. And they have opposable thumbs, which makes them nimble and dextrous. They’re more than happy to pickpocket “tax” visitors of food and even items like hats, sunglasses, earrings, and wigs. Watch out!

You might think after reading all this that your next move should be to someplace like Gibraltar. In fact, the nonprofit Tax Justice Network ranks our own United States as the number three tax haven in the world. The reality is that you don’t need to move offshore to save money on taxes — you just need a proactive plan to make the most of legal opportunities here at home. So call our tax preparers on 773-728-1500 for that plan — we promise no monkeying around!

Fixed This For You

For generations, Americans fostered a culture of thrifty self-reliance, especially where it comes to taking care of our stuff. It started all the way back in pioneer days, and living on the frontier’s edge. Back when Pa Ingalls lived in that little house in the big woods, if his saw broke, he couldn’t just order up a replacement on Amazon. He had to fix it, or he would have a tough time heating his house for the winter! Ma had one nice dress, for Sunday church, and when she got home she spent the rest of the day taking care of it. Folks mended and darned and repaired until household items had more lives than the family cat.

More recently, though, we’ve become a throwaway society. Maybe it’s the flood of cheap, shoddy stuff from Walmart and China. Even formerly big-ticket purchases like TVs are cheap enough now that it rarely makes sense to repair them. (Think about it — your family room TV may have cost less than your phone.) Even real estate has become disposable, as thousands of Americans buy perfectly serviceable houses for the land they sit, then and tear them down to replace with something bigger (and usually gaudier and not as well built).

Our democratic socialist friends in the Kingdom of Sweden have noticed the same trend, and they’re not very happy about it. (Yes, Sweden is still a monarchy — King Carl XVI Gustaf hands out the Nobel Prizes every year, and collects Porsche 911s.) It might seem ironic for the country that unleashed IKEA’s particleboard aesthetic on the world to champion durability. But they’ve expressed it through their tax code, of all things, by passing a new law cutting taxes on fixing things.

Here’s the scoop. Like most European countries, Sweden imposes a value-added tax, which is a form of sales tax levied at each level of production (such as from producer to distributor to retailer). In Sweden, the tax is 25% for most goods and services, 12% for restaurant meals and hotel stays, and 6% for printed materials, cultural events, and travel within the country. For 2014, the VAT raised 353 billion krona ($39 billion dollars, give or take a couple of meatballs), which amounts to 21% of the country’s revenue.

Last November, the legislature chopped the VAT tax on repairs to items like bicycles, shoes, and clothing, from 25% to 12%. The goal is to encourage Swedes to buy higher-quality products. They also “Sweden the pot” by letting taxpayers deduct half the cost of repairs they make to appliances like refrigerators, ovens, and dishwashers. This makes repairs cheaper and helps keep repairmen employed in Sweden. (We suppose it could be possible to outsource refrigerator repairs to China or Mexico, but your food would probably melt before it gets back.)

Per Bolund, Sweden’s Minister for Financial Markets, told BBC News, “I think it will be a good incentive and I think there’s also a possibility that people will buy high-quality products and repair them, rather than buying cheap products they know will break down and then buy something new instead.” He estimates the new law will cost Sweden about $250 million krona, not to mention slowing the growth of landfill fjords.

As long as we’re on the topic of taxes and maintenance . . . how’s your tax plan looking these days? Still shiny and new? Or showing some wear and tear at the seams? Tax planning isn’t something you do just once and forget about. It’s an ongoing process that needs periodic maintenance and tuning. So call our tax preparers  on 773-728-1500 to help keep your plan running in tip-top shape! (And if you don’t already have a plan, what are you waiting for?)

Names!

Every year, the IRS gives us a peek inside the wallets of the highest-earning 400 Americans. It’s full of juicy facts like their average income ($318 million in 2014), how much they give to charity ($37 million each) and how much they pay Uncle Sam ($73.5 million). But there’s one set of facts the IRS guards as carefully as the secret formulas they use to decide who gets audited — the top taxpayers’ names. That wasn’t always the case. Back in 1924, the stock market was soaring, flappers were dancing the Charleston, and bootleggers were exploiting arbitrage opportunities in cross-border commodity transactions. The federal income tax wasn’t quite the big deal it is today. For starters, it didn’t kick in until you earned $5,000 of taxable income (about $71,000 in today’s dollars). Just seven million out of 114 million Americans even filed returns. Form 1040 and its instructions were just two pages each.

That’s when Congress decided to shake things up. Tax rates were still near their wartime highs, and new gift and estate taxes were unpopular. So the Revenue Act of 1924 dropped the top rate to 46% on incomes over $500,000, reduced the estate tax, and repealed the gift tax entirely. And, much to the delight of gossips everywhere, it directed local tax collectors to publish the names, addresses, and tax bills for every filer in their district.

Topping the national list, to nobody’s surprise, was Standard Oil heir John D. Rockefeller, who paid $6,277,669 (just north of $89 million today). Henry Ford and his son Edsel brought home the silver and the bronze. Treasury Secretary Andrew W. Mellon was number four. And lucky Payne Whitney, heir to the Payne and Whitney family fortunes, was number five.

The rest of the top 100 includes plenty of old-money names like Vanderbilt, Astor, and Guggenheim, along with newer Gilded Age tycoons and their progeny. The average top earner was married, fiftyish, with two children and five servants. But there were a few exceptions to that predictable profile: tobacco heiress Doris Duke, “the richest girl in the world,” paid $252,241 in tax — at age 17!

Of course, not everyone on the list inherited their fortune. John G. Shedd began his career as a stock clerk for Marshall Field, then rose to run the company. Thomas Lamont, who started out as a reporter for the New York Tribune, became a partner of J.P. Morgan and helped President Wilson negotiate the Treaty of Versailles. Arthur Cutten started out as a $4/week clerk for a Chicago commodity broker before speculating his way into, then out of, a $100 million fortune. He died under indictment for tax evasion.

Why did Congress pass a law making federal income tax bills public? Progressive supporters argued it would discourage cheating. Big-city newspapers split on whether to publish the information, with about half going for what today’s editors call “the easy clickbait” and the others sanctimoniously resisting the temptation. Just two years later, the buzzkills in Washington repealed the publicity provision, and tax returns have been private ever since.

Most of yesterday’s fortunes have long since faded into history, divvied up by generations of heirs or diverted into philanthropic foundations. But there’s one lesson that survives a century of changing fortunes, and it’s worth heeding, whether you’re a flashy celebrity or a discreet millionaire next door: the key to paying less is planning. So call our tax preparers on 773-728-1500 and count on us to help you keep more of your fortune!

Better Call Saul!

Upcoming Important Deadlines-

   March 15th:

       – Corporate Tax Returns DueDue date of 2016 income tax returns for calendar year S-Corporations (Form 1120S). An automatic six-month extension may be obtained.

      – Partnership Tax Returns Due Due date for 2016 income tax returns for Limited Liability Companies (2 member or more LLCs), General Partnerships, and Limited Partnerships (Form 1065). An automatic six-month extension may be obtained.

       Contact Salman Anwar at our office to file your tax return or extension at Salman@VadariaGroupCPA.com

 

April 15th:

        – ‘C’ Corporations Tax Returns Due Due date of 2016 income tax returns for calendar year C-Corporations (Form 1120).  An automatic five-month extension may be obtained.

        – Individual Tax Returns Due – Due date for 2016 income tax returns for Individuals (Form 1040).  An automatic six-month extension may be obtained.

        Contact Salman Anwar at our office to file your tax return or extension at Salman@VadariaGroupCPA.com

 

 

On January 20, 2008, AMC debuted a promising new drama called Breaking Bad. The series chronicled the highs and lows of high-school chemistry teacher Walter White, who was diagnosed with terminal lung cancer and put his knowledge to work opening a meth lab to secure his family’s financial future. Millions of viewers became addicted to White’s exploits as he plunged deeper and deeper into a life of crime, breathlessly watching him juggle relationships with his DEA-agent brother-in-law, arms dealers, cartel soldiers, and crooked strip-mall lawyer Saul Goodman. All fun to watch, sure . . . but there’s a reason the announcer always says, “Kids . . . don’t try this at home.”

Jack Vitayanon is a 41-year-old, Ivy League-educated attorney in the IRS Office of Professional Responsibility, where he investigates crooked accountants, attorneys, and IRS agents. He even taught a class called “Tax Lawyering and Professional Responsibility in Tax Practice” at Georgetown Law School. But apparently he needed to crank out some adventure in his life. And while we may never know if he drew his ambition from AMC’s antihero, it’s crystal clear that he decided to join the methamphetamine trade.

Agents from the Department of Homeland Security say that back in December, they intercepted a FedEx package containing 460 grams of meth at the end of its journey from Arizona to Long Island. (Everyone knows you ship your drugs FedEx instead of regular mail — who needs U.S. Postal Inspectors all up in your grill?) The unlucky recipient did what everyone does when they get busted with a pound of meth — he flipped and agreed to rat out someone further up the supply chain. Unfortunately, that chain included Vitayanon, who had been dealing with the Arizona sender since 2014.

Two weeks later, our new confidential source recorded a video chat with Vitayanon, “who was observed in his Washington DC apartment smoking what appeared to be methamphetamine from a glass pipe.” (C’mon, Jack, you never get high on your own supply!) Vitayanon promised to send a “zip” (one ounce of meth) to the source. A day later, he texted to confirm he was packaging the shipment and helpfully provided a FedEx tracking number for the delivery. (You’d expect that sort of attention to detail from an IRS attorney, wouldn’t you?)

Last month, agents tailed Vitayanon as he shipped two more zips to the same source on Long Island. At that point, he was pretty much cooked, and on February 1 he was arrested. Naturally, the Justice Department dropped a Breaking Bad reference in the press release announcing the bust.

Now the  attorney is looking at spending several years surrounded by fellow Walter White wannabes. Adding insult to injury, he might face another smack for failing to pay tax on his side gig. Remember, the IRS doesn’t care how you make your money. They even tweaked the tax code with a special provision, Section 280E, that prevents drug dealers from writing off their legal business expenses. No deductions for delivery and shipping, business use of the home, or even “cost of goods sold”!

Jack Vitayanon won’t be making much money over the next few years, so taxes will be the least of his worries. Unfortunately, you don’t have that luxury. So count on us and call us on 773-728-1500 to help you pay less — legally, morally, and ethically!

Star Power

Upcoming Important Tax Deadlines:

Tax Season is in full swing. Please come to the office to get your Income Taxes done. You can call us on 773-728-1500, fax us your info at 773-728-3534, email us at Salman@VadariaGroupCPA.com or stop by our office.

February 28th: Forms 1099 and 1096 must be mailed to the IRS.

March 15th: Due date for Income Taxes of S-Corporation and C-Corporation for the calendar year 2016.

April 15th: Due date for Individual Income Taxes (Form 1040) for the calendar year 2016.

 

On January 23, the IRS began accepting 2016 tax returns, and that means refund season is officially here. For 2017, the IRS expects 70% of Americans will get refunds, and those refunds will average around $2,840. Yes, if you’re among that 70%, it means you paid in too much over the course of the year and gave the IRS an interest-free loan. (And no, they won’t return the favor.) But millions of Americans still very consciously use their tax withholding as a savings account, and look forward all winter to receiving that sweet check.

That leaves just one nice problem to have — deciding where to spend it all. Feel like blowing it on a vacation? Your friendly travel agent will tell you that airfares to Europe are low and exchange rates are great. Want to update your home? The Wall Street Journal reports that this is an excellent time to buy a big-screen TV. Got kids in college? The bursar will be happy to cash your check, and you won’t even have to feel guilty about it. Feeling responsible? It never hurts to drop more into retirement savings.

Or you could turn to the Daily Horoscope and look to your sun sign for help spending it! Here are some of the site’s suggestions for that windfall:
Aries: “You have no impulse control,” so don’t even think about saving it. Harsh. But given that you can always adjust your withholding throughout the year, and spend those extra dollars the minute you earn them, it’s hard to imagine too many Aries collecting refunds in the first place.

Gemini: “Sort through that big pile of mail, and once you’ve found it, take it straight to the bank.” (Or use direct deposit to defeat temptation!) Of course, with banks averaging a miserly 1% or so on savings accounts, you might as well take it to your favorite casino and put it all on Red.

Leo: “Your tax refund may not be big enough for what you think you deserve.” But $2,840 still isn’t anything to sneeze at — so find your nearest Tiffany store and pick out something that makes you look as good as you feel about yourself, or give someone else a gift they’ll never forget.

Virgo: “The first thing you’ll do is open your spreadsheet or financial management program and enter your refund.” Of course, just having a spreadsheet to track your spending choices doesn’t guarantee they’ll be smart choices, does it?

Scorpio: “Since your sign rules reusing and recycling, consider going green with your greenbacks: put your money into funds that support socially and ecologically responsible companies.” Now there’s a choice you can be proud of.

Aquarius: “Whatever someone suggests you do with your refund, you won’t do it anyway.” Ouch. Still, that doesn’t mean you can’t make smart choices on your own. A little research, a little investigation, and pretty soon you’ll be ready to plunge into something that surprises everyone!

Whatever your sign, our primary goal has always been to help you pay less. But we’re happy to help you with the next step, too — and you’ll probably be happier with our suggestions than something you see advertised on the evening news or ESPN. The biggest refunds don’t come from the stars, they come from planning. So call our tax preparers on 773-728-1500 and we’re here to help you make everything align!