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Articles Posted in Tax Law

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

giftsIt’s a generous time of year.

There are donations making their way to non-profits, and checks being written in lieu of gifts to family members. If you prefer to give money rather than gifts to children, grandchildren or others on your list, there are a few things you need to know before you write that check.

We’ll address just giving to your children in this blog post; we’ll address giving to charities in part two later this month.

The main point: your gift can trigger your obligation to file a gift tax return if you aren’t careful. We’ll walk you through who you can give to, how you can give and how much you can give. Here’s the official information from the IRS.

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calculator-scientific

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

Everyone who owns a home gets a bill from their local municipality for property taxes. It’s not a surprise that it’s coming. Most of us sigh, write the check (or let your mortgage holder do it) and move on, wondering what that money really does, anyway. (Short answer: it funds governments and schools.)

But every now and then, you get a property tax bill that makes you do a double-take because it is larger than you expected. There are a few reasons this can happen.

  • Your local government entity increased its tax rate.
  • Your property was recently re-assessed, and the value has increased.
  • A new tax referendum passed, increasing your rate.
  • Someone made a mistake.

You don’t have to accept the tax bill you’re sent if you truly believe the tax rate or assessment is wrong. You can protest – and I’ll walk you through how to do that.

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By Nathan Vinson, attorney
English, Lucas, Priest and Owsley, LLP

flag, Olympics, taxesAn interesting question popped up in social media during the 2016 Summer Olympics: will U.S. athletes taking home a medal be taxed on the value of it – particularly those who win the gold?

News accounts have confirmed that yes, U.S. medal-winning athletes will be taxed, but not on the value of the medal itself. It’s the cash prize that comes with each medal that is taxed.

Swimmer Michael Phelps, who has broken all kinds of records this year, may owe the government $55,000 in taxes for the cash prizes that go along with his five gold medals and one silver medal, reports USA Today. Each gold medal is accompanied by a check for $25,000, while each silver earns $15,000 and each bronze $10,000. If Phelps is taxed at the highest income tax rate of 39.6 percent, he would owe around $55,000, the newspaper reports. I checked the math, and yes, that’s about right.

Ouch.

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By Nathan Vinson, attorney
English, Lucas, Priest and Owsley, LLP

This time of year is nice, isn’t it? It’s warm and pleasant out, and maybe a little bit more laid back at work. Tax time is behind you (yes!) and it’s not time to think about next year’s taxes.

OR IS IT?

Well, we hate to break it to you, but yeah, it is time to think about it NOW. It’s July. More than half of the year is gone. If you haven’t set up a good filing system for your receipts and other tax-related information, you need to – and soon. If you’ve got a giant pile of paperwork and receipts, hey, you’re not alone – but don’t let this linger.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

exchange gifted property

If you receive a vacation home as a gift, you can exchange it for another property to avoid a big tax hit.

Receiving a home or significant piece of property as a gift may sound wonderful. And it is, in nearly every case.

But sometimes when you get a piece of property as a gift, it’s not quite what you want, or perhaps it is too much of a burden to handle. You may decide to sell it, or, you may find it more advantageous to do an exchange. That’s a strategy we recommend to clients on occasion to help avoid tax on a second home. That tax is usually at the more advantageous capital gain rate, but nevertheless, it is still tax dollars out of your pocket.

I’ll explain how it works.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

gambling taxes

We’ve written previously about gambling taxes, highlighting this issue mainly because of the affection Kentucky has for horse racing. And as you well know, we’re in the midst of horse racing season. Keeneland had its spring meet, and Churchill Downs is now open for the season, with the Kentucky Derby set for May 7. This will be followed by the Preakness in Baltimore and the Belmont Stakes in New York, and the Breeder’s Cup in November in California.

Lots of us love to put a little dough (or a lot!) down on a horse at the track. There was some talk earlier this year of lowering the threshold at which tracks were required to report winnings to the IRS, but that never moved forward, so far as we can tell.

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TAX DAY IS APRIL 18 ELPO

By Nathan Vinson, Attorney

English, Lucas, Priest and Owsley, LLP

Tax Day is a day that we know you celebrate with great abandon. Right?

If you do in fact go all out for Tax Day, this year, you’ll need to move your Tax Day celebrations to April 18. Traditionally, Tax Day is April 15. In some circumstances, it is moved back a few days to accommodate a holiday. This year, Tax Day is April 18 because of Emancipation Day, which is a holiday in Washington, D.C. that marks the anniversary of the abolition of slavery in the nation’s capital.  It is celebrated annually on April 16.  Because that date falls on a Saturday, Emancipation Day will be officially celebrated on April 15 this year, shutting down city offices.

Tax Day is also moved when April 15 falls on a Saturday or Sunday. It is then moved to the following Monday.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

We’ve heard more than one report of people getting called by scammers pretending to be the IRS, wanting money for back taxes or claiming that the IRS is going to IRS doorwaysue you. Make no mistake: the IRS will not call you.

This time of year, as many people are working on tax filings, anticipating returns and otherwise crunching numbers, the IRS is top of mind, and the scammers know it.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

If you own a small business, offering health insurance to your employees is likely one of your biggest headaches. There are an incredible number of options for health insurance, including the use of health savings accounts. Some small businesses have never offered it for those reasons, and because the costs of it can send a company’s expenses through the roof.

It’s understandable – and until recently, it was entirely legal. Employees could go elsewhere for insurance, such as through a spouse’s work or purchase it privately. But the Affordable Care Act changed all of that. The Act mandates that businesses offer health insurance to employees and their dependents. The rules were phased in over time (but they’re here now), and it’s only for those businesses that hit certain thresholds. An excellent Associated Press article recently outlined all of the thorny problems for small businesses. You can read that here.

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