The Blog

A recent study by Fidelity Investments revealed that individuals often lack adequate knowledge of family finances. The results of the study showed that a surprising number of marriage partners have insufficient information about important financial matters such as insurance policies, investment accounts, physical assets, beneficiary designations and income taxes, among other things.  While this lack of awareness may not be a problem when life is going smoothly, it can have unforeseen consequences there is a bump in the road. In the face of a death, a divorce or a sudden disability, a spouse who does not have a satisfactory understanding of family finances can find themselves at a serious disadvantage. The results of the recent Fidelity study showed that, while most couples reported that they … Continue reading →

In the face of increasingly strict asset disclosure legislation, more and more United States citizens are renouncing their citizenship in order to avoid potential tax consequences. In the second quarter of this year, the number of expatriates turning in their passports to United States embassies abroad was up almost 500% from that same time period the previous year. Compared to the first half of 2008, the number of renunciations in the first half of 2013 was up over 15 times! The United States is the only county of the 34 members of the Organization for Economic Development that taxes its citizens no matter where they reside. Although this has been the case for quite some time, the government’s fairly recent crackdown on the reporting of … Continue reading →

 The major news headlines everywhere are focused on the government shutdown. The government shutdown is the result of the recent vote by House of Representatives opposing funding for Obamacare (Obama’s healthcare law) as part of a bill to pay for government operations after the close of the fiscal year on September 30th. Questions remain as to how this government shutdown will affect the economy. When the government shuts down, it is estimated that about 800,000 federal employees will be out of work. Obviously the workers’ lost wages are a problem, but these lost wages will also bleed into other related areas. In particular, some businesses will be forced to reduce or even suspend their services until the shutdown is over. This will lead to cut back … Continue reading →

The creator of Beanie Babies, Ty Warner, has been accused of tax evasion due to the non-reporting of income earned on funds held in a secret Swiss bank account. Mr. Warner failed to report $3.2 million in income on an account which held as much as $93.6 million in assets. He will be assessed over $50 million in penalties for his oversight. U.S. attorney Gay Shapiro said that Warner, 69, will plead guilty in federal court to dishonestly recording his 2002 income as $49.1 million, overlooking money he made on his UBS account. His plea will take place on October 2nd. Once his plea is entered, he will be required to pay a civil penalty of $53.6 million for failing to file the required Report … Continue reading →

Phil Mickelson Wins British Open—And California Taxes It Tax relief is what Phil Mickelson needs after his CA tax bill from the British Open. According to Sports Illustrated, Phil Mickelson made $36 million last year from his sponsors. Companies such as KPMG, Barclays, and Callaway endorse Mickelson. His recent win in the British Open escalates his endorsement and marketing appeal, which will mean even more revenue in the future. However, with more revenue, there will be more taxes. Although Mickelson currently resides in a high-tax California home, he has become a poster-child for selecting residency based on tax law. Mickelson found himself in the news after he announced that his taxes were high and that he would have to look at all available options. He even … Continue reading →

A new ruling has declared tax breaks for same sex marriages since they will now receive equality across the entire nation.The Defense of Marriage Act (DOMA), enacted by Bill Clinton in 1996, was terminated this summer. This act, which allowed same-sex couples to receive the same tax benefits as heterosexual couples, was recently repealed by a 5-4 majority vote of the Supreme Court. While this vote may demonstrate a shift in the opinion of the American people, it also provides certain fiscal advantages for gay couples. Previously, only states that recognized gay marriage allowed same-sex couples to file federal tax returns as married couples. Now, however, gay partners are permitted by law to file federal returns as married couples in any state regardless of whether that … Continue reading →

A court ruling from December of 2012 could result in many small business investors in California owing large sums of money in back taxes from a practice now deemed unconstitutional.  Five years ago many small business investors in California were promised a tax break.  The investors were told that if they invested in specific types of businesses, they would receive a large tax deduction.  Now these same investors are being told that they could receive tax bills that for up to $250,000 for deductions that were granted under tax laws that were on the books at the time the investments were made. Of course there is an enormous uproar and battle over this ruling! Senator Ted Lieu (a Redondo Beach Democrat) said, “When we make … Continue reading →

The American dream used to be to get rich young and retire by the age of 40. However, the results of a recent survey by the Spectrem Group indicate that the current goal for many wealthy Americans is to work past the age of 70. This survey revealed that America’s uppermost wage earners do not plan on retiring until they are at least this old. A third of those surveyed who have annual earnings of $750,000 or more, claim they will not retire until after they turn 70. Of that group, 15% say they never plan to step down.  On the other hand, the same survey showed that only 6% of those making under $100,000 a year say they plan to work that long. Another … Continue reading →

It is very common to read about a celebrity or affluent person who owes the IRS a large amount of money in back taxes.  Believe it or not, some people have even taunted the IRS on social media pages in regards to stealing and defrauding the government. Here are some hot stories in the news media this summer that are a good read: First off, it seems Courtney Love has landed herself in the news again. It is not good publicity either! The singer reportedly owes the Internal Revenue Service more than $260,000 in unpaid back taxes. It has been reported that the IRS filed a tax lien on Courtney Love claiming that she needs to settle an outstanding balance of back taxes from 2009 … Continue reading →

The Supreme Court recently declared the Defense of Marriage Act unconstitutional. This means that, in some states, same-sex couples who are legally married can now receive the same Social Security, retirement and health care benefits that have long been available to heterosexual couples.  The ruling could even lead to a check from Uncle Sam for some!  This article discusses the financial and tax implications of this new ruling for same-sex couples. Gift Taxes and Estate Planning Gift and estate taxes have been a core issue for many same-sex couples. Since there was previously no federal recognition of same- sex couples, members of these unions were not able to pass their assets on to their spouses upon their death without being taxed. Now some same sex couples … Continue reading →