2019 Tax Rates

           The tax rates will change again for 2019 getting somewhat wider. You remember all the talk about having almost a flat tax. Forget it. There are seven tax brackets for each of the various individual tax statuses. There are a couple of notable changes. The new and improved anti blue state standard deduction will rise to $12,200 for single taxpayers and $24,400 for married couples. For tax years 2017 and 2018 medical expenses were deductible which exceeded 7.5% of the taxpayer’s adjusted gross income. Starting in 2019 the uninsured medical deduction will only be allowed to the extent that it exceeds 10% of AGI. The Social Security annual wage base will jump to $132,900. The lifetime estate and gift tax exemption will increase to $11,400,000 for single taxpayers and twice that amount for couples if portability is elected. The annual gift tax exclusion will increase to $15,000 per donee. The federal tax law provides a special rule for the exclusion of gain on the sale of a principal residence. If you have owned your residence for at least two of the five years ending on the date of sale a single taxpayer can exclude $250,000 of gain and a married taxpayer $500,000. However, recognizing perhaps that we baby boomers are getting older, if a taxpayer is moving to a nursing home, the use requirement is reduced to one out of five years preceding the date of sale.  

Race the Tax Crooks

On your mark, get set…GO. The race is about to begin between you and the computer crooks who are intent on stealing both your identity and any tax refunds you may be entitled to. The Super Bowl for these cheats and scoundrels has already begun. While most Americans think of April 15 as a tax filing deadline a true hacker sees the very start of tax filing season as an opportunity to grab what he or she can as soon as possible. The game gets played this way: hackers will attempt to file tax returns for you using the identity information they have stolen. The object is to get a refund way before you do. So how then to cross the finish line 1^st? IRS councils that the best way is to file early. If you are able to beat the scoundrels there is a good chance that your refund will find its way to you. At the time of the writing of this bulletin the government, including the IRS, may in fact be closed again. With that closing may go your opportunity to get in the game at all. It will also give tax crooks more time to implement their strategies. No sense trying to call IRS…the phones won’t work in shutdown.

The "Fake" Bar Bulletin for February 2019

1)      Taking a lead from Great Britain it should come as no surprise that New Jersey, New York and California have decided to secede from the union. Governors in each of those states have gotten together to create a new country which permits the deduction of real estate taxes as well as other state and local income taxes. The governors believe that making their constituents happy will result in further productivity and increased tax revenues. Gov. Murphy from New Jersey declared: “New Jersey has it all. Mountains, lakes and the seashore. What need does it have for Washington DC.?” Murphy also declared that the state flag would be changed to read:” I’ll have a pork roll, egg and cheese” with an Art Deco version of the Bendix diner in its center. It should be noted that California has never really considered itself part of the United States anyway and it’s lost to the union is of little consequence especially since tech giants have decided to take their money and tax revenues elsewhere recently. Pres. Trump stated: “We don’t want California anyway. It’s a tinderbox. It’s Blue and just not nice.” He also noted enthusiastically that “Florida had better weather in the winter than does all of California.” And added “that he had no intention whatsoever of building any hotels in California or Russia.” Gov. Cuomo stated that New York’s proximity to Canada makes his state the “best choice for liberals” who hope to sneak their way across Canadian borders or who may wish to seek political asylum depending on the outcome of the 2020 presidential election. New York State he said will also do better courting tech giants with massive tax give-a- ways much sweeter than California. Pres. Trump on Fox news stated that he believes “Shrinking the country is a lot like shrinking the government… It’s got to be a good thing.” Other states continue to flirt with the idea following in the footsteps of New Jersey, New York and California. Some states have even suggested building a 35 foot tall border wall around their new country made of clear plastic so those less fortunate could look through and see how well they are doing.

       

2)      It would seem that investors in stocks on Wall Street are no longer of the “True Grit” variety. Without any provocation whatsoever (except for the trade wars with China and the rest of the world, climactic disasters everywhere, a federal deficit completely out of control and a President who could find himself indicted, impeached or worse) those scaredy cats sent the stock market down more than 1000 points in a single day which could be one of the worst recorded events in stock market history. Fortunately, the Secretary of the Treasury was quick to go on national news telling investors there was nothing to worry about. He told reporters that this was but a tiny blip in the overall healthy American economy. He said that the Republicans in Congress believe that America’s giant corporations would not let investors down even if it meant cutting wages by 50% to bolster profits. “It’s what these companies are used to doing anyway, .If that doesn’t work we can cut taxes again and again until we get it right.” When asked what his plans are when Pres. Trump fires him, as he has most other cabinet holders, he spoke confidently of his plans to start a hedge fund in a country just north of China specializing in foreign securities. He also spoke of his alternate plan to star in a sitcom to be called “The Last Big Bang Theory” about his days in the White House.

3)       It’s hard to believe that this February bar bulletin is actually being written in January due to time constraints and a pressing vacation schedule. It’s also hard to imagine that a good chunk of the federal government is closed and shuttered. In a surprise announcement Bill Gates told CNN reporters that it is his intention to buy the entire government. “When a business is on the skids, it’s the best time to buy”, Gates proclaimed. “We have a government that is closed and boarded up, deeply in debt and a dysfunctional Congress. What could this mess be worth?” The White House was stunned but quick to immediately begin negotiations. “I was sent to Washington to shake things up. What better way than to sell the entire government to one of its great entrepreneurial geniuses.” The President said. “Just look how great Bill Gates made Microsoft. I think he can do the same thing for us.” He also told reporters “that unless he takes Nancy Pelosi as part of the purchase, there will be no deal.” The plan needs Justice Department approval, but it, like the IRS was closed for comment.

Readers, forgive me. There is just too much nonsense going on these days to write another “real” bar bulletin.  Hope you enjoy the diversion. If you need any real updates…ask Alexa.