Speaker 1: It's Night Side with Dan Ray i WBZ Boston's radio.
Speaker 2: All right, welcome back everyone. It's nine oh seven in Boston, Massachusetts.
Speaker 2: You're listening to WBZ Radio where we are ten thirty
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Speaker 2: WBZ in Boston. As they say, my name is Dan Ray.
Speaker 2: I'm the host of the show and with us tonight,
Speaker 2: and I wish I kept a record mark, Misslbeck, of
Speaker 2: the number of years we've had you on at this
Speaker 2: time of year. But we are now entering, well, we
Speaker 2: have entered the income tax season, that time of the
Speaker 2: year when all of us get these missives in the mail,
Speaker 2: these forms, these two forms which tell us how much
Speaker 2: many we made and ten ninety nine from banks and
Speaker 2: can be kind of overwhelming. As we get on the
Speaker 2: glide path to April fifteenth. I want to welcome back
Speaker 2: my friend Mark Misselbeck. He's the core tax director of
Speaker 2: Cherry Beckett Advisory LLC CPA, and Mark, I was just
Speaker 2: saying that we've done this now, this probably is our
Speaker 2: fourteenth or fifteenth year at least doing this. How are
Speaker 2: you tonight?
Speaker 3: Pretty good?
Speaker 2: Busy time.
Speaker 4: I found an old posting that an appeal of an
Speaker 4: appearance March sixth, twenty eleven. I was fored. I thought
Speaker 4: we were eight or ten years Max.
Speaker 2: Yeah, No time flies when you're having fun, Mark, that's
Speaker 2: for sure. Yeah, Well that would that would make it
Speaker 2: now where this would be Well, if twenty eleven was
Speaker 2: the first, this must be the fifteenth year. But you're
Speaker 2: always great. You explained things so that people can understand
Speaker 2: they're what they are doing. And I always like to
Speaker 2: start off with my threshold question. And I think you've
Speaker 2: heard the question enough so you know the answer that
Speaker 2: I'm looking for, and that is what's the most important
Speaker 2: thing an individual? Because most of my listeners who are
Speaker 2: listening tonight are individuals who know they have to file
Speaker 2: taxes in April fifteenth. What's the most important thing they
Speaker 2: can do before they arrive at their CPA's office or
Speaker 2: their lawyer's office, or whatever tax filing service they are utilizing.
Speaker 4: If you have a folder, take it and put all
Speaker 4: of your information, your documentation into the folder. W two's
Speaker 4: ten ninety nine's stock trade information, documentation of charitble donations,
Speaker 4: the property tax bills, the auto excise tax, medical costs,
Speaker 4: anything and everything along the lines. If you're a partner
Speaker 4: and a partnership that information. If you are a sole proprietor,
Speaker 4: you need your business records of income and expenses for
Speaker 4: the year, and particularly if you're using your vehicle in
Speaker 4: that business, the mileage records for business versus personal use.
Speaker 2: Yeah, I mean it's a lot. It's overwhelming to most people.
Speaker 2: I don't know how any individual with any sense of
Speaker 2: certainty can do this without some professional help. And I
Speaker 2: mean that seriously. I think, thank God that there are
Speaker 2: people like you and others around who not only do
Speaker 2: work for corporations but also do work, you know, for
Speaker 2: sub chapter s and individuals and corporations. I mean, it's
Speaker 2: just it's overwhelming. As I get older, I think to myself,
Speaker 2: it just seems to get more complicated every year. Is
Speaker 2: that my imagination? Or is it indeed becoming more complicated
Speaker 2: every year.
Speaker 4: I don't know to a degree it's more complicated, but
Speaker 4: the Congress seems to perceive that with computers available, the
Speaker 4: programmers can set up anything to deal with whatever it
Speaker 4: is they write into the tax codes so they feel
Speaker 4: free to do so. Yeah, and as far as being overwhelming,
Speaker 4: the guide you need is your last year's return. Look
Speaker 4: for the information this year for what you reported in
Speaker 4: the return last year, bank accounts and brokerage statements.
Speaker 2: Yeah, and at this point you're you should have I
Speaker 2: think you know your W two's and your ten ninety
Speaker 2: nine from banks, you know your simpler accounts, if you
Speaker 2: have investments. A lot of that stuff can come later,
Speaker 2: but most of that stuff should have arrived on it
Speaker 2: before January thirty.
Speaker 3: First, correct, pretty much?
Speaker 2: So yes, right, and so ope, get a Manila folder,
Speaker 2: put it together, you know, use some paper clips, you know,
Speaker 2: paper clip what if you have more than one ten
Speaker 2: ninety nine, or if you happen to have, you know,
Speaker 2: more than you know a W two, clip them together,
Speaker 2: et cetera. The other thing which people should be aware of.
Speaker 2: And I know that these are very elementary observations. I'm
Speaker 2: trying to establish and get out of the way. There's
Speaker 2: going to be a lot of talk in the next
Speaker 2: few weeks about changes in the tax code and the
Speaker 2: tax the Trump tax plan, and specifics dealing with assault limitations,
Speaker 2: you know, all of that. But in terms of this
Speaker 2: tax year, which is really twenty twenty four, nothing's going
Speaker 2: to change. So don't sit around thinking, oh, I'll be
Speaker 2: able to delay filing my taxes for twenty twenty four
Speaker 2: because they're going to change the tax code anyway. If
Speaker 2: they change the tax code, it's going to be effective
Speaker 2: as of January first, twenty twenty six, or the effective
Speaker 2: January first, twenty twenty five. Correct.
Speaker 3: Well, historically that's the case.
Speaker 4: There has been talked on occasion of making things retroactive,
Speaker 4: but so far they've held off from actually doing that.
Speaker 4: So it's largely a safe bet that what was in
Speaker 4: effect as of December thirty first will be what you
Speaker 4: need to deal with in your return this year. There
Speaker 4: is some past year end work that can be done
Speaker 4: in terms of doing an IRA, or if you have
Speaker 4: a business adopting a pension plan. It used to be
Speaker 4: that self employes had to have their pension plan in
Speaker 4: place or they defaulted to a simple IRA with off
Speaker 4: the rack terms to it. That may be a little
Speaker 4: more of a straight jacket than you wanted. Congress a
Speaker 4: couple of years back changed the law. It isn't December
Speaker 4: thirty first that you need the plan in place. You
Speaker 4: need to do it by the time you file your
Speaker 4: return including extensions. So people with a business, if they
Speaker 4: haven't had a pension plan in place, had a decent
Speaker 4: year last year, want to put some money aside and
Speaker 4: a pension plan, can still adopt it. Those who are
Speaker 4: on a W two, if their income is below the
Speaker 4: phase out threshold, they can still do deductible iris. If
Speaker 4: they'd rather, they can do roth iras.
Speaker 2: Yeah, roth ira. I think most people are beginning to
Speaker 2: understand that you convert your four h one k into
Speaker 2: a ROTH, you pay the taxes to convert it, but
Speaker 2: then the money that is left over goes into the
Speaker 2: roth will never be taxed again.
Speaker 4: Correct, Well, you've got to pay money on the money,
Speaker 4: pay tax on the money going into the raw because
Speaker 4: it's not deductible. So if you if you decide to
Speaker 4: do a conversion, understand you can't undo it. Years ago,
Speaker 4: you used to be able to Congress took that away
Speaker 4: from us. So once you make the decision and make
Speaker 4: the change, you're stuck with it.
Speaker 2: Yeah. And the theory on that is that your earning
Speaker 2: power will probably not necessarily always, but probably diminish upon
Speaker 2: your retirement.
Speaker 4: Correct, not your earning power, but your overall income if
Speaker 4: you are not going to solder on in the workforce
Speaker 4: beyond your retirement date.
Speaker 2: Yeah. So the idea is you probably if you're relying
Speaker 2: upon either a pension or social security some combination thereof,
Speaker 2: and you've left a job, your your tax rate probably
Speaker 2: would be higher through the time that you work, and
Speaker 2: once you actually retire, your tax rate is going to
Speaker 2: go down. So therefore, when you go and you take
Speaker 2: your money out of your your wroth account, it's it's
Speaker 2: going to be taxed at a lower rates. As a consequence,
Speaker 2: there'll be no tax. There'll be no tax on it.
Speaker 4: It's not necessarily no tax, but a lesser tax. If
Speaker 4: you don't have a substantial accumulation to your benefit of
Speaker 4: a pension plan, if you've been packing money away and
Speaker 4: the market has been rewarding you with its rise over
Speaker 4: the last some years, you may in fact have a
Speaker 4: balance in your account that can produce an income that,
Speaker 4: in combination with Social Security benefits, pushes you into the
Speaker 4: same or a higher bracket. In that case, doing a
Speaker 4: wroth conversion will pay the tax now at the turnent
Speaker 4: rates in case they rise in a later year, and
Speaker 4: you need never tap the wroth if you choose not to,
Speaker 4: or if you do and you have it in there
Speaker 4: long enough five years, whatever comes out is tax free
Speaker 4: and doesn't impact your Medicare charges and your income levels
Speaker 4: and your tax rates.
Speaker 2: Yeah, they just don't make it simple. Guess Mark Misselbeck.
Speaker 2: Mark is a CPA. He knows his stuff. He's the
Speaker 2: core tax director. I'm not familiar with the phrase core
Speaker 2: tax director. Is that a new phrase or is that
Speaker 2: a phrase that I should be familiar with?
Speaker 4: Nolly, Different firms have different designations. Principal director, partner, echley partner,
Speaker 4: non equity partner, profit participant. It's all over the lot.
Speaker 4: It's stratified. And the higher up you get, the bigger
Speaker 4: the title.
Speaker 2: The bigger the title. Okay, fair enough. I wasn't sure
Speaker 2: if there was a meaning that I was missing. He's
Speaker 2: with Cherry Beckett Advisory LLC. We'll give at some point
Speaker 2: later on tonight. They're located in Waltham, pretty easy to
Speaker 2: find if you're interested. But now it's an opportunity for
Speaker 2: you to get some free tax advice. If you have
Speaker 2: a question six one, seven, two, five, four, ten thirty,
Speaker 2: six one seven thirty, do not hesitate. Feel free. As
Speaker 2: I've often said, there is no such thing as a
Speaker 2: dumb question. If you you may be able to save
Speaker 2: yourself some aggravation. So feel free to join the conversation.
Speaker 2: We're going to take very quick break, be back with
Speaker 2: Mark Misselbeck, and my call is questions, So feel free
Speaker 2: just dial that number and ask away. This is not
Speaker 2: going to cost you anything, and it may save you
Speaker 2: some money in the long run or in the short run.
Speaker 2: Back on night Side right after this.
Speaker 1: Now back to Dan Ray live from the Window World
Speaker 1: Nightside Studios on WBZ News Radio.
Speaker 2: We're talking taxes. April fifteenth is the deadline. April fifteenth
Speaker 2: this year? Does the Patriots Day celebration get us an
Speaker 2: extra couple of days?
Speaker 3: Mark?
Speaker 2: Do you know that off the top of your head?
Speaker 4: It's April fifteenth, and it is Patriots Day that gets
Speaker 4: you extra time?
Speaker 3: Anymore?
Speaker 4: It's Emancipation Day down on DC.
Speaker 2: Yeah, I see. Yeah, okay, well Patriots Day here is
Speaker 2: the twenty first, so tax Day is indeed the fifteenth.
Speaker 2: And if people one thing people should know, and I
Speaker 2: think we could should get this out quickly, and that
Speaker 2: is that people have a right to seek an extension,
Speaker 2: a six month extension automatically, but they have to make
Speaker 2: a good faith effort to pay the taxes owed by
Speaker 2: April fifteenth. Can you explain that a little bit better
Speaker 2: than I can explain it. So people, if they're up
Speaker 2: against the deadline and they know they're not going to
Speaker 2: make it, they do have an option.
Speaker 4: Yeah, based on your information that you have in hand,
Speaker 4: you make your best reasonable estimate of your taxes, do
Speaker 4: and pay in what you haven't paid so far. We
Speaker 4: usually think about putting in the first quarter estimate because
Speaker 4: the people who have that problem usually have to pay
Speaker 4: estimates and thereby increasing by that depositing that first quarter
Speaker 4: estimate an additional level of security against a surprise income
Speaker 4: coming in the door from somewhere they weren't anticipating. Then
Speaker 4: their first quarter estimate is short, they can make it
Speaker 4: up with June the second quarter, and they only suffer
Speaker 4: a charge of two months interest for not having paid
Speaker 4: the first quarter correctly.
Speaker 2: Tell you it's keeping the rules in your head. You
Speaker 2: always amaze me. Let's go to phone calls. We got
Speaker 2: John in Dorchester, starts us off tonight. Hey, John, welcome
Speaker 2: your first This Hour with Mark Misselbeck talking taxes. What's
Speaker 2: your question? What do you call it? John?
Speaker 5: So, thank you Dan, and thank you Mike. I appreciate
Speaker 5: your help and what you're doing. Absolutely, I am. I
Speaker 5: filed twenty twenty three last year on time single and
Speaker 5: I'm sixty five now I'll be sixty six in May.
Speaker 5: But I didn't do twenty twenty two. But my understanding
Speaker 5: is it's not too late to file, so I could
Speaker 5: file for that. And why did you do that?
Speaker 2: John, John woll Woa, WHOA, what do you mean you
Speaker 2: you didn't do twenty twenty two, which would have been
Speaker 2: ding April at twenty twenty three? Did you just forget
Speaker 2: or did.
Speaker 5: You had had I had some health issues going on.
Speaker 5: I took care of all the I took care of
Speaker 5: all the other years and that effect they just I
Speaker 5: just got a refunded enough.
Speaker 2: Okay, so let me come back. I just want to
Speaker 2: understand and I want Mark to understand. So you never
Speaker 2: filed twenty twenty two. Do you think your owed tax
Speaker 2: you have to file, But do you think your owe
Speaker 2: taxes did that?
Speaker 5: I want to say that I'd be surprised if I
Speaker 5: wasn't getting a refund. Okay, I'd be surprised if I
Speaker 5: wasn't getting a refund.
Speaker 2: Okay. So so let's find out from Mark what sort
Speaker 2: of jeopardy you're in. You as I'm sure you probably know,
Speaker 2: you're supposed to file. Correct Mark situation as John presents it,
Speaker 2: presents it. He didn't file. He had some health complications
Speaker 2: and he thinks that he should be doing a refund.
Speaker 2: What's the best guidance for him?
Speaker 4: File and file as soon as you can. If you
Speaker 4: wait another two years, you may you still have the
Speaker 4: obligation to file, and the statute of limitations, which runs
Speaker 4: typically three years from filing, will start when you submit
Speaker 4: the return. The problem is if you go three years
Speaker 4: out from the original do date, the refund may not
Speaker 4: be due you any longer. He may be shut out
Speaker 4: from it. So you need to get on your horse
Speaker 4: a little bit. And if you're owed money, there may
Speaker 4: be a small late penalty for not having filed timely.
Speaker 4: But there should be no penalty for under payment. And
Speaker 4: there is a program with the IRS. If you are
Speaker 4: a first time penalty assessment and you haven't had penalties
Speaker 4: assessed in the last three years, and use this first
Speaker 4: time escape patch, you can ask them to waive the
Speaker 4: penalty under that program.
Speaker 5: Is that what they call the amnesty program?
Speaker 4: No, no, no Mass had an amnesty hasn't had or
Speaker 4: has an amnesty program going on. I think it may
Speaker 4: have been shut down by now. It was a second
Speaker 4: one in the last decade that you could file, pay
Speaker 4: your taxes, pay the interest and not get hit with penalties.
Speaker 4: But no, this is just an abatement program on first
Speaker 4: time penalty assessments first time, the first time in the
Speaker 4: last three years.
Speaker 2: Okay, but remember John, you got your mass resident I assume,
Speaker 2: so did you file in twenty twenty three, either for
Speaker 2: state or federal or.
Speaker 5: I took care of twenty twenty three on time, which
Speaker 5: was I was supposed to do when things worked out
Speaker 5: well in my half.
Speaker 3: Okay, and both authorities.
Speaker 5: And then like I said, this year, I am you know,
Speaker 5: I'm sixty five this year, so I know there's a
Speaker 5: I think there's a special exemption right off if you're
Speaker 5: sixty five, I think it might be a twenty five
Speaker 5: hundred dollars exemption. I could be all, well.
Speaker 4: Listen, it's an increased standard deduction in the deduction, but
Speaker 4: under deduction, those who attained a certain age get an
Speaker 4: extra right off both state and federal because the state
Speaker 4: is a little bit less the Fed is a little
Speaker 4: bit more.
Speaker 5: Yeah, I could be as I want to say. They
Speaker 5: said it was twenty five hundred. I could be, well,
Speaker 5: but I think that's what they said. I don't know
Speaker 5: if that's a total pan off, but that's what they said,
Speaker 5: it was twenty five hundred.
Speaker 2: That assumes you're filing a standard with a standard deduction,
Speaker 2: not not to deducted.
Speaker 4: Okay, s sixty five and twenty twenty three, you got
Speaker 4: an extra eighteen hundred and fifty dollars. In twenty twenty
Speaker 4: four it'll be nineteen hundred and fifty dollars as a
Speaker 4: standard deduction.
Speaker 2: I want to come back to my original question, John,
Speaker 2: what was the tax year that you failed to file
Speaker 2: and did you fail to file for both federal and
Speaker 2: state or did you fail to file for just one?
Speaker 5: Twenty twenty two was the and I unfortunately and file
Speaker 5: for both federal law state.
Speaker 2: Okay, but I held hopefully you got the answers that
Speaker 2: you need here. Is there anything that you need to
Speaker 2: clear up with with Mark before we let you go?
Speaker 5: No, I are you answered all my questions. But I
Speaker 5: greatly greatly appreciate it and appreciate you volunteer any time
Speaker 5: now that Mark, and again you always do a great job.
Speaker 5: And welcome back whatever year it is, Mark twentieth or
Speaker 5: fifteenth or whatever it is.
Speaker 2: At least fifteen, at least fifteen. Yeah, all right, thank
Speaker 2: thanks you. I appreciate you getting us going here. You
Speaker 2: broke the ice. Thanks my friend.
Speaker 5: Math wasn't my strong point. That's why I always sat
Speaker 5: next to the spotkits.
Speaker 2: But not that you'd look on the paper or anything
Speaker 2: like that for answers.
Speaker 5: The chiefs would ask a question if I go that way?
Speaker 5: They did.
Speaker 2: I didn't do it intentionally. Yeah, we got it, all right,
Speaker 2: Thank you, John, appreciate it.
Speaker 5: Okay, Well, God bless thanks again.
Speaker 2: That was a good one to start off with. Mark.
Speaker 2: We'll we have other callers on the line and waiting,
Speaker 2: and one line open at six one, seven, two, five,
Speaker 2: four ten thirty that John just left and one line
Speaker 2: at six one, seven, nine, three, ten thirty. My guess
Speaker 2: is Mark Misselbeck, CPAH. He has an extraordinary knowledge of
Speaker 2: tax law and uh, he always amazes me. He's a
Speaker 2: core tax director at a firm called Cherry Beckert Advisory LLC.
Speaker 2: They're located in Waltham and will give ways in which
Speaker 2: you can contact him if you want. He has plenty
Speaker 2: of work and I'm surprised that he's always as generous
Speaker 2: with his time, but he is. It benefits me and
Speaker 2: it benefits you if you take advantage and dial the calls.
Speaker 2: We'll be back on Nightside run after this break, news break,
Speaker 2: this news break, and they think I have one commercial
Speaker 2: to read and then we'll be done for the night.
Speaker 2: On the commercials, it's Night Side with.
Speaker 1: Boston's News Radio.
Speaker 2: My guest is Mark Misselbeck. He's a CPA. He takes
Speaker 2: your tax questions. He done it, He's done it with us,
Speaker 2: he did it with David bread Noo. As a matter
Speaker 2: of fact, how many years did you did you coordinate
Speaker 2: with David brednege on this.
Speaker 4: Mark, I gotta be either ten.
Speaker 2: Yeah, yeah. David's great friend, great guy, and I'm happy
Speaker 2: to carry on to tradition with you and appreciate you
Speaker 2: spending some time with us. Tonight, let me go to
Speaker 2: Pat in Waymouth. Pat, you are next this hour with
Speaker 2: my guest Mark Misselbecker.
Speaker 6: Right ahead, Pat, Hi, Dan, thanks for taking my call,
Speaker 6: and Mark, thank you for any advice you can give me.
Speaker 6: Seventy six years old, I've always filed as individual short form.
Speaker 6: This year I was awarded a lawsuit proceeds, and I
Speaker 6: understand that that those proceeds that I was awarded are
Speaker 6: not textical.
Speaker 4: It depends upon the nature of the claim, what you
Speaker 4: base the claim on, and I would have to get
Speaker 4: into it with you as to what that lawsuit claimed
Speaker 4: in order to obtain the settlement. In order to make
Speaker 4: the determination, you need to.
Speaker 6: Say yes, and I do have an appointment. But yeah,
Speaker 6: it was a motor vehicle accident and the f fault
Speaker 6: driver went over double line and hit me head on,
Speaker 6: and of course my car was total and I was
Speaker 6: in the hospital for two days.
Speaker 2: And I think you were not this was this was
Speaker 2: a torch claim. You were injured and you you want
Speaker 2: some money a Mark, I.
Speaker 6: Was was boarded money.
Speaker 4: You said, yeah, okay, yeah, all right, now if it
Speaker 4: if the basis of the claim is your physical injuries.
Speaker 4: Compensation for physical injuries is typically going to be untaxable, okay,
Speaker 4: And anything else would be taxable. It was replacing wages
Speaker 4: or income earning capacity, that's probably.
Speaker 3: Going to be taxable.
Speaker 7: Okay.
Speaker 6: No, it would be all for the physical I was
Speaker 6: in the hospital for two days and I underwent a
Speaker 6: lot of tests, and so.
Speaker 2: Your medical pain, medical and pain and suffering and things
Speaker 2: like that, I assume.
Speaker 6: Oh yeah, oh yeah. When I got out of the
Speaker 6: hospital it was twenty seven.
Speaker 2: I was telling you that you made that you that
Speaker 2: your tax advisor is probably going to tell you. And
Speaker 2: again you have to listen to your own tax advisor
Speaker 2: that you might be okay, any other question or.
Speaker 4: Know The only thing I would say further is to
Speaker 4: disclose it in the return that you received the settlement,
Speaker 4: but it was for this particular problem or event, the
Speaker 4: physical damage, and that therefore under and your advisor will
Speaker 4: look up the code site, the tax code site, and
Speaker 4: cite that particular provision that makes it exempt.
Speaker 2: You know, Mark, while we're talking about this, I'm going
Speaker 2: to ask you a question, because you know a lot
Speaker 2: more about this than I do. And when I was
Speaker 2: in television. I was able to help some men get
Speaker 2: out of prison for a wrongful imprisonment by corrupt FBI agents,
Speaker 2: and the client that we were advocating for was awarded
Speaker 2: approximately thirty two million dollars, which he actually he received for. Again,
Speaker 2: it was a taught claim, a federal torts claim where
Speaker 2: ages of the government were found to have been to
Speaker 2: wrongfully and intentionally imprison this gentleman for thirty years for
Speaker 2: a crime that he had nothing to do with, that
Speaker 2: he did not commit. I don't know the answer to
Speaker 2: the question, but I'm just curious. Obviously that was money
Speaker 2: that he was was awarded for wrongful imprisonment. How do
Speaker 2: you think that would have been treated from a tax
Speaker 2: point of view.
Speaker 4: I think it's going to be taxable as compensatory.
Speaker 2: Yeah, boy, that's tough to think about.
Speaker 3: Uh.
Speaker 2: And And I'm curious because it seems to me that
Speaker 2: if the government was forced the government, you know, was
Speaker 2: the one that put him in this situation, and the
Speaker 2: judge determined that he would be awarded that money, and
Speaker 2: I think it it was taxable. It just seemed to
Speaker 2: me so unfair at the time that you that you
Speaker 2: that you lose thirty two, you'll lose thirty years of
Speaker 2: your life, which it kind of worked out to about
Speaker 2: a million dollars a year, which sounds like a lot
Speaker 2: of money. But spend spend one year in prison, and
Speaker 2: tell me what you think it's worth. And so if
Speaker 2: it's categorized as compensatory, which I guess it was, that
Speaker 2: just seems to me inherently unfair, particularly when it's the
Speaker 2: government that has caused.
Speaker 3: Lay a minute time out.
Speaker 4: And I keep saying to people, give me the certificate
Speaker 4: of fairness in the tax arena.
Speaker 3: Yeah, okay, nobody's produced one yet. I got it a
Speaker 3: broad brush.
Speaker 4: The broad brush of the Congress states all income from
Speaker 4: whatever source derived is taxable unless there's another provision that
Speaker 4: they enact that exempts it from taxation.
Speaker 3: But it just in the.
Speaker 4: Personal injury for physical damages to your body that's excludable.
Speaker 3: Yeah, this will.
Speaker 6: Excludable for Catt.
Speaker 4: Yeah you're gonna be okay, Pat, But again, follow the
Speaker 4: advice of your tax advisor.
Speaker 2: I gotta keep rolling pad. Okay, next so much? Yes, okay,
Speaker 2: let me go next to Michael in Boston. Michael, you're
Speaker 2: next on nice side with Mark Misselbeck.
Speaker 8: Go ahead, Michael, Hi there, thanks for taking questions.
Speaker 5: Welcome.
Speaker 8: If we take a trust, an irrevocable trust, let's say
Speaker 8: not that it might make a difference. And as long
Speaker 8: as the grantor of that trust is alive, he not
Speaker 8: only does his own ten forty and form one for
Speaker 8: the state, he also does a ten forty one federal
Speaker 8: and a two A for the state. So taxes from
Speaker 8: the trust, the interest and dividends from the trust, he
Speaker 8: is still responsible the grantor of the trust as long
Speaker 8: as he's alive. Now the granted is no longer with us,
Speaker 8: the beneficiary is able to receive the stated amount and
Speaker 8: the trust, let's say five thousand dollars a month, to
Speaker 8: pick a figure. That is my understanding is you, I'd
Speaker 8: like you to confirm please that that is not tax
Speaker 8: He'll put it on his return if it's taxable. But
Speaker 8: it only would be taxable if he would withdraws that
Speaker 8: sixty thousand dollars a year from the principle of the trust,
Speaker 8: not the interest in the dividends.
Speaker 4: Well, first off, when you say irrevocable trust, there are
Speaker 4: two flavors. One is an irrevocable trust that is taxable
Speaker 4: in its own right. What you're describing is a circumstance
Speaker 4: of an irrevotable trust where the terms cannot be changed,
Speaker 4: but within the terms there are provisions that cause it
Speaker 4: to be taxable to the grand tour as though it
Speaker 4: were still their assets and their income during their lifetime
Speaker 4: on their death. If the terms of the trust mandate
Speaker 4: a five thousand a month distribution, it will be taxable
Speaker 4: to the recipient, the beneficiary if there is sufficient income
Speaker 4: generated in the trust to support that payment. That is,
Speaker 4: the first money out of the trust is the income
Speaker 4: generated by the trust. If the payouts exceed the income
Speaker 4: for the year, then the trust is dipping into principle
Speaker 4: that's already been taxed, and that piece would be none taxable.
Speaker 8: Okay, But does it is he committed to take just
Speaker 8: to dividends or can take the He can't take the
Speaker 8: principal from the start.
Speaker 4: No, he cannot choose to take the principle from the start.
Speaker 4: The tax on mandates that you the income. The obligation
Speaker 4: to pay the taxes on the income transfers with the
Speaker 4: cash flow, so it drains out of the trust first
Speaker 4: to the recipient.
Speaker 8: Okay, cash the interesting dividends.
Speaker 4: Interest dividends, and if the trustee has the ability to
Speaker 4: designate and the state law permits it, they may designate
Speaker 4: that the capital gains as well as income rather than
Speaker 4: capital or principle, that's a trust to trustee has to make.
Speaker 5: I see.
Speaker 8: Okay, the beneficiary is the trustee.
Speaker 4: Then they need to consult with somebody as to whether
Speaker 4: or not that's a beneficial election to make. Once made it,
Speaker 4: you're going to be bound by it and going forward,
Speaker 4: capital gains, if treated as income at the start of
Speaker 4: the payout, will forever after be income to be distributed
Speaker 4: to the beneficiary.
Speaker 8: Okay, Dan, can I asked you another question? Or no?
Speaker 2: No, go ahead? Sure.
Speaker 8: Oh it's kind of confusing on the r m D. Yeah, yeah, people.
Speaker 2: I just want to explain it so that people Mark
Speaker 2: understands they want to make the audience allowed that if
Speaker 2: you have an obligation, if if you have a four
Speaker 2: to oh one K, which now is a pot of gold,
Speaker 2: and you're required based upon how old you are to
Speaker 2: take out a certain amount of money required minimum distribution
Speaker 2: every year. It depends upon how old you are set
Speaker 2: to Mark. We'll get into that, but I just want
Speaker 2: people to understand that a required minimum distribution is a
Speaker 2: good thing to have. Go ahead, Michael.
Speaker 8: Okay, So on the federal it's clear that that in
Speaker 8: full is put on my return because it was previously
Speaker 8: deducted over forty years every year and I never paid
Speaker 8: any tax on the interest that it produced on the
Speaker 8: state return. It's confusing. It gives you a little worksheet
Speaker 8: and it says, take your RMD for this year and
Speaker 8: subtracted from previous taxes on contributions. I don't understand why
Speaker 8: would there be a tax on a previous contribution. I
Speaker 8: don't know of any that I have. I don't understand that.
Speaker 4: Okay, here's the deal. Federally, you could pay into an
Speaker 4: IRA many years ago. It was deductible regardless of income level.
Speaker 4: The last number of years you could potentially make the contribution,
Speaker 4: but if your income was too high, you wouldn't get
Speaker 4: the deduction. That's on the federal level. MASS has never
Speaker 4: allowed a deduction for an IRA contribution. So if you
Speaker 4: have your records and can assemble from those records or
Speaker 4: from the custodians records telling you how much you contributed
Speaker 4: each year, the total of what you contributed into the IRA,
Speaker 4: that was never deducted for Mass purposes. That's all tax
Speaker 4: paid money as far as Mass is concerned. And the
Speaker 4: first dollars out are charged against or recoupment of those
Speaker 4: non deductible already tax moneies until you get it all
Speaker 4: back thereafter it's one hundred percent taxable for Mass. That's
Speaker 4: what the work she is telling you.
Speaker 8: I see, Okay, it's kind of confusing, at least for me.
Speaker 5: Yeah, okay, I guess you carried it up.
Speaker 8: Thank you so much.
Speaker 2: Appreciate you, Thanks, Michael, appreciate the call.
Speaker 8: Thank you, thank you.
Speaker 2: Six seven two four ten thirty one line there, six
Speaker 2: one seven nine three one ten thirty one line there.
Speaker 2: Back we have Janice, We have a Harriet. Harriet, Janice
Speaker 2: and Mary. Uh again, be more than happy to get
Speaker 2: as many calls as we can, and then we might
Speaker 2: even take this into the next hour, folks, So stay
Speaker 2: with us right after this on said.
Speaker 1: Now back to Dan Ray live from the Window World
Speaker 1: Nice Sin Studios, i' WBZ News Radio.
Speaker 2: My guest is Mark misslbeck CPA.
Speaker 4: Uh.
Speaker 2: He is our tax expert, has been that one for
Speaker 2: fIF fifteen years.
Speaker 5: Uh.
Speaker 2: He is with a firm called Cherry Beckert Advisory LLC
Speaker 2: and Mark, we have full line, so I think we're
Speaker 2: gonna continue on with your UH as long as you're
Speaker 2: willing a little longer than we than we had expected.
Speaker 2: Let's go to Harriet and Lowell. Harriet, you're with Mark
Speaker 2: Misselbecker right ahead, and Harriet.
Speaker 7: Harriet, Hi, Hi, thanks for taking my call.
Speaker 9: My husband and I filed a joint tax return and
Speaker 9: we went with H and I Block. And it's now
Speaker 9: a year and we were supposed to get a refund
Speaker 9: for at least two thousand dollars and we have got nothing.
Speaker 9: We want to know if we do, it's something wrong.
Speaker 9: We've contacted them. I don't know what the problem is,
Speaker 9: and they keep saying they're looking into it and nothing
Speaker 9: gets done.
Speaker 2: Well, Mark is not with H and R Block. First
Speaker 2: of all, let's let's make that I know that, okay,
Speaker 2: there sometimes can be a problem. I know that out
Speaker 2: of COVID, and Mark correct me if I'm wrong. There
Speaker 2: were some refunds, legitimate refunds that were withheld because people
Speaker 2: had not established an account with the federal government. Do
Speaker 2: you know of what I speak there?
Speaker 4: Not particularly, but I can think they're off hand of
Speaker 4: two circumstances one, did you pay per file or did
Speaker 4: you electronically submit through HMR block.
Speaker 7: Electronically?
Speaker 4: Okay, So the first problem of paper going into the
Speaker 4: IRS and getting lost, misplaced, or treaded is not the issue.
Speaker 4: The secondary issue is there may be a conflict that
Speaker 4: somebody stole your identity and file the return before you did.
Speaker 3: That.
Speaker 4: You need to contact the Taxpayer Advocate Service at the IRS.
Speaker 4: Look on the web for that particular designation. They have
Speaker 4: an eight hundred number and they are in the JFK
Speaker 4: building downtown Boston. I don't know if you want to
Speaker 4: go in there. If you do, they screen you along
Speaker 4: the lines of what the TSA does at the airport.
Speaker 4: They will look at your metal objects and so forth.
Speaker 4: But if you go in there, either the tax per
Speaker 4: Advocate Service or the help desk, but they usually have
Speaker 4: lines there. So contacting the Tax pay Advocate Service to
Speaker 4: me is the better avenue to go explaining the problem
Speaker 4: and have available from H and R Block the confirmation
Speaker 4: of acceptance of the return through electronic filing that they
Speaker 4: are supposed to have received back from the government to
Speaker 4: documentary the.
Speaker 7: Return was there right then they required something else like
Speaker 7: in September, which again it was electronically accepted that they
Speaker 7: received the paperwork, and again we filed in February of
Speaker 7: last year.
Speaker 2: Let me help you out here, Harriet. Okay, yeah, let
Speaker 2: me let me help you out here. You're in Lowell.
Speaker 2: So your congress congressional office is Lori Trehan.
Speaker 7: Correct, Well, actually I live in Tewksbury.
Speaker 2: Okay, who's your congressman.
Speaker 6: Who's my congressman?
Speaker 4: Well, you can take let me let me.
Speaker 2: Shot Glori Trehan would be Seth Molten.
Speaker 4: Dan I had. I had a big problem with the client.
Speaker 4: I wanted to get the congressional delegation involved, and I did,
Speaker 4: and I found out afterwards. All they do is referred
Speaker 4: over to the tax for advocate service they do.
Speaker 2: But in most congressionals, in most congressional offices, they have
Speaker 2: a liaison. And I can speak to personal knowledge of this.
Speaker 2: If you ask for the liaison, you can avoid going
Speaker 2: into the into the JFK building. And if if you
Speaker 2: deal with either Trahan or Moulton, there are two vult
Speaker 2: Malt Moulten. Okay, Carl Milton's office, Tell them that that
Speaker 2: you called night Side uh and that they you'd like
Speaker 2: to find out if they could advocate on your behalf.
Speaker 2: Try that first. It will save you going into Boston.
Speaker 2: If that doesn't work, then you may have to do that.
Speaker 2: But there are individuals in these congressional offices.
Speaker 3: Yeah, don't forget.
Speaker 4: You've got two senators also that you can bring in
Speaker 4: on the deal.
Speaker 2: It's true. But I think that that that Molten would
Speaker 2: do a good job for you. And I really mean
Speaker 2: that because I have had personal experience where once you
Speaker 2: get your congressman's office involved, you know, particularly if you're legitimate,
Speaker 2: and you sound like you're totally legitimate, they can track
Speaker 2: this down. And if you were, as as Mark suggested,
Speaker 2: the victim of someone else stealing your check, they can
Speaker 2: they can track that down. It's started that way, and
Speaker 2: start just with the local office. I think Seth's local
Speaker 2: office is one of his local offices is in Salem. Okay, right,
Speaker 2: all right, hope that helps.
Speaker 9: All right, Thank you Dan, Thank you Mark.
Speaker 2: You're welcome to post it on it and feel free
Speaker 2: to call me back and let me know. Okay, Thanks, Okay,
Speaker 2: all right, good night, Mark. We have full lines and
Speaker 2: we got a little bit of a news break here,
Speaker 2: so I would again thank you very much for joining us.
Speaker 2: Let's stick with it. You can get up, stretch your legs,
Speaker 2: get a glass of water, and one quick comment.
Speaker 4: Yeah, these these identity thefts are rampant, and anyone can
Speaker 4: request what is known as an ip pin for electronic
Speaker 4: filing by going to the IRS website and requesting one.
Speaker 4: At this time of year, You've got to wait for
Speaker 4: it to come, likely in the mails for several weeks,
Speaker 4: but it will then authenticate that the return you're submitting
Speaker 4: with that TIN number is the correct return.
Speaker 2: Yeah, and I think that's what I went through a
Speaker 2: few years ago. It was after COVID, So I think
Speaker 2: she I think I've given her good advice. I know
Speaker 2: that is not tax advice, but I think that the
Speaker 2: congressional offices will will in this case, Molten's office will
Speaker 2: help her out. And a Ken Harritt, if you're listening,
Speaker 2: let me know how you make out on that. We'll
Speaker 2: be back with Mark misselback right after the ten o'clock news.
Speaker 2: More questions right here on nightside. Your tax question is
Speaker 2: the only line six months seven A nine, three, one,
Speaker 2: ten thirty