While nearly 70% individual taxpayers will receive a refund this tax season, most taxpayers don’t look forward to Tax Day and are willing to do almost anything to get out of paying taxes. A recent survey by GOBankingRates asked over 1,000 U.S. citizens: “Which of the following would you do to get out of paying your taxes?” The respondents could select from the following answer choices. Here’s how they responded:
  • Perform 5 karaoke songs for your company: 32%
  • Go without WiFi for 1 year: 18%
  • Have your credit score reduced by 50 points: 16%
  • Gain 20 pounds: 13%
  • Have your web browsing history made public: 11%
  • Be stuck with skunk stench for 6 months: 5%
  • Give up half of your retirement savings: 5%
Nearly one-third of respondents to the survey said they’d gladly get up and perform five karaoke songs in front of their company if they could avoid paying taxes. This choice was the clear winner for both females and males in every age group. It’s evident that the clear majority of people interested in getting out of paying their taxes are not afraid of sharing their singing skills with a large without the acoustics of the shower assisting them in their performance.
While the potential embarrassment of singing karaoke would seem trivial if it meant being rewarded with less taxes, some Americans are even willing to put their finances at risk. More than 15% of those surveyed were willing to take a 50 point hit to their credit score in exchange for not paying taxes. By age, GenXers (ages 35 to 54) are the most willing to choose this option. By geographical location, Southerners are more willing to choose this option than those in other parts of the country: those in the Northeast were least likely to choose this option.
A surprising 5% of those surveyed would be willing to give up half of their retirement savings in exchange for not paying taxes. That said, most retirement reports have found that a third of Americans have $0 saved for retirement…so maybe there’s not a lot to lose? GenXers were three times more likely than millennials to choose this option.
GenXers are also more willing to allow their web browsing history to be made public while seniors are more willing than any other age group to go without WiFi for a year. We wonder how many seniors are actually are familiar with WiFi, and what they would actually be giving up if they chose this option.
What would you be willing to do in order to avoid paying your taxes this year?
Talley LLP
Advice. Solutions. Results.
If you’re one of the 40 million Americans who has still not filed their taxes this year, here’s a friendly reminder that might offer a little relief: You have an extra three days to submit your annual return.
Tax Day 2017 is on April 18 this year because of something called the District of Columbia Compensated Emancipation Act, signed into existence by President Lincoln on April 16, 1862. With the stroke of his pen, Lincoln not only freed more than 3,000 enslaved people in the District of Columbia and compensated their owners, but he also messed big-time with Tax Day for years to come.
Does all this ring a little bell? It should. Because last year a similar delay occurred thanks to the holiday, which is observed in D.C. but is not an official work holiday in most places. And last year was even weirder because the emancipation holiday fell on a Saturday but was celebrated on Friday the 15th — gotta get that day off from work! — which meant Tax Day was shoved back to Monday the 18th.
Elsewhere in the United States, the emancipation of slaves is celebrated on different dates in Florida (May 20), Puerto Rico (March 22) and Texas (June 19). And similar events take place throughout the Caribbean, including Anguilla, Bahamas, Bermuda and Barbados, though many of these observances happen in August to commemorate the the day slavery was abolished in the British Empire, which was August 1, 1834.
This time around, we’ll have to wait until Tuesday, April 18, to settle our bills (or refunds) with Uncle Sam.
Which means all the procrastinators out there still have at least three more days to stress out.

Talley

Advice. Solutions. Results.

“The Situation” finds himself with another bad tax situation in his hands. In September 2014, Michael “The Situation” Sorrentino, ex-star of the infamous MTV show “Jersey Shore”, and his brother, Marc, were indicted for tax offenses and conspiring to defraud the U.S. Now, new charges have been brought against both men. Sorrentino is now also charged with tax evasion and structuring funds to evade currency transaction reports. His brother, Marc, is now also charged with falsifying records to obstruct a grand jury investigation.
The superseding indictment alleges that the brothers conspired to defraud the U.S. by not paying all federal income tax owed on approximately $8.9 million that Sorrentino earned between 2010 and 2012. It is alleged that the brothers filed or caused to be filed with the IRS false tax returns that understated gross receipts, claimed fraudulent business deductions, disguised income payments made to the brothers and to other individuals and underreported net business income.
The brothers also allegedly commingled funds among business and personal bank accounts, and used the money from the business bank accounts to pay for personal items, such as high-end luxury vehicles and clothing.
If convicted, the Sorrentino brothers face a statutory maximum sentence of five years in prison on the conspiracy count, and three years in prison for each count of aiding in the preparation of false tax returns. Michael faces a statutory maximum sentence of 10 years in prison for each structuring count, and five years in prison for the tax evasion count. Marc faces a statutory maximum sentence of 20 years in prison for obstruction. They also face a period of supervised release, restitution and monetary penalties.
How’s that for a Tax “Situation”?

 

With over 25 years’ experience consulting with industry-leading companies, we understand the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Working remotely is increasingly becoming more popular and widespread, as employers have taken advantage of modern technological advances that allow teams of employees to collaborate in a remote environment, as wells as employees finding flexible work options more desirable. In something like a backlash against this shift, several high-profile companies have started to roll back remote work options for employees.  IBM, considered one of the first corporations to fully embrace remote work, is now calling its employees back to the physical office.

As reported by Quartz, IBM decided to “co-locate” its U.S. marketing department of approximately 2,600 people, meaning that all teams would now work “shoulder to shoulder” from one of six different locations: Atlanta, Raleigh, Austin, Boston, San Francisco, and New York. Employees who worked remotely or from an office that was not on the list would be required to either move or look for another job.

The list of remote work’s touted benefits is long and varied, ranging from a better balance work and home life for employees, stronger personal relationships, to increased productivity. That last point is probably the most attractive for employers, but IBM needs to focus on something other than productivity right now. As some of its core businesses, like technology services and systems, face challenges from cloud-based vendors, the company’s strategy has been to reinvent itself around new businesses like artificial intelligence and its own cloud-computing operations. In simple terms, IBM is placing a bet on its future -that innovation will trump productivity.

In a somewhat ironic move, IBM is trying to innovate by returning to an older, more traditional workplace model. While most would agree that a balance needs to be struck between face-to-face interaction and the ability to work remotely, the benefits of finding that right balance are too great to shy away from the challenge.

Talley and its affiliate, Group 11 Advisors, keep clients on track with how to properly leverage technology to meet the needs of their growing businesses.  From outsourced accounting solutions to management information, analysis and reporting, we are the premier business consulting practice to entrepreneurs and their closely-held businesses.

Contact Talley today to see how technology can be an asset to your business and not just an expense.

Claim another victory for the (not so) little guy vs. the IRS: Amazon.com Inc. won a key victory over the Internal Revenue Service in a dispute worth over $1.5 billion relating to the online retailer’s transactions with a Luxembourg subsidiary.

The U.S. Tax Court ruled Thursday that the IRS made arbitrary determinations and abused its discretion in several instances, marking another setback for the agency in high-profile international corporate tax cases. It wasn’t clear from the ruling what Amazon’s ultimate tax bill would be.

The case involved a series of transactions known at Amazon as Project Goldcrest that transferred certain U.S. assets, such as software, trademarks and customer lists, to their Luxembourg headquarters, which helped lower the company’s tax bill in 2005 and 2006.

According to an annual report filed by Amazon, the company’s tax bill would have increased by about $1.5 billion plus interest for those two years alone, with the possibility of additional bills for years beyond that,

Amazon isn’t out of the woods yet.  In a similar case last year, Apple faced a potential bill of billions over its Irish tax affairs after a European Union ruling last year. Amazon will still face scrutiny in Europe, where Brussels is examining Amazon’s European tax deals to determine if they constitute illegal “state aid” from Luxembourg to the company, benefits that could give them an unfair advantage over rivals.

Only broadly experienced tax advisory professionals can provide a truly global perspective so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. Talley welcomes the opportunity to discuss with you the current opportunities available to you and your family. For more information, contact us here.

March Madness is one of the biggest gambling events of the year: Americans bet $9.2 billion last year on the tournament through office pools, offshore sites and bookmakers, according to the American Gaming Association. But few people realize that if they get lucky, the IRS gets lucky too.
While there are a lot of eyes on Warren Buffet’s employee bracket competition, the battle wages on for millions of others who’ve placed friendly bets in pools that carry much better odds, though of course for much smaller amounts of money. Yet we’re willing to wager that few (if any) of them have been thinking about how winning would impact their taxes. Of course, here at Talley, you know we do just that. That’s because whether there’s $1 million per year for life at stake or $100, March Madness bets are classified as gambling, and gambling is taxable. 
Like with any day at the track, outing to a casino, or purchase of a lottery ticket, cash and non-cash winnings from March Madness bets are taxable. All winnings should be reported on Form 1040 as “Other Income” (line 21). In addition, you may be required to pay an estimated tax on your gambling winnings.  
Special paperwork comes into play only if your winnings are over $600 or 300 times the wager (lucky you, if that’s the case). Gambling winnings in excess of $5,000 could also be subject to a tax withholding requirement before the winning payout is made to the recipient. If luck wasn’t on your side, take heart-some gambling losses can also be deductible if you itemize and keep good records.
If you enjoy the entertainment making a trip to Vegas to try your luck at the slots, or in the rare instance that you make a living as a professional gambler, detailed win-loss records are a must.  
Talley offers a broad spectrum of services to fulfill the needs of high net worth individuals, entrepreneurially driven companies and their owners. Whether you are considering an M&A transaction or experiencing a financial windfall event, the professionals at Talley & Company can make the most of both your earnings and winnings.

While most of the retail industry is focused on scaling back their brick-and-mortar presence, Target said earlier this week that their stores, both existing stores and small-format stores to come, will be critical to the growth of the company’s core business.  Given the current trend of shopper’s focusing more and more on e-commerce websites to satisfy their shopping demands, many analysts wonder if the company should consider first shutting down of its low performing assets to free up funds for the many ambitious projects the retail giant has planned.

During the company’s financial community meeting, Target outlined its strategy for the future, which includes a $7 billion investment over the next three years. In that time, the company plans to revamp more than 600 of its approximately 1,800 locations, and open more than 100 small-format stores.

The small-format stores will be focused on metropolitan areas with large populations and college campuses. Thirty of these stores will open in 2017. Target began rolling out smaller stores in cities in 2012, and opened 13 of them in places like Chicago, New York and Philadelphia in 2016. The company is also revamping its supply chain and the way merchandise moves across its network.

The focus on growing stores is a departure from the store closures we’ve heard from major retailers like J.C. Penney, Macy’s and Sears.   While analysts are generally supportive of the changes that Target outlined, some believe a few closures could be a good thing:

“We do have some concerns that Target should consider more aggressively seeking to prune lower productivity stores despite the fact that they are likely cash flow accretive and profitable on a four-wall basis,” said Cowen & Co. in a note published Tuesday. “If this is conducted thoughtfully, store pruning/closing can drive a better overall brand experience, free up capital investment for more productive stores, and improve resource allocation.”

With over 25 years’ experience consulting with industry-leading companies, we understand the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Tom Brady -who earlier this month led the New England Patriots to a comeback Super Bowl victory- may be 39, but has no plans to retire before next season. He told the Fox pregame show that there was “no way” he’d retire if he won the championship: “This is the time to capitalize. I’ve worked too hard to get to this point.”

The prime of your career is most likely the best time to capitalize on your earnings. Unlike Brady, who is most likely could live quite a comfortable life if he decided to hang up his cleats and pads after winning the big game’s MVP honors, most of us need those prime-year earnings, even if you’ve topped your earnings potential.

We need those prime earning years to shore up our retirement funds. Americans ages 35 to 44 have a median balance of just about $24,000 in their 401(k)s, for ages 45 to 54 it’s $46,200 and from 55 to 64 it’s about $71,500, according to 2016 data from Vanguard. Experts say that’s far too little: Fidelity Investments recommends that by 40 you have three times your salary saved, which for the median household would be roughly $150,000; by 50 it would be six times your salary, or $300,000.

On the other hand, there may be a risk to staying at your job. For example, your performance could decline, as may be the case for Tom Brady. As Brady grows older in age, he is more likely to become injured playing football and some say he could tarnish his reputation with poor performance. A valid point, but having more championship rings than any other quarterback in NFL history (five) would most likely far outweigh any damage he could do to his legacy on the grid iron.

Most of us don’t have such options, like parlaying his success on the field into a broadcasting gig, or Brady’s bank account, so continuing to work during your prime earning years is most likely a solid strategy.

In what can be a harrowing process, many business leaders who do attempt to create an exit plan take on too many tasks by themselves. Others simply don’t start early enough to identify and prepare the right people for future roles. With so much at stake – both emotionally, financially and professionally – the key is simply to bite the bullet, start early, and be thorough. Doing so can create a smooth transition that keeps confidence strong among customers, investors, and employees. This confidence can play a major role in ensuring the success of your company’s future and enhancing your own personal legacy.

Shares of United Parcel Service (UPS) suffered earlier this month their biggest one-day selloff in two years, as disappointing fourth-quarter results revealed that UPS was still having trouble adapting to the surge in online holiday shopping. The results were also a clear lesson that not all business is good business.
To the surprise of no one, E-commerce business increased sharply during the holiday season, but by a lot more than UPS had anticipated. Chief Financial Officer Richard Peretz said that the normal percentage of business-to-consumer (B2C) revenue to total revenue is 55%, and that spiked to 63% in December, marking the biggest swing in 10 years.
While it might seem like that would be a good thing, B2C shipping is a lower-revenue, narrow-margin business, so it came at a cost to the company’s profits. Peretz said approximately two-thirds to three-quarters of the earnings miss was a result of this big shift in revenue source.
While UPS noted that they are in the early stages of a multiyear effort to adapt operations to meet those challenges, the quarter’s results reflect “more work needs to be done.” Peretz said UPS is increasing capital expenditures in 2017 to $4 billion from nearly $3 billion in 2016, in an effort to speed up its multiyear effort to adapt to e-commerce challenges by increasing capacity and efficiency, including through expanded automation.
With over 25 years’ experience consulting with industry-leading companies, we understand the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Here’s something you might not know: Over 1.33 billion chicken wings and 49.2 million cases of beer will be consumed during this weekend’s championship football game. 

But what happens when the red-hot Atlanta Falcons and the experienced New England Patriots, a team that has played in a record 8 big games, go toe-to-toe in Houston Texas? We’re hoping it’ll be an epic game, but many players involved already have something to be thankful for, a bump in pay due to the big game being in Houston, and Texas doesn’t collect income tax.

Since pro athletes work in numerous states, they’re affected by each state’s different income tax level, which has affectively been termed the “jock tax”. That means that for every game they play in, they have to pay the income-tax rate of the state where the game is played. However players on the Atlanta Falcons and New England Patriots are in luck this year: everything may be bigger in Texas, except the taxes.

What does that mean for each player’s piggy bank? Each player on the winning team will be cut a $107,000 check by the NFL, while the losing team’s players will receive $53,000. Although Texas has no state income tax, Patriots and Falcons players who are residents of states with income taxes will still be taxed by those states as well as the federal government. This means Tom Brady, who reportedly is a resident of Massachusetts (5.1% state income tax rate), and Matt Ryan, who reportedly is a resident of Georgia (6% state income tax rate), will not receive a tax free check, just a slightly higher one than if the game were played in their home state or another state with a higher tax rate.

By comparison, last year’s Super Bowl was in the Bay Area, and many players had faced California’s top tax rate of 13.3% on their Super Bowl paychecks, so Brady and Ryan probably aren’t complaining about the change of venue.

The Pats and Falcons are also lucky they’re not playing in next year’s championship game scheduled to be played in Minnesota, which has a 9.85% income tax.

Like NFL athletes, many entrepreneurs hit new revenue strides and quickly find themselves the decision-makers of an increasingly intricate business playbook facing many additional tax “flags on the play”. We have yet to hear clients complain about quarterbacking in more money, but many soon come to see that having an expert advisory team can help avoid unnecessary fumbles and maximize growth. With a full playbook of services complimenting the needs of entrepreneurs and their closely-held businesses, Talley can offer you an accurate look at financial, tax and legal insights you need in order to call the best plays for you and your business.


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