Asset Protection

By Michael T. Lahti

WASHINGTON -- The Internal Revenue Service recently warned taxpayers about groups masquerading as charitable organizations to attract donations from unsuspecting contributors, one of the "Dirty Dozen" for the 2016 filing season.

"Fake charities set up by scam artists to steal your money or personal information are a recurring problem," said IRS Commissioner John Koskinen. "Taxpayers should take the time to research organizations before giving their hard-earned money."

By: Stephen T. O’Neill

Retirement Planning in its most basic form involves accumulating sufficient resources via appropriate retirement vehicles and investment expertise, with the objective of providing yourself a financially secure retirement. But in its highest manifestation retirement planning involves optimizing not just the accumulation component but also the distribution component, as well as the creditor protection component, by minimizing the impact of income and estate taxes and third-party claims while maximizing perpetuation of retirement asset wealth over multiple generations.

By Michael T. Lahti

President Obama and first lady Michelle Obama paid $93,362 in federal taxes on their adjusted gross income of $477,383 -- for a 19.6 percent federal tax rate -- on their 2014 income tax returns, according an April 10 White House blog post (http://goo.gl/hhLvOb).

Vice President Biden and his wife, Jill, reported an AGI of $388,844 in 2014 and paid $90,506 in federal income tax, for an effective tax rate of 23.3 percent, the White House said.

In their 2013 tax return, the Obamas reported an AGI of $481,098 and paid $98,169 in taxes, for an effective rate of 20.4 percent, while the Bidens paid $96,378 in taxes on $407,009 in AGI, for an effective rate of 23.7 percent.

The President and Mrs. Obama donated $70,712 -- about 14.8 percent of their AGI -- to 33 charities, 31 percent of which went to Fisher House Foundation, a charity for families of wounded American war veterans. The Bidens donated $7,380 -- about 2 percent of their federal AGI -- to charity in 2014, according to their Form 1040.

The Obamas also released their Illinois state tax returns, reportedly paying $22,640 in state income tax. The Bidens paid $13,661 in state income tax to Delaware, while Jill paid $3,777 in Virginia income tax, the White House said.

By Michael T. Lahti

Recently I blogged about the new Achieving a Better Life Experience Act (“ABLE” Act).  This is a new law, and we are still exploring how ABLE accounts will be used. Two developments will have an impact on this; the first would be the federal government adopting regulations implementing the new law, and the second would be the states actually creating ABLE accounts. Although regulations will be forthcoming, we do not expect them anytime soon.

It will be interesting to see how this evolves, especially for people who live in states that do not enact an ABLE plan, as the ABLE Act is limited to the state where the person with a disability lives.  But, assuming that the state you live in does enact an ABLE account, we have provided some examples to identify specific issues that may arise.

By Michael T. Lahti 

As reported in Tax Notes Today, the Internal Revenue Service recently claimed that avoiding taxes by hiding money or assets in unreported offshore accounts remains on its annual list of tax scams known as the "Dirty Dozen," for the 2015 filing season.

By Michael T. Lahti, Esq.

Senate Retroactively Renews Tax “Extenders” and Votes in “Able Act”

The Senate, on December 16, 2014, passed legislation to retroactively renew expired tax extenders through the end of 2014, and to authorize disabled individuals to set up section 529 savings accounts for living expenses such as housing and education. The Tax Increase Prevention Act of 2014 (H.R. 5771) now goes to President Obama for his signature. The bill includes the text of the Achieving a Better Life Experience (ABLE) Act. The Achieving a Better Life Experience Act (“ABLE Act”) would allow states to establish and operate an ABLE program under which idividuals who suffered a "significant disability" before the age of 26 would be able to open a section 529 savings account. This will enable them make annual contributions up to the gift tax exclusion limit, which is $14,000 for 2014 but is adjusted for inflation each year.