Today is April fifteen, traditionally known as tax Day. Wasn't really tax day last year, not really tax day this year. But you are gonna have to have your taxes done soon. And I know lots of people have questions because practically everybody has done something different in the last year, if not a lot of things different in terms of, you know, writing off gas mileage or home offices or whatever. Right, plus the changing the administrations, changing Congress, retroactive laws, the
rest of it confusing times. And for years and years we've asked our our task questions to Stephen Moscowitz, who's a tax attorney and uh former cp A. Stephen joins us now. By the way, before I forget, if you ever need to get in touch with Stephen, go to moscow It's LLLP dot com. Stephen, how are you, sir? I'm great. It's my favorite day of the year, April fifteen. Listen, we can hear this everyone, Yeah, we can hear the spring and your step that's funny. Everybody else dreads that
you love it? Yeah, you know, you know I love taxes, but more importantly saving taxes. Yeah, here here, and so just a quick silly question, why did they put off the text headline this year, do you know, because they got political pressure and like everything else, they go ahead and they give something and say, hey, they've done something for you. But you have to watch out because the deadlines,
you know, May seventeenth is coming up. And also there's a difference between paying the estimated payments which are for next year, which they want by today, as opposed to the taxes when you go ahead and file the return or extend the return. But on the other hand, the government has given us so much stuff and there's just
so much. One of the things I want to caution people, if you go on the internet to look the stuff up, be very very careful because there's been so many recent changes that a lot of the websites are given you what was good law a while ago. But the things just change and change. For example, we had a big change on the eleventh of last month when the Congress
has really given in the way of the store. For example, if you own a restaurant, bar, food truck, foodstand, or any type of business that serves food and beverage to the public, the government is willing to give you your pandemic gross revenue losses up to ten million dollars a taxpayer. That's a really big deal. Um. I know, over the years, I've known lots of people that really tried to push the whole home office thing to write stuff off, and
then you try to include everything in your home office. Right, Well, I've got garbage in my home office, so I should write off my garbage. You know, I gotta have a TV in my office to keep track of the stock market, and that's why my TV is paid. But legitimately, a lot more people worked at home in the last year. Are the rules the same around that or any different? Are you have any advice for people who worked at home primarily and what they can benefit from that tax wise? Yeah,
a couple of things. In order to qualify for home all this, you have to use a portion of the home exclusively for business, which a lot of people are doing now. And the bottom line is you want to take all your expenses to go along with that. Just watch out though there's a dark side to that. The dark side is that you're converting a portion of your
home from your personal property to business property. So when you set if and when you sell the home, there's a difference in tax treatment on the other hand, if you say, oh, you know, I needn't keep my records, I don't know. The government also has a standard deduction for home office too, so you can check that and you can do that. Obviously, you should take the greater of the actual or the standard, but you can you can take a look at that. I didn't know that.
So when you sell your house, you have to make it clear that that bedroom there that you're going to use as a bedroom with my office. Yes, because it makes a difference on your taxes. So that's one of the things that I tell people when we do the return generally to your benefit or to yourm I did not know that. Well, that's why you talk to me. And it's kind of like a doctor saying, here, I have this medicine for you. It does some good things. By the way, your ears will drop off if you
do something, so there's some side effects. Wow. Another great thing the government did was they changed the e r C Employee Redemption Credit Retention credit. And what happens with that is when the p p P first came out, the government said, okay, you got to choose between p p P and e r C. Most people took p P P and they got the loan from the government,
which you want to have forgiven. Then the I R said, well, you know that's free money, so you can't take a tax adoption, and the converse said, no, that wasn't the intention of Congress. Yes, you can take the tax adoption. Then on December last year, the government said, only kidding, you can have both as long as you don't double dip. But the fact that you have P P P doesn't stop you from getting the e r C. And they offered a max of five grand per employee a year.
Then the government came out and they said, you know what, they're gonna change this for one and let you have the first two quarters. Then they changed it again last month on the eleventh and said only kidding again, and you can have all four quarters. And by the way, they're raising it from the five grand a year to
seven thousand a quarter. So that means if you have an employee, that's twenty eight thousand dollars per employee, So so post you had to employees, the government's going to give you two hundred and eighty thousand dollars free free, and then you can deduct that money that you get and when somebody gives you something nice, what do you say? No, you say more. What happens is that the government said, you know, they had to with menderform three times to
account for this stuff. And you say, well, okay, now what you can do if you can get back payroll taxes that you've paid. But you said, well, wait, minut, where where's my more? There's a new form Form seventy two. And what that lets you do is, rather than asking for the money back. So I suppose you've already paid the first quarters, Okay, I want to go ahead and get that money back. Fine, But if you haven't paid, let's say the next quarter. You say, you know what's
supposed For example, I make up a number. You're entitled to a credit of a hundred and and this quarter I would have had to write the I R S a check for thirty. So say I R S. Instead of writing you a check for thirty, I'm going to claim thirty of my credit and you write me a check for seventy. This is trumendous stuff. The government is giving away the farm. Now later on we're going to pay for this within these taxes. At President Biden has already talked about And that's one of the things you
have to watch out too. With the state planning. Right now, we have each of us has an eleven point five eight million dollar exemption, so married couples twenty three million bucks. You know most people have less than that, don't the way about state taxes. When candidate Biden was campaigning, he said he wanted to drop that to three and a half or four mil. Now President Biden says, well, we're giving away all this money. He wants to drop it
to one mill. So what that means is that there's an awful lot of taxpayers who never had to think about the state taxes that now have to think about it. So I know this isn't a course and the state planning, but I'll just throw out there that there's some things you can do now to save what to behalf of your state would otherwise go in taxes. Stephen Moscow, it's is online. Stephen are longtime tax advisor started jump in their crime against humanity taking half of what you've already
paid for taxes on your whole life. But that's a different topic, and they always start with a huge number than would it down down down. I want to in the time we have though, you're always so good at what are people surprised by this year? What did they fail to calculate or anticipate? And they get hammered on their taxes? Well, you know, unemployment insurance is fully taxable. So a lot of people went ahead and they paid the taxes on that. Then convers said, well, have changed
our mind. The first if you otherwise qualify the first ten thousand, two hundred is not so the I R S is correcting those. Also, you can take a hundred grand out of you if you're under and a half, you can take a hundred grand out of your retirement account without paying the penalties, but you have to pay
it back within three years. And what you have to do is pro rated over three years, so you pay tax on one third of it, and then if you pay it back within three years, you found amended return and you go ahead and you get the money back. Another thing is there's an awful lot of how excited to get about this stuff? That really is if a lot of people have said, hey, I never got my
stimulus payment, what's up with that? That's so widespread. The I R S actually added a line to the ten forty line thirty where if you didn't get your stimulus payment, you can go to line thirty of your tax return and make up for it there. So there's an awful out there. I could go on and on and on, and we're talking. We're talking with Stephen Moscotz. Yeah, we're talking to Stephen Moscowitz, tax attorney who we've talked to
for years. And so I know because we have talked to for years that the pendulum swings back and forth on enforcement. Now you want everybody to follow the law. I don't care, but is it is it? Is it swinging towards they're really cracking down or away from that? Right now? They're cracking down a lot of things. For example, the I R S just launched a new program called Operation Hidden Treasure. That sounds ominous, That sounds like it's
be an accident venture movie. Right, they're going after crypto people. So what's happened is, remember for years we talked about how the government's going after people are feign bank accounts. They've now changed the emphasis. Now their number one priority is hunting down crypto people. And a lot of people mistakenly think that, oh, if you do crypto it's hidden. The government can't know, So forgive the pun I'm going
to use. The RS has successfully mind and you know what that is if you're in crypto, they have mind the information. And now the government is going after people both criminally put you in prison and civilly civil fraud penalty stacks plus interest for not reporting crypto or reporting
it improperly. So the bottom line, like so much else in tax, now is the time where if you said oops, maybe you you inadvertently overlook something, is the time to fix it before the government comes knocking on your door with a heavy hand. Stephen, Moscow, it's online, Stephen. We gotta have you on again before the new deadline. But it's great to talk. Thanks for the advice. And if you need Stephen services or you just want to get in contact Moscow. It's LLLP dot com. Stephen. Always great
to talk. Thanks, thanks so much. I always loved doing your show. You we got to do a podcast with him or something, so we have lots and lots of time. One of my favorite things he's ever said, and he's done it a couple of times. He did it last time we had lunch. But he poses this to people a lot, and it sticks in my mind. Uh, I'm gonna give you a choice. Do you want to have two million dollars from this guy? Orould you have to
have this guy give you four million dollars? And you know, if you haven't thought about it a lot, or you're younger or whatever, you'd say obviously the four million dollars. No, no no, No, I need to know what the tax implications are. That's the whole ball game. What what is the entity or whatever situation I'm getting the two million verses of the formula, because one might be free and clear, one might be you know, the tax at six you'd end up with less with taking a four million than
the two million. And that applies to every single dollar you get in your life. And you know I didn't used to think that way the way way you have to now. The tax implications are everything on every bit of money you get, which is twisted. I have more thoughts on that topic, but you know I'll hold back for the moment. Yeah, I mean that's why I You know, I used to be a hardcore. If you're a tax cheat, you're a bad person. I'm pretty flexible on that. It depends.
There are tax cheat that I think you are a bad person. There tack Texas where I think, yeah, they're rapacious, on that they made it too complicated, whatever, Yes, at some point the King has so abused as subjects they should not be asked to comply with his laws art. And yet