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Dear Ed: TaxConnections Friday Financial Planning Q&As

Dear Ed: TaxConnections Friday Financial Planning Q&As

Once I read Ed Mahaffy’s book titled “How To Select A Financial Advisor: The Least You Should Know”, interviewed him, reviewed his video library, I knew we had the right person for this special financial planning series. On Fridays, TaxConnections presents questions often asked of a Financial Planner.

Dear Ed: Financial Planning Questions  

Question: The SECURE Act of December 2019 raised the beginning age for RMDs from 70 1/2 to 72. When should households with higher incomes consider ROth conversions?

Answer: In their first few years of retirement before the temporarily lower tax rates expire at the end of 2025.

Question: The SECURE Act creates problems for IRA trusts, what problems should I be aware of if I have an IRA trust?

Answer: Before the SECURE Act, language in an IRA trust might restrict access to the beneficiary to annual RMDs from the IRA. The intent was to stretch the payments to mitigate taxes however now the maximum stretch period is only ten years. This means there is no RMD due in years 1-9, but distributions must be taken by the end of year 10, after the death of the owner.  This may sense with a Roth, but it can penalize beneficiaries of traditional traditional IRAs who, although they get ten years of tax deferral, will be forced to take a large taxable distribution possibly resulting in higher taxes.

Question: What is one estate planning strategy to consider now that the stretch IRA has been removed?

Answer: Life insurance death benefits can be received free of income tax as well as estate tax free. Proceeds can be used to offset the higher tax liability caused by the  the new 10-year distribution period.

Contact Ed Mahaffy

(How To Select A Financial Advisor – Ed Mahaffy)

Request Copy of eBook In Its Entirety With Charts

Tax Professionals Organizing Tax Returns With TaxCalendar 

Akore TaxCalendar

One of the interesting aspects of my job is speaking to corporate tax executives worldwide on how they have been managing all their tax filings in multiple local, state, national and international jurisdictions while the corporate tax teams are working remote from home. What I learned about was a software program now receiving significant attention by corporate tax executives. Corporations, public accounting firm tax practitioners, and independent tax practitioners are all using this software to organize every tax return and access them easily and securely in the cloud.

It is easy to use, smartly organized and a low-cost alternative to any tax calendar on the market today. Tax professionals like this Tax Calendar software because it addresses every tax return imaginable and is easy to use.

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10 Reasons Tax Professionals Establish A Virtual Office

10 Reasons Tax Firms Establish Virtual Offices Online

What is a Virtual Office and why are thousands of tax professionals in public accounting firms, law firms, independent tax services firms and corporate tax professionals establishing a Virtual Office online?

As the CEO of, we have worked for several years on prescient technology. We anticipated the need for tax and financial professionals to prepare for disruptions to their businesses. At the time we started, our thinking was around the business disruptions from floods, fires, hurricanes, moving office addresses, and then came the pandemic. We were born of a generation growing up watching the “Jetsons” so we had imagination for our futures in  business. Long before anyone had an office in the cloud we were building Virtual Offices for the professions. The importance of establishing a Virtual Office in the cloud is you need a presence in the cloud where your expertise can be found and connected to easily online(without other platforms blocking your success).

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Freeman Law: The Tax Court in Brief

Freeman Law: The Tax Court in Brief

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

The Week of September 12 – September 18, 2020

Deckard v. Comm’r, 155 T.C. No. 8  | September 17, 2020 | Thornton, J. | Dkt. No. 11859-17

Short Summary:  Waterfront Fashion Week, Inc. (Waterfront) was organized under Kentucky law as a nonstock, nonprofit corporation in 2012.  Mr. Deckard was Waterfront’s president and one of its three directors.  Waterfront never applied for recognition of tax-exempt status with the IRS.

On October 28, 2014, Waterfront mailed to the IRS Form 2553, Election by a Small Business Corporation.  In the Form 2553, Waterfront sought to elect to be an S corporation retroactively as of the date of its incorporation in 2012.  Mr. Deckard signed the Form 2553 in his capacity as Waterfront’s president.  In addition, Mr. Deckard signed the Form 2553 shareholder’s consent statement, indicating that he owned 100% of Waterfront.

In 2015, Waterfront filed Forms 1120S, U.S. Income Tax Return for an S Corporation, for its taxable years 2012 and 2013, reporting operating losses.  Mr. Deckard reported these flow-through losses on his 2012 and 2013 returns.

The IRS disallowed the losses on the ground that Waterfront filed to make a valid S corporation election and alternatively that Mr. Deckard was not a shareholder of Waterfront.  Mr. Deckard filed a timely petition with the United States Tax Court.

Key Issue:  Whether Mr. Deckard can claim the losses from Waterfront on his 2012 and 2013 tax returns?

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Bringing TaxConnections Network Together Through Music

TaxConnections Free Music

There are people all over the world right now searching for a way to communicate and work together. TaxConnections wants to remind our community there is always something to bring us together during your journey. You are never alone when you join us as we are here for you to help you be more successful every day.

This series is the start of our music journey together to remind you that each of us has a purpose working together; the gift of your tax expertise, your listening skills, your ability to communicate tax issues in a language people can understand, your understanding of a client’s needs, your ability to write about tax issues, etc.

Each Tuesday, we will post selected music to work by weekly with the goal of bringing our community together by music. This week we have chosen “The Most Beautiful & Relaxing Piano Pieces” to inspire you. Our goal is to remind you that you are never alone when you are a member of TaxConnections.

Special Tax Professional Membership now available to tax professionals looking for work. Join Us So We Can Help You!

This Weeks Music “The Most Beautiful & Relaxing Piano Pieces

Listen To The Music:) Kat Jennings, TaxConnections CEO

Tax And Business Climate In State Of New Jersey

Tax And Business Climate In State Of New Jersey

Nicknamed the Garden State, New Jersey is the fourth smallest of the 50 U.S. States. It is also the 11th most populous state.

New Jersey’s most famous city, Atlantic City, is best known for its famous boardwalk. This four-mile-long promenade was constructed in 1870 and to this day remains the place where the majority of the city’s attractions are found. Among its most popular tourist spots is Steel Pier, a carnival-style amusement park that has rides for all ages, including a massive observation wheel with climate-controlled gondolas that gives riders amazing views over the city and the ocean year-round.

There are two climatic zones in the state. The south central and northeast parts of the state have a humid subtropical climate, while the northwest has a humid continental climate (microthermal), with much cooler temperatures due to higher elevation. The state receives between 2,400 and 2,800 hours of sunshine annually.

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Earn Continuing Education: TaxConnections Welcomes Pronto Tax School

CPE Tax Training

TaxConnections welcomes Pronto Tax School to its continuing education platform. We have been very impressed with the quality of training and how fun they make it for attendees. Andy Frye, CEO and Jeff Dolan, VP offer an enjoyable learning experience for all the tax professionals they train through Pronto Tax School. They make learning about taxes more interesting and also make certain everyone is having a good time.

When I attended their webinar last week it was also fun to see them give away more than three thousand dollars in gifts and awards to attendees. They sincerely want to help tax professionals build their expertise and this came through during the presentation. I really enjoy working with the team at Pronto Tax School and know you will, too. Take a Continuing Education tax course from them.

Take a look at their Continuing Education Tax Courses Online.


How To Select A Financial Advisor: The Least You Should Know (Part 6 In eBook Series)

How To Select A Financial Advisor: The Least You Should Know (Part 6 In eBook Series)
Chapter 4:
The Type of Account You Maintain Matters

The type of investment account that you maintain will determine the extent to which you receive the protections offered by the fiduciary standard. Your account type also can affect the investment recommendations that you receive. Will your portfolio be comprised of cost-effective, tax-efficient investment vehicles? Or will it include financial products characterized by high annual expenses, surrender charges and unnecessary tax liability? Over time, these factors can make a huge difference in your account balance.

There are two basic account types: the Brokerage Account and the Advisory Account. What is the difference? Brokerage accounts must only meet the suitability standard, but advisory accounts must meet the fiduciary standard. To repeat from the previous chapter, the suitability standard provides far less protection for investors than does the fiduciary standard.
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250+ Motivational Quotes To Inspire You

Free - 250 Motivational Quotes

We have compiled a complimentary eBook of more than 250 Motivational Quotes from famous people for you to read each day.  Remember great thoughts create the very best results.

“Be kind whenever possible.It is always possible.” ~ Dalai Lama

“Victory belongs to the most persevering.” ~ Albert Einstein, Theoretical Physicist

“Believe you can and you are halfway there.” ~ Theodore Roosevelt, 26th U.S. President

“Strength does not come from physical capacity. It comes from indomitable will.” ~ Mahatma Gandhi

“An investment in knowledge pays the best interest.” ~ Benjamin Franklin, Inventor, Author, Politician

Success is not final, failure is not fatal: it is the courage to continue that counts. ~ Winston Churchill


How To Select A Financial Advisor: The Least You Should Know (Part 3 In eBook Series)

How To Select A Financial Advisor

Chapter 1: Doing Your Homework

Many people are uncomfortable managing their own investments. They may be overwhelmed by the myriad of unfamiliar terms and investment vehicles, and they may lack the confidence to select their own investments.

Selecting a financial advisor can be equally difficult. There are many different choices—from the large publicly held Wall Street brokerage firms (also known as “wire-houses”) with well-known brand names and offices on every corner, to the small independent boutiques comprised of financial planners and/or investment managers. As the industry has expanded in the last 30 years, financial advisors have adopted many job titles, and they can earn many different credentials. Distinguishing among all the choices of firms and financial advisors can be bewildering—like sorting through all the makes, models, and options on a new vehicle. At least with vehicles, it’s easy to obtain an apples-to-apples comparison. Not so with financial advice.

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How To Offer Wealth Management Services As A Small CPA Firm (Complimentary CPE Credits)

Ed Mahaffy CFP

As a small CPA firm, nothing hurts worse than losing a trusted client to a larger firm offering wealth management services. It’s frustrating and it hurts your bottom line. You’d love to round out your service offerings with investment, insurance, and financial planning. But you’re too strapped for time and resources to figure out the details.

So, what do you do?

Join me in this exclusive webinar as I reveal the most efficient way to offer wealth management services as a small CPA firm. (Hint: it’s not expensive or time-consuming.)

I’ve spent 30+ years in the financial services industry watching trusted CPAs lose clients to larger firms that don’t always have the best intentions. In this webinar, I’ll walk you through how you can compete with larger firms (and keep all those clients you love) without breaking the bank.

Register now to learn more.

10 Keys To Success In The Tax Profession Today

10 Keys To Success In The Tax Profession Today

If you are a tax professional you will want to read this important post. TaxConnections has spent years building a network focused on raising the visibility of tax, financial and legal professionals online. This post is a road map to help you succeed because there are tax professionals acquiring many clients right now. I will share with you what we see tax professionals doing to acquire clients and connect with jobs successfully. It is all about how you market your tax expertise online. Inaction is not an option in this market! My goal in writing this post is to guide you through these times and show you the keys to unlock the door to success in the tax profession today.

1. START TODAY: Take action daily by feeding your mind with positive thoughts! Research proves positive thoughts will change your life. A positive attitude makes your life journey easier, attracts more people and business opportunities to you, and creates greater value for your professional life. Your mind is the most powerful computer in the world so feed it with positive energy that energizes you personally and professionally. One of my favorite books is Norman Vincent Peale’s The Power of Positive Thinking and the first line of Chapter 1 states “BELIEVE IN YOURSELF! Have faith in your abilities.” Start your day by reading from this free eBook of 250 Inspirational And Motivational Quotes. We built it to make you feel good each day!
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