Phone Scams Still High on the Tax Scam List

While the majority of taxpayers have already filed their 2017 tax return, there are still millions who haven’t quite got around to completing this task. Whether you’ve filed or not, you need to be aware of the possible scams that are still going on this tax season.

Every year the IRS warns taxpayers about these scams but every year thousands of people fall prey to scammers. Although scammers use all kinds of methods to con people out of their money, phone scams continue to be common each year. It’s no different for the 2018 tax-filing season.

In fact phone scams still top the IRS’s “Dirty Dozen” list of scams. If you’re not familiar with this scam here’s generally how it works. You receive a phone call from someone who identifies his or herself as an IRS representative.

The caller then claims that you owe the IRS money and they are trying to collect it.  The caller informs the taxpayer that they must pay this tax debt off immediately via

wire transfer or with a pre-loaded debit card. If they refuse to pay the caller threatens them with severe punishment, such as prison time, losing their license or in some cases, deportation.

This is just one variation, but they all have one thing in common. The person demands money for unpaid tax debt.

The IRS will never call and demand money. The agency will always send a letter in the mail to inform taxpayers of any issue. They will never ask for you to make payments over the phone or even ask for debit or credit card numbers.  And they won’t threaten to arrest you or with other punishment.

If you get one of these calls, don’t argue with them. Just hang up.  You can also report the scammer to the Treasury Inspector General for Tax Administration (TIGTA) by calling 1.800.366.4484. Or, you can use the “IRS Impersonation Scam Reporting” form on their website.
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This Year Will Be the Last Time You Can Claim These Deductions

If you’re like many taxpayers, then you’ve already filed your 2017 tax return, and perhaps even received your refund. If so, congratulations are in order. You can now

forget about taxes for another year…although we don’t recommend that. On the other hand, if you’re one of the many procrastinators out there that just can’t find the motivation to get your taxes done, then you should probably read this before you finally get around to doing them.

Last Chance Deductions

Perhaps you’ve heard about some changes to the nation’s tax code? It was kind of a big deal. However, these changes don’t apply to the 2017 tax year. You’ll have to worry about them come 2019. That being said, because of the changes there are some things that will be a lot different next year. For example you won’t be able to enjoy all of the same deductions that you always have. In fact, here are five common deductions that won’t be back next year. That means you better make sure you claim them this year, because they will soon be a thing of the past.

Personal Exemptions–this is the last year you can claim a personal exemption of $4050 for you, your spouse and each of your dependents. The standard deduction has increased, but
that won’t benefit everyone that would have claimed the personal exemption, including some families with multiple children, or single parent homes.

Mortgage Interest Deductions–although most people will still be able to claim this deduction, there are significant changes that affect high price mortgages. If you purchased your home before December 15 of last year you can claim the mortgage interest on loans up to $1 million. For new mortgages after that, the cap has been reduced to $750,000.

State and Local Tax Deductions–This is the last year you can deduct state income, property and sales taxes from your federal return. The Tax Cuts and Jobs Act now combines the three and caps the combined amount for all three at $10,000.

Moving Expenses–anyone who had to move for work and incurred tangible moving expenses might be able to deduct those expenses. First off, your move must be because of work and it has to be more than 50 miles away from where you previously lived. So, if you moved last year, you’re in luck.  But going forward, at least until 2026, this deduction will no longer be available.

Alimony Payments–if you paid alimony payments to your ex in 2017 you can still deduct them. Starting in 2018 that won’t be the case. What’s more, the person who receives the payments will no longer have to report them as income. The one caveat: this only applies to new divorces that occur in 2019 or later.

Just Do It
So, if you still have to file your return this year, make sure you don’t miss out on any of these deductions. This might just be your last chance.
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Selling globally: How to get started

For many businesses, selling their products or services globally is a natural next step in their growth.  But while the prospect of billions of new potential customers is attractive, going global can be a daunting proposition.  Here are a few tips on how to get started.

Tap your network.  Take advantage of your network for ideas about going global and assistance in finding strategic partners and international customers.  This includes your advisors, colleagues, customers, suppliers, employees, trade association contacts and social media connections.

Leverage technology to boost your global presence.  To attract international customers, make the most of today’s technology to “broadcast” your business. Examples include websites, YouTube, blogs, social media networks, and other online platforms.  Regardless of the tools you use, the key is to make your business known internationally and to provide content that attracts international visitors to your website.

Determine how you will sell internationally.  You can sell directly to overseas customers, but keep in mind that you will be responsible for shipping and other logistics, as well as collecting, which can be risky.  A safer option may be to set up an e-commerce site or use an e-commerce platform, such as Shopify, to streamline and automate the sales and collection process in exchange for a percentage of your sales. Other strategies to consider include joint ventures or strategic partnerships with firms overseas, outsourcing global sales, using an intermediary to ship products to international consumers, and licensing and franchising arrangements.

Determine how you will collect.  Fear of not getting paid is the biggest obstacle to going global for many businesses, so it’s important to have a collection strategy before you dip your toes in international waters.  Strategies to consider include getting paid in advance; online payment platforms, such as PayPal; and banking products, such as letters of credit and sight drafts. In addition, the Export – Import Bank, the Small Business Administration and other organizations have programs that assist businesses in financing international transactions.

Get help. To mitigate the risks associated with going global, it’s important to work with a team of advisors – including lawyers, bankers, and accountants – with international experience. It’s particularly critical to find a qualified lawyer who can help you preserve your intellectual property, comply with the laws in the countries in which you do business, and draft contracts that clearly spell out the parties’ respective rights and responsibilities and protect your interests.
Here are a few sources for more information about selling globally:


Is Bitcoin Ready for Another Surge?

If you’re lucky enough to own a stake in the cryptocurrency Bitcoin, then you’re already aware of it’s extreme volatility. The ultra popular digital currency has experienced massive jumps and slides during the last year, which have seen it reach as high as $19,783 back in December, only to see it tumble all the way back down to less than $10,000 a few weeks later.

At the time of this writing it stood at $9,739, essentially $10,000 less than it’s high mark.  Of course, it could be much or lower at this very moment, depending on when you read this story. That’s the nature of Bitcoin.

Despite the rough and tumble ride, however, most Bitcoin owners are staying the course and holding on tightly to the most popular cryptocurrency in the market.   So what does the future hold for Bitcoin? That depends on whom you ask, but according to one prominent analyst, the digital currency is set to see another huge surge by the time summer arrives.

Tom Lee, managing partner and head of research at Fundstrat Global Advisors, sees big gains for Bitcoin, including record highs ($20,000) by July of this year.  Lee also believes the cryptocurrency will hit $25,000 by the end of the year. And when it comes to the long-term forecast, Lee sees Bitcion reaching as much as $125,000 by 2022. That’s based on his model for valuing the most popular cryptocurrency.

How Do Biotech and Pharma Companies Feel About New Tax Law?

The back and forth regarding the new tax reform bill has been endless since even before it became law. Obviously, there are pros and cons and both sides hold tight to their arguments.  Additionally, some taxpayers and industries oppose the reform, while others are embracing it.

Two such industries are biotech and pharma. However, it might not be for the reason you think. While the corporate tax rate has been lowered significantly, the fact is, these industries won’t actually see a big gain from the new rate, because they have been keeping so much of their cash overseas. That means they’ve already been saving big-time on corporate taxes.

However, biotech and pharma companies will be able to use that overseas cash much easier under the new law. That’s because the new law encourages companies to bring cash being stored overseas back to U.S. soil. Corporations have been slow to do that because of the high corporate tax rate previously in place.

Now, the new law makes it a lot cheaper for companies to bring money back to the U.S. Pharma companies and biotech firms have some of the largest amounts of cash in foreign lands, so by lowering the corporate tax rate stateside, these companies are likely to start bringing more of that cash back home.

By bringing it back to the U.S. these companies would then have access to a lot more assets, which they could use to fund more transactions.

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Maximizing the Value of your Carried Interest

After the passage of the 2017 Tax Cuts and Jobs Act (ACT), many people are wondering how to maximize the value of their carried interest. There are some changes in the ACT that might affect how you proceed when selling or transferring your carried interest to achieve long-term capital gain treatment. These rules apply to taxable years ending after December 31, 2017.

Perhaps you’ve heard of the new three-year holding rule but you’re not sure if it applies to you.

Distributions and gains passed thru to you because of your carried interest
To receive long term capital gain rates (20%) on gains or distributions associated with your carried interest from the fund, the underlying investment at the fund level must be held for more than three years.

Sale or redemption of your Carried interest
If you decide to redeem or sell a portion or all your carried interest, your interest must be held for more than three years to get the long-term capital gain rate treatment.

Additional guidance from the IRS is needed to see if the underlying investments at the fund level must also be considered when you sell or redeem your interest.

Planning Point: The good news is that if stock is distributed to you and it has not yet met the three-year requirement, you can use the fund’s purchase date of the stock and hold on to it until it satisfies the three-year requirement to achieve long-term capital gain rates.


Prior to the ACT, when you gifted your carried interest to a non-charity, typically your accountant would inform you that you may incur some gift taxes or if the proper structure was in place, no gift taxes at all.

Now, with the passages of the new ACT, you may get a call from your accountant asking you to not only pay gift taxes, but income taxes as well.

What? Income taxes? Yes.

Now, when you sell, transfer or gift your carried interest to a person related to you, you may recognize a short-term capital gain.

How much? Well, it’s complicated. That’s tax simplification.

Who is this person related to you? Well, that’s changed too. Now it includes not only your relatives but your colleagues, vendors and current or former employees.

Planning Points: Make sure that you talk to your tax advisor before making the transfer. Try to do the transfer on January 1 or December 31 when the fund can value the fund assets.


These rules apply to individuals, trusts and estates, but not corporations.

Planning Point: It may be possible to hold the carried interest in an S Corporation and avoid these rules.


The ACT only applies to partnership interest (which may include limited liability companies) that hold entities that raise or return capital from investors (VC’s, PE’s and hedge fund managers), investing in, disposing of, or developing securities, commodities, cash options or derivatives, (investment fund managers) and real estate held for rental or investment.

Entities not subject to the ACT

Farmers that hold land in which they actively farm are not subject to these new rules.
Additionally, these rules generally should not apply to “profit interest,” granted to service providers who are employed by a related but separate entity (e.g. a management company).

The rules also do not apply to gains attributable to any asset not held for portfolio investment on behalf of third-party investors. We will have to wait for more guidance for this definition.

There are still many unanswered questions regarding these new rules, with hopefully more guidance coming from the IRS and Congress. Practically speaking, if you’re involved in investments, and hold the assets for more than three years, then these new rules will not have much impact. Furthermore, California has not adopted these rules.

However, there are still numerous traps for the unwary. At GROCO, we assist high net worth clients and their families with wealth creation, family transfers, taxes and charitable giving. Please give me a call at 510-797-8661 if you need assistance or have questions on these new rules or would like to know how to make, keep and/or transfer your wealth.

Apple Gives in to UK Demands, Agrees to Pay Huge Tax Bill

The ongoing battle between Apple and the UK over unpaid taxes appears to finally be coming to a head. The tech giant announced recently that it has agreed to pay the UK £137 million ($185 million) in extra taxes.  Part of the payment will help cover interest that has been adding up since 2015.

Apple, which operates two main subsidiaries in the UK, said it understands the importance of paying taxes and that it does “pay all that we owe according to tax laws and local customs in the countries where we operate.” Apple also stated that as the largest taxpayer in the world it is regularly audited and this payment represents the settlement it reached with HM Revenue and Customs, the UK tax body.

According to the company the payment helps cover the corporate income tax from previous years that occurred because of increased business in the UK. While $185 million might not seem like much for a company that’s worth 100’s of billions of dollars, it is significant given the fact Apple has always proclaimed to pay all of its taxes.

The company says it is the largest taxpayer in the world after shelling out $35 billion in corporate taxes over the last three years. It also claims to have an effective tax rate of 21 percent on its foreign earnings. This is the second time in recent months that Apple has agreed to pay back taxes in Europe. In December, the company agreed to pay Ireland $15.4 billion in overdue taxes.
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How Californians Can Protect Their Home From Crime & Reduce Their Home Insurance Costs

By. Cassandra June

From theft, burglary, arson and vandalism, the types of property crime homeowners need to protect their homes from is a worrying list of felonies. 2016 saw property crime in California creep above 1 million instances; a scary and shocking statistic for anyone who owns a home. Finding yourself the victim of a crime is a scary and difficult time where finding ways to stay positive can be difficult, but knowing that you’ve taken steps to protect your home by holding a home insurance policy is a relief for many.

Home insurance

One of the first things any homeowner should do when they purchase a property is obtain home insurance. While it can be costly, there are ways to save on your home insurance, and it’s a brilliant product to utilize, should your property be involved in a crime.

If your property is damaged following a crime, your insurer will arrange for repairs and replacement of household goods to ensure that you and your family aren’t at a loss. Although, some items are invaluable and can’t simply be replaced, home insurance does provide you with the reassurance that generic items, such as televisions and laptops, will be replaced should a thief steal these.

Secure windows and doors

Leaving doors and windows open or unlocked makes your home an easy target to thieves. Therefore, it’s important that you remember to close and lock them when you leave your home – even if you’re only popping to the shop and back. Additional locks for windows can be installed in addition to existing locks. Whilst, door chains can provide additional security too. Other ways to maximize the security of your windows and doors is to install window bars, sensors and reinforced glass. Aside from ensuring your home is protected from criminals, making your windows and doors extra secure can also result in lower home insurance costs.

Alarm system

Installing an alarm system and CCTV can reduce the cost of your home insurance premium and deter criminals from selecting your home as the one to burgle or vandalize. Insurers will offer you a lower premium as alarms are a great way of reducing damages, so be sure to purchase a good quality, dependable alarm.

Home insurance is a remarkable product which many Californians are already benefiting from. However, by ensuring your home has top-class security features, you can be sure of a safer home and lower home insurance costs.


Best and Worst Tax States for Businesses

Where is the best place to call home? That all depends on the criteria you’re using to judge. So what if you’re looking to start a business or move your business and you want to find a tax-friendly location for your business? It turns out that where you locate your company can have significant implications.
According to the Tax Foundation, these are the 10 states with best tax climate when it comes to corporate or business taxes.
1. Wyoming
2. South Dakota
3. Alaska
4. Florida
5. Nevada
6. Montana
7. New Hampshire
8. Utah
9. Indiana
10. Oregon
So what makes these 10 states so tax-friendly? In most cases it’s the lack of a major tax. For example, all of these states forgo one or more of the following taxes: individual income tax, the corporate tax, or the sales tax.
On the other hand, these are the 10 worst states for the business tax climate.
41. Rhode Island
42. Louisiana
43. Maryland
44. Connecticut
45. Ohio
46. Minnesota
47. Vermont
48. California
49. New York
50. New Jersey
These states share several tax traits, including having non-neutral, complex taxes with high rates, including property taxes and high individual income taxes. The Tax Foundation also ranked New Jersey 36th in unemployment insurance tax, 42nd in corporate business taxes, 46th in sales taxes, 48th in individual income taxes and
dead last in property taxes.
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Will New Tax Plan Hurt California Home Owners?

While it still remains to be seen if the new tax proposal from House republicans ever gets through the Senate and reaches the president, many taxpayers are still concerned about the consequences. One of the largest groups in this category is homeowners in California, not to mention builders and realtors, as well.

So what’s the reason for the concern? There are actually several. For starters, the House bill would hurt any taxpayer that itemizes his or her deductions and uses the mortgage interest deduction. That’s because that deduction is now in question under the new proposal. The threshold would be reduced from $1.1 million to $500,000.

The bill would also completely eliminate this deduction for vacation homes, while the Senate bill would actually keep it. And lastly, while the House would cap the property tax deduction at $10,000, the Senate proposal would completely cut it.

Because California has such high-priced housing already, these limits and changes would hurt many residents even more. “In a high-priced state where we’ve already got a shortage of homes for sale, this simply traps people in their homes longer,” said Steve White, a Studio City broker who is president of the state Realtors association. Fewer people will move and that will just exacerbate the home shortage.

This is sure to be a hot-button topic for lawmakers as they continue trying to move this bill through. However, many California residents are already pushing their congressman to vote against it.

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