March 7, 2025 • 42 mins
Do you have your tax filing information in order? Do you have a specific question about a tax deduction or the necessary paperwork you need to complete your tax filing? Dan spoke with CPA Mark Misselbeck with Cherry Bekaert Advisory LLC, and he answered all your tax-related questions in the 9pm hour!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Repairs on the earlier down poll from the heavier winds
earlier today that ended up blocking that road at Walnut Street.
So those heavy winds did in fact affect the roads
all day. Right now though everything does seem to be
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(00:23):
like I said, are wide open. The Leveret up and
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Here's the fourty WBZ and you weather forecast.
Speaker 4 (01:06):
And I will be windy and cold, still under a
partly cloudy sky. Low t upature around thirty two, but
the wind gusts will not be as high as they
were earlier. Tomorrow's still going to be a blustery day,
whens gusting thirty to forty miles per hour and all
add a chill to the air, despite sunshine and some clouds.
I forty three Tomorrow and accub with the real field
tempatures mostly in the twenties, mainly clear, brisk and cold Tomorrow,
(01:27):
night lows in the mid to upper twenties. Still the
chili breeze Sunday, but not even as much of a
factor as tomorrow. Partly Sunday. Sunday a high forty two
and early clouds given what a sunshine. Monday a high
of forty seven and highs get into the fifties on Tuesday.
I'm accub with the bed relatis Brian TOMPs a WBZ
Boston's news radio.
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Speaker 8 (02:46):
Well, let's get back to Nightside with Dan Ray. I'm
Al Griffith WBZ Boston's News Radio.
Speaker 3 (02:54):
It's night Side with Dan Ray. I'm WBZ Costin's Radio.
Speaker 8 (03:00):
Thank you very much. Al Griffin. Here on a Friday
night and a little after nine o'clock as we head
towards the midnight hour weekend. Beckons, we'll get you all
the way till it is about eleven fifty eight. We
have an interesting program lined up and we have delighted
to have back as a guest, Mark Misselbeck. Mark is
a CPA. He's been doing this work for a few years.
(03:21):
I'm not going to ask him how many, but believe me,
he's as good as there is. Mark, Misslbeck, welcome back
to Nightside.
Speaker 7 (03:28):
How are you well? Thank you for the ability to
present to the public.
Speaker 8 (03:34):
Well, I'll tell you, I think we've figured this out.
This is probably the fifteenth year that we have done this.
We've been doing the show for seventeen and a half years,
and you are now with a major firm. You've been
with a major firm your entire career. This one is
Cherry Cherry Beckheart Advisory LLC out of Waltham. Will be
(03:59):
more than happy to give that address and how people
can get in touch with you. You're not looking for work.
You've done this and generally we do it twice a year.
We did it I think it was the day before
Valentine's Day in February, February thirteenth and Basically people call
up with all sorts of different questions and you're not off.
(04:23):
Amazes me, You've been doing this how many years? Unless
you don't want to date the specific over four decades?
Speaker 7 (04:30):
Would you say, I'm working on fifty three years?
Speaker 8 (04:35):
Okay? Pretty direct? And did you go to school for this?
Up here? I've never really asked you this in the air.
I just wanted to kind of make people know where you're,
where you where you learned everything that well, of course,
this is your career, your your subject is that you
have to learn stuff every year when the when the
tax code has changed. But where did just where did
(04:56):
you start off? At a collegiate level.
Speaker 7 (05:00):
I took my Bachelor of Science degree in accounting at
the University of Connecticut in Stores. I then spent five
years with the I R. S on the other side
of the table, auditing, and later on I got my
master's degree at the University of Hartford.
Speaker 8 (05:16):
All right, Hartford, by the way, has a few A
couple of guys on the Red Sox played at the
University of Hartford. I don't know how much of a
baseball fan you are, but a kid they just picked
up who had been a picture with the Braves, and
so there's a there's a couple of players from from
your old school who are who might be might be
on the Red Sox this year. But we're not here
(05:38):
to talk baseball. We're here to talk taxes. Even though
taxes arrives the same month as baseball, April, taxes are
something we all have to worry about. I always like
to ask this as a fundamental question, what is the
best way people can save money when someone else is
doing their taxes for them, whether it's a firm like
(05:58):
yours or private practitioner. I think if people have the
ability to pull their stuff together and not just put
a box of receipts and all of that in front
of you, is that not true? I assume you're going
to agree with me on this issue.
Speaker 7 (06:17):
If you don't summarize your own materials, then you're going
to pay us to do it. So setting out the
details of your numbers, adding up the totals, describing them,
then we can just scan through them and make sure
that they are properly categorized deductible items, and then drop
them into the appropriate point in the return. In preparing it.
Speaker 8 (06:43):
Now, you of course can help people with relatively simple returns,
but every year the tax code gets bigger. When you
started doing the taxes fifty yard years ago, how much
has that tax code grown in terms of sections, pages,
(07:05):
whoever you want to describe it. Has it doubled in
size in the last fifty years.
Speaker 7 (07:10):
I couldn't tell you. I don't keep track of that.
I have enough trouble keeping up for the changes.
Speaker 8 (07:16):
Well that's the point I mean. It just seems to
me that there's always more. Congress is always either uh passing,
you know, carve outs and exceptions. That's why the lobbyists
works so hard in Washington, d C. So what I
want to do is give people an opportunity to however
(07:36):
complicated or simple their questions might be. Mark will take
your phone calls at six one, seven, two, five, four
ten thirty six one seven, nine, three, one ten thirty. Again,
I don't know what percentage of people at this point
even attempt to do their taxes, But I think that
anyone who who's earning money is well advised in this
(08:02):
day and age to work with someone, whether it's an
accountant in their neighborhood, or as their taxes get more complex,
deal with a company like yours. What are some of
the things that are important to know about this year's
tax season mark that perhaps are different from others. Let's
(08:23):
start off with a few new wrinkles that people need
to be concerned about.
Speaker 7 (08:28):
The tax code was modified to expand the child tax credits,
adds some additional credits or larger credits for home improvements
that tend to provide energy efficiency. Depending upon the rating
of the materials put in, you may need a certificate
from the contractor to prove that it meets the criteria
(08:53):
that qualifies the improvement for the credits, and for the
first time in instead of merely being limited to your
principal residence, it's potentially available on a vacation home. So
if you installed solar panels or heat pumps, solar power,
(09:15):
heat waters, waters windows.
Speaker 8 (09:20):
I have a friend of mine who installed a lot
of windows which will make his home.
Speaker 7 (09:23):
Tighter insulation windows more secure, that is by way of
air tight or heat heat protective doors, et cetera. But
the total costs tends to be limited in those categories.
The greater credits are available for geothermal, for solar and
(09:48):
that kind of thing, and those are the.
Speaker 8 (09:51):
Kind of things that are much more expensive as well.
Speaker 7 (09:54):
Oh yeah, but then you also have the potential for
some rebate grants through either the state government or sometimes
the power companies.
Speaker 8 (10:05):
Now these are these deductions or are there some deductions
as well as credits? And I want you to explain
to people the difference between a deduction and a credit.
Speaker 7 (10:17):
Typically, there's no deduction unless you are doing it more
on a commercial basis to generate power and sell it
back to the electric companies. It's more in the nature
of credits. That is, you get to office your taxes
by some dollar amount that effectively becomes a tax rebate
(10:39):
to offset the cost of the installation of the improvement
that is, reducing your reliance on generated electricity and so forth.
Speaker 8 (10:49):
A lot of people still don't quite understand the difference
between deductions and credits. Credits are dollar for dollar will
reduce if you have x amount of credits that will
reduce your tax obligation on a dollar for a dollar basis.
A deduction is less valuable because you can you can
offset the amount of money which is subject to taxation.
(11:11):
But a deduction is not nearly as valuable, you know.
Speaker 7 (11:15):
As a DAN. The top tax bracket for individuals is
thirty seven percent. If you have a ten thousand dollars deduction,
that saves you thirty seven hundred dollars exactly if you
have a ten thousand credit to saves your ten thousand
in taxes. That's the basic difference between the deduction and
a credit.
Speaker 8 (11:33):
Explain very simply, as you often are able, as you
always seem to be able to do. My guest is
Mark Misselback. He's a CPA. Mark has been doing this
for a few years, actually a few years over fifty,
but he is always at the top of his game.
He's been a guest in this program now probably for
fifteen years. Whatever questions you might have about your taxes,
(11:55):
I will remind all of you that it is tax Day.
This year is April fifteenth. There's no Patriots Day or
Marathon Day exception.
Speaker 10 (12:05):
This year.
Speaker 8 (12:05):
It's Tuesday, April fifteenth. I have plenty of questions, but
the questions that are the most important are the ones
that work with you. So feel free to join the conversation.
We'll open up the phone line six one seven, two five,
four ten thirty. That's pretty easy. Six one seven, two
five four ten thirty or six one seven nine, three, one,
ten thirty. Don't be shy. Don't assume someone else is
(12:28):
going to ask you a question, because taxes are so individualized.
Back on Night Side with Mark Misselbeck. Get the phones
going back right after this, and we will start with
what we take questions in order. So if you wait
and you call late, you might not make it. If
you call now, I guarantee you'll get on. Coming back
on night Side.
Speaker 3 (12:50):
Now back to Dan Ray live from the Window World
nights Side Studios on WBZ News Radio.
Speaker 8 (12:57):
Six one, seven, two, five, four, ten thirty. Those lines
are full. The only line that is open is six
one seven nine. As always, Mark, there'll be plenty of questions. Uh,
And we're going to start it off with Heather in Arlington. Heather, welcome.
You're on Night Side with CPA of several years, Mark Misselbeck.
(13:18):
Go ahead, Heather, what's your comment or question? Hi?
Speaker 11 (13:21):
Thank you very much for taking my call. I wanted
to ask if you have a child who is over
eighteen and becomes disabled then that you're providing and they're
you know, seemed disabled, do you get a tax credit?
Can you like count that as a dependent? Again, if
(13:43):
you're providing housing and all that.
Speaker 10 (13:44):
Kind of stuff.
Speaker 7 (13:48):
There's some kind of noise coming through on them on
the line. But yes, I.
Speaker 12 (13:53):
Heard that as well, Heather everything, okay, yes, No, sorry,
I don't I didn't hear anything.
Speaker 8 (14:00):
Okay, Yeah, we're hearing some crackling, so that's fine. Okay,
I heard the same thing.
Speaker 7 (14:05):
Mark, Go ahead, Mark, Yeah, I'm getting a lot of that,
but I'll try and answer. If they're over eighteen and disabled,
or over eighteen and a full time student up to
age twenty four. On the student side, you can still
claim them as dependent. There's no additional dependency exemption to
(14:29):
be claimed at this point, with the prospect that at
the end of the year, if Congress doesn't act, we
revert to the law as it stood before twenty eighteen,
and then there would be a dependency exemption and your
standard deduction would go down. We're waiting now to see
what action the Congress may take with respect to those
tax cuts and benefits that were enacted in twenty seventeen
(14:52):
effective twenty eighteen.
Speaker 8 (14:54):
So in twenty seventeen, Heather's situation was eliminated, and it
was not that your son or daughter was eighteen at
that time, but that was something that was taken away
in twenty seventeen.
Speaker 7 (15:10):
Well, here, here's the deal. The additional trick with this
is if the child is not your dependent and you're
paying for the living expenses, college, rooming, car insurance, clothing vacations,
those are all gifts to the child, and you can't
give more than eighteen thousand without having to file a
(15:32):
gift tax return and report the excess as a taxable gift.
It doesn't result in actual tax paid because you have
a lifetime exemption approaching fourteen million dollars under the inflation
adjusted exemption, but you eat into that with each year
that you gift over eighteen thousand as a full time
as a full dependent of yours counted as disabled or
(15:56):
a full time student. All of the expense, since you're
paying to support the child, are support obligations and not gifts,
so there's no other tax impact in paying those expenses.
Speaker 8 (16:14):
It's an interesting sort of distinction that Congress makes on
something like that. Mark. I mean, I understand you can
have a rationale for almost anything, but boy, that that
seems to me that in this day and age, I mean,
if I'm not mistaken, you can you can keep your
children on your your medical insurance up until the twenty
(16:38):
six Yeah, And it just seems to me to be
distinctions that Congress draws, And I don't see why someone
like Heather who has a child, Oh no.
Speaker 7 (16:47):
I remember I said, full time student from nineteen to twenty.
Speaker 11 (16:51):
No, he's able to go to school now.
Speaker 7 (16:53):
Yeah, a stabled child is in a different category. And
as it is a full disability, the age limit on
claiming them as a dependent is gone.
Speaker 8 (17:07):
Right, which seems to me counterintuitive, and again count Congress
often is counterintuitive. But it seems to me that if
someone is dealing with the responsibility for a child over
the age of eighteen, and that child still is able
to maintain independence and live at home, we should be
giving that family encouragement, you know, financially and otherwise to
(17:30):
be able to continue care for the child. I think Heather,
you understand what I'm what I mean, and I'm sure
I want as well. I just wish Congress would understand it,
is what I'm trying to say, because it seems to
me to be frankly unfair in my opinion.
Speaker 7 (17:44):
Well, you could explore the possibility of claiming it a
child dependent care credit. I don't delve into that as
much as I may have or may need to be
able to fully advise you, but you could take a
look at that.
Speaker 8 (18:04):
Okay, do you have a quick question for me? Do
you have your taxes prepared? Do you do them? I
hope you don't do them yourselves because they're so.
Speaker 11 (18:12):
Damned Oh, absolutely not. We were going to ask our
tax professional. But I my husband and I were talking
about the other night. We're like, what happens if you
ever a kid who was okay and then becomes disabled,
and then now you're responsible again? Can you claim them?
Speaker 10 (18:28):
You know?
Speaker 8 (18:29):
Yeah? But I just think that again, the Congress produces
these these new regulations or they changes, they change the code,
and on one like this, the average American if you said,
should someone who's taking care of a child over the
age of eighteen, should they receive some additional tax benefit?
(18:51):
I mean as opposed to saying, well, we're gonna put
them in some sort of a medical facility or some
sort of a facility that's going to care for him.
It's much more economic for that the other taxpayers and
for the government for you to be caring for your child,
and and your child probably is much more comfortable in
a home, in an at home setting. Why would Congress
(19:14):
not recognize that? That's That's one of the frustrations I
have as somebody who deals with Congress a lot a
lot of times, and you just know that there has
to be someone out there who's working some some committee
or some members or influential member of Congress, uh and
and and not looking at it from the perspective of
Heather from Arlington, who's dealing with the situation of of
(19:39):
of you know, difficulty, but also you know, love for
her child. So Heather, thank you for doing what you do.
And I hope that that your son or daughter is
going to be uh taken care of and and hopefully
will regain their independence totally in some in some form
of goal. You bet you, Heather, Thanks for listening tonight.
Speaker 11 (20:04):
Thank you so much, very well.
Speaker 13 (20:06):
Ye bye.
Speaker 8 (20:06):
Thanks Mark. Do you agree with me on that that
sometimes you wonder what the rationale is for Congress to
do this or not do this?
Speaker 7 (20:18):
Well as to the student age limit, the seeming logic
behind it is four years of undergraduate degree. Two years
of graduate degree should give somebody enough education to support themselves, right,
and if you're still supporting them. Then it's more, it's
(20:41):
not your obligation under the law, and it's not to
get them to the point where they've gained the skills
to go to work. It's just gifting to them to
continue on to whatever life goal they may have before
they become productive members of society. So that's the twenty
(21:02):
four age cut off, But disability continuing to support and
not be treated as a gift that causes further tax
implications to you and keeps them out of the dole
of the government supporting them is seemingly the logic behind it,
as much as I can divine whatever logic there may
be to this area of the law.
Speaker 8 (21:24):
Right, but it sounds to me as if heather situation
is that she will not be able to claim him
as him or her as it dependent up when they
get beyond the age of eighteen, even though.
Speaker 7 (21:35):
Oh no, no, no no, if they're disabled, the age limit
has no impact on it. It is the fact that
the child is disabled or even the adult is disabled,
and they are still caring for them.
Speaker 8 (21:49):
Okay, good, then, I'm i'm I'm all revised and revoked
by remarks. I was under the impression that she that
she was not receiving the benefit of being able to
claim that child, that disabled young person as a dependent.
We'll take a quick break. Thanks very much for the clarification. Mark,
I'm sorry I misunderstood the conversation. That's my fault. We'll
(22:13):
be back on Nightside. The only line open right now
is six one, seven, nine, three, one, ten thirty. All
the other lines are filled up. We will get to
as many people as we can and Mark Misselbeck uh
is with us until ten o'clock at least, if your
interest continues. Mark has always been very generous with his time.
(22:34):
We will be back on Nightside right after this with
Mark Misslbeck CPA of fifty three years, so he knows
what he's talking about. Coming back on Nightside.
Speaker 3 (22:43):
You're on night Side with Dan Ray on WBZ, Boston's
news radio.
Speaker 8 (22:49):
All right, back, we go to the phones, and I
want you to know Mark, we have full lines, so
let's keep rolling. Here're gonna go to Suzanne in Newton. Suzanne,
do you have a tax question from I?
Speaker 13 (23:01):
Actually do. I am an eighty six year old lady
in assistant living. I have my taxests in New York,
but can I deduct anything at this stage? Of my life.
I can't dedust by rent. I do deduct my charitable contributions.
(23:22):
This is not a vacation house. Is there anything at
eighty six yearly in an assistant living with some services
can deduct legitimately. I don't have any.
Speaker 8 (23:39):
I don't have Okay, you gotta listen up, now, says
any started trying to answer you a question.
Speaker 7 (23:44):
Go ahead, mark ye. In order to itemize, you have
to have more than the standard deduction that is provided
in the law, depending upon your filing status. Assuming you
are a single person for twenty twenty four, the standard
deduction is fourteen eight hundred dollars, and if you're over
(24:07):
age sixty five, and that sounds as though you are,
then there's an additional nineteen hundred and fifty dollars permitted
as a deduction without having to figure out taxes, charitable
contributions of medical interests and so forth. So you're starting
off with sixteen seven hundred and fifty dollars. If your
(24:28):
aggregate itemized deductions are less than that, it doesn't make
sense for you to try and itemize for schedule a
itemized deduction. Now that said, if you have significant charitable contributions,
or you bunch your charitable contributions, that is, make a
bundle in one year and not do it the year
(24:49):
before and the year after. That raises your charitable contributions
plus up to ten thousand dollars of local taxes automobile
X size, real estate or income taxes to the state.
The cap is currently ten thousand dollars. That can go
into the bucket to beat that sixteen thousand dollars deduction
(25:13):
plus medical in excess of seven and a half percent
now in the medical category if you're an assisted living.
Each year the assisted living, depending upon its statistical analysis
of how it has spent its money, will tell you
what portion, if any, of what you're paying for living
in the facility can be counted as a medical expense deduction.
(25:37):
Then you test that for the deduction in excess of
seven and a half percent to add into your other
deductions to come up over the standard deduction of sixteen
seven fifty first single.
Speaker 8 (25:50):
A lot of numbers there, Suzanne, and I'm sure.
Speaker 6 (25:52):
That thanks you so much, by.
Speaker 8 (25:59):
Right, okay, age, okay, thanks Susan appreciated. The point is
that there are things out there and and deductions that
you might not be aware of, and that's what we're
hoping to do. So, Uh, the the answer that Mark
just gave to Suzanne could apply to hundreds or thousands
(26:22):
of people who were similarly situated. So again, this might
be a reason why you might say to yourself, I
want to go to a professional tax preparer, or if
I'm doing them myself, I at least want to be
aware of some of the things that Mark just mentioned,
and that's the benefit of this program. Next up is
Steve from Rentham. Steve, you're on with Mark Misselbeck the CPA,
(26:47):
not only for Knight's Side tonight, for my nightside audience,
but with Cherry Beckett Advisory LLC out of Waltham.
Speaker 14 (26:54):
Go right ahead, Steve, Steve, if you're ready to go,
ready to go, If you're having a good you're on
with Mark Misselbeck.
Speaker 8 (27:06):
Go ahead, Steve.
Speaker 6 (27:08):
Hey, Mike, Because of cod whatever and getting older, I
put a rental property in an irrevocable trust. But then
the house needed all new windows inside and everything else.
But the trust didn't have any funds to do that,
so I supplied the money to do that. There is
a way to write off the money that I theoretically
(27:30):
loaned the irrevocable trust.
Speaker 7 (27:34):
Well, either you actually loaned the money to the trust
and it's not a write off because you expect to
collect it back, or you made an additional contribution or
transfer into the trust. Now, if the trust is a
fully irrevocable trust and a completed gift, you had a
gift tax return you needed to file when you placed
(27:57):
the rental property into that trust, and any additional funds
need to be reported as a gift. The good part
is if you have the proper provisions in the trust
that treat any additions as an immediate gift to the
beneficiaries of the trust. The first eighteen thousand transferred into
(28:21):
the trust per beneficiary will not impact your gift ability
for current or through your current gifts or through your estate.
After that, you reduce your ability to make gifts through
your estate as bequests. But if you're going to treat
(28:42):
it as a loan, not only do you not have
any deduction because you're going to get the money back,
you need to charge interest. If the loan is in
excess of ten thousand dollars and remains outstanding for more
than six months and there are governor governments, there are
governments set minimum interest rates that must be applied to
(29:03):
that loan. Otherwise, on December thirty first, whether you collected
interest or not, or charged interests or not, the government
now mandates, or the Congress has mandated, that that minimum
interest rate for the rental of the money by the
borrower must be paid to you in the form of
interest and is treated as given back to the borrower,
(29:24):
in this case as a gift because of the relationship
between you as the lender and the trust of the borrower.
Speaker 8 (29:31):
Steve, let me ask you this. The house that you
put in the trust is not your the home in
which you live. It's a second property, correct, Okay? Is
that property available? Is that property rented? You get income
for that property?
Speaker 6 (29:48):
Well, the income comes in to pay the mortgage. And
I did it as a medicarrier locable trust.
Speaker 8 (29:56):
No, I understand, but that's not my question, and I
just want to make sure that I understand that. And
also it may well, I'm sure Mark want to comment,
how long have you owned this this house that you
put in trust? This this this this separate property that
you put in trust. Uh, and that you now have
invested some money to modernize it or to make it tighter.
(30:21):
How how how long had you owned the property outright
before you put it in trust?
Speaker 6 (30:27):
Forty plus years and it's been in the trust now
four years?
Speaker 8 (30:31):
Okay? During those forty plus years, has it always been
a rental? Have you treated it as a rental property?
Has it? Have you been able to rent and make
money off it during the summers? Or has it just
sat there and no rent came to you?
Speaker 7 (30:46):
No?
Speaker 6 (30:46):
No, it was always rental.
Speaker 8 (30:48):
Okay. How much money last year would have you made
in terms of your rental property? How much rent would
have you would have that generated for you? Approxiate? I
don't know.
Speaker 6 (31:04):
About eighty thousand, okay?
Speaker 8 (31:07):
And how much was the how much was the money
that you invested the loan you made to do whatever
you wanted to do?
Speaker 6 (31:15):
One hundred and twenty.
Speaker 8 (31:18):
Okay, So there's some numbers, mister missiback. He's generating about
eighty per year and it's spent one hundred and twenty
in one year. How would you handle that?
Speaker 7 (31:30):
The one twenty sounds like it's a loan. You need
to charge interest the highest short term rate on the
demand loan that the government mandates as a minimum industrate
in twenty twenty four I believe was five point one
two percent in June of twenty twenty four. So if
you charge interest to the trust at five point one
(31:51):
two percent, which seems to be below what you would
get if you went to a commercial lender at a bank,
you'd have a favorable interest rate, you'd have to pick
up the interest. The trust would have to pay you
that interest. Now, without getting into it, somebody needs to
look at the terms of the trust or speak to
the attorney who crafted the trust to make sure that
(32:13):
it is a completed gift, that the trust is responsible
for paying taxes and not you. Depending upon the terms
of the trust, it could be that you were responsible
for reporting the income rather than the trust. I can't
speak to that without going through the trust document, which
of course I can't do tonight.
Speaker 8 (32:30):
Yeah, but okay, at least I think he's given you
some guidance here. The most important thing is, I assume
you have a profession who prepared your taxes. If you
have an income property that's going to generate eighty thousand
dollars per year, correct, and.
Speaker 6 (32:45):
The trust is under I report it as income on
my tax return.
Speaker 8 (32:50):
Okay, well, I think the answers are going to be
pretty obvious when you sit with you. But again, you've
got to treat it as an arms length transaction and
you have to be concerned about, uh, the what I
think Mark would be referring to as imputed interest. So
I hope we've helped you a little bit. It's uh,
it's a good There's probably a lot of people out
(33:11):
there who are in similar situations. So thank you for
joining us.
Speaker 6 (33:15):
Tonight, YOD, thank you, You're very welcome.
Speaker 8 (33:18):
We'll take a break. My guest is Mark Missilbeck. We'll
be right back. We have a couple of only one
open line six one seven, two five, four ten thirty.
Jump on board. We have coming up next. We got
Maria in Plymouth. We got Jimmy and Cambridge and Jay
and Sharon and I got some room for you, but
only at six one seven, five, four ten thirty. Back
(33:39):
on night Side right after this.
Speaker 3 (33:43):
Now back to Dan ray Line from the Window World,
Light Side Studios on w b Z the news radio.
Speaker 8 (33:50):
My guess, Mark Misselbeck, CPA. We're talking taxes. Tax Day
approaches April fifteenth, as it does every year. Let me
go next to Maria in Plymothy. Maria, you are next
on Night Side with Mark Missilback. Welcome, Go right ahead, Maria.
What is your question for Mark?
Speaker 10 (34:07):
Hi? Mark? My question is on the regarding the circuit breaker,
say credit whatever for the circuit breaker to qualify, do
you have to pay Massachusetts income tax?
Speaker 7 (34:27):
It's more well, the circuit breaker is a credit back,
so if you don't have tax, you may not get
benefit from it. But there are income limits. You need
to give them all kinds of details of your taxes
and other elements. And from what I hear amongst the
community of CPA preparers, virtually every submission of the circuit
(34:54):
breaker tax is scrutinized very strongly by the Department and
a revenue and they demand all kinds of information and
documentation for it. I hate to be discouraging on it,
but very few of anybody who has submitted it gets
clear sailing on it, to my.
Speaker 10 (35:14):
Knowledge really, because we have some people at our Senior
center filling out forms and they said, you know, people
have done well getting their money back. But I just wondered,
because my income comes from a mass pension, so you
don't pay tax on that in Massachusetts.
Speaker 13 (35:35):
So I wondered if you have.
Speaker 10 (35:37):
No taxable Massachusetts income, if there would still be a
possibility of getting a credit. I didn't know if the
credit comes from like your town, through the taxes, or
it comes through this.
Speaker 7 (35:50):
No, it's coming from the state. It's part of your
submission of your state income tax return. I've only done
it a couple of times. The couple of times I
did it, the income was so low that it did
not seem to draw the attention of the department in
challenging it. But I have had communications posted on our
(36:13):
professional message board that it is problematic in a lot
of instances. It may be that people who are edging
towards or slightly over or slightly under the ceiling on
the income limit to qualify for this benefit draw more
scrutiny than the others. But I could just that is
(36:34):
the word amongst.
Speaker 8 (36:35):
Us, If I could just jump in for a second
for those who do not know what a circuit what
the circuit breaker is that Marie is referring to senior
citizens sixty five years of age or older by December
thirty first of last year might be eligible to claim
a refundable credit on a Massachusetts personal income tact return.
(36:55):
The circuit Breaker tax credit is based on the actual
real estate taxes or rent paid on the Massachusetts residential
property you own or rent and occupy as your principal residence.
The maximum credit amount for your tax year of twenty
twenty four is two seven hundred and thirty dollars. If
(37:16):
the credit you owed exceeds the amount of the total
tax payable for the year, you'll be refunded the additional
amount of the credit without interest. So I just want
people to understand what we're talking about here. This is
a tax break for senior citizens who are sixty five
years of age or overlay.
Speaker 12 (37:35):
DAN.
Speaker 7 (37:36):
This is where this is where the practicing community is
sharing information and saying as a pure outgo from the
state Treasury. In a lot of instances, it's another area
that is perceived to be susceptible to fraud, as was
the earned ERC credits and other credits that the FED
(37:59):
adopt the federal government adopted during COVID nineteen that was
rife with fraud. So it while it sounds beneficial, it
also tends to attack attract greater scrutiny because of the
potential for the fraud.
Speaker 8 (38:13):
All right, Maria, thank you very much for the question.
That's that's an area of a very very interesting area.
Thanks very much.
Speaker 10 (38:20):
Good, have a great I asked one more quick question.
Speaker 8 (38:25):
Yeah, go ahead, go ahead.
Speaker 10 (38:28):
Okay, quick question. So if my husband passed away last
year in the spring, I would file is still filed jointly?
Speaker 6 (38:38):
Yes?
Speaker 7 (38:40):
For the year that the spouse dies. Yes, you file
mary filing jointly thereafter your single unless you have a
qualifying child and can claim head of household. I don't
imagine that's the case here, but I put it out there.
Speaker 8 (38:54):
Okay, thanks Maria, Okay, thank you so much. Have a
great night. Let me go to Jimmy and Cambridge. Jimmy,
how are you, sir?
Speaker 12 (39:01):
I'm good, Dan, nice to talk to you again. Thank
you so much for your show tonight.
Speaker 8 (39:06):
I know who this is. If you want to identify
yourself further, great, If you don't, that's okay too, my friend.
You go right ahead.
Speaker 12 (39:14):
Sure.
Speaker 13 (39:15):
Well.
Speaker 12 (39:16):
First of all, I love the show. I don't know
that much about taxes, so I'm glad you have an
expert on But I was reading recently that Doge and
the Trump administration is planning on cutting more IRS agents
during tax season, and the articles I was reading was
saying this is going to result in less tax revenue
(39:37):
for the United States of America. So I asked, your guest,
do you think cutting IRS agents and the demonization of
the IRS that seems to go on in certain sectors
of our society, do you think that's healthy for the economy?
Do you think it's healthy for the United States of America.
Speaker 8 (39:54):
Okay, let me first of all give Mark an opportunity.
He's here as a CPA are for tax advice. I
don't know if he wants to weigh it into what
might be construed as a political question. Jim, so Mark,
you can you can either defer or you can react.
Speaker 7 (40:14):
I will remain neutral in the broadcast community and say
that this is more of a political nature than falling
into the area of advice on taxes. This is more
on tax collection, tax enforcement, and sometimes tax advice, because
(40:34):
a chunk of those people will be manning the IRSH
communication centers where the questions come in during tax season
to the best of their ability, they will also answer
questions such as I'm doing tonight.
Speaker 8 (40:50):
Yeah, absolutely right. I think that I think Jim is a.
Speaker 12 (40:55):
Good question of that.
Speaker 8 (40:56):
Dan and I also think this and to comment that
some people might read into that answer. If I could,
if I could make an editorial coal Man, thanks Jimmy.
That gentlemen is a well known Greater Boston comedian, Jim Tingle. Jimmy,
thanks very much. We'll talk soon.
Speaker 12 (41:11):
Okay, Thanks, Dan, appreciate it.
Speaker 8 (41:14):
You bet you. We'll be right back now. We're going
to take a break. Mark, I got some other calls.
If you could stay with us for a little while
into the next hour, we'll see if the calls sustain. Uh.
Can you I know it's a Friday night, and I
know it's the end of a long week. Can I
hold you over into the next hour?
Speaker 7 (41:33):
My week runs through the weekend at this time of
the year.
Speaker 8 (41:37):
Uh. He is a good sport and a great friend, Mark, Misslbeck. Uh,
he's a fabulous CPA to boot. If you have a
question and you're on the line, we're going to get you,
I promise. If you're not the only lines that are
open right now, we're six one seven, two, five four
ten thirty six one seven, two, five, four ten thirty
back with Mark, Misslbeck. Mark, we get about six or
seven minutes here. If you need to stretch your legs
(41:58):
or get a glass of water. That's a exactly what
I'm going to do. We'll be back in about six
or seven minutes with CPA Mark Misselbeck of the firm
Cherry Beckhart Advisory LLC out of Waltham, Massachusetts. They do
not need more business. If you want to contact Mark,
you can do that. But he does this and I
think he enjoys doing and he enjoys talking to nightside listeners,
(42:21):
and I am very grateful for his time. We'll be
back on nightside right after this
Repairs on the earlier down poll from the heavier winds
earlier today that ended up blocking that road at Walnut Street.
So those heavy winds did in fact affect the roads
all day. Right now though everything does seem to be
moving along just fine. Let's go to the downtown upper
and lower decks at ninety three. Look good, Zacmbridge all
wide open. Both directions upper and lower decks of ninety three,
(00:23):
like I said, are wide open. The Leveret up and
down ramps are good. Stuo drive. No problems there. On
the pike. You should be good out west heading out
to Natick. Everything looks good in the south of town.
Twenty four Route three ninety five all good along the
south shore and four ninety five no problems right now
between Foxborough and as you make your way down towards Bourne.
(00:44):
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Speaker 3 (01:03):
Here's the fourty WBZ and you weather forecast.
Speaker 4 (01:06):
And I will be windy and cold, still under a
partly cloudy sky. Low t upature around thirty two, but
the wind gusts will not be as high as they
were earlier. Tomorrow's still going to be a blustery day,
whens gusting thirty to forty miles per hour and all
add a chill to the air, despite sunshine and some clouds.
I forty three Tomorrow and accub with the real field
tempatures mostly in the twenties, mainly clear, brisk and cold Tomorrow,
(01:27):
night lows in the mid to upper twenties. Still the
chili breeze Sunday, but not even as much of a
factor as tomorrow. Partly Sunday. Sunday a high forty two
and early clouds given what a sunshine. Monday a high
of forty seven and highs get into the fifties on Tuesday.
I'm accub with the bed relatis Brian TOMPs a WBZ
Boston's news radio.
Speaker 5 (01:46):
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Speaker 6 (01:51):
Thinks?
Speaker 7 (01:51):
Backed up? What am I gonna do?
Speaker 5 (01:52):
Call the company that gives a poop about your pipes?
Speaker 8 (01:55):
Don't around.
Speaker 3 (01:55):
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Thank you a fool. Your pipe.
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Speaker 8 (02:46):
Well, let's get back to Nightside with Dan Ray. I'm
Al Griffith WBZ Boston's News Radio.
Speaker 3 (02:54):
It's night Side with Dan Ray. I'm WBZ Costin's Radio.
Speaker 8 (03:00):
Thank you very much. Al Griffin. Here on a Friday
night and a little after nine o'clock as we head
towards the midnight hour weekend. Beckons, we'll get you all
the way till it is about eleven fifty eight. We
have an interesting program lined up and we have delighted
to have back as a guest, Mark Misselbeck. Mark is
a CPA. He's been doing this work for a few years.
(03:21):
I'm not going to ask him how many, but believe me,
he's as good as there is. Mark, Misslbeck, welcome back
to Nightside.
Speaker 7 (03:28):
How are you well? Thank you for the ability to
present to the public.
Speaker 8 (03:34):
Well, I'll tell you, I think we've figured this out.
This is probably the fifteenth year that we have done this.
We've been doing the show for seventeen and a half years,
and you are now with a major firm. You've been
with a major firm your entire career. This one is
Cherry Cherry Beckheart Advisory LLC out of Waltham. Will be
(03:59):
more than happy to give that address and how people
can get in touch with you. You're not looking for work.
You've done this and generally we do it twice a year.
We did it I think it was the day before
Valentine's Day in February, February thirteenth and Basically people call
up with all sorts of different questions and you're not off.
(04:23):
Amazes me, You've been doing this how many years? Unless
you don't want to date the specific over four decades?
Speaker 7 (04:30):
Would you say, I'm working on fifty three years?
Speaker 8 (04:35):
Okay? Pretty direct? And did you go to school for this?
Up here? I've never really asked you this in the air.
I just wanted to kind of make people know where you're,
where you where you learned everything that well, of course,
this is your career, your your subject is that you
have to learn stuff every year when the when the
tax code has changed. But where did just where did
(04:56):
you start off? At a collegiate level.
Speaker 7 (05:00):
I took my Bachelor of Science degree in accounting at
the University of Connecticut in Stores. I then spent five
years with the I R. S on the other side
of the table, auditing, and later on I got my
master's degree at the University of Hartford.
Speaker 8 (05:16):
All right, Hartford, by the way, has a few A
couple of guys on the Red Sox played at the
University of Hartford. I don't know how much of a
baseball fan you are, but a kid they just picked
up who had been a picture with the Braves, and
so there's a there's a couple of players from from
your old school who are who might be might be
on the Red Sox this year. But we're not here
(05:38):
to talk baseball. We're here to talk taxes. Even though
taxes arrives the same month as baseball, April, taxes are
something we all have to worry about. I always like
to ask this as a fundamental question, what is the
best way people can save money when someone else is
doing their taxes for them, whether it's a firm like
(05:58):
yours or private practitioner. I think if people have the
ability to pull their stuff together and not just put
a box of receipts and all of that in front
of you, is that not true? I assume you're going
to agree with me on this issue.
Speaker 7 (06:17):
If you don't summarize your own materials, then you're going
to pay us to do it. So setting out the
details of your numbers, adding up the totals, describing them,
then we can just scan through them and make sure
that they are properly categorized deductible items, and then drop
them into the appropriate point in the return. In preparing it.
Speaker 8 (06:43):
Now, you of course can help people with relatively simple returns,
but every year the tax code gets bigger. When you
started doing the taxes fifty yard years ago, how much
has that tax code grown in terms of sections, pages,
(07:05):
whoever you want to describe it. Has it doubled in
size in the last fifty years.
Speaker 7 (07:10):
I couldn't tell you. I don't keep track of that.
I have enough trouble keeping up for the changes.
Speaker 8 (07:16):
Well that's the point I mean. It just seems to
me that there's always more. Congress is always either uh passing,
you know, carve outs and exceptions. That's why the lobbyists
works so hard in Washington, d C. So what I
want to do is give people an opportunity to however
(07:36):
complicated or simple their questions might be. Mark will take
your phone calls at six one, seven, two, five, four
ten thirty six one seven, nine, three, one ten thirty. Again,
I don't know what percentage of people at this point
even attempt to do their taxes, But I think that
anyone who who's earning money is well advised in this
(08:02):
day and age to work with someone, whether it's an
accountant in their neighborhood, or as their taxes get more complex,
deal with a company like yours. What are some of
the things that are important to know about this year's
tax season mark that perhaps are different from others. Let's
(08:23):
start off with a few new wrinkles that people need
to be concerned about.
Speaker 7 (08:28):
The tax code was modified to expand the child tax credits,
adds some additional credits or larger credits for home improvements
that tend to provide energy efficiency. Depending upon the rating
of the materials put in, you may need a certificate
from the contractor to prove that it meets the criteria
(08:53):
that qualifies the improvement for the credits, and for the
first time in instead of merely being limited to your
principal residence, it's potentially available on a vacation home. So
if you installed solar panels or heat pumps, solar power,
(09:15):
heat waters, waters windows.
Speaker 8 (09:20):
I have a friend of mine who installed a lot
of windows which will make his home.
Speaker 7 (09:23):
Tighter insulation windows more secure, that is by way of
air tight or heat heat protective doors, et cetera. But
the total costs tends to be limited in those categories.
The greater credits are available for geothermal, for solar and
(09:48):
that kind of thing, and those are the.
Speaker 8 (09:51):
Kind of things that are much more expensive as well.
Speaker 7 (09:54):
Oh yeah, but then you also have the potential for
some rebate grants through either the state government or sometimes
the power companies.
Speaker 8 (10:05):
Now these are these deductions or are there some deductions
as well as credits? And I want you to explain
to people the difference between a deduction and a credit.
Speaker 7 (10:17):
Typically, there's no deduction unless you are doing it more
on a commercial basis to generate power and sell it
back to the electric companies. It's more in the nature
of credits. That is, you get to office your taxes
by some dollar amount that effectively becomes a tax rebate
(10:39):
to offset the cost of the installation of the improvement
that is, reducing your reliance on generated electricity and so forth.
Speaker 8 (10:49):
A lot of people still don't quite understand the difference
between deductions and credits. Credits are dollar for dollar will
reduce if you have x amount of credits that will
reduce your tax obligation on a dollar for a dollar basis.
A deduction is less valuable because you can you can
offset the amount of money which is subject to taxation.
(11:11):
But a deduction is not nearly as valuable, you know.
Speaker 7 (11:15):
As a DAN. The top tax bracket for individuals is
thirty seven percent. If you have a ten thousand dollars deduction,
that saves you thirty seven hundred dollars exactly if you
have a ten thousand credit to saves your ten thousand
in taxes. That's the basic difference between the deduction and
a credit.
Speaker 8 (11:33):
Explain very simply, as you often are able, as you
always seem to be able to do. My guest is
Mark Misselback. He's a CPA. Mark has been doing this
for a few years, actually a few years over fifty,
but he is always at the top of his game.
He's been a guest in this program now probably for
fifteen years. Whatever questions you might have about your taxes,
(11:55):
I will remind all of you that it is tax Day.
This year is April fifteenth. There's no Patriots Day or
Marathon Day exception.
Speaker 10 (12:05):
This year.
Speaker 8 (12:05):
It's Tuesday, April fifteenth. I have plenty of questions, but
the questions that are the most important are the ones
that work with you. So feel free to join the conversation.
We'll open up the phone line six one seven, two five,
four ten thirty. That's pretty easy. Six one seven, two
five four ten thirty or six one seven nine, three, one,
ten thirty. Don't be shy. Don't assume someone else is
(12:28):
going to ask you a question, because taxes are so individualized.
Back on Night Side with Mark Misselbeck. Get the phones
going back right after this, and we will start with
what we take questions in order. So if you wait
and you call late, you might not make it. If
you call now, I guarantee you'll get on. Coming back
on night Side.
Speaker 3 (12:50):
Now back to Dan Ray live from the Window World
nights Side Studios on WBZ News Radio.
Speaker 8 (12:57):
Six one, seven, two, five, four, ten thirty. Those lines
are full. The only line that is open is six
one seven nine. As always, Mark, there'll be plenty of questions. Uh,
And we're going to start it off with Heather in Arlington. Heather, welcome.
You're on Night Side with CPA of several years, Mark Misselbeck.
(13:18):
Go ahead, Heather, what's your comment or question? Hi?
Speaker 11 (13:21):
Thank you very much for taking my call. I wanted
to ask if you have a child who is over
eighteen and becomes disabled then that you're providing and they're
you know, seemed disabled, do you get a tax credit?
Can you like count that as a dependent? Again, if
(13:43):
you're providing housing and all that.
Speaker 10 (13:44):
Kind of stuff.
Speaker 7 (13:48):
There's some kind of noise coming through on them on
the line. But yes, I.
Speaker 12 (13:53):
Heard that as well, Heather everything, okay, yes, No, sorry,
I don't I didn't hear anything.
Speaker 8 (14:00):
Okay, Yeah, we're hearing some crackling, so that's fine. Okay,
I heard the same thing.
Speaker 7 (14:05):
Mark, Go ahead, Mark, Yeah, I'm getting a lot of that,
but I'll try and answer. If they're over eighteen and disabled,
or over eighteen and a full time student up to
age twenty four. On the student side, you can still
claim them as dependent. There's no additional dependency exemption to
(14:29):
be claimed at this point, with the prospect that at
the end of the year, if Congress doesn't act, we
revert to the law as it stood before twenty eighteen,
and then there would be a dependency exemption and your
standard deduction would go down. We're waiting now to see
what action the Congress may take with respect to those
tax cuts and benefits that were enacted in twenty seventeen
(14:52):
effective twenty eighteen.
Speaker 8 (14:54):
So in twenty seventeen, Heather's situation was eliminated, and it
was not that your son or daughter was eighteen at
that time, but that was something that was taken away
in twenty seventeen.
Speaker 7 (15:10):
Well, here, here's the deal. The additional trick with this
is if the child is not your dependent and you're
paying for the living expenses, college, rooming, car insurance, clothing vacations,
those are all gifts to the child, and you can't
give more than eighteen thousand without having to file a
(15:32):
gift tax return and report the excess as a taxable gift.
It doesn't result in actual tax paid because you have
a lifetime exemption approaching fourteen million dollars under the inflation
adjusted exemption, but you eat into that with each year
that you gift over eighteen thousand as a full time
as a full dependent of yours counted as disabled or
(15:56):
a full time student. All of the expense, since you're
paying to support the child, are support obligations and not gifts,
so there's no other tax impact in paying those expenses.
Speaker 8 (16:14):
It's an interesting sort of distinction that Congress makes on
something like that. Mark. I mean, I understand you can
have a rationale for almost anything, but boy, that that
seems to me that in this day and age, I mean,
if I'm not mistaken, you can you can keep your
children on your your medical insurance up until the twenty
(16:38):
six Yeah, And it just seems to me to be
distinctions that Congress draws, And I don't see why someone
like Heather who has a child, Oh no.
Speaker 7 (16:47):
I remember I said, full time student from nineteen to twenty.
Speaker 11 (16:51):
No, he's able to go to school now.
Speaker 7 (16:53):
Yeah, a stabled child is in a different category. And
as it is a full disability, the age limit on
claiming them as a dependent is gone.
Speaker 8 (17:07):
Right, which seems to me counterintuitive, and again count Congress
often is counterintuitive. But it seems to me that if
someone is dealing with the responsibility for a child over
the age of eighteen, and that child still is able
to maintain independence and live at home, we should be
giving that family encouragement, you know, financially and otherwise to
(17:30):
be able to continue care for the child. I think Heather,
you understand what I'm what I mean, and I'm sure
I want as well. I just wish Congress would understand it,
is what I'm trying to say, because it seems to
me to be frankly unfair in my opinion.
Speaker 7 (17:44):
Well, you could explore the possibility of claiming it a
child dependent care credit. I don't delve into that as
much as I may have or may need to be
able to fully advise you, but you could take a
look at that.
Speaker 8 (18:04):
Okay, do you have a quick question for me? Do
you have your taxes prepared? Do you do them? I
hope you don't do them yourselves because they're so.
Speaker 11 (18:12):
Damned Oh, absolutely not. We were going to ask our
tax professional. But I my husband and I were talking
about the other night. We're like, what happens if you
ever a kid who was okay and then becomes disabled,
and then now you're responsible again? Can you claim them?
Speaker 10 (18:28):
You know?
Speaker 8 (18:29):
Yeah? But I just think that again, the Congress produces
these these new regulations or they changes, they change the code,
and on one like this, the average American if you said,
should someone who's taking care of a child over the
age of eighteen, should they receive some additional tax benefit?
(18:51):
I mean as opposed to saying, well, we're gonna put
them in some sort of a medical facility or some
sort of a facility that's going to care for him.
It's much more economic for that the other taxpayers and
for the government for you to be caring for your child,
and and your child probably is much more comfortable in
a home, in an at home setting. Why would Congress
(19:14):
not recognize that? That's That's one of the frustrations I
have as somebody who deals with Congress a lot a
lot of times, and you just know that there has
to be someone out there who's working some some committee
or some members or influential member of Congress, uh and
and and not looking at it from the perspective of
Heather from Arlington, who's dealing with the situation of of
(19:39):
of you know, difficulty, but also you know, love for
her child. So Heather, thank you for doing what you do.
And I hope that that your son or daughter is
going to be uh taken care of and and hopefully
will regain their independence totally in some in some form
of goal. You bet you, Heather, Thanks for listening tonight.
Speaker 11 (20:04):
Thank you so much, very well.
Speaker 13 (20:06):
Ye bye.
Speaker 8 (20:06):
Thanks Mark. Do you agree with me on that that
sometimes you wonder what the rationale is for Congress to
do this or not do this?
Speaker 7 (20:18):
Well as to the student age limit, the seeming logic
behind it is four years of undergraduate degree. Two years
of graduate degree should give somebody enough education to support themselves, right,
and if you're still supporting them. Then it's more, it's
(20:41):
not your obligation under the law, and it's not to
get them to the point where they've gained the skills
to go to work. It's just gifting to them to
continue on to whatever life goal they may have before
they become productive members of society. So that's the twenty
(21:02):
four age cut off, But disability continuing to support and
not be treated as a gift that causes further tax
implications to you and keeps them out of the dole
of the government supporting them is seemingly the logic behind it,
as much as I can divine whatever logic there may
be to this area of the law.
Speaker 8 (21:24):
Right, but it sounds to me as if heather situation
is that she will not be able to claim him
as him or her as it dependent up when they
get beyond the age of eighteen, even though.
Speaker 7 (21:35):
Oh no, no, no no, if they're disabled, the age limit
has no impact on it. It is the fact that
the child is disabled or even the adult is disabled,
and they are still caring for them.
Speaker 8 (21:49):
Okay, good, then, I'm i'm I'm all revised and revoked
by remarks. I was under the impression that she that
she was not receiving the benefit of being able to
claim that child, that disabled young person as a dependent.
We'll take a quick break. Thanks very much for the clarification. Mark,
I'm sorry I misunderstood the conversation. That's my fault. We'll
(22:13):
be back on Nightside. The only line open right now
is six one, seven, nine, three, one, ten thirty. All
the other lines are filled up. We will get to
as many people as we can and Mark Misselbeck uh
is with us until ten o'clock at least, if your
interest continues. Mark has always been very generous with his time.
(22:34):
We will be back on Nightside right after this with
Mark Misslbeck CPA of fifty three years, so he knows
what he's talking about. Coming back on Nightside.
Speaker 3 (22:43):
You're on night Side with Dan Ray on WBZ, Boston's
news radio.
Speaker 8 (22:49):
All right, back, we go to the phones, and I
want you to know Mark, we have full lines, so
let's keep rolling. Here're gonna go to Suzanne in Newton. Suzanne,
do you have a tax question from I?
Speaker 13 (23:01):
Actually do. I am an eighty six year old lady
in assistant living. I have my taxests in New York,
but can I deduct anything at this stage? Of my life.
I can't dedust by rent. I do deduct my charitable contributions.
(23:22):
This is not a vacation house. Is there anything at
eighty six yearly in an assistant living with some services
can deduct legitimately. I don't have any.
Speaker 8 (23:39):
I don't have Okay, you gotta listen up, now, says
any started trying to answer you a question.
Speaker 7 (23:44):
Go ahead, mark ye. In order to itemize, you have
to have more than the standard deduction that is provided
in the law, depending upon your filing status. Assuming you
are a single person for twenty twenty four, the standard
deduction is fourteen eight hundred dollars, and if you're over
(24:07):
age sixty five, and that sounds as though you are,
then there's an additional nineteen hundred and fifty dollars permitted
as a deduction without having to figure out taxes, charitable
contributions of medical interests and so forth. So you're starting
off with sixteen seven hundred and fifty dollars. If your
(24:28):
aggregate itemized deductions are less than that, it doesn't make
sense for you to try and itemize for schedule a
itemized deduction. Now that said, if you have significant charitable contributions,
or you bunch your charitable contributions, that is, make a
bundle in one year and not do it the year
(24:49):
before and the year after. That raises your charitable contributions
plus up to ten thousand dollars of local taxes automobile
X size, real estate or income taxes to the state.
The cap is currently ten thousand dollars. That can go
into the bucket to beat that sixteen thousand dollars deduction
(25:13):
plus medical in excess of seven and a half percent
now in the medical category if you're an assisted living.
Each year the assisted living, depending upon its statistical analysis
of how it has spent its money, will tell you
what portion, if any, of what you're paying for living
in the facility can be counted as a medical expense deduction.
(25:37):
Then you test that for the deduction in excess of
seven and a half percent to add into your other
deductions to come up over the standard deduction of sixteen
seven fifty first single.
Speaker 8 (25:50):
A lot of numbers there, Suzanne, and I'm sure.
Speaker 6 (25:52):
That thanks you so much, by.
Speaker 8 (25:59):
Right, okay, age, okay, thanks Susan appreciated. The point is
that there are things out there and and deductions that
you might not be aware of, and that's what we're
hoping to do. So, Uh, the the answer that Mark
just gave to Suzanne could apply to hundreds or thousands
(26:22):
of people who were similarly situated. So again, this might
be a reason why you might say to yourself, I
want to go to a professional tax preparer, or if
I'm doing them myself, I at least want to be
aware of some of the things that Mark just mentioned,
and that's the benefit of this program. Next up is
Steve from Rentham. Steve, you're on with Mark Misselbeck the CPA,
(26:47):
not only for Knight's Side tonight, for my nightside audience,
but with Cherry Beckett Advisory LLC out of Waltham.
Speaker 14 (26:54):
Go right ahead, Steve, Steve, if you're ready to go,
ready to go, If you're having a good you're on
with Mark Misselbeck.
Speaker 8 (27:06):
Go ahead, Steve.
Speaker 6 (27:08):
Hey, Mike, Because of cod whatever and getting older, I
put a rental property in an irrevocable trust. But then
the house needed all new windows inside and everything else.
But the trust didn't have any funds to do that,
so I supplied the money to do that. There is
a way to write off the money that I theoretically
(27:30):
loaned the irrevocable trust.
Speaker 7 (27:34):
Well, either you actually loaned the money to the trust
and it's not a write off because you expect to
collect it back, or you made an additional contribution or
transfer into the trust. Now, if the trust is a
fully irrevocable trust and a completed gift, you had a
gift tax return you needed to file when you placed
(27:57):
the rental property into that trust, and any additional funds
need to be reported as a gift. The good part
is if you have the proper provisions in the trust
that treat any additions as an immediate gift to the
beneficiaries of the trust. The first eighteen thousand transferred into
(28:21):
the trust per beneficiary will not impact your gift ability
for current or through your current gifts or through your estate.
After that, you reduce your ability to make gifts through
your estate as bequests. But if you're going to treat
(28:42):
it as a loan, not only do you not have
any deduction because you're going to get the money back,
you need to charge interest. If the loan is in
excess of ten thousand dollars and remains outstanding for more
than six months and there are governor governments, there are
governments set minimum interest rates that must be applied to
(29:03):
that loan. Otherwise, on December thirty first, whether you collected
interest or not, or charged interests or not, the government
now mandates, or the Congress has mandated, that that minimum
interest rate for the rental of the money by the
borrower must be paid to you in the form of
interest and is treated as given back to the borrower,
(29:24):
in this case as a gift because of the relationship
between you as the lender and the trust of the borrower.
Speaker 8 (29:31):
Steve, let me ask you this. The house that you
put in the trust is not your the home in
which you live. It's a second property, correct, Okay? Is
that property available? Is that property rented? You get income
for that property?
Speaker 6 (29:48):
Well, the income comes in to pay the mortgage. And
I did it as a medicarrier locable trust.
Speaker 8 (29:56):
No, I understand, but that's not my question, and I
just want to make sure that I understand that. And
also it may well, I'm sure Mark want to comment,
how long have you owned this this house that you
put in trust? This this this this separate property that
you put in trust. Uh, and that you now have
invested some money to modernize it or to make it tighter.
(30:21):
How how how long had you owned the property outright
before you put it in trust?
Speaker 6 (30:27):
Forty plus years and it's been in the trust now
four years?
Speaker 8 (30:31):
Okay? During those forty plus years, has it always been
a rental? Have you treated it as a rental property?
Has it? Have you been able to rent and make
money off it during the summers? Or has it just
sat there and no rent came to you?
Speaker 7 (30:46):
No?
Speaker 6 (30:46):
No, it was always rental.
Speaker 8 (30:48):
Okay. How much money last year would have you made
in terms of your rental property? How much rent would
have you would have that generated for you? Approxiate? I
don't know.
Speaker 6 (31:04):
About eighty thousand, okay?
Speaker 8 (31:07):
And how much was the how much was the money
that you invested the loan you made to do whatever
you wanted to do?
Speaker 6 (31:15):
One hundred and twenty.
Speaker 8 (31:18):
Okay, So there's some numbers, mister missiback. He's generating about
eighty per year and it's spent one hundred and twenty
in one year. How would you handle that?
Speaker 7 (31:30):
The one twenty sounds like it's a loan. You need
to charge interest the highest short term rate on the
demand loan that the government mandates as a minimum industrate
in twenty twenty four I believe was five point one
two percent in June of twenty twenty four. So if
you charge interest to the trust at five point one
(31:51):
two percent, which seems to be below what you would
get if you went to a commercial lender at a bank,
you'd have a favorable interest rate, you'd have to pick
up the interest. The trust would have to pay you
that interest. Now, without getting into it, somebody needs to
look at the terms of the trust or speak to
the attorney who crafted the trust to make sure that
(32:13):
it is a completed gift, that the trust is responsible
for paying taxes and not you. Depending upon the terms
of the trust, it could be that you were responsible
for reporting the income rather than the trust. I can't
speak to that without going through the trust document, which
of course I can't do tonight.
Speaker 8 (32:30):
Yeah, but okay, at least I think he's given you
some guidance here. The most important thing is, I assume
you have a profession who prepared your taxes. If you
have an income property that's going to generate eighty thousand
dollars per year, correct, and.
Speaker 6 (32:45):
The trust is under I report it as income on
my tax return.
Speaker 8 (32:50):
Okay, well, I think the answers are going to be
pretty obvious when you sit with you. But again, you've
got to treat it as an arms length transaction and
you have to be concerned about, uh, the what I
think Mark would be referring to as imputed interest. So
I hope we've helped you a little bit. It's uh,
it's a good There's probably a lot of people out
(33:11):
there who are in similar situations. So thank you for
joining us.
Speaker 6 (33:15):
Tonight, YOD, thank you, You're very welcome.
Speaker 8 (33:18):
We'll take a break. My guest is Mark Missilbeck. We'll
be right back. We have a couple of only one
open line six one seven, two five, four ten thirty.
Jump on board. We have coming up next. We got
Maria in Plymouth. We got Jimmy and Cambridge and Jay
and Sharon and I got some room for you, but
only at six one seven, five, four ten thirty. Back
(33:39):
on night Side right after this.
Speaker 3 (33:43):
Now back to Dan ray Line from the Window World,
Light Side Studios on w b Z the news radio.
Speaker 8 (33:50):
My guess, Mark Misselbeck, CPA. We're talking taxes. Tax Day
approaches April fifteenth, as it does every year. Let me
go next to Maria in Plymothy. Maria, you are next
on Night Side with Mark Missilback. Welcome, Go right ahead, Maria.
What is your question for Mark?
Speaker 10 (34:07):
Hi? Mark? My question is on the regarding the circuit breaker,
say credit whatever for the circuit breaker to qualify, do
you have to pay Massachusetts income tax?
Speaker 7 (34:27):
It's more well, the circuit breaker is a credit back,
so if you don't have tax, you may not get
benefit from it. But there are income limits. You need
to give them all kinds of details of your taxes
and other elements. And from what I hear amongst the
community of CPA preparers, virtually every submission of the circuit
(34:54):
breaker tax is scrutinized very strongly by the Department and
a revenue and they demand all kinds of information and
documentation for it. I hate to be discouraging on it,
but very few of anybody who has submitted it gets
clear sailing on it, to my.
Speaker 10 (35:14):
Knowledge really, because we have some people at our Senior
center filling out forms and they said, you know, people
have done well getting their money back. But I just wondered,
because my income comes from a mass pension, so you
don't pay tax on that in Massachusetts.
Speaker 13 (35:35):
So I wondered if you have.
Speaker 10 (35:37):
No taxable Massachusetts income, if there would still be a
possibility of getting a credit. I didn't know if the
credit comes from like your town, through the taxes, or
it comes through this.
Speaker 7 (35:50):
No, it's coming from the state. It's part of your
submission of your state income tax return. I've only done
it a couple of times. The couple of times I
did it, the income was so low that it did
not seem to draw the attention of the department in
challenging it. But I have had communications posted on our
(36:13):
professional message board that it is problematic in a lot
of instances. It may be that people who are edging
towards or slightly over or slightly under the ceiling on
the income limit to qualify for this benefit draw more
scrutiny than the others. But I could just that is
(36:34):
the word amongst.
Speaker 8 (36:35):
Us, If I could just jump in for a second
for those who do not know what a circuit what
the circuit breaker is that Marie is referring to senior
citizens sixty five years of age or older by December
thirty first of last year might be eligible to claim
a refundable credit on a Massachusetts personal income tact return.
(36:55):
The circuit Breaker tax credit is based on the actual
real estate taxes or rent paid on the Massachusetts residential
property you own or rent and occupy as your principal residence.
The maximum credit amount for your tax year of twenty
twenty four is two seven hundred and thirty dollars. If
(37:16):
the credit you owed exceeds the amount of the total
tax payable for the year, you'll be refunded the additional
amount of the credit without interest. So I just want
people to understand what we're talking about here. This is
a tax break for senior citizens who are sixty five
years of age or overlay.
Speaker 12 (37:35):
DAN.
Speaker 7 (37:36):
This is where this is where the practicing community is
sharing information and saying as a pure outgo from the
state Treasury. In a lot of instances, it's another area
that is perceived to be susceptible to fraud, as was
the earned ERC credits and other credits that the FED
(37:59):
adopt the federal government adopted during COVID nineteen that was
rife with fraud. So it while it sounds beneficial, it
also tends to attack attract greater scrutiny because of the
potential for the fraud.
Speaker 8 (38:13):
All right, Maria, thank you very much for the question.
That's that's an area of a very very interesting area.
Thanks very much.
Speaker 10 (38:20):
Good, have a great I asked one more quick question.
Speaker 8 (38:25):
Yeah, go ahead, go ahead.
Speaker 10 (38:28):
Okay, quick question. So if my husband passed away last
year in the spring, I would file is still filed jointly?
Speaker 6 (38:38):
Yes?
Speaker 7 (38:40):
For the year that the spouse dies. Yes, you file
mary filing jointly thereafter your single unless you have a
qualifying child and can claim head of household. I don't
imagine that's the case here, but I put it out there.
Speaker 8 (38:54):
Okay, thanks Maria, Okay, thank you so much. Have a
great night. Let me go to Jimmy and Cambridge. Jimmy,
how are you, sir?
Speaker 12 (39:01):
I'm good, Dan, nice to talk to you again. Thank
you so much for your show tonight.
Speaker 8 (39:06):
I know who this is. If you want to identify
yourself further, great, If you don't, that's okay too, my friend.
You go right ahead.
Speaker 12 (39:14):
Sure.
Speaker 13 (39:15):
Well.
Speaker 12 (39:16):
First of all, I love the show. I don't know
that much about taxes, so I'm glad you have an
expert on But I was reading recently that Doge and
the Trump administration is planning on cutting more IRS agents
during tax season, and the articles I was reading was
saying this is going to result in less tax revenue
(39:37):
for the United States of America. So I asked, your guest,
do you think cutting IRS agents and the demonization of
the IRS that seems to go on in certain sectors
of our society, do you think that's healthy for the economy?
Do you think it's healthy for the United States of America.
Speaker 8 (39:54):
Okay, let me first of all give Mark an opportunity.
He's here as a CPA are for tax advice. I
don't know if he wants to weigh it into what
might be construed as a political question. Jim, so Mark,
you can you can either defer or you can react.
Speaker 7 (40:14):
I will remain neutral in the broadcast community and say
that this is more of a political nature than falling
into the area of advice on taxes. This is more
on tax collection, tax enforcement, and sometimes tax advice, because
(40:34):
a chunk of those people will be manning the IRSH
communication centers where the questions come in during tax season
to the best of their ability, they will also answer
questions such as I'm doing tonight.
Speaker 8 (40:50):
Yeah, absolutely right. I think that I think Jim is a.
Speaker 12 (40:55):
Good question of that.
Speaker 8 (40:56):
Dan and I also think this and to comment that
some people might read into that answer. If I could,
if I could make an editorial coal Man, thanks Jimmy.
That gentlemen is a well known Greater Boston comedian, Jim Tingle. Jimmy,
thanks very much. We'll talk soon.
Speaker 12 (41:11):
Okay, Thanks, Dan, appreciate it.
Speaker 8 (41:14):
You bet you. We'll be right back now. We're going
to take a break. Mark, I got some other calls.
If you could stay with us for a little while
into the next hour, we'll see if the calls sustain. Uh.
Can you I know it's a Friday night, and I
know it's the end of a long week. Can I
hold you over into the next hour?
Speaker 7 (41:33):
My week runs through the weekend at this time of
the year.
Speaker 8 (41:37):
Uh. He is a good sport and a great friend, Mark, Misslbeck. Uh,
he's a fabulous CPA to boot. If you have a
question and you're on the line, we're going to get you,
I promise. If you're not the only lines that are
open right now, we're six one seven, two, five four
ten thirty six one seven, two, five, four ten thirty
back with Mark, Misslbeck. Mark, we get about six or
seven minutes here. If you need to stretch your legs
(41:58):
or get a glass of water. That's a exactly what
I'm going to do. We'll be back in about six
or seven minutes with CPA Mark Misselbeck of the firm
Cherry Beckhart Advisory LLC out of Waltham, Massachusetts. They do
not need more business. If you want to contact Mark,
you can do that. But he does this and I
think he enjoys doing and he enjoys talking to nightside listeners,
(42:21):
and I am very grateful for his time. We'll be
back on nightside right after this
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