February 13, 2025 • 40 mins
Now that it’s officially tax season, are you ready to get 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? CPA Mark Misselbeck with Cherry Bekaert Advisory LLC joined us to answer all your tax related questions!
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Episode Transcript
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Speaker 1 (00:00):
It's Night Side with Dan Ray i WBZ Boston's radio.
Speaker 2 (00:06):
All right, welcome back everyone. It's nine oh seven in Boston, Massachusetts.
You're listening to WBZ Radio where we are ten thirty
right SMACKDB in the middle of your AM dial. If
you're listening to us in a car somewhere in the
Midwest or down south and picking us up for the
first time, lock us in on your car radio. If
you're listening at home, same way. If you're listening on
(00:28):
your tablet or on some sort of social media device,
feel free to lock us in there as well. You
always can find us on the iHeart app. This is
WBZ in Boston. As they say, my name is Dan Ray.
I'm the host of the show and with us tonight,
and I wish I kept a record mark, Misslbeck, of
the number of years we've had you on at this
time of year. But we are now entering, well, we
(00:51):
have entered the income tax season, that time of the
year when all of us get these missives in the mail,
these forms, these two forms which tell us how much
many we made and ten ninety nine from banks and
can be kind of overwhelming. As we get on the
glide path to April fifteenth. I want to welcome back
(01:12):
my friend Mark Misselbeck. He's the core tax director of
Cherry Beckett Advisory LLC CPA, and Mark, I was just
saying that we've done this now, this probably is our
fourteenth or fifteenth year at least doing this. How are
you tonight?
Speaker 3 (01:29):
Pretty good?
Speaker 2 (01:31):
Busy time.
Speaker 4 (01:32):
I found an old posting that an appeal of an
appearance March sixth, twenty eleven. I was fored. I thought
we were eight or ten years Max.
Speaker 2 (01:43):
Yeah, No time flies when you're having fun, Mark, that's
for sure. Yeah, Well that would that would make it
now where this would be Well, if twenty eleven was
the first, this must be the fifteenth year. But you're
always great. You explained things so that people can understand
they're what they are doing. And I always like to
(02:04):
start off with my threshold question. And I think you've
heard the question enough so you know the answer that
I'm looking for, and that is what's the most important
thing an individual? Because most of my listeners who are
listening tonight are individuals who know they have to file
taxes in April fifteenth. What's the most important thing they
can do before they arrive at their CPA's office or
(02:28):
their lawyer's office, or whatever tax filing service they are utilizing.
Speaker 4 (02:37):
If you have a folder, take it and put all
of your information, your documentation into the folder. W two's
ten ninety nine's stock trade information, documentation of charitble donations,
the property tax bills, the auto excise tax, medical costs,
(02:58):
anything and everything along the lines. If you're a partner
and a partnership that information. If you are a sole proprietor,
you need your business records of income and expenses for
the year, and particularly if you're using your vehicle in
that business, the mileage records for business versus personal use.
Speaker 2 (03:20):
Yeah, I mean it's a lot. It's overwhelming to most people.
I don't know how any individual with any sense of
certainty can do this without some professional help. And I
mean that seriously. I think, thank God that there are
people like you and others around who not only do
(03:44):
work for corporations but also do work, you know, for
sub chapter s and individuals and corporations. I mean, it's
just it's overwhelming. As I get older, I think to myself,
it just seems to get more complicated every year. Is
that my imagination? Or is it indeed becoming more complicated
every year.
Speaker 4 (04:03):
I don't know to a degree it's more complicated, but
the Congress seems to perceive that with computers available, the
programmers can set up anything to deal with whatever it
is they write into the tax codes so they feel
free to do so. Yeah, and as far as being overwhelming,
the guide you need is your last year's return. Look
(04:23):
for the information this year for what you reported in
the return last year, bank accounts and brokerage statements.
Speaker 2 (04:32):
Yeah, and at this point you're you should have I
think you know your W two's and your ten ninety
nine from banks, you know your simpler accounts, if you
have investments. A lot of that stuff can come later,
but most of that stuff should have arrived on it
before January thirty.
Speaker 3 (04:50):
First, correct, pretty much?
Speaker 2 (04:52):
So yes, right, and so ope, get a Manila folder,
put it together, you know, use some paper clips, you know,
paper clip what if you have more than one ten
ninety nine, or if you happen to have, you know,
more than you know a W two, clip them together,
et cetera. The other thing which people should be aware of.
And I know that these are very elementary observations. I'm
(05:15):
trying to establish and get out of the way. There's
going to be a lot of talk in the next
few weeks about changes in the tax code and the
tax the Trump tax plan, and specifics dealing with assault limitations,
you know, all of that. But in terms of this
(05:37):
tax year, which is really twenty twenty four, nothing's going
to change. So don't sit around thinking, oh, I'll be
able to delay filing my taxes for twenty twenty four
because they're going to change the tax code anyway. If
they change the tax code, it's going to be effective
as of January first, twenty twenty six, or the effective
(05:58):
January first, twenty twenty five. Correct.
Speaker 3 (06:01):
Well, historically that's the case.
Speaker 4 (06:04):
There has been talked on occasion of making things retroactive,
but so far they've held off from actually doing that.
So it's largely a safe bet that what was in
effect as of December thirty first will be what you
need to deal with in your return this year. There
is some past year end work that can be done
(06:28):
in terms of doing an IRA, or if you have
a business adopting a pension plan. It used to be
that self employes had to have their pension plan in
place or they defaulted to a simple IRA with off
the rack terms to it. That may be a little
more of a straight jacket than you wanted. Congress a
(06:51):
couple of years back changed the law. It isn't December
thirty first that you need the plan in place. You
need to do it by the time you file your
return including extensions. So people with a business, if they
haven't had a pension plan in place, had a decent
year last year, want to put some money aside and
a pension plan, can still adopt it. Those who are
(07:12):
on a W two, if their income is below the
phase out threshold, they can still do deductible iris. If
they'd rather, they can do roth iras.
Speaker 2 (07:24):
Yeah, roth ira. I think most people are beginning to
understand that you convert your four h one k into
a ROTH, you pay the taxes to convert it, but
then the money that is left over goes into the
roth will never be taxed again.
Speaker 4 (07:40):
Correct, Well, you've got to pay money on the money,
pay tax on the money going into the raw because
it's not deductible. So if you if you decide to
do a conversion, understand you can't undo it. Years ago,
you used to be able to Congress took that away
from us. So once you make the decision and make
(08:02):
the change, you're stuck with it.
Speaker 2 (08:04):
Yeah. And the theory on that is that your earning
power will probably not necessarily always, but probably diminish upon
your retirement.
Speaker 4 (08:17):
Correct, not your earning power, but your overall income if
you are not going to solder on in the workforce
beyond your retirement date.
Speaker 2 (08:28):
Yeah. So the idea is you probably if you're relying
upon either a pension or social security some combination thereof,
and you've left a job, your your tax rate probably
would be higher through the time that you work, and
once you actually retire, your tax rate is going to
go down. So therefore, when you go and you take
(08:51):
your money out of your your wroth account, it's it's
going to be taxed at a lower rates. As a consequence,
there'll be no tax. There'll be no tax on it.
Speaker 4 (09:02):
It's not necessarily no tax, but a lesser tax. If
you don't have a substantial accumulation to your benefit of
a pension plan, if you've been packing money away and
the market has been rewarding you with its rise over
the last some years, you may in fact have a
balance in your account that can produce an income that,
(09:24):
in combination with Social Security benefits, pushes you into the
same or a higher bracket. In that case, doing a
wroth conversion will pay the tax now at the turnent
rates in case they rise in a later year, and
you need never tap the wroth if you choose not to,
or if you do and you have it in there
long enough five years, whatever comes out is tax free
(09:50):
and doesn't impact your Medicare charges and your income levels
and your tax rates.
Speaker 2 (09:57):
Yeah, they just don't make it simple. Guess Mark Misselbeck.
Mark is a CPA. He knows his stuff. He's the
core tax director. I'm not familiar with the phrase core
tax director. Is that a new phrase or is that
a phrase that I should be familiar with?
Speaker 4 (10:13):
Nolly, Different firms have different designations. Principal director, partner, echley partner,
non equity partner, profit participant. It's all over the lot.
It's stratified. And the higher up you get, the bigger
(10:34):
the title.
Speaker 2 (10:35):
The bigger the title. Okay, fair enough. I wasn't sure
if there was a meaning that I was missing. He's
with Cherry Beckett Advisory LLC. We'll give at some point
later on tonight. They're located in Waltham, pretty easy to
find if you're interested. But now it's an opportunity for
you to get some free tax advice. If you have
a question six one, seven, two, five, four, ten thirty,
(10:58):
six one seven thirty, do not hesitate. Feel free. As
I've often said, there is no such thing as a
dumb question. If you you may be able to save
yourself some aggravation. So feel free to join the conversation.
We're going to take very quick break, be back with
Mark Misselbeck, and my call is questions, So feel free
(11:20):
just dial that number and ask away. This is not
going to cost you anything, and it may save you
some money in the long run or in the short run.
Back on night Side right after this.
Speaker 1 (11:30):
Now back to Dan Ray live from the Window World
Nightside Studios on WBZ News Radio.
Speaker 2 (11:38):
We're talking taxes. April fifteenth is the deadline. April fifteenth
this year? Does the Patriots Day celebration get us an
extra couple of days?
Speaker 3 (11:49):
Mark?
Speaker 2 (11:49):
Do you know that off the top of your head?
Speaker 4 (11:52):
It's April fifteenth, and it is Patriots Day that gets
you extra time?
Speaker 3 (11:56):
Anymore?
Speaker 4 (11:57):
It's Emancipation Day down on DC.
Speaker 2 (12:01):
Yeah, I see. Yeah, okay, well Patriots Day here is
the twenty first, so tax Day is indeed the fifteenth.
And if people one thing people should know, and I
think we could should get this out quickly, and that
is that people have a right to seek an extension,
a six month extension automatically, but they have to make
(12:22):
a good faith effort to pay the taxes owed by
April fifteenth. Can you explain that a little bit better
than I can explain it. So people, if they're up
against the deadline and they know they're not going to
make it, they do have an option.
Speaker 4 (12:35):
Yeah, based on your information that you have in hand,
you make your best reasonable estimate of your taxes, do
and pay in what you haven't paid so far. We
usually think about putting in the first quarter estimate because
(12:56):
the people who have that problem usually have to pay
estimates and thereby increasing by that depositing that first quarter
estimate an additional level of security against a surprise income
coming in the door from somewhere they weren't anticipating. Then
(13:16):
their first quarter estimate is short, they can make it
up with June the second quarter, and they only suffer
a charge of two months interest for not having paid
the first quarter correctly.
Speaker 2 (13:30):
Tell you it's keeping the rules in your head. You
always amaze me. Let's go to phone calls. We got
John in Dorchester, starts us off tonight. Hey, John, welcome
your first This Hour with Mark Misselbeck talking taxes. What's
your question? What do you call it? John?
Speaker 5 (13:47):
So, thank you Dan, and thank you Mike. I appreciate
your help and what you're doing. Absolutely, I am. I
filed twenty twenty three last year on time single and
I'm sixty five now I'll be sixty six in May.
But I didn't do twenty twenty two. But my understanding
(14:10):
is it's not too late to file, so I could
file for that. And why did you do that?
Speaker 2 (14:17):
John, John woll Woa, WHOA, what do you mean you
you didn't do twenty twenty two, which would have been
ding April at twenty twenty three? Did you just forget
or did.
Speaker 5 (14:26):
You had had I had some health issues going on.
I took care of all the I took care of
all the other years and that effect they just I
just got a refunded enough.
Speaker 2 (14:36):
Okay, so let me come back. I just want to
understand and I want Mark to understand. So you never
filed twenty twenty two. Do you think your owed tax
you have to file, But do you think your owe
taxes did that?
Speaker 5 (14:49):
I want to say that I'd be surprised if I
wasn't getting a refund. Okay, I'd be surprised if I
wasn't getting a refund.
Speaker 2 (14:59):
Okay. So so let's find out from Mark what sort
of jeopardy you're in. You as I'm sure you probably know,
you're supposed to file. Correct Mark situation as John presents it,
presents it. He didn't file. He had some health complications
and he thinks that he should be doing a refund.
(15:20):
What's the best guidance for him?
Speaker 4 (15:23):
File and file as soon as you can. If you
wait another two years, you may you still have the
obligation to file, and the statute of limitations, which runs
typically three years from filing, will start when you submit
the return. The problem is if you go three years
out from the original do date, the refund may not
(15:47):
be due you any longer. He may be shut out
from it. So you need to get on your horse
a little bit. And if you're owed money, there may
be a small late penalty for not having filed timely.
But there should be no penalty for under payment. And
there is a program with the IRS. If you are
(16:08):
a first time penalty assessment and you haven't had penalties
assessed in the last three years, and use this first
time escape patch, you can ask them to waive the
penalty under that program.
Speaker 5 (16:23):
Is that what they call the amnesty program?
Speaker 4 (16:26):
No, no, no Mass had an amnesty hasn't had or
has an amnesty program going on. I think it may
have been shut down by now. It was a second
one in the last decade that you could file, pay
your taxes, pay the interest and not get hit with penalties.
But no, this is just an abatement program on first
(16:47):
time penalty assessments first time, the first time in the
last three years.
Speaker 2 (16:52):
Okay, but remember John, you got your mass resident I assume,
so did you file in twenty twenty three, either for
state or federal or.
Speaker 5 (17:01):
I took care of twenty twenty three on time, which
was I was supposed to do when things worked out
well in my half.
Speaker 3 (17:09):
Okay, and both authorities.
Speaker 5 (17:11):
And then like I said, this year, I am you know,
I'm sixty five this year, so I know there's a
I think there's a special exemption right off if you're
sixty five, I think it might be a twenty five
hundred dollars exemption. I could be all, well.
Speaker 4 (17:24):
Listen, it's an increased standard deduction in the deduction, but
under deduction, those who attained a certain age get an
extra right off both state and federal because the state
is a little bit less the Fed is a little
bit more.
Speaker 5 (17:44):
Yeah, I could be as I want to say. They
said it was twenty five hundred. I could be, well,
but I think that's what they said. I don't know
if that's a total pan off, but that's what they said,
it was twenty five hundred.
Speaker 2 (17:55):
That assumes you're filing a standard with a standard deduction,
not not to deducted.
Speaker 4 (18:01):
Okay, s sixty five and twenty twenty three, you got
an extra eighteen hundred and fifty dollars. In twenty twenty
four it'll be nineteen hundred and fifty dollars as a
standard deduction.
Speaker 2 (18:13):
I want to come back to my original question, John,
what was the tax year that you failed to file
and did you fail to file for both federal and
state or did you fail to file for just one?
Speaker 5 (18:26):
Twenty twenty two was the and I unfortunately and file
for both federal law state.
Speaker 2 (18:32):
Okay, but I held hopefully you got the answers that
you need here. Is there anything that you need to
clear up with with Mark before we let you go?
Speaker 5 (18:42):
No, I are you answered all my questions. But I
greatly greatly appreciate it and appreciate you volunteer any time
now that Mark, and again you always do a great job.
And welcome back whatever year it is, Mark twentieth or
fifteenth or whatever it is.
Speaker 2 (18:56):
At least fifteen, at least fifteen. Yeah, all right, thank
thanks you. I appreciate you getting us going here. You
broke the ice. Thanks my friend.
Speaker 5 (19:03):
Math wasn't my strong point. That's why I always sat
next to the spotkits.
Speaker 2 (19:06):
But not that you'd look on the paper or anything
like that for answers.
Speaker 5 (19:13):
The chiefs would ask a question if I go that way?
They did.
Speaker 2 (19:17):
I didn't do it intentionally. Yeah, we got it, all right,
Thank you, John, appreciate it.
Speaker 5 (19:20):
Okay, Well, God bless thanks again.
Speaker 2 (19:24):
That was a good one to start off with. Mark.
We'll we have other callers on the line and waiting,
and one line open at six one, seven, two, five,
four ten thirty that John just left and one line
at six one, seven, nine, three, ten thirty. My guess
is Mark Misselbeck, CPAH. He has an extraordinary knowledge of
(19:44):
tax law and uh, he always amazes me. He's a
core tax director at a firm called Cherry Beckert Advisory LLC.
They're located in Waltham and will give ways in which
you can contact him if you want. He has plenty
of work and I'm surprised that he's always as generous
with his time, but he is. It benefits me and
(20:05):
it benefits you if you take advantage and dial the calls.
We'll be back on Nightside run after this break, news break,
this news break, and they think I have one commercial
to read and then we'll be done for the night.
On the commercials, it's Night Side with.
Speaker 1 (20:21):
Boston's News Radio.
Speaker 2 (20:23):
My guest is Mark Misselbeck. He's a CPA. He takes
your tax questions. He done it, He's done it with us,
he did it with David bread Noo. As a matter
of fact, how many years did you did you coordinate
with David brednege on this.
Speaker 4 (20:35):
Mark, I gotta be either ten.
Speaker 2 (20:39):
Yeah, yeah. David's great friend, great guy, and I'm happy
to carry on to tradition with you and appreciate you
spending some time with us. Tonight, let me go to
Pat in Waymouth. Pat, you are next this hour with
my guest Mark Misselbecker.
Speaker 6 (20:52):
Right ahead, Pat, Hi, Dan, thanks for taking my call,
and Mark, thank you for any advice you can give me.
Seventy six years old, I've always filed as individual short form.
This year I was awarded a lawsuit proceeds, and I
understand that that those proceeds that I was awarded are
(21:16):
not textical.
Speaker 4 (21:20):
It depends upon the nature of the claim, what you
base the claim on, and I would have to get
into it with you as to what that lawsuit claimed
in order to obtain the settlement. In order to make
the determination, you need to.
Speaker 6 (21:40):
Say yes, and I do have an appointment. But yeah,
it was a motor vehicle accident and the f fault
driver went over double line and hit me head on,
and of course my car was total and I was
in the hospital for two days.
Speaker 2 (22:00):
And I think you were not this was this was
a torch claim. You were injured and you you want
some money a Mark, I.
Speaker 6 (22:13):
Was was boarded money.
Speaker 4 (22:16):
You said, yeah, okay, yeah, all right, now if it
if the basis of the claim is your physical injuries.
Compensation for physical injuries is typically going to be untaxable, okay,
And anything else would be taxable. It was replacing wages
or income earning capacity, that's probably.
Speaker 3 (22:39):
Going to be taxable.
Speaker 7 (22:40):
Okay.
Speaker 6 (22:41):
No, it would be all for the physical I was
in the hospital for two days and I underwent a
lot of tests, and so.
Speaker 2 (22:50):
Your medical pain, medical and pain and suffering and things
like that, I assume.
Speaker 6 (22:55):
Oh yeah, oh yeah. When I got out of the
hospital it was twenty seven.
Speaker 2 (22:59):
I was telling you that you made that you that
your tax advisor is probably going to tell you. And
again you have to listen to your own tax advisor
that you might be okay, any other question or.
Speaker 4 (23:09):
Know The only thing I would say further is to
disclose it in the return that you received the settlement,
but it was for this particular problem or event, the
physical damage, and that therefore under and your advisor will
(23:29):
look up the code site, the tax code site, and
cite that particular provision that makes it exempt.
Speaker 2 (23:37):
You know, Mark, while we're talking about this, I'm going
to ask you a question, because you know a lot
more about this than I do. And when I was
in television. I was able to help some men get
out of prison for a wrongful imprisonment by corrupt FBI agents,
and the client that we were advocating for was awarded
approximately thirty two million dollars, which he actually he received for. Again,
(24:02):
it was a taught claim, a federal torts claim where
ages of the government were found to have been to
wrongfully and intentionally imprison this gentleman for thirty years for
a crime that he had nothing to do with, that
he did not commit. I don't know the answer to
the question, but I'm just curious. Obviously that was money
(24:22):
that he was was awarded for wrongful imprisonment. How do
you think that would have been treated from a tax
point of view.
Speaker 4 (24:32):
I think it's going to be taxable as compensatory.
Speaker 2 (24:36):
Yeah, boy, that's tough to think about.
Speaker 3 (24:38):
Uh.
Speaker 2 (24:39):
And And I'm curious because it seems to me that
if the government was forced the government, you know, was
the one that put him in this situation, and the
judge determined that he would be awarded that money, and
(24:59):
I think it it was taxable. It just seemed to
me so unfair at the time that you that you
that you lose thirty two, you'll lose thirty years of
your life, which it kind of worked out to about
a million dollars a year, which sounds like a lot
of money. But spend spend one year in prison, and
tell me what you think it's worth. And so if
it's categorized as compensatory, which I guess it was, that
(25:21):
just seems to me inherently unfair, particularly when it's the
government that has caused.
Speaker 3 (25:25):
Lay a minute time out.
Speaker 4 (25:27):
And I keep saying to people, give me the certificate
of fairness in the tax arena.
Speaker 3 (25:33):
Yeah, okay, nobody's produced one yet. I got it a
broad brush.
Speaker 4 (25:38):
The broad brush of the Congress states all income from
whatever source derived is taxable unless there's another provision that
they enact that exempts it from taxation.
Speaker 3 (25:50):
But it just in the.
Speaker 4 (25:51):
Personal injury for physical damages to your body that's excludable.
Speaker 3 (25:59):
Yeah, this will.
Speaker 6 (26:00):
Excludable for Catt.
Speaker 4 (26:04):
Yeah you're gonna be okay, Pat, But again, follow the
advice of your tax advisor.
Speaker 2 (26:10):
I gotta keep rolling pad. Okay, next so much? Yes, okay,
let me go next to Michael in Boston. Michael, you're
next on nice side with Mark Misselbeck.
Speaker 8 (26:21):
Go ahead, Michael, Hi there, thanks for taking questions.
Speaker 5 (26:26):
Welcome.
Speaker 8 (26:27):
If we take a trust, an irrevocable trust, let's say
not that it might make a difference. And as long
as the grantor of that trust is alive, he not
only does his own ten forty and form one for
the state, he also does a ten forty one federal
and a two A for the state. So taxes from
(26:50):
the trust, the interest and dividends from the trust, he
is still responsible the grantor of the trust as long
as he's alive. Now the granted is no longer with us,
the beneficiary is able to receive the stated amount and
the trust, let's say five thousand dollars a month, to
(27:11):
pick a figure. That is my understanding is you, I'd
like you to confirm please that that is not tax
He'll put it on his return if it's taxable. But
it only would be taxable if he would withdraws that
sixty thousand dollars a year from the principle of the trust,
(27:34):
not the interest in the dividends.
Speaker 4 (27:38):
Well, first off, when you say irrevocable trust, there are
two flavors. One is an irrevocable trust that is taxable
in its own right. What you're describing is a circumstance
of an irrevotable trust where the terms cannot be changed,
but within the terms there are provisions that cause it
to be taxable to the grand tour as though it
(27:59):
were still their assets and their income during their lifetime
on their death. If the terms of the trust mandate
a five thousand a month distribution, it will be taxable
to the recipient, the beneficiary if there is sufficient income
(28:19):
generated in the trust to support that payment. That is,
the first money out of the trust is the income
generated by the trust. If the payouts exceed the income
for the year, then the trust is dipping into principle
that's already been taxed, and that piece would be none taxable.
Speaker 8 (28:39):
Okay, But does it is he committed to take just
to dividends or can take the He can't take the
principal from the start.
Speaker 4 (28:48):
No, he cannot choose to take the principle from the start.
The tax on mandates that you the income. The obligation
to pay the taxes on the income transfers with the
cash flow, so it drains out of the trust first
to the recipient.
Speaker 8 (29:05):
Okay, cash the interesting dividends.
Speaker 4 (29:11):
Interest dividends, and if the trustee has the ability to
designate and the state law permits it, they may designate
that the capital gains as well as income rather than
capital or principle, that's a trust to trustee has to make.
Speaker 5 (29:29):
I see.
Speaker 8 (29:31):
Okay, the beneficiary is the trustee.
Speaker 4 (29:35):
Then they need to consult with somebody as to whether
or not that's a beneficial election to make. Once made it,
you're going to be bound by it and going forward,
capital gains, if treated as income at the start of
the payout, will forever after be income to be distributed
to the beneficiary.
Speaker 8 (29:54):
Okay, Dan, can I asked you another question? Or no?
Speaker 2 (29:57):
No, go ahead? Sure.
Speaker 8 (29:58):
Oh it's kind of confusing on the r m D. Yeah, yeah, people.
Speaker 2 (30:09):
I just want to explain it so that people Mark
understands they want to make the audience allowed that if
you have an obligation, if if you have a four
to oh one K, which now is a pot of gold,
and you're required based upon how old you are to
(30:32):
take out a certain amount of money required minimum distribution
every year. It depends upon how old you are set
to Mark. We'll get into that, but I just want
people to understand that a required minimum distribution is a
good thing to have. Go ahead, Michael.
Speaker 8 (30:46):
Okay, So on the federal it's clear that that in
full is put on my return because it was previously
deducted over forty years every year and I never paid
any tax on the interest that it produced on the
state return. It's confusing. It gives you a little worksheet
(31:11):
and it says, take your RMD for this year and
subtracted from previous taxes on contributions. I don't understand why
would there be a tax on a previous contribution. I
don't know of any that I have. I don't understand that.
Speaker 4 (31:27):
Okay, here's the deal. Federally, you could pay into an
IRA many years ago. It was deductible regardless of income level.
The last number of years you could potentially make the contribution,
but if your income was too high, you wouldn't get
the deduction. That's on the federal level. MASS has never
(31:50):
allowed a deduction for an IRA contribution. So if you
have your records and can assemble from those records or
from the custodians records telling you how much you contributed
each year, the total of what you contributed into the IRA,
that was never deducted for Mass purposes. That's all tax
paid money as far as Mass is concerned. And the
(32:13):
first dollars out are charged against or recoupment of those
non deductible already tax moneies until you get it all
back thereafter it's one hundred percent taxable for Mass. That's
what the work she is telling you.
Speaker 8 (32:29):
I see, Okay, it's kind of confusing, at least for me.
Speaker 5 (32:32):
Yeah, okay, I guess you carried it up.
Speaker 8 (32:34):
Thank you so much.
Speaker 2 (32:35):
Appreciate you, Thanks, Michael, appreciate the call.
Speaker 8 (32:37):
Thank you, thank you.
Speaker 2 (32:39):
Six seven two four ten thirty one line there, six
one seven nine three one ten thirty one line there.
Back we have Janice, We have a Harriet. Harriet, Janice
and Mary. Uh again, be more than happy to get
as many calls as we can, and then we might
even take this into the next hour, folks, So stay
with us right after this on said.
Speaker 1 (33:01):
Now back to Dan Ray live from the Window World
Nice Sin Studios, i' WBZ News Radio.
Speaker 2 (33:09):
My guest is Mark misslbeck CPA.
Speaker 4 (33:11):
Uh.
Speaker 2 (33:12):
He is our tax expert, has been that one for
fIF fifteen years.
Speaker 5 (33:17):
Uh.
Speaker 2 (33:17):
He is with a firm called Cherry Beckert Advisory LLC
and Mark, we have full line, so I think we're
gonna continue on with your UH as long as you're
willing a little longer than we than we had expected.
Let's go to Harriet and Lowell. Harriet, you're with Mark
Misselbecker right ahead, and Harriet.
Speaker 7 (33:37):
Harriet, Hi, Hi, thanks for taking my call.
Speaker 9 (33:43):
My husband and I filed a joint tax return and
we went with H and I Block. And it's now
a year and we were supposed to get a refund
for at least two thousand dollars and we have got nothing.
We want to know if we do, it's something wrong.
We've contacted them. I don't know what the problem is,
(34:04):
and they keep saying they're looking into it and nothing
gets done.
Speaker 2 (34:08):
Well, Mark is not with H and R Block. First
of all, let's let's make that I know that, okay,
there sometimes can be a problem. I know that out
of COVID, and Mark correct me if I'm wrong. There
were some refunds, legitimate refunds that were withheld because people
had not established an account with the federal government. Do
(34:34):
you know of what I speak there?
Speaker 4 (34:38):
Not particularly, but I can think they're off hand of
two circumstances one, did you pay per file or did
you electronically submit through HMR block.
Speaker 7 (34:50):
Electronically?
Speaker 4 (34:52):
Okay, So the first problem of paper going into the
IRS and getting lost, misplaced, or treaded is not the issue.
The secondary issue is there may be a conflict that
somebody stole your identity and file the return before you did.
Speaker 3 (35:12):
That.
Speaker 4 (35:12):
You need to contact the Taxpayer Advocate Service at the IRS.
Look on the web for that particular designation. They have
an eight hundred number and they are in the JFK
building downtown Boston. I don't know if you want to
go in there. If you do, they screen you along
the lines of what the TSA does at the airport.
(35:34):
They will look at your metal objects and so forth.
But if you go in there, either the tax per
Advocate Service or the help desk, but they usually have
lines there. So contacting the Tax pay Advocate Service to
me is the better avenue to go explaining the problem
(35:56):
and have available from H and R Block the confirmation
of acceptance of the return through electronic filing that they
are supposed to have received back from the government to
documentary the.
Speaker 7 (36:13):
Return was there right then they required something else like
in September, which again it was electronically accepted that they
received the paperwork, and again we filed in February of
last year.
Speaker 2 (36:30):
Let me help you out here, Harriet. Okay, yeah, let
me let me help you out here. You're in Lowell.
So your congress congressional office is Lori Trehan.
Speaker 7 (36:40):
Correct, Well, actually I live in Tewksbury.
Speaker 2 (36:45):
Okay, who's your congressman.
Speaker 6 (36:47):
Who's my congressman?
Speaker 4 (36:49):
Well, you can take let me let me.
Speaker 2 (36:51):
Shot Glori Trehan would be Seth Molten.
Speaker 4 (36:55):
Dan I had. I had a big problem with the client.
I wanted to get the congressional delegation involved, and I did,
and I found out afterwards. All they do is referred
over to the tax for advocate service they do.
Speaker 2 (37:08):
But in most congressionals, in most congressional offices, they have
a liaison. And I can speak to personal knowledge of this.
If you ask for the liaison, you can avoid going
into the into the JFK building. And if if you
deal with either Trahan or Moulton, there are two vult
(37:32):
Malt Moulten. Okay, Carl Milton's office, Tell them that that
you called night Side uh and that they you'd like
to find out if they could advocate on your behalf.
Try that first. It will save you going into Boston.
If that doesn't work, then you may have to do that.
But there are individuals in these congressional offices.
Speaker 3 (37:56):
Yeah, don't forget.
Speaker 4 (37:56):
You've got two senators also that you can bring in
on the deal.
Speaker 2 (38:00):
It's true. But I think that that that Molten would
do a good job for you. And I really mean
that because I have had personal experience where once you
get your congressman's office involved, you know, particularly if you're legitimate,
and you sound like you're totally legitimate, they can track
this down. And if you were, as as Mark suggested,
(38:21):
the victim of someone else stealing your check, they can
they can track that down. It's started that way, and
start just with the local office. I think Seth's local
office is one of his local offices is in Salem. Okay, right,
all right, hope that helps.
Speaker 9 (38:39):
All right, Thank you Dan, Thank you Mark.
Speaker 2 (38:41):
You're welcome to post it on it and feel free
to call me back and let me know. Okay, Thanks, Okay,
all right, good night, Mark. We have full lines and
we got a little bit of a news break here,
so I would again thank you very much for joining us.
Let's stick with it. You can get up, stretch your legs,
get a glass of water, and one quick comment.
Speaker 4 (39:04):
Yeah, these these identity thefts are rampant, and anyone can
request what is known as an ip pin for electronic
filing by going to the IRS website and requesting one.
At this time of year, You've got to wait for
it to come, likely in the mails for several weeks,
(39:24):
but it will then authenticate that the return you're submitting
with that TIN number is the correct return.
Speaker 2 (39:32):
Yeah, and I think that's what I went through a
few years ago. It was after COVID, So I think
she I think I've given her good advice. I know
that is not tax advice, but I think that the
congressional offices will will in this case, Molten's office will
help her out. And a Ken Harritt, if you're listening,
let me know how you make out on that. We'll
(39:52):
be back with Mark misselback right after the ten o'clock news.
More questions right here on nightside. Your tax question is
the only line six months seven A nine, three, one,
ten thirty
It's Night Side with Dan Ray i WBZ Boston's radio.
Speaker 2 (00:06):
All right, welcome back everyone. It's nine oh seven in Boston, Massachusetts.
You're listening to WBZ Radio where we are ten thirty
right SMACKDB in the middle of your AM dial. If
you're listening to us in a car somewhere in the
Midwest or down south and picking us up for the
first time, lock us in on your car radio. If
you're listening at home, same way. If you're listening on
(00:28):
your tablet or on some sort of social media device,
feel free to lock us in there as well. You
always can find us on the iHeart app. This is
WBZ in Boston. As they say, my name is Dan Ray.
I'm the host of the show and with us tonight,
and I wish I kept a record mark, Misslbeck, of
the number of years we've had you on at this
time of year. But we are now entering, well, we
(00:51):
have entered the income tax season, that time of the
year when all of us get these missives in the mail,
these forms, these two forms which tell us how much
many we made and ten ninety nine from banks and
can be kind of overwhelming. As we get on the
glide path to April fifteenth. I want to welcome back
(01:12):
my friend Mark Misselbeck. He's the core tax director of
Cherry Beckett Advisory LLC CPA, and Mark, I was just
saying that we've done this now, this probably is our
fourteenth or fifteenth year at least doing this. How are
you tonight?
Speaker 3 (01:29):
Pretty good?
Speaker 2 (01:31):
Busy time.
Speaker 4 (01:32):
I found an old posting that an appeal of an
appearance March sixth, twenty eleven. I was fored. I thought
we were eight or ten years Max.
Speaker 2 (01:43):
Yeah, No time flies when you're having fun, Mark, that's
for sure. Yeah, Well that would that would make it
now where this would be Well, if twenty eleven was
the first, this must be the fifteenth year. But you're
always great. You explained things so that people can understand
they're what they are doing. And I always like to
(02:04):
start off with my threshold question. And I think you've
heard the question enough so you know the answer that
I'm looking for, and that is what's the most important
thing an individual? Because most of my listeners who are
listening tonight are individuals who know they have to file
taxes in April fifteenth. What's the most important thing they
can do before they arrive at their CPA's office or
(02:28):
their lawyer's office, or whatever tax filing service they are utilizing.
Speaker 4 (02:37):
If you have a folder, take it and put all
of your information, your documentation into the folder. W two's
ten ninety nine's stock trade information, documentation of charitble donations,
the property tax bills, the auto excise tax, medical costs,
(02:58):
anything and everything along the lines. If you're a partner
and a partnership that information. If you are a sole proprietor,
you need your business records of income and expenses for
the year, and particularly if you're using your vehicle in
that business, the mileage records for business versus personal use.
Speaker 2 (03:20):
Yeah, I mean it's a lot. It's overwhelming to most people.
I don't know how any individual with any sense of
certainty can do this without some professional help. And I
mean that seriously. I think, thank God that there are
people like you and others around who not only do
(03:44):
work for corporations but also do work, you know, for
sub chapter s and individuals and corporations. I mean, it's
just it's overwhelming. As I get older, I think to myself,
it just seems to get more complicated every year. Is
that my imagination? Or is it indeed becoming more complicated
every year.
Speaker 4 (04:03):
I don't know to a degree it's more complicated, but
the Congress seems to perceive that with computers available, the
programmers can set up anything to deal with whatever it
is they write into the tax codes so they feel
free to do so. Yeah, and as far as being overwhelming,
the guide you need is your last year's return. Look
(04:23):
for the information this year for what you reported in
the return last year, bank accounts and brokerage statements.
Speaker 2 (04:32):
Yeah, and at this point you're you should have I
think you know your W two's and your ten ninety
nine from banks, you know your simpler accounts, if you
have investments. A lot of that stuff can come later,
but most of that stuff should have arrived on it
before January thirty.
Speaker 3 (04:50):
First, correct, pretty much?
Speaker 2 (04:52):
So yes, right, and so ope, get a Manila folder,
put it together, you know, use some paper clips, you know,
paper clip what if you have more than one ten
ninety nine, or if you happen to have, you know,
more than you know a W two, clip them together,
et cetera. The other thing which people should be aware of.
And I know that these are very elementary observations. I'm
(05:15):
trying to establish and get out of the way. There's
going to be a lot of talk in the next
few weeks about changes in the tax code and the
tax the Trump tax plan, and specifics dealing with assault limitations,
you know, all of that. But in terms of this
(05:37):
tax year, which is really twenty twenty four, nothing's going
to change. So don't sit around thinking, oh, I'll be
able to delay filing my taxes for twenty twenty four
because they're going to change the tax code anyway. If
they change the tax code, it's going to be effective
as of January first, twenty twenty six, or the effective
(05:58):
January first, twenty twenty five. Correct.
Speaker 3 (06:01):
Well, historically that's the case.
Speaker 4 (06:04):
There has been talked on occasion of making things retroactive,
but so far they've held off from actually doing that.
So it's largely a safe bet that what was in
effect as of December thirty first will be what you
need to deal with in your return this year. There
is some past year end work that can be done
(06:28):
in terms of doing an IRA, or if you have
a business adopting a pension plan. It used to be
that self employes had to have their pension plan in
place or they defaulted to a simple IRA with off
the rack terms to it. That may be a little
more of a straight jacket than you wanted. Congress a
(06:51):
couple of years back changed the law. It isn't December
thirty first that you need the plan in place. You
need to do it by the time you file your
return including extensions. So people with a business, if they
haven't had a pension plan in place, had a decent
year last year, want to put some money aside and
a pension plan, can still adopt it. Those who are
(07:12):
on a W two, if their income is below the
phase out threshold, they can still do deductible iris. If
they'd rather, they can do roth iras.
Speaker 2 (07:24):
Yeah, roth ira. I think most people are beginning to
understand that you convert your four h one k into
a ROTH, you pay the taxes to convert it, but
then the money that is left over goes into the
roth will never be taxed again.
Speaker 4 (07:40):
Correct, Well, you've got to pay money on the money,
pay tax on the money going into the raw because
it's not deductible. So if you if you decide to
do a conversion, understand you can't undo it. Years ago,
you used to be able to Congress took that away
from us. So once you make the decision and make
(08:02):
the change, you're stuck with it.
Speaker 2 (08:04):
Yeah. And the theory on that is that your earning
power will probably not necessarily always, but probably diminish upon
your retirement.
Speaker 4 (08:17):
Correct, not your earning power, but your overall income if
you are not going to solder on in the workforce
beyond your retirement date.
Speaker 2 (08:28):
Yeah. So the idea is you probably if you're relying
upon either a pension or social security some combination thereof,
and you've left a job, your your tax rate probably
would be higher through the time that you work, and
once you actually retire, your tax rate is going to
go down. So therefore, when you go and you take
(08:51):
your money out of your your wroth account, it's it's
going to be taxed at a lower rates. As a consequence,
there'll be no tax. There'll be no tax on it.
Speaker 4 (09:02):
It's not necessarily no tax, but a lesser tax. If
you don't have a substantial accumulation to your benefit of
a pension plan, if you've been packing money away and
the market has been rewarding you with its rise over
the last some years, you may in fact have a
balance in your account that can produce an income that,
(09:24):
in combination with Social Security benefits, pushes you into the
same or a higher bracket. In that case, doing a
wroth conversion will pay the tax now at the turnent
rates in case they rise in a later year, and
you need never tap the wroth if you choose not to,
or if you do and you have it in there
long enough five years, whatever comes out is tax free
(09:50):
and doesn't impact your Medicare charges and your income levels
and your tax rates.
Speaker 2 (09:57):
Yeah, they just don't make it simple. Guess Mark Misselbeck.
Mark is a CPA. He knows his stuff. He's the
core tax director. I'm not familiar with the phrase core
tax director. Is that a new phrase or is that
a phrase that I should be familiar with?
Speaker 4 (10:13):
Nolly, Different firms have different designations. Principal director, partner, echley partner,
non equity partner, profit participant. It's all over the lot.
It's stratified. And the higher up you get, the bigger
(10:34):
the title.
Speaker 2 (10:35):
The bigger the title. Okay, fair enough. I wasn't sure
if there was a meaning that I was missing. He's
with Cherry Beckett Advisory LLC. We'll give at some point
later on tonight. They're located in Waltham, pretty easy to
find if you're interested. But now it's an opportunity for
you to get some free tax advice. If you have
a question six one, seven, two, five, four, ten thirty,
(10:58):
six one seven thirty, do not hesitate. Feel free. As
I've often said, there is no such thing as a
dumb question. If you you may be able to save
yourself some aggravation. So feel free to join the conversation.
We're going to take very quick break, be back with
Mark Misselbeck, and my call is questions, So feel free
(11:20):
just dial that number and ask away. This is not
going to cost you anything, and it may save you
some money in the long run or in the short run.
Back on night Side right after this.
Speaker 1 (11:30):
Now back to Dan Ray live from the Window World
Nightside Studios on WBZ News Radio.
Speaker 2 (11:38):
We're talking taxes. April fifteenth is the deadline. April fifteenth
this year? Does the Patriots Day celebration get us an
extra couple of days?
Speaker 3 (11:49):
Mark?
Speaker 2 (11:49):
Do you know that off the top of your head?
Speaker 4 (11:52):
It's April fifteenth, and it is Patriots Day that gets
you extra time?
Speaker 3 (11:56):
Anymore?
Speaker 4 (11:57):
It's Emancipation Day down on DC.
Speaker 2 (12:01):
Yeah, I see. Yeah, okay, well Patriots Day here is
the twenty first, so tax Day is indeed the fifteenth.
And if people one thing people should know, and I
think we could should get this out quickly, and that
is that people have a right to seek an extension,
a six month extension automatically, but they have to make
(12:22):
a good faith effort to pay the taxes owed by
April fifteenth. Can you explain that a little bit better
than I can explain it. So people, if they're up
against the deadline and they know they're not going to
make it, they do have an option.
Speaker 4 (12:35):
Yeah, based on your information that you have in hand,
you make your best reasonable estimate of your taxes, do
and pay in what you haven't paid so far. We
usually think about putting in the first quarter estimate because
(12:56):
the people who have that problem usually have to pay
estimates and thereby increasing by that depositing that first quarter
estimate an additional level of security against a surprise income
coming in the door from somewhere they weren't anticipating. Then
(13:16):
their first quarter estimate is short, they can make it
up with June the second quarter, and they only suffer
a charge of two months interest for not having paid
the first quarter correctly.
Speaker 2 (13:30):
Tell you it's keeping the rules in your head. You
always amaze me. Let's go to phone calls. We got
John in Dorchester, starts us off tonight. Hey, John, welcome
your first This Hour with Mark Misselbeck talking taxes. What's
your question? What do you call it? John?
Speaker 5 (13:47):
So, thank you Dan, and thank you Mike. I appreciate
your help and what you're doing. Absolutely, I am. I
filed twenty twenty three last year on time single and
I'm sixty five now I'll be sixty six in May.
But I didn't do twenty twenty two. But my understanding
(14:10):
is it's not too late to file, so I could
file for that. And why did you do that?
Speaker 2 (14:17):
John, John woll Woa, WHOA, what do you mean you
you didn't do twenty twenty two, which would have been
ding April at twenty twenty three? Did you just forget
or did.
Speaker 5 (14:26):
You had had I had some health issues going on.
I took care of all the I took care of
all the other years and that effect they just I
just got a refunded enough.
Speaker 2 (14:36):
Okay, so let me come back. I just want to
understand and I want Mark to understand. So you never
filed twenty twenty two. Do you think your owed tax
you have to file, But do you think your owe
taxes did that?
Speaker 5 (14:49):
I want to say that I'd be surprised if I
wasn't getting a refund. Okay, I'd be surprised if I
wasn't getting a refund.
Speaker 2 (14:59):
Okay. So so let's find out from Mark what sort
of jeopardy you're in. You as I'm sure you probably know,
you're supposed to file. Correct Mark situation as John presents it,
presents it. He didn't file. He had some health complications
and he thinks that he should be doing a refund.
(15:20):
What's the best guidance for him?
Speaker 4 (15:23):
File and file as soon as you can. If you
wait another two years, you may you still have the
obligation to file, and the statute of limitations, which runs
typically three years from filing, will start when you submit
the return. The problem is if you go three years
out from the original do date, the refund may not
(15:47):
be due you any longer. He may be shut out
from it. So you need to get on your horse
a little bit. And if you're owed money, there may
be a small late penalty for not having filed timely.
But there should be no penalty for under payment. And
there is a program with the IRS. If you are
(16:08):
a first time penalty assessment and you haven't had penalties
assessed in the last three years, and use this first
time escape patch, you can ask them to waive the
penalty under that program.
Speaker 5 (16:23):
Is that what they call the amnesty program?
Speaker 4 (16:26):
No, no, no Mass had an amnesty hasn't had or
has an amnesty program going on. I think it may
have been shut down by now. It was a second
one in the last decade that you could file, pay
your taxes, pay the interest and not get hit with penalties.
But no, this is just an abatement program on first
(16:47):
time penalty assessments first time, the first time in the
last three years.
Speaker 2 (16:52):
Okay, but remember John, you got your mass resident I assume,
so did you file in twenty twenty three, either for
state or federal or.
Speaker 5 (17:01):
I took care of twenty twenty three on time, which
was I was supposed to do when things worked out
well in my half.
Speaker 3 (17:09):
Okay, and both authorities.
Speaker 5 (17:11):
And then like I said, this year, I am you know,
I'm sixty five this year, so I know there's a
I think there's a special exemption right off if you're
sixty five, I think it might be a twenty five
hundred dollars exemption. I could be all, well.
Speaker 4 (17:24):
Listen, it's an increased standard deduction in the deduction, but
under deduction, those who attained a certain age get an
extra right off both state and federal because the state
is a little bit less the Fed is a little
bit more.
Speaker 5 (17:44):
Yeah, I could be as I want to say. They
said it was twenty five hundred. I could be, well,
but I think that's what they said. I don't know
if that's a total pan off, but that's what they said,
it was twenty five hundred.
Speaker 2 (17:55):
That assumes you're filing a standard with a standard deduction,
not not to deducted.
Speaker 4 (18:01):
Okay, s sixty five and twenty twenty three, you got
an extra eighteen hundred and fifty dollars. In twenty twenty
four it'll be nineteen hundred and fifty dollars as a
standard deduction.
Speaker 2 (18:13):
I want to come back to my original question, John,
what was the tax year that you failed to file
and did you fail to file for both federal and
state or did you fail to file for just one?
Speaker 5 (18:26):
Twenty twenty two was the and I unfortunately and file
for both federal law state.
Speaker 2 (18:32):
Okay, but I held hopefully you got the answers that
you need here. Is there anything that you need to
clear up with with Mark before we let you go?
Speaker 5 (18:42):
No, I are you answered all my questions. But I
greatly greatly appreciate it and appreciate you volunteer any time
now that Mark, and again you always do a great job.
And welcome back whatever year it is, Mark twentieth or
fifteenth or whatever it is.
Speaker 2 (18:56):
At least fifteen, at least fifteen. Yeah, all right, thank
thanks you. I appreciate you getting us going here. You
broke the ice. Thanks my friend.
Speaker 5 (19:03):
Math wasn't my strong point. That's why I always sat
next to the spotkits.
Speaker 2 (19:06):
But not that you'd look on the paper or anything
like that for answers.
Speaker 5 (19:13):
The chiefs would ask a question if I go that way?
They did.
Speaker 2 (19:17):
I didn't do it intentionally. Yeah, we got it, all right,
Thank you, John, appreciate it.
Speaker 5 (19:20):
Okay, Well, God bless thanks again.
Speaker 2 (19:24):
That was a good one to start off with. Mark.
We'll we have other callers on the line and waiting,
and one line open at six one, seven, two, five,
four ten thirty that John just left and one line
at six one, seven, nine, three, ten thirty. My guess
is Mark Misselbeck, CPAH. He has an extraordinary knowledge of
(19:44):
tax law and uh, he always amazes me. He's a
core tax director at a firm called Cherry Beckert Advisory LLC.
They're located in Waltham and will give ways in which
you can contact him if you want. He has plenty
of work and I'm surprised that he's always as generous
with his time, but he is. It benefits me and
(20:05):
it benefits you if you take advantage and dial the calls.
We'll be back on Nightside run after this break, news break,
this news break, and they think I have one commercial
to read and then we'll be done for the night.
On the commercials, it's Night Side with.
Speaker 1 (20:21):
Boston's News Radio.
Speaker 2 (20:23):
My guest is Mark Misselbeck. He's a CPA. He takes
your tax questions. He done it, He's done it with us,
he did it with David bread Noo. As a matter
of fact, how many years did you did you coordinate
with David brednege on this.
Speaker 4 (20:35):
Mark, I gotta be either ten.
Speaker 2 (20:39):
Yeah, yeah. David's great friend, great guy, and I'm happy
to carry on to tradition with you and appreciate you
spending some time with us. Tonight, let me go to
Pat in Waymouth. Pat, you are next this hour with
my guest Mark Misselbecker.
Speaker 6 (20:52):
Right ahead, Pat, Hi, Dan, thanks for taking my call,
and Mark, thank you for any advice you can give me.
Seventy six years old, I've always filed as individual short form.
This year I was awarded a lawsuit proceeds, and I
understand that that those proceeds that I was awarded are
(21:16):
not textical.
Speaker 4 (21:20):
It depends upon the nature of the claim, what you
base the claim on, and I would have to get
into it with you as to what that lawsuit claimed
in order to obtain the settlement. In order to make
the determination, you need to.
Speaker 6 (21:40):
Say yes, and I do have an appointment. But yeah,
it was a motor vehicle accident and the f fault
driver went over double line and hit me head on,
and of course my car was total and I was
in the hospital for two days.
Speaker 2 (22:00):
And I think you were not this was this was
a torch claim. You were injured and you you want
some money a Mark, I.
Speaker 6 (22:13):
Was was boarded money.
Speaker 4 (22:16):
You said, yeah, okay, yeah, all right, now if it
if the basis of the claim is your physical injuries.
Compensation for physical injuries is typically going to be untaxable, okay,
And anything else would be taxable. It was replacing wages
or income earning capacity, that's probably.
Speaker 3 (22:39):
Going to be taxable.
Speaker 7 (22:40):
Okay.
Speaker 6 (22:41):
No, it would be all for the physical I was
in the hospital for two days and I underwent a
lot of tests, and so.
Speaker 2 (22:50):
Your medical pain, medical and pain and suffering and things
like that, I assume.
Speaker 6 (22:55):
Oh yeah, oh yeah. When I got out of the
hospital it was twenty seven.
Speaker 2 (22:59):
I was telling you that you made that you that
your tax advisor is probably going to tell you. And
again you have to listen to your own tax advisor
that you might be okay, any other question or.
Speaker 4 (23:09):
Know The only thing I would say further is to
disclose it in the return that you received the settlement,
but it was for this particular problem or event, the
physical damage, and that therefore under and your advisor will
(23:29):
look up the code site, the tax code site, and
cite that particular provision that makes it exempt.
Speaker 2 (23:37):
You know, Mark, while we're talking about this, I'm going
to ask you a question, because you know a lot
more about this than I do. And when I was
in television. I was able to help some men get
out of prison for a wrongful imprisonment by corrupt FBI agents,
and the client that we were advocating for was awarded
approximately thirty two million dollars, which he actually he received for. Again,
(24:02):
it was a taught claim, a federal torts claim where
ages of the government were found to have been to
wrongfully and intentionally imprison this gentleman for thirty years for
a crime that he had nothing to do with, that
he did not commit. I don't know the answer to
the question, but I'm just curious. Obviously that was money
(24:22):
that he was was awarded for wrongful imprisonment. How do
you think that would have been treated from a tax
point of view.
Speaker 4 (24:32):
I think it's going to be taxable as compensatory.
Speaker 2 (24:36):
Yeah, boy, that's tough to think about.
Speaker 3 (24:38):
Uh.
Speaker 2 (24:39):
And And I'm curious because it seems to me that
if the government was forced the government, you know, was
the one that put him in this situation, and the
judge determined that he would be awarded that money, and
(24:59):
I think it it was taxable. It just seemed to
me so unfair at the time that you that you
that you lose thirty two, you'll lose thirty years of
your life, which it kind of worked out to about
a million dollars a year, which sounds like a lot
of money. But spend spend one year in prison, and
tell me what you think it's worth. And so if
it's categorized as compensatory, which I guess it was, that
(25:21):
just seems to me inherently unfair, particularly when it's the
government that has caused.
Speaker 3 (25:25):
Lay a minute time out.
Speaker 4 (25:27):
And I keep saying to people, give me the certificate
of fairness in the tax arena.
Speaker 3 (25:33):
Yeah, okay, nobody's produced one yet. I got it a
broad brush.
Speaker 4 (25:38):
The broad brush of the Congress states all income from
whatever source derived is taxable unless there's another provision that
they enact that exempts it from taxation.
Speaker 3 (25:50):
But it just in the.
Speaker 4 (25:51):
Personal injury for physical damages to your body that's excludable.
Speaker 3 (25:59):
Yeah, this will.
Speaker 6 (26:00):
Excludable for Catt.
Speaker 4 (26:04):
Yeah you're gonna be okay, Pat, But again, follow the
advice of your tax advisor.
Speaker 2 (26:10):
I gotta keep rolling pad. Okay, next so much? Yes, okay,
let me go next to Michael in Boston. Michael, you're
next on nice side with Mark Misselbeck.
Speaker 8 (26:21):
Go ahead, Michael, Hi there, thanks for taking questions.
Speaker 5 (26:26):
Welcome.
Speaker 8 (26:27):
If we take a trust, an irrevocable trust, let's say
not that it might make a difference. And as long
as the grantor of that trust is alive, he not
only does his own ten forty and form one for
the state, he also does a ten forty one federal
and a two A for the state. So taxes from
(26:50):
the trust, the interest and dividends from the trust, he
is still responsible the grantor of the trust as long
as he's alive. Now the granted is no longer with us,
the beneficiary is able to receive the stated amount and
the trust, let's say five thousand dollars a month, to
(27:11):
pick a figure. That is my understanding is you, I'd
like you to confirm please that that is not tax
He'll put it on his return if it's taxable. But
it only would be taxable if he would withdraws that
sixty thousand dollars a year from the principle of the trust,
(27:34):
not the interest in the dividends.
Speaker 4 (27:38):
Well, first off, when you say irrevocable trust, there are
two flavors. One is an irrevocable trust that is taxable
in its own right. What you're describing is a circumstance
of an irrevotable trust where the terms cannot be changed,
but within the terms there are provisions that cause it
to be taxable to the grand tour as though it
(27:59):
were still their assets and their income during their lifetime
on their death. If the terms of the trust mandate
a five thousand a month distribution, it will be taxable
to the recipient, the beneficiary if there is sufficient income
(28:19):
generated in the trust to support that payment. That is,
the first money out of the trust is the income
generated by the trust. If the payouts exceed the income
for the year, then the trust is dipping into principle
that's already been taxed, and that piece would be none taxable.
Speaker 8 (28:39):
Okay, But does it is he committed to take just
to dividends or can take the He can't take the
principal from the start.
Speaker 4 (28:48):
No, he cannot choose to take the principle from the start.
The tax on mandates that you the income. The obligation
to pay the taxes on the income transfers with the
cash flow, so it drains out of the trust first
to the recipient.
Speaker 8 (29:05):
Okay, cash the interesting dividends.
Speaker 4 (29:11):
Interest dividends, and if the trustee has the ability to
designate and the state law permits it, they may designate
that the capital gains as well as income rather than
capital or principle, that's a trust to trustee has to make.
Speaker 5 (29:29):
I see.
Speaker 8 (29:31):
Okay, the beneficiary is the trustee.
Speaker 4 (29:35):
Then they need to consult with somebody as to whether
or not that's a beneficial election to make. Once made it,
you're going to be bound by it and going forward,
capital gains, if treated as income at the start of
the payout, will forever after be income to be distributed
to the beneficiary.
Speaker 8 (29:54):
Okay, Dan, can I asked you another question? Or no?
Speaker 2 (29:57):
No, go ahead? Sure.
Speaker 8 (29:58):
Oh it's kind of confusing on the r m D. Yeah, yeah, people.
Speaker 2 (30:09):
I just want to explain it so that people Mark
understands they want to make the audience allowed that if
you have an obligation, if if you have a four
to oh one K, which now is a pot of gold,
and you're required based upon how old you are to
(30:32):
take out a certain amount of money required minimum distribution
every year. It depends upon how old you are set
to Mark. We'll get into that, but I just want
people to understand that a required minimum distribution is a
good thing to have. Go ahead, Michael.
Speaker 8 (30:46):
Okay, So on the federal it's clear that that in
full is put on my return because it was previously
deducted over forty years every year and I never paid
any tax on the interest that it produced on the
state return. It's confusing. It gives you a little worksheet
(31:11):
and it says, take your RMD for this year and
subtracted from previous taxes on contributions. I don't understand why
would there be a tax on a previous contribution. I
don't know of any that I have. I don't understand that.
Speaker 4 (31:27):
Okay, here's the deal. Federally, you could pay into an
IRA many years ago. It was deductible regardless of income level.
The last number of years you could potentially make the contribution,
but if your income was too high, you wouldn't get
the deduction. That's on the federal level. MASS has never
(31:50):
allowed a deduction for an IRA contribution. So if you
have your records and can assemble from those records or
from the custodians records telling you how much you contributed
each year, the total of what you contributed into the IRA,
that was never deducted for Mass purposes. That's all tax
paid money as far as Mass is concerned. And the
(32:13):
first dollars out are charged against or recoupment of those
non deductible already tax moneies until you get it all
back thereafter it's one hundred percent taxable for Mass. That's
what the work she is telling you.
Speaker 8 (32:29):
I see, Okay, it's kind of confusing, at least for me.
Speaker 5 (32:32):
Yeah, okay, I guess you carried it up.
Speaker 8 (32:34):
Thank you so much.
Speaker 2 (32:35):
Appreciate you, Thanks, Michael, appreciate the call.
Speaker 8 (32:37):
Thank you, thank you.
Speaker 2 (32:39):
Six seven two four ten thirty one line there, six
one seven nine three one ten thirty one line there.
Back we have Janice, We have a Harriet. Harriet, Janice
and Mary. Uh again, be more than happy to get
as many calls as we can, and then we might
even take this into the next hour, folks, So stay
with us right after this on said.
Speaker 1 (33:01):
Now back to Dan Ray live from the Window World
Nice Sin Studios, i' WBZ News Radio.
Speaker 2 (33:09):
My guest is Mark misslbeck CPA.
Speaker 4 (33:11):
Uh.
Speaker 2 (33:12):
He is our tax expert, has been that one for
fIF fifteen years.
Speaker 5 (33:17):
Uh.
Speaker 2 (33:17):
He is with a firm called Cherry Beckert Advisory LLC
and Mark, we have full line, so I think we're
gonna continue on with your UH as long as you're
willing a little longer than we than we had expected.
Let's go to Harriet and Lowell. Harriet, you're with Mark
Misselbecker right ahead, and Harriet.
Speaker 7 (33:37):
Harriet, Hi, Hi, thanks for taking my call.
Speaker 9 (33:43):
My husband and I filed a joint tax return and
we went with H and I Block. And it's now
a year and we were supposed to get a refund
for at least two thousand dollars and we have got nothing.
We want to know if we do, it's something wrong.
We've contacted them. I don't know what the problem is,
(34:04):
and they keep saying they're looking into it and nothing
gets done.
Speaker 2 (34:08):
Well, Mark is not with H and R Block. First
of all, let's let's make that I know that, okay,
there sometimes can be a problem. I know that out
of COVID, and Mark correct me if I'm wrong. There
were some refunds, legitimate refunds that were withheld because people
had not established an account with the federal government. Do
(34:34):
you know of what I speak there?
Speaker 4 (34:38):
Not particularly, but I can think they're off hand of
two circumstances one, did you pay per file or did
you electronically submit through HMR block.
Speaker 7 (34:50):
Electronically?
Speaker 4 (34:52):
Okay, So the first problem of paper going into the
IRS and getting lost, misplaced, or treaded is not the issue.
The secondary issue is there may be a conflict that
somebody stole your identity and file the return before you did.
Speaker 3 (35:12):
That.
Speaker 4 (35:12):
You need to contact the Taxpayer Advocate Service at the IRS.
Look on the web for that particular designation. They have
an eight hundred number and they are in the JFK
building downtown Boston. I don't know if you want to
go in there. If you do, they screen you along
the lines of what the TSA does at the airport.
(35:34):
They will look at your metal objects and so forth.
But if you go in there, either the tax per
Advocate Service or the help desk, but they usually have
lines there. So contacting the Tax pay Advocate Service to
me is the better avenue to go explaining the problem
(35:56):
and have available from H and R Block the confirmation
of acceptance of the return through electronic filing that they
are supposed to have received back from the government to
documentary the.
Speaker 7 (36:13):
Return was there right then they required something else like
in September, which again it was electronically accepted that they
received the paperwork, and again we filed in February of
last year.
Speaker 2 (36:30):
Let me help you out here, Harriet. Okay, yeah, let
me let me help you out here. You're in Lowell.
So your congress congressional office is Lori Trehan.
Speaker 7 (36:40):
Correct, Well, actually I live in Tewksbury.
Speaker 2 (36:45):
Okay, who's your congressman.
Speaker 6 (36:47):
Who's my congressman?
Speaker 4 (36:49):
Well, you can take let me let me.
Speaker 2 (36:51):
Shot Glori Trehan would be Seth Molten.
Speaker 4 (36:55):
Dan I had. I had a big problem with the client.
I wanted to get the congressional delegation involved, and I did,
and I found out afterwards. All they do is referred
over to the tax for advocate service they do.
Speaker 2 (37:08):
But in most congressionals, in most congressional offices, they have
a liaison. And I can speak to personal knowledge of this.
If you ask for the liaison, you can avoid going
into the into the JFK building. And if if you
deal with either Trahan or Moulton, there are two vult
(37:32):
Malt Moulten. Okay, Carl Milton's office, Tell them that that
you called night Side uh and that they you'd like
to find out if they could advocate on your behalf.
Try that first. It will save you going into Boston.
If that doesn't work, then you may have to do that.
But there are individuals in these congressional offices.
Speaker 3 (37:56):
Yeah, don't forget.
Speaker 4 (37:56):
You've got two senators also that you can bring in
on the deal.
Speaker 2 (38:00):
It's true. But I think that that that Molten would
do a good job for you. And I really mean
that because I have had personal experience where once you
get your congressman's office involved, you know, particularly if you're legitimate,
and you sound like you're totally legitimate, they can track
this down. And if you were, as as Mark suggested,
(38:21):
the victim of someone else stealing your check, they can
they can track that down. It's started that way, and
start just with the local office. I think Seth's local
office is one of his local offices is in Salem. Okay, right,
all right, hope that helps.
Speaker 9 (38:39):
All right, Thank you Dan, Thank you Mark.
Speaker 2 (38:41):
You're welcome to post it on it and feel free
to call me back and let me know. Okay, Thanks, Okay,
all right, good night, Mark. We have full lines and
we got a little bit of a news break here,
so I would again thank you very much for joining us.
Let's stick with it. You can get up, stretch your legs,
get a glass of water, and one quick comment.
Speaker 4 (39:04):
Yeah, these these identity thefts are rampant, and anyone can
request what is known as an ip pin for electronic
filing by going to the IRS website and requesting one.
At this time of year, You've got to wait for
it to come, likely in the mails for several weeks,
(39:24):
but it will then authenticate that the return you're submitting
with that TIN number is the correct return.
Speaker 2 (39:32):
Yeah, and I think that's what I went through a
few years ago. It was after COVID, So I think
she I think I've given her good advice. I know
that is not tax advice, but I think that the
congressional offices will will in this case, Molten's office will
help her out. And a Ken Harritt, if you're listening,
let me know how you make out on that. We'll
(39:52):
be back with Mark misselback right after the ten o'clock news.
More questions right here on nightside. Your tax question is
the only line six months seven A nine, three, one,
ten thirty
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