IRS Tax Tip 2017-26: Medical and Dental Expenses May Impact Your Taxes

joe b. nagel

Here is what you need to know if you are claiming medical/dental expenses as itemized deductions:

Medical expenses can trim taxes. Keeping good records and knowing what to deduct make all the difference. Here are some tips to help taxpayers know what qualifies as medical and dental expenses:

Itemize. Taxpayers can only claim medical expenses that they paid for in 2016 if they itemize deductions on a federal tax return.
Qualifying Expenses. Taxpayers can include most medical and dental costs that they paid for themselves, their spouses and their dependents including:

• The costs of diagnosing, treating, easing or preventing disease.
• The costs paid for prescription drugs and insulin.
• The costs paid for insurance premiums for policies that cover medical care.
• Some long-term care insurance costs.

Exceptions and special rules apply. Costs reimbursed by insurance or other sources normally do not qualify for a deduction. More examples of what costs taxpayers can and can’t deduct are in IRS Publication 502 , Medical and Dental Expenses.

Travel Costs Count. It is possible to deduct travel costs paid for medical care. This includes costs such as public transportation, ambulance service, tolls and parking fees. For use of a car, deduct either the actual costs or the standard mileage rate for medical travel. The rate is 19 cents per mile for 2016.
No Double Benefit. Don’t claim a tax deduction for medical expenses paid with funds from your Health Savings Accounts or Flexible Spending Arrangements . Amounts paid with funds from these plans are usually tax-free.
Use the Tool. Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to see if they can deduct their medical expenses.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return .

For more information regarding this or any other tax concern please contact Hoffman & Associates at 404-255-7400 or info@hoffmanestatelaw.com.

2013 Year-End Tax Planning: Personal Tax Considerations

As January 1, 2014 gets closer, year-end tax planning considerations should be starting to take shape. New tax legislation has brought greater certainty to year-end planning, but has also created new challenges. The number of changes made to the Tax Code and the opportunities these changes bring may seem overwhelming. However, early planning will help you to maximize your potential tax savings and minimize your tax liability. This letter is intended to be a mile-high view of some key year-end tax planning strategies.

Changes for 2013 and beyond

In 2012, year-end planning was complicated by the great uncertainty over the fate of the Bush-era tax cuts. For more than 10 years, individuals had enjoyed lower income tax rates, but these rates were scheduled to expire after 2012. Moreover, many tax credits and deductions that had been made more generous were also set to expire after 2012. In January 2013, Congress passed the American Taxpayer Relief Act of 2012, which made permanent many, but not all, of the Bush-era tax cuts and also some tax benefits enacted during the Obama administration. Congress also permanently “patched” the alternative minimum tax (AMT) to prevent its encroachment on middle income taxpayers. The result is much greater certainty in year-end tax planning for 2013 because we know what the individual tax rates are in 2014, how many tax credits and deductions are structured, and much more.

Of course, there are always complexities in the Tax Code. In 2013, two new Medicare taxes kicked-in (3.8-percent net investment income (NII) surtax and a 0.9-percent Additional Medicare Tax). In addition, the U.S. Supreme Court ruled that the federal government’s denial of recognition of same-sex marriage was unconstitutional, opening the door to allowing married same-sex couples to file joint federal tax returns and take advantage of other tax benefits available to married couples. Beginning in 2014, some of the most far reaching provisions of the Affordable Care Act will become effective: the individual mandate, the start of Marketplaces to obtain insurance and a special tax credit to help offset the cost of insurance.

Planning for expiring tax incentives

First, do not lose the benefit of some generous, but temporary tax incentives that are available in 2013 but may not be in 2014. Are you planning to purchase a big-ticket item such as a new car or boat? The state and local sales tax deduction (available in lieu of the deduction for state and local income taxes) is scheduled to expire after 2013, and you may want to accelerate that purchase to take advantage of the tax break. A valuable tax credit for making certain energy efficient home improvements, including windows and heating and cooling systems, and a deduction for teachers’ classroom expenses are also scheduled to expire after 2013. These are just some of many incentives that will sunset after 2013 unless extended by Congress. The window for maximizing your tax savings for 2013 is closing. Please contact our office for more details.

Planning for new taxes and rates

Some individuals may be surprised that they owe additional taxes in 2013, even with the extension of the Bush-era tax cuts. Three new taxes are in effect for 2013: the NII surtax, the Additional Medicare Tax and a revived 39.6 percent tax bracket for higher income individuals. The 3.8-percent NII surtax very broadly applies to individuals, estates and trusts that have certain investment income above set threshold amounts. These amounts include a $250,000 threshold for married couples filing jointly; $200,000 for single filers. It should also be noted that trusts will hit the highest tax rate with only $11,950 of retained taxable income.  One strategy to consider is to keep, if possible, income below the threshold levels for the NII surtax by spreading income out over a number of years or finding offsetting above-the-line deductions. If you are considering the sale of your home, and the gain will exceed the home sale exclusion, please contact our office so we can discuss any possible NII surtax.

The Additional Medicare Tax applies to wages and self-employment income above threshold amounts including $250,000 for married couples filing joint returns and $200,000 for single individuals. If you have not already reviewed your income tax withholding for 2013, now is the time to do it. One way to reduce the sting of any Additional Medicare Tax liability is to withhold an additional amount of income tax.

As discussed, ATRA extended the Bush-era tax rates for middle and lower income individuals. ATRA also revived the 39.6 percent top tax rate. For 2013, the starting points for the 39.6 percent bracket are 450,000 for married couples filing jointly and surviving spouses, $425,000 for heads of households, $400,000 for single filers, and $225,000 for married couples filing separately. ATRA also revived the personal exemption phaseout and the limitation on itemized deductions for higher income individuals.

Starting in 2013, ATRA also sets the top rate for capital gains and dividends to 20 percent. This top rate aligns itself with the levels at with the new 39.6 percent income tax rate bracket starts: capital gains and dividends to the extent they would be otherwise taxed at the 39.6 percent rate as marginal ordinary income will be taxed at the 20 percent rate. ATRA did not change the application of ordinary income rates to short-term capital gains. However, individuals should plan for the possibility of being subject to a higher top rate (39.6 percent).

Planning for health care changes

Before year-end, individuals need to review how the Affordable Care Act will impact them. The Affordable Care Act brings a sea-change to our traditional image of health insurance. The law requires individuals, unless exempt, to either carry minimum essential health care coverage or make a shared responsibility payment (also known as a penalty). Most employer-sponsored health insurance is deemed to be minimum essential coverage, as is coverage provided by Medicare, Medicaid, and other government programs. Self-employed individuals and small business owners should revisit their health insurance coverage, if they have coverage, before year-end and weigh the benefits and costs of obtaining coverage in a public Marketplace (or a private insurance exchange) for themselves and their employees. Small businesses may be eligible for a tax credit to help pay for health insurance. Individuals may qualify for a premium assistance tax credit, which is refundable and payable in advance, to offset the cost of coverage. Please contact our office for more details about the Marketplaces, and health insurance coverage for small businesses and individuals.

Individuals with health flexible spending accounts (FSAs) and similar arrangements should take a look at their spending habits for 2013 and predict how they will use these tax-favored funds in the future. In 2013, the maximum salary-reduction contribution to a health FSA is $2,500. Remember that health FSAs have strict “use it or lose it” rules, and the cost of over-the-counter drugs cannot be reimbursed with health FSA dollars unless you obtain a prescription (there are some exceptions).

Individuals who itemize their deductions also need to keep in mind the 10 percent floor for qualified medical expenses. This change took effect at the beginning of 2013. It means that you can only claim deductions for medical expenses when they reach 10 percent of adjusted gross income (for regular tax purposes and for alternative minimum tax purposes). There is a temporary exception for individuals over age 65 for regular tax purposes.

Planning for gifts

Gift-giving is often overlooked as a year-end planning strategy. For 2013, individuals can make tax-free gifts (no tax consequences for the giver or the recipient) of up to $14,000 to any individual. Married couples may “split” their gifts to each recipient, which effectively raises the tax-free gift to $28,000. Gifts between spouses are always tax-free unless one spouse is not a U.S. citizen. In that case, the first $143,000 in gifts made in 2013 is tax-free.

There are special rules for gifts made for medical care and education that can be a valuable component of a year-end tax strategy, especially for individuals who want to help a family member or friend. Monetary gifts given directly to a college to pay tuition or to a medical service provider are tax-free to the person making the gift and the person benefitting from education or medical care.

Gifts to charity also are frequently made at year-end. Through the end of 2013, taxpayers age 70 ½ and older can make a tax-free distribution from individual retirement accounts directly to a charity. The maximum distribution is $100,000. Individuals taking this option cannot claim a deduction for the charitable gift.

Planning for retirement savings

Year-end is a good time to review if your retirement savings plans and tax strategies complement each other. For 2013, the maximum amount of contributions that can be made to an IRA is $5,500, with a $1,000 catch-up amount allowed for individuals over age 50. Keep in mind that the maximum amount that can be contributed to a Roth IRA begins to decrease once a taxpayer’s adjusted gross income crosses a certain threshold. For example, married couples filing jointly will begin to see their contributions begin to phase out when their AGI is $178,000. Once their AGI reaches $188,000 or more, they can no longer contribute to a Roth IRA. For single filers the corresponding income thresholds for 2013 are $112,000 and $127,000. Please note that 2013 contributions, for tax purposes, may be made until April 15, 2014.

Traditional IRAs and Roth IRAs are very different savings vehicles. A traditional IRA or Roth IRA set up years ago may not be the best savings vehicle today or for the immediate future if employment and other personal circumstances have changed. Some individuals may be contemplating rolling over a workplace retirement plan into an IRA. Very complex rules apply in these situations and rollovers should be carefully planned. The same is true in converting a traditional IRA to a Roth IRA and vice-versa. Every individual has unique goals for retirement savings and no one size fits all. Please contact our office for a more detailed discussion of your retirement plans.

Planning for Small Businesses

There are also strategies available for small businesses seeking to maximize tax benefits in 2013.  Two of the business incentives scheduled to end or significantly change after 2013 are the bonus depreciation allowance and the enhanced section 179 expensing provisions.

Bonus depreciation is scheduled to end after 2013 if not renewed by Congress. Additional 50-percent bonus depreciation was extended by the American Taxpayer Relief Act of 2012 (ATRA, signed into law on January 2, 2013) for one-year only and applies to qualifying property placed in service before January 1, 2014. In the case of property with a longer production period and certain non-commercial aircraft, the extension also applies to property acquired before January 1, 2014 and placed in service before January 1, 2015.

Unlike regular depreciation, under which half- or quarter-year conventions may be required, a taxpayer is entitled to the full, 50-percent bonus depreciation irrespective of when during the year the asset is purchased. Therefore, year-end placed-in-service strategies can provide an almost immediate “cash discount” from qualifying purchases, even when factoring in the cost of business loans to finance a portion of those purchases.

An enhanced section 179 expense deduction is available until 2014 for taxpayers (other than estates, trusts or certain non-corporate lessors) that elect to treat the cost of qualifying property (so called section 179 property) as an expense rather than a capital expenditure. The current section 179 dollar cap for 2013 is $500,000. For tax years beginning after 2013, that dollar limit is officially scheduled to plunge to $25,000 unless otherwise extended by Congress. For tax years beginning in 2013, the overall investment limitation is $2 million. That level is also scheduled to fall to $200,000 in 2014. Please contact our office regarding how to best benefit from these provisions in 2013.

Georgia Tax Credits

The State of Georgia has several state specific credits against Georgia income taxes.  Many of you may be aware of or have utilized the Georgia Private School Credit.  Each year Georgia sets aside an amount of money which is available to taxpayers who qualify in advance for the benefit.  Married taxpayers can claim up to $2500 and single taxpayers up to $1000.  Since there is a finite amount available, the fund will be fully utilized well before the end of 2014.  If you wish to claim this credit, you should make it a New Year’s resolution and apply for qualification at the beginning of 2014.  You can get more specific information at http://www.gadoe.org/External-Affairs-and-Policy/Policy/Pages/Tax-Credit-Program.aspx or talk directly with your private school.  This credit is a win/win since you get every dollar up to the limit back on your tax return and you also get a federal income tax deduction on Schedule A if you itemize. 

The film industry in Georgia is entitled to tax credits.  The law allows these credits to be transferred to other taxpayers.  As a result, unused credits are being sold at a discount and you can purchase them to satisfy your Georgia tax liability.  Additionally, you get a full itemized deduction for the amount of the credit but you must report the discount as a short-term capital gain on Schedule D.  An additional benefit is that the credit is treated like withholding and can minimize or eliminate the need for estimated payments and possibly withholding.

A small but frequently overlooked credit is the $150 Driver Education Credit.  If you pay for your child to take a driver’s education course and get a certificate of completion, you are entitled to a credit of the amount spent up to $150.

It should also be noted that the income tax exclusion on retirement income, for taxpayers who are 65 and older, will increase from $100,000 in 2013 to $150,000 in 2014, $200,000 in 2015, and to an unlimited retirement income exclusion effective in 2016.

We have reviewed only some of the many year-end tax planning strategies that could help you minimize your 2013 tax bill and maximize savings.  Please contact our office to schedule an appointment to personalize your 2013 year-end tax planning.

For more information regarding this or any other tax planning concern, please visit the Hoffman & Associates website at www.hoffmanestatelaw.com, call us at 404-255-7400 or send us an email.

In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose. The information contained herein is provided “as is” for general guidance on matters of interest only. Hoffman & Associates, Attorneys-at-Law, LLC is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. Before making any decision or taking any action, you should consult a competent professional advisor.

2012 Year End Newsletter

Dear Tax Clients:

With the year coming to an end, as always, there becomes a heightened sense of emphasis on financial and tax planning. This is true now more than ever with the future of America’s tax code being so uncertain and with many tax cuts taxpayers have taken for granted for over a decade set to expire in 2012.  Knowing this, we at Hoffman & Associates, would like to help you by providing some general reminders, items of interest for the current tax year and some valuable planning tips for changes we are likely to see in the future. We hope these notes, as well as some general estate planning and business items that are of importance, will help you prepare for your 2012 taxes as well as for the future. However, as every taxpayer paints a different picture, we recommend contacting one of our tax and legal experts for reassurance or with any question you may have.

Individuals

Tax planning for individuals for both the 2012 year-end and forward will be complicated for a multitude of reasons, with the most important being that most of the Bush-era tax cuts are set to expire at year end.  This casts doubts about the renewal of many tax extenders, like the AMT patch, and makes the possibility of across-the-board tax hikes, including the new 3.8 percent “medicare” tax on investment income and .9 percent increase one earned income, a likelihood. Individual taxpayers will want to be sure to make the most of the favorable tax savings opportunities while they are available in 2012 because they may not see such favorable tax rules in the coming years.  Although Congressional action between now and the end of the year may cause more tax changes, we have summarized below some year-end tax reminders and tips.

Annual Reminders

  • Estimated Payments – Make your 4th Quarter Georgia estimated payment in December instead of waiting until January 2013, unless you are in an AMT situation (see “Current Year Items of Interest”).
  • Tax Withholdings – If you have not had enough withheld from your 2012 pay, or you have missed an estimated payment, you can opt to have more tax withheld from your paycheck before year end in order to cover this potentially costly mistake.
  • Sell Your “Losers” – Don’t forget to offset any 2012 capital gains. Married taxpayers can take up to a $3,000 capital loss ($1,500 for single filers). Be careful to avoid “wash sale” rules by not buying the same stock within 30 days before or after the original sale; otherwise the losses won’t count.
  • Retirement Plan Contributions – Have you made your contributions to your retirement plans for 2012? The deadline for all types of IRA contributions is April 15th, 2013, you can make these contributions before the end of the year.

Items Set to Expire in 2012

  • Consider Converting Your IRA – With an expected tax increase post-2012 and into the future, you may want to consider converting your Traditional IRA to a Roth IRA. You would owe tax on the IRA amount currently, to the extent it exceeds basis, but upon retirement when tax rates are expected to be higher, all the distributions from the Roth, if the holding period is met, would be tax free.   The conversion of traditional IRA’s to Roth IRA’s is not an all or nothing proposition.  Also, the maneuver is particularly attractive if you are experiencing an extraordinary low income or loss year.
  • Alternative Minimum Tax – Unless action is taken in Congress, the exemption for AMT in 2012 will decrease to $33,750 for individuals and $45,000 for married couples. Favorable legislation passed in the House and Senate earlier in the year indicating action will be taken to increase these amounts has yet to be enacted. Therefore, taxpayers should not assume this change will take place and should be prepared if there is no increase.
  • American Opportunity Tax Credit – This enhancement to the Hope Education Credit that allows for a credit of up to $2,500 per student for the first four years of post-secondary education expires after 2012.  If not made permanent by Congress in 2013, it will revert back to the less generous Hope Scholarship credit (maximum credit of $1,950 and available for only two years).  In contrast, the still available Lifetime Learning Credit is a per taxpayer per year credit and can be claimed for an unlimited number of years.
  • Student “Above-the-Line” Expense – The Qualified Higher Education Expense deduction for tuition and fees expired last year.  For those who will are paying off student loans, the student loan interest deduction after 2012 will be limited to five years and phased out at lower AGI levels.
  • Social Security Payroll – Most taxpayers can expect a smaller paycheck in 2013 due to Social Security Payroll taxes withheld reverting back to their normal amounts. The social security wage base for this additional 2 percent is $113,700 in 2013 (up from $110,100 in 2012) and also applies to self-employed individuals, whose self-employment tax on social security will revert back to 15.3 percent in 2013 (up from 13.3 percent in 2012).

Tax Planning Opportunities

  • Child Tax Credit – The child tax credit for 2012 is $1,000 per eligible child, but going forward will be reduced to $500. Taxpayers should plan ahead for this reduction as the refundable amount also will be limited for those with at least three qualifying children in 2013.
  • Increasing Tax Rates – The current percentage rates of 10, 15, 25, 28, 33 and 35 are set to  revert to the pre-Bush tax cut rates of 15, 28, 31, 36 and 39.6 percent. President Obama has  proposed to keep the current structure, but replace the 33 and 35 percent rates with the 36 and 39.6 percent rates for higher income tax payers. Because of potential tax hikes across the board, taxpayers should discuss their income projections and tax plan for 2013 with both their financial advisor and tax preparer to ensure adequate estimates and withholdings, especially since the 39.6 percent top rate does not include the 3.8 and .9 percent Medicare taxes.
  • Capital Gains/Losses and Dividends – Beginning in 2013, the tax rates for long-term capital gains and qualified dividends will change. The rates will move from zero percent for taxpayers in the 10 and 15 percent brackets and 15 percent for everyone else to 10 percent for taxpayers in the 15 percent bracket and 20 percent for everyone else, respectively. Dividends will be taxed at ordinary income tax rates (top rate of 39.6 percent, or 43.4 percent if the 3.8 percent Medicare tax applies.  Individuals should consider accelerating capital asset sales and C Corporations may want to declare and distribute special dividends before year-end).
  • 3.8 Percent Medicare Contribution Tax – 2013 also brings a new 3.8 percent “unearned income Medicare contribution” tax. The tax will target higher-income individuals, estates and trusts and will be assessed on the smaller of net investment income (NII), which is investment income minus allocable expenses, or the amount by which  an individual taxpayer’s modified adjusted gross income (MAGI) is over $200,000 ($250,000 for married couples). For estates and trusts, this tax applies to the lesser of undistributed NII or adjusted gross income (AGI) in excess of $11,950 for 2013. Estates and trusts should consider distributing NII to beneficiaries whose MAGI threshold is much higher.  Individual taxpayers, and certain estates with passive rental income, whose NII exceed MAGI and AGI thresholds, should re-do their triple net leases so they can actively participate in the management of their rental properties and avoid this 3.8 percent tax.  Income from taxable IRAs, social security and alimony is not investment income, but increases MAGI and could subject your NII to this tax.  Consider investing in tax-exempt bonds or funds which are neither included in AGI nor MAGI for investment income purposes.
  • Personal Exemption Phaseout and Pease – The personal exemption phaseout (PEP) and Pease (a limitation on itemized deductions) were repealed through 2012, but could be reinstated in 2013. A reinstatement of the PEP and Pease means taxpayers that have an adjusted gross income of certain amounts (estimates of the phaseout are said to begin at $178,150 for singles and $267,200 for those married filing jointly) will lose any advantage of personal exemptions and itemized deductions. Note that medical and investment interest expenses, gambling and casualty or theft losses are not subject to the Pease limitation.  Therefore, taxpayers should consider making additional gifts to charity this year.  Paying state income or real estate taxes in 2012 is a good idea too, unless you are subject to the AMT.
  • Medical Expense Deductions – As provisions for personal exemption phaseouts and limitations on itemized deductions are set to kick in, so is an increase to the threshold for the itemized medical deduction. Currently, medical expenses must exceed 7.5 percent of a taxpayer’s adjusted gross income (AGI) before they qualify as a subtraction to AGI. Beginning in 2013, the threshold will increase to 10 percent of AGI; however, individuals who are age 65 and older will be exempt from this increase through 2016.  If possible, taxpayers under 65 years old should take advantage now of the current 7.5 percent of AGI threshold by accelerating elective unreimbursed qualifying medical expenses.

Estate Planning

Estate planning is another important aspect of your financial well-being. This is an area of tax that is often convoluted and constantly changing. Some important and potentially drastic changes are set to expire in 2012. We have listed below the changes that we believe will have the most impact on our clients.

  • Estate and Gift Tax – The 2012 estate and gift tax rate is 35 percent with an exemption of $5.12 million. This will revert back to $1 million in 2013 as the maximum tax rate reverts back to 55 percent. Also, the portability rule allowing an individual’s estate or spouse to make the election on a timely filed federal estate tax return to utilize the “deceased spouse’s unused exclusion” amount (DSUE Amount) is set to expire.  If made, the surviving spouse’s unused estate and gift tax exemption amount available for gifting before the 12-31-12 expiration date, could be in excess of $10,000,000.  Therefore, individuals with significant assets should consider taking advantage of the higher gift and generation-skipping exclusions now.
  • 2012 Annual Gift Tax Exclusion – The annual exclusion for gifts free of any gift tax is $13,000 this year ($14,000 beginning in 2013) (married couples can gift up to $26,000) to each individual. Married donors can gift up to $26,000 in 2012 ($28,000 in 2013) per donee.
  • Year End Donations – When gifting to charitable organizations consider gifting securities that have appreciated. As long as you have held the securities more than a year, you take a deduction for their market value.

Business Planning

Business tax planning, like individual tax planning, will become just as difficult to plan for in the coming years because of the expiring tax incentives. The tips and changes we believe will be the most significant to our clients are listed below.

  • 2012 Section 179 Expense – Typically, for business property with a useful life of more than one year, the cost must be depreciated (deducted ratably over several tax years).  IRC Section 179 allows the business to fully expense the cost of eligible-tangible personal property in the year purchased.  The maximum amount in 2012 that may be expensed is $139,000 with a $560,000 investment ceiling placed on the purchase of all otherwise qualifying expenses.  In 2013, both the Section 179 expense and investment ceiling are scheduled to drop to $25,000 and $200,000, respectively.
  • Bonus Depreciation – Fifty percent first year bonus depreciation is allowed for the cost of new qualified property with a recovery period of 20 years or less placed in service (i.e., ready for use and not merely purchased) in 2012, but will expire at year end. Businesses should take advantage of these favorable expensing rules now while they are still available.
  • Dividends – Closely-held C Corporations may want to declare and distribute special dividends this year so shareholders may take advantage of the lower expiring tax rates and to avoid the 3.8 percent Medicare tax on investment income.

Additional Items to Note

  • IRS “Phishing” Scams – As was noted in last year’s letter, the IRS continues to battle cons taking advantage of taxpayers. They stress that the IRS does not solicit taxpayer information via e-mail and that any emails received from the “IRS” requesting personal information should be deleted immediately.
  • Audits – Taxpayer audits continue to be a problem for individual taxpayers. As the Federal government continues to struggle financially, the automatic notices for audits and penalties are sent out at a staggering rate. Please let us know if you receive any notice from the IRS as we are prepared to help you if you have any issues.

 As always, we encourage you to feel free to contact us with any concerns or questions you may have about your taxes.

HAPPY HOLIDAYS!

HOFFMAN & ASSOCIATES, ATTORNEYS-AT-LAW, L.L.C.

In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose.  The information contained herein is provided “as is” for general guidance on matters of interest only.  Hoffman & Associates, Attorneys-at-Law, LLC is not herein engaged in rendering legal, accounting, tax, or other professional advice and services.  Before making any decision or taking any action, you should consult a competent professional advisor.