Tax Attic

Useful tax tips and information from Jerry Coon of Action Tax Service.

The Tax Attic

May 20, 2015 // 0 Comments

Next Monday is Memorial Day and it is our chance to honor veterans, both living and those who have passed on, who gave up portions, and in many cases all, of their lives to defend our country. Since the beginning of our country, approximately 42 million men and women have served in our military. Over 600,000 have died in various battles in those 200 plus years. Many of the remaining 42 million have now also passed on like my dad, Floyd Coon; my father-in-law, Jim Veenstra; and my friend, Bob Hext. Last week, I attended Bob’s funeral, a World War Two vet who gave up four years of his life to serve in North Africa and Italy. He did meet his wife, Evelyn, a native of Wisconsin, also in Italy fighting the war, so I believe he thought that was a fair trade. They spent over 60 years together and both were wonderful people. The Kent County Honor Guard performed its ceremony to close out the funeral. Even though I have heard the speech and watched the six-gun salute multiple times, listening to the playing of taps provides a very emotional ending to the ceremony. For Mr. Hext, it was a fitting ending to a life well-lived.   So what is the history of Memorial Day? It started on May 5, 1868 when General John Logan, Commander of the Grand Army of the Republic, issued General Order No. 11: “The 30th of May, 1868, is designated for the purpose of strewing with flowers, or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village, and hamlet churchyard in the land.” Memorial Day was called Decoration Day until Congress changed the name and the date to the last Monday in May. It’s a great holiday. Take a look around any cemeteries across this great land and you will see flags on the graves of millions of vets. There are Memorial Day parades through-out our land as there will be in Rockford. We are truly fortunate as a country to have millions of citizens who have served in one of the branches of our military to protect and preserve our […]

Tax Attic

May 13, 2015 // 0 Comments

The Coons have done something for the last several years that I believe not many Michiganders do. To kick off the camping season, we go camping for the first weekend in May down to Northern Indiana. The weather is usually at least a week warmer and, in most years, spring has sprung. The downside is Indiana seems to get more spring-time rains than West Michigan so it can be pretty wet. We did get two gully washers and some sprinkles last weekend but for the most part, it was dry and sunny. Of course, the first camping trip of the season is always an adventure. Put the trailer away in the fall in perfect condition. Open it up in the spring and Murphy’s Law strikes. Usually it is little things that need to be fixed but over the years we have run into some major fixes. One year, I put up the awning and it made a crunching sound as it snapped into place. When I tried to put it down, no dice. The awning mechanism was broken. Fortunately, this was pre-Indiana days and we were camping at Wabasis Lake so Woodland Trailer was able to send out a technician to help us. One year, we had no hot water. Labor Day at Muskegon State Park; plenty of hot water. Come May in Indiana; no hot water. The hot water heater just quit working. I successfully fixed that by installing a new electronic sensor after quite a discussion with a technician. This year, Deb got a small tingling shock when she touched the door casing of the trailer. That’s not good when you are hooked up to the campground’s power. I’m not as perceptive as Deb so I could touch the trailer anywhere and not get a poke. But we would all agree that is a dangerous situation especially since the electric outlets are of the ground-fault variety and the ground faults were not breaking. Woodland Trail has our unit and we are depending upon their repair abilities once again. We are hoping that they can put Murphy’s Law in its’ place and fix this strange situation.   Another strange situation we tax professionals are encountering today is one that I have written about before. […]

Tax Attic

May 11, 2015 // 0 Comments

Last Friday evening, the Rockford Area Community Endowment (R.A.C.E) held their annual Recognition Banquet at the Rockford Sportsman’s Club. It was a wonderful event and not just because the dinner, dessert, drink and key-note speaker, Tom Rademacher, were excellent. It was excellent because we all gathered to induct three individuals to be honored at R.A.C.E.’s Recognition Plaza in Peppler Park at the Rockford Dam. Don Kurylowicz, Steven R. Servaas, and Lyle Squires all met the requirements to be so honored. As R.A.C.E.’s brochure states “Our Recognition Plaza honors those Rockford Area individuals/organizations that have achieved significant accomplishments in their lifetime through career, community or personal success.” Don is affectionately called “the Mayor of Cannonsburg”. He has quite the imagination and is a tremendous entrepreneur. Steve is better known as “Judge”, now retired after 42 years on the bench. He is a well-respected jurist and his time as a Judge was characterized by fair but firm treatment to all those who entered his courtroom. Lyle, having passed away a few years ago, was represented by his son, Larry, and family members. Lyle served the community many years on various Algoma Township boards; owned more than one area farm; and also ran an auction business. All three of these fine gentlemen deserve to be honored. Our area is better off because they lived here. The group of twenty-two other individual inductees is also quite an impressive group including John Sjogren, the area’s only Congressional Medal of Honor winner, Smith Lapham, the founder of Laphamville which grew into Rockford, Clarence (Mr. Rockford) Blakeslee, and Robert Boyer. This summer, take a walk down to Peppler Park to see Recognition Plaza and plaques enshrined there to the entire group.   The economy must be getting a little better. We encountered a number of taxpayers this tax season who started new businesses. Not surprisingly, the Internal Revenue Service has a lot to say about the costs involved in starting a new business. Starting a new business can be expensive and the natural inclination is to want to deduct those expenses in the year spent. However, there is a place in time when money is spent before the start-up business has become a going concern. The expenses spent before that place in […]


April 24, 2015 // 0 Comments

Tax professionals have become very familiar with a relatively new term this tax season. It’s not a brand new term to the world at large. It’s just new to tax professionals because it hasn’t affected tax returns in a significant manner previous to this tax season. The term I am talking about is “poverty level” in relation to the income on a taxpayer’s tax return. A new credit called the Affordable Care Act’s Premium Tax Credit is substantially based on the taxpayer’s income in relation to the federal poverty level.   Another long-standing credit, the Earned Income Tax Credit is phased-out as the taxpayer’s income exceeds the federal poverty level. I just read an article about Proposal 1 stating that should Proposal 1 pass, taxpayers with incomes below the federal poverty level will actually see their income go up due to the Earned Income Tax Credit (EITC). According to the Michigan Center for Public Policy, if Proposal 1 passes, the average Michigan family with income above the poverty level will actually incur about $500 in new tax with the EITC being the wild card that puts money back into the taxpayers’ pockets after the sales and gas tax takes it out. How the EITC works will make a good future article but right now, let’s take a minute to examine how the Affordable Care Act’s Premium Tax Credit interacts with the poverty level to determine how much credit the taxpayer actually gets on the tax return.   When Congress passed the Affordable Care Act back in 2010, the vision at that time was to make it “affordable” through the use of the Premium Tax Credit. Taxpayers with incomes of between 100% and 400% of the federal poverty level would pay a reduced premium. People with incomes below the poverty level basically would qualify for Medicaid and would not have to buy health insurance. For a single taxpayer, 100% of poverty level is income of $11,670 and 400% of the poverty level is income of $46,680. For a family of four, 100% of the poverty level is $23,850 and 400% is income of $95,400. At an income level of 100% of poverty level, the taxpayer theoretically would pay an annual premium equal to approximately 8% of the […]

The Tax Attic

April 15, 2015 // 0 Comments

There was an interesting article in Sunday’s Grand Rapids Press concerning the Internal Revenue Service. The article detailed the fact that if you are a delinquent taxpayer in Texas and you owe the federal government less than $1,000,000, the Internal Revenue Service has admitted that it is not going to pursue the collection of that money. Now, that’s a stunning admission. According to the article, there are more than 1,000 taxpayers who owe between $100,000 to $999,999. There is no effort being made to collect the dollars from these taxpayers. The IRS’ collection efforts are being severely hampered by a variety of factors.   First, the IRS budget has been reduced by Congress over the past few years and especially for this year. The reasons given by Congress are many and some are quite legitimate including wasteful IRS spending and targeting conservative Tea Party groups for audits. However, these reductions have led to bringing the second factor into play.   Second, as personnel are leaving and retiring, they are not being replaced. Currently, there are 5,000 fewer revenue agents, fewer revenue officers, and fewer criminal investigators working on these delinquent tax cases than in the past. The IRS estimates that upwards of $2 billion in delinquent taxes nation-wide will go uncollected this year because of this lack of personnel. So, let’s get this straight. Congress cuts the budget. Taxes go uncollected. Congress needs that money to run the country. Those uncollected dollars then contribute to record deficits being racked up by Congress. This may be the perfect example of cutting off your nose to spite your face.   A third factor coming into play is the number of people and dollars increasingly being allocated by the IRS to the identity theft issue. More and more taxpayers are having their identity compromised and/or stolen. The IRS is being forced to allocate an accordingly increasing percentage of staff to this issue. This is a problem that is not going away. A solution must be found. Perhaps one solution would be to issue every taxpayer a private personal identification number. If that number doesn’t show up on your tax return, the IRS will presume that the return isn’t your return. They already do issue pins to those who […]

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