"Stimulus News"


All of this could change as the final package is negotiated; however, this is where things stand now based on drafts of the legislation.

1. How much money?: $1,200 per adult and $500 for each of their children (final numbers could change).

2. Do I qualify?: People who make less than $75,000 a year or married couples who make less than $150,000 a year qualify. People who make more would still get some money, but the amounts decrease for incomes above $75,000 / $150,000. Caps on the maximum number of children is still being worked out.

3. Caps?: Yes. A single person with no dependents who makes more than $100,000 would not qualify. A married couple with a combined income above $200,000 and no dependents would not qualify. These numbers change if person or couple has children.

4. Do I make too much?: The IRS will use the 2018 tax return if a person has not filed for the 2019 tax year yet. If a 2019 return has been filed, then that is the return that will be used.

5. How soon?: Perhaps as soon as early to mid-April.

6. What if I don’t File Taxes?: Almost half the population owes zero in taxes and it is estimated that about 12% of the total population simply doesn’t file. These people would need to file with the IRS to get a check. It is still being worked out whether seniors on Social Security will get a check or a bump in their Social Security.

7. How will they find me?: As of right now, you do not need to fill out any special forms or go on any website to qualify. If you have filed taxes, the IRS (Treasury) already knows how to find you.

What taxpayers really think

By: Jim Buttonow


For the last two years, the Internal Revenue Service has surveyed taxpayers to find out what makes them comply with their tax obligations. The study – called the “Comprehensive Taxpayer Attitude Survey” is released with the annual IRS Data Book, a compendium of data related to tax filings and IRS enforcement and service activity. Prior to 2017, the last survey and study of taxpayer’s attitudes was from the IRS Oversight Board in 2014.

The Attitude Survey offers some interesting understandings on how taxpayers view the IRS and fellow taxpayers. It provides many findings about taxpayer needs and preferences – and what taxpayers value. Tax professionals can use this


information to gain knowledge about what clients want and how they like to be served.

Here are seven insights from the survey.


1. Our voluntary tax system is still intact

Taxpayers want to do the right thing. This is good news for the US Treasury. The Survey showed that 85 percent of all taxpayers think it is not acceptable at all to cheat on their taxes. This number is fairly close to the voluntary compliance rate (VCR) of 81.7 percent in the last IRS tax gap study. The VCR measures how much of the nation’s taxes are paid voluntarily by taxpayers. Now 81.7 percent may seem low — but is higher than most countries in the world with a voluntary tax system (refer to the Greek and Russian economies with large portions of their economies outside the taxing system).

An interesting finding in the survey was that only 50 percent of Americans mostly or completely agree that it was their responsibility to report tax cheaters. Taxpayers with lower incomes also felt more strongly about making sure taxpayers paid their “fair amount” of taxes. Taxpayers felt strongly that the IRS should pursue corporations and high-income taxpayers to pay their taxes.

Tax pros — our clients are motivated to get it right. They feel obligated to do the right thing – and that means that they will need your help and assurance that they are in good standing with the IRS.


2. Taxpayers are generally OK with the IRS

Trust in the IRS is up over the past 5 years – 71 percent of all taxpayers polled say they trust the IRS to fairly enforce the laws. (Note: The chart above reflects phone respondents only for 2014-2016, and phone and online respondents for 2017 and 2018; the percent of phone-only respondents who trust the IRS is even higher for 2018, at 73 percent.)

Also, more Americans thought that the IRS had a good balance of customer service versus enforcement and 58 percent of all taxpayers thought the IRS should get more funding from Congress to enforce the tax laws. Last year, only 56 percent of taxpayers believed the IRS needed more money. Taxpayers mostly want the extra funding to go to provide more phone and personal assistance to taxpayers.

Taxpayers generally trust the IRS to protect their tax account records from cyber criminals. Seventy-two percent of all those polled stated are confident in the IRS’s cyber protections.

Tax pros need not worry that the IRS will be replacing them — see No. 5 below. The person that they value the most is not the IRS — it is their tax professional.


3. Most people feel compelled to pay taxes — but they know there is a ‘stick’ if they don’t

Consistent with the findings that most taxpayers do not like tax cheats, personal integrity is still the No. 1 reason for voluntary compliance — 93 percent of taxpayers state they are influenced to pay (somewhat or a great deal of influence) by their personal integrity. That is good news for the IRS whose audit rate is at a dismal 0.5 percent.

However, taxpayers still think big brother is watching them — through information statements like W-2s and 1099s. IRS compliance enforcement and audits are still a mystery to most — and there is real fear of an audit that drives taxpayer compliance. 


Tax pros are expected to make sure that the return is accurate, and it matches the IRS third-party information statements (W-2s, 1099s). If a discrepancy exists, taxpayer “fear” is real – and tax pros should be prepared to help.


4. Taxpayers prefer not to visit the IRS

Many taxpayers would rather get a root canal than interact with the IRS. When interacting with the service is necessary, taxpayers prefer to deal with the IRS online or by phone. Much of this preference may also have to do with shifting customer service delivery expectations to internet-based service options. Dealing with your taxes is likely not an exception to this trend. Taxpayers over 65 still like to deal with the IRS by phone. Everyone else prefers more web solutions.

What everyone agrees on is that waiting more than 5 minutes to get ahold of the IRS is not acceptable. The IRS is sure to feel the pressure to accelerate its digital service solutions to create phone capacity and to meet modern service preferences. The IRS is currently undergoing a six-year initiative to modernize IRS systems and customer service platforms. The survey shows that taxpayers are already screaming for these solutions.

Tax pros- multi-channel customer service is critical. Your clients want you to be responsive. Likely communicating with younger clients via email and your website is preferred. However, older clients still expect you to pick up the phone and not to leave them waiting on hold.



5. Tax professionals are valuable resources – and the IRS should be able to regulate them

This is not a light-bulb moment. Taxpayers still prefer an advocate — their tax pro — when they need answers and advice. But taxpayers also see value in the content on the IRS website.

The survey also shows taxpayers value an independent interpretation of the tax law and how it impacts them. Reference materials from non-IRS sources are the preferred choice for taxpayers to get information about their taxes. 

But taxpayers want comfort that their tax pro is doing a good job. Over 90 percent of all taxpayers believe it is somewhat or very important that tax preparers meet competency and ethical standards to practice. This statistic has long been the IRS’s fuel for tax preparer regulation.

For tax pros, your visible credentials are important here. Taxpayers like accountability. Your website and communications with your clients should be informative and display your expertise.


6. The older you are, the more you need a tax pro

Again, not a revelation here. Taxes get more complicated as you get older – and as a result, the need for a tax pro increases. Also, younger taxpayers are more comfortable with technology to prepare their taxes. While 51 percent of all taxpayers use a paid preparer, paid preparer use drops to 32 percent for those aged 18-24. Those 65 and older still use a tax pro 61 percent of the time to get their taxes done.

Younger taxpayers tend to self-file more. But as life gets more complex, taxes get more complicated. Tax pros need to be in a position to offer advice to new clients on changing life events that trigger the younger self-filer to engage with a tax pro. Many tax firms’ websites greet these new clients with information about how the firm can help with new life events, such as starting a business.



7. 41% of taxpayers still must deal with the IRS outside of filing a tax return

This data point is always my favorite and it shows that taxes do not end for many individual taxpayers after April 15. In 2014, the IRS Oversight Board’s survey showed 43 percent had to deal with the IRS after April 15. Today, that number has not changed much — 41 percent of taxpayers must deal with the IRS after filing. Ten percent of taxpayers are contacted by the IRS, mainly through an IRS notice or letter. The other 31 percent contacted the IRS, mostly by interacting with their website or calling them by phone (only 2 percent sent an email, and the same percentage accessed IRS information through social media). Whether they needed help with a notice, a tax issue like an audit, a penalty, their tax account information, return status, or other information, the fact is: 2 out of 5 taxpayers need help beyond April 15.

What does this mean? For 41 percent of taxpayers, taxes don’t end at filing. 

Out of the over 150 million individual taxpayers, there are millions with a tax issue, problem or notice. Some examples: 27 million taxpayers each year have a penalty; over 15 million taxpayers owe the IRS back taxes; 3 million taxpayers received a CP2000 underreporter matching notice in 2018; almost 1 million got audited in 2018. The list goes on … . 

One other data point: 79 percent of the taxpayers who interact with the IRS outside of filing a return are satisfied with their service. Tax pros — you can do better than 79 percent and be in a position to advocate for your client.



The 2018 Attitude Survey provides tax professionals a few clear takeaways. As taxes get more complex, the more the tax pro is needed. Taxpayers want to “get it right” and tax pros are clearly a valued resource for tax compliance and advice.

Younger taxpayers are making more demands of their service providers. The generational shift toward technology is upon us – and clients want the quick, responsive answers for their taxes that they commonly get with other financial products and services. 

Lastly, taxpayers are good people and they want to remain in good standing with the IRS. They want to comply but often fear the IRS should they need to contact them. Tax professionals need to be there year-round for the 2 out of 5 clients who must interact with the IRS outside of a tax return. The equation: Client retention is being there when you client needs you.

Tax pros, the future of your business looks bright. Despite all the talk about simplification, the modern tax pro is still the preferred choice for many taxpayers.



What is a 529 Plan?

By:  |  Updated:  August 29th, 2018


A 529 plan is a college savings plan that offers tax and financial aid benefits. 529 plans may also be used to save and invest for K-12 tuition in addition to college costs. There are two types of 529 plans: college savings plans and prepaid tuition plans. Almost every state has at least one 529 plan. There is also a 529 plan operated by a group of private colleges and universities.


History of 529 plans

The first 529 plan was a prepaid tuition plan established by the Michigan Education Trust (MET) in 1986.

529 plans are named after Section 529 of the Internal Revenue Code (IRC), which was added in 1996 to authorize tax-free status for 'qualified tuition programs'. Earnings in 529 plans accumulate on a tax-deferred basis and distributions are not taxed federally when used for qualified higher education expenses. The definition of qualified higher education expenses was expanded in 2015 to include computers and in 2017 to include up to $10,000 annually in K-12 tuition.

Can you use a 529 plan for any college?

You can invest in any state 529 plan, not just your own state’s 529 plan. 529 plans can be used to pay for college costs at any qualified college nationwide. In most plans, your choice of college is not affected by the state that sponsored your 529 college savings plan. You can be a California resident, invest in a Vermont plan and send your student to college in North Carolina. You can use your 529 plan at more than 6,000 U.S. colleges and universities and more than 400 foreign colleges and universities. Check to see if your institution is eligible under 529 rules.


Which States offer 529 Plans?

Nearly every state now has at least one 529 plan available. It's up to each state to decide whether it will offer a 529 plan (possibly more than one) and what it will look like, meaning 529 plans can differ from state to state. You should research the features and benefits of your plan before you invest, research state 529 plans and even compare 529 plans.

Tax benefits

As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits, such as 5-year gift tax averaging and tax-free qualified distributions. See the top 7 benefits of 529 plans.

Some states offer state income tax incentives to investors as well, such as state income tax deductions and tax credits for contributions to the state’s 529 plan. Research your state's tax treatment.

Types of 529 plans

529 plans are usually categorized as either prepaid tuition or college savings plans.


College Savings Plans work much like a Roth 401(k) or Roth IRA by investing your after-tax contributions in mutual funds or similar investments. The 529 college savings plan offers several investment options from which to choose. The 529 plan account will go up or down in value based on the performance of the investment options. You can see how each 529 plan's investment options are performing by reviewing our quarterly 529 plan performance rankings.

Prepaid Tuition Plans let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Private College 529 Plan is a separate prepaid plan for private colleges, sponsored by more than 250 private colleges.

Educational institutions can offer a prepaid tuition plan but not a college savings plan.


The 10 Richest Men in America

What do all these men have in common?

For starters, they’re all men who mostly work in tech. And almost all of them made their fortunes by starting their own companies and maintaining ownership as they soared to success, including Microsoft and Facebook. In fact, seven of the 10 richest men in America are also among the 10 richest people in the world.

These American billionaires also share a few quirks: Microsoft founder Bill Gates, Facebook CEO Mark Zuckerberg, Oracle founder Larry Ellison dropped out of college. Jeff Bezos, Larry Page and Sergey Brin all went to Montessori schools, where children are encouraged to think independently and creatively rather than following traditional rules. It seems, too, that billionaires really like houses in Hawaii.

As is the case with the richest women in America, the richest people in America donate a lot of money to causes they care about. Some of the men on this list have donated hundreds of millions into research designed to improve human lifespan and eradicate dangerous diseases, such as Alzheimer’s disease and cancer. Warren Buffett, Gates, Zuckerberg, and Ellison have gone a step further and promised to give their fortunes away as part of The Giving Pledge, an initiative designed by Buffett and Gates to encourage billionaires to funnel their vast wealth to philanthropy.

Here’s everything else you need to know about the richest people in America.

1. Jeff Bezos

Amazon CEO  

Industry: Tech

Net worth: $109.9 billion

Bezos, 53, recently became the richest person in history.

Before he started selling books online, a business that ultimately became e-commerce giant, he worked at a hedge fund in New York after graduating from Princeton. The beginnings of are typical start up lore – Bezos started the company out of his garage in Seattle in 1994, according to Forbes.

The founder is well-known for purchasing the Washington Post for $250 million in 2013, but his space startup, Blue Origin, is quickly becoming nearly as famous. The aerospace company is developing re-useable rockets to carry passengers into space, with the goal of one day moving industrial manufacturing off of Earth.

Bezos lives with his wife and four children in Medina, Wash. He owns five houses, as well as a 290,000-acre ranch in Texas where Blue Origin is headquartered, making him one of the largest land holders in the U.S. He was named TIME person of the year in 1999.


2. Bill Gates

Bill Gates, Creator of Microsoft and CEO of Gates Foundation Inaugural  

Industry: Tech

Net worth: $93.3 billion

Gates, 62, is an iconic entrepreneur who co-founded the software company Microsoft in 1975. Gates made his fortune primarily through his shares of the company after dropping out of Harvard.

He was raised in Seattle and met his future business partner, Paul Allen, with whom he founded Microsoft, in high school. The two became obsessed with computers and even created their first venture, a traffic data system, while still in school. Gates became a millionaire at age 31 after Microsoft went public in 1986. In the 21st century, he’s become known for his commitment to philanthropy and established The Bill and Melinda Gates Foundation with his wife, Melinda, in 2000. The largest private charity in the world, the Gates Foundation aims to solve global problems like world hunger and empower people in poor communities.

Gates currently lives in Medina, Wash., in the same neighborhood as Jeff Bezos. He was a TIME person of the year in 2005 and awarded the Presidential Medal of Freedom by Barack Obama in 2016.

3. Warren Buffet

Warren Buffett, chairman and CEO of Berkshire Hathaway

Industry: Finance and Investments

Net worth: $87.2 billion

Buffet, 87, is one of the only richest people in America not to have made his fortune in the tech industry. Known as the “Oracle of Omaha,” Buffet is the chairman and CEO of the publicly traded investment firm Berkshire Hathaway. Most of his wealth is derived from an 18% stake in the business. Buffet is known for being a value investor who holds stocks over long periods of time.

He bought his first stocks at age 11, and at age $13 filed his first tax return with a $35 deduction for his bicycle.

On Jan. 10, Buffet appointed two of Berkshire Hathaway’s vice presidents to its board as vice chairs, a move that sparked speculation he may execute his succession plan for Berkshire Hathaway sooner rather than later, but the billionaire said the decision is a “part of a movement to succession over time.”

4. Mark Zuckerberg

Co-Founder, Chairman and CEO of Facebook

Industry: Tech

Net worth: $77.5 billion

Zuckerberg, 33, is another Harvard dropout who is famous for starting his own tech company. There’s even a movie about it. He is the co-founder and CEO of Facebook, the largest social media network in the world. When the company went public in 2012, it was the biggest tech IPO in history.

He owns an estimated $175 million worth of real estate across the country, with 700 acres of property in Hawaii alone. He usually calls Palo Alto, Calif. home, where he lives with his two daughters and wife, Priscilla Chan, whom he met at Harvard.

Together, the couple started the Chan Zuckerberg Initiative, pouring $3 billion of funding into an effort to cure diseases and develop new technology for researchers. The foundation also established a “Biohub” at the University of Calif. San Francisco to bolster collaboration among scientists.


5. Larry Page

Larry Page, co-founder of Google Inc. and chief executive officer of Alphabet Inc.

 Industry: Tech

Net worth: $54.9 billion

Page, 44, is one of Google’s co-founders and is now the CEO of its parent company, Alphabet. He met his business partner Sergey Brin, No. 7 on the list of richest people in America, while working on his doctorate at Stanford.

Most of Page’s wealth comes from inventing one of the world’s most valuable tech companies — through his stock he owns about 6% of Google. Under Page, who is known for his efficiency, Google has invested in hundreds of start-ups. He decided to rid himself of his assistants in 2007 so that anyone who needed him must physically find him in order to talk.

Page became fascinated with computers at a young age, picking up a passion for tech from his parents, who both taught computer science at Michigan State University.

Page resides in Palo Alto with his wife, a research scientist, and their two children.

6. Larry Ellison

Oracle CEO  

Industry: Tech

Net worth: $54.7 billion

Ellison, 73 — another college dropout — co-founded the software firm Oracle in 1977. In addition to owning about 25% of the company, he also owns the entire Hawaiian island of Lanai, a sailing team and even an entire tennis tournament, the New York Times reports.

While known for living large (the billionaire owns a 288-foot yatch), Ellison started out with modest ambitions. His parents, who adopted him when he was nine months old, wanted him to be a doctor, but he left school when he realized medicine didn’t interest him. He moved to California and worked as a computer programmer and a rock-climbing instructor and river guide, according to the Times. At this point, Ellison said he was “pretty happy with his life.”

But after a series of jobs, he became part of a company working to establish a new type of software database. That company would become Oracle, now one of the largest software companies in the world.

Ellison, like other titans on this list, is interested in extending human lifespan, and has given over $330 million for research into aging and related diseases.

Four-times divorced, Ellison has two adult children and calls his $70 million Woodside, Calif. estate home. However, Ellison’s massive real estate portfoliomeans he never spends much time in one place. He owns additional properties in Japan, San Francisco, Malibu, Lake Tahoe and Rhode Island.


7. Sergey Brin

Sergey Brin Co-Founder of Google 

Industry: Tech

Net worth: $53.3 billion

Brin, 44, also made his fortune in the tech industry as one of the storied co-founders of Google, along with Larry Page (No. 5). Born in the Soviet Union, Brin and his family, who is Jewish, came to the U.S. when Brin was just six-years-old after facing anti-Semitism in their home country.

At Google, the entrepreneur headed up Google X, a secretive division of the company, until becoming president of Google’s new parent company, Alphabet, in 2015. While running the Google X labs, he was rumored to be building a secret airship in a massive airplane hangar in Silicon Valley.

Brin has donated around $50 million to Parkinson research after discovering he has a genetic mutation predisposing him to the disease. He also gave $1 million to the Hebrew Immigrant Aid Society, the organization that helped him leave Russia as a child.


8 & 9(tie). Charles & David Koch

David H. Koch (L); Charles Koch (R) Kock Industries

Industry: Conglomerate

Net worth: $48.6 billion each

The Koch brothers—Charles, 82, and David Koch, 77—tie for eighth place as two of the richest people in America.

Charles is the chairman and CEO of Koch Industries, a Kansas-based conglomerate with $100 billion in annual revenue. David is the vice president of the company, and both own 42% of the company.

The men both graduated from MIT with degrees in engineering and joined their family’s business upon graduating, according to Bloomberg.

In 1976, Charles established a libertarian think tank called the Cato Institute, which the brothers later sued over a debate about ownership rights.

The Koch brothers are politically active, having donated hundreds of millions of dollars to Republican and conservative causes in their lifetimes.


10. Michael Bloomberg

CEO of Bloomberg L.P.

Industry: Banking

Net worth: $43.3 billion

Bloomberg, 76, was born at St Elizabeth’s Hospital in Boston MA. on February 14, 1942.

Bloomberg is an Eagle Scout.

He attended Johns Hopkins University and graduated with a B.S. degree in Electrical Engineering. In 1966 he graduated from Harvard Business School with a M.B.A.

In 1973 Bloomberg general partner of Salomon Brothers Investment Bank where he headed up the equity trading, and later systems development. In 1981 Salomon was bought out and Bloomberg was given a severance package of $10 million dollars. He started his own business in 1981, Innovative Market Sysytems, with the money from the severance package. Merrill Lynch became his first customer investing $30 million dollars in his company. In 1987 the company was renamed Bloomberg L.P. which gave him a boost in the business world.

Bloomberg became the 108th mayor of NYC on January 1, 2002. He won re-elections in 2005 and again in 2009.


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