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JUNE 2021
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A GOLF TRIP TO REMEMBER
5 Days, 2 States, 171 Holes Played
I don’t know what the busy times at your job are like, but tax season really takes it out of me. This year was even crazier than usual since the IRS extended its filing deadline, but not long enough, unlike last year. On the one hand, that was great because it gave me more time to help people before Tax Day. On the other hand, by the end of May, I hadn’t taken a day off for more than four months! Luckily, I know the cure for working seven days a week: an epic golf trip with my buddies. Right after the tax deadline, I made it happen. I got together with a few guys who are also serious golfers, and we took off for five days of golfing at different courses in two states. First, we hit up French Lake, Indiana, which I like to call the “basketball holy land” because it’s where my all-time favorite ball player, Larry Bird, was born. We played the Donald Ross Course at French Lick Resort on Tuesday. Then we played the Pete Dye Course at the resort on Wednesday. Pete Dye’s courses are notoriously challenging. They’re full of hazards like long grass, steep hills, water, and sand, so it’s important to keep your shots in the fairway if you don’t want to go walking off a cliff by accident! That 18-hole course cost $350 to play, which is pretty pricey, but the cool thing was that if you played it twice, the second time was free. My buddies and I teed off at 7:30 a.m., and when we wrapped our two play- throughs at 1:30 p.m., I said, “Let’s play again!” My friend looked at me with fish eyes (“A third time? Really?”), but I like to get my money’s worth, so off we went. By the end of the day, we’d played 54 holes and were absolutely beat. That evening we drove 25 miles to Jasper, Indiana, to play first thing in the morning at Sultan’s Run Golf Course . It was a great course, but the real star was our afternoon game at the Brickyard Crossing Golf Course in Indianapolis, another Pete Dye designed course. It’s next to the racetrack where the Indie 500 is held, and four of the holes are right inside the track’s infield! We had to go through a tunnel under the track while we played, and the whole time the Indie 500 guys were out there time testing the cars. When they raced around the track, it sounded like a jet engine taking off! After a good night’s sleep, we drove up to West Lafayette, Indiana, and played two more courses at the Birck Boilermaker Golf Complex at Purdue University, including the Kampen Course designed by Pete Dye. A gal from the
Purdue golf team joined us on the Ackerman-Allen course , and we had a great time swapping golf stories. By the end of the day, we’d played 45 holes and had to practically limp back to our hotel room! From there, we rounded out the trip at Harbor Shores Golf Club in Benton Harbor, Michigan, where we played an 18-hole Jack Nicklaus Signature Course . I got home late on Saturday night, and let me tell you, it was strange to wake up the next morning and realize I didn’t have any golf to play! All in all, my buddies and I played 171 holes over those five days. It was a much-needed break, and I came back full of energy and was ready to resolve my clients’ IRS problems. I love being on the green, but coming home feels good because I love my work, too. Tax resolution is a lot easier on my calves, back, and knees!
Paul Francetic
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WHY ARE CELEBRITIES INVESTING IN SPACS? SHOULD I CONSIDER IT, TOO?
This past year, the volatility of the pandemic and independent Reddit-based investors bidding up shares of GameStop has turned Wall Street toward a trend of nontraditional investing and trading — and it continues. Starting as early as last summer, celebrities and big-time Wall Street players began investing more and more money in special purpose acquisition companies (SPACs). SPACs are shell corporations with no assets. A pool of investors sets up one of these companies with the sole purpose of raising money through an initial public offering (IPO) to eventually acquire a private company and take it public. SPACs don’t have products or services. Its only asset is typically the money raised in its own IPO. SPACs are usually given two years after its IPO to find a company to acquire, although investors rarely know what business the SPAC will acquire.
(Shareholders do have to vote to approve the acquisition.) As CNBC explains, once acquired, shares of that business can be swapped for the SPAC shares (a SPAC merger), or investors can redeem their money plus interest. If a business cannot be acquired within an established time frame, the investors get their money back plus interest. Sounds lucrative, right? It can be, but not for everyone. For a long time, SPACs were seen as last-ditch efforts on the part of small start-ups that couldn’t afford to raise money on the open market. Many investors argued that if a business couldn’t raise these funds, how well could they actually perform once public? Plus, CNBC also reports that a five-year study found the average return on investment from SPAC mergers was generally less than returns from IPO investors.
This should make investors wary, especially since they have no idea which company a SPAC might acquire. The risk is much higher than traditional investing. However, recent SPAC acquisitions of big corporations like DraftKings, the online sports gambling website, and a space exploration company, Virgin Galactic, have some investors hopeful. This could shift the thinking on the usefulness of SPACs and attract larger businesses to this arrangement. A SPAC may or may not be right for you, but that’s your decision to make. If you want to learn more about SPACs, speak with a trusted financial advisor to assess your risk.
What You Need to Know for 2020 and 2021
UNEMPLOYMENT AND YOUR TAXES
The unemployment system is complicated, and the tax system is even more complicated. So, it’s no surprise that when the two come together, things get dicey. In my line of work, I deal with a lot of folks who are confused about how getting unemployment payments impacts what they owe the IRS. To demystify it a little bit, I’ve put together a short guide. IF YOU WERE UNEMPLOYED IN 2020 Last April, the unemployment rate jumped to 14.8%. If you lost your job last year, you probably received unemployment payments from the government. These payments are taxable just like other income. However, the American Rescue Plan Act of 2021 allowed an exclusion of unemployment compensation of up to $10,200 for individuals (or $10,200 per spouse for married couples filing jointly) for the 2020 tax year. That means you didn’t have to pay tax on the first $10,200 of unemployment payments you received last year!
If you’ve already filed your 2020 tax return, that exclusion should have been automatically taken into account. You won’t have to file an amended return unless “you now qualify for deductions or credits not claimed on your original return.” If you’re confused about this or haven’t filed yet, give me a call, and I’ll look over your return to make sure you’re okay. IF YOU WERE UNEMPLOYED IN EARLY 2021 As of this writing, unemployment checks received in the 2021 tax year are still fully taxable. It’s possible another exclusion will come down the pipe, but just in case it doesn’t, I’d suggest putting about 10% of the amount of unemployment you received into a savings account so you have it on hand to pay next year’s taxes. IF YOU’RE UNEMPLOYED RIGHT NOW The unemployment checks you're getting are taxable, so save 10% of every check if you can or
make a plan to save up that amount before April 15, 2022. You can ask for 10% to be withheld from your checks if that makes it easier. Either way, looking ahead will save you from a nasty surprise on Tax Day!
Still have questions or know someone who needs help with this? Send them my way.
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HOW TO AVOID THE GIFT TAX ON MEDICAL BILLS AND TUITION FTR TAX TIP OF THE MONTH
GRILLED CHICKEN SHAWARMA
You might recall that last month in this section of the newsletter, I told you all about the gift tax. I described when a gift might be taxable, and when the Form 709 Gift Tax Return should be filed with the IRS. I also laid out the annual exclusions and lifetime exclusion. What I didn’t mention are the two specific instances when, if you make a gift under particular circumstances, there is no limit to the amount of the gift and no requirement to file a Form 709 with the IRS. THE MAGIC TRANSACTIONS Qualified transfers for tuition or medical expenses are not considered gifts if handled properly. To do it right, the payment must be made directly from the donor to the school or care provider. Payments made to the beneficiary (the person in need of medical help or education) do not qualify, even if the payments reimburse the beneficiary for tuition or medical expenses. The donor and donee do not need to be related, and there is no limit on the amount that can be transferred. An annual exclusion gift can also be made to the same beneficiary in the same year. IMPORTANT QUALIFICATIONS Tuition qualifies as long as it’s paid to a domestic or foreign institution that maintains a regular faculty and curriculum, and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Man, what a mouthful! The tuition can be for primary, secondary, or higher education, and for part-time students. Books, room and board, and other expenses do not qualify. Qualified medical expenses include any unreimbursed expenses that would be deductible medical expenses on a Form 1040. Do you still have questions about these gift tax exclusions? Please contact me! I can help you, your friend, or your family member figure out how to make a gift tax-free.
Inspired by FeastingAtHome.com
INGREDIENTS
• • • • • •
2 tbsp ground cumin
• • • • •
1 tsp ground black pepper
2 tbsp ground coriander
2 tsp allspice
2 tsp kosher salt
8 garlic cloves, minced
1/4 tsp cayenne pepper
6 tbsp olive oil
2 tsp turmeric
2 lbs boneless, skinless chicken thighs
1 tsp ground ginger
DIRECTIONS
1. To create marinade, whisk all spices with the garlic and olive oil in a medium bowl. 2. Add chicken to the bowl, coat well with marinade, cover, and let sit in the fridge for at least 20 minutes — or up to 48 hours. Strain off excess marinade before cooking. 3. Preheat grill to medium-high heat. Grill thighs for 10–12 minutes on each side, or until a meat thermometer reads 165 F.
4. Serve with rice, vegetables, or pita bread with tzatziki.
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5429 DEERFIELD ROAD MOUNT PLEASANT, WI 53406-1919
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INSIDE
RETURNSERVICE REQUESTED
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Why Paul Played 171 Holes of Golf in 5 Days
SPACs Are the Latest Celebrity Trend — Should You Invest, Too?
How to Avoid the Gift Tax on Medical Bills and Tuition
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June Tax Tip
Grilled Chicken Shawarma
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DIY or Buy: Summer Lawn Games
The warm summer sun may be enough to beckon your family outdoors, but lawn games will guarantee hours of fun outside. If you’re handy, there are plenty of great lawn games you can make yourself. If not, buy an off- the-shelf alternative and enjoy the easy setup. GIANT JENGA: EASY DIY All you need to build a giant Jenga tower are two-by-fours that are cut to length. If you’re handy with a saw, you can do this at home. If not, ask to have the wood cut at your local lumberyard. Be sure to sand down the edges before stacking the boards to create a classic Jenga tower! For extra fun, pick a few paint colors and paint each board. Visit ABeautifulMess.com/make-this- giant-jenga to see a complete set of instructions. Buy: Skip the project and buy GoSports Giant Wooden Toppling Tower online, which retails for about $70 and stacks over 5 feet high. CLASSIC HORSESHOES: INTERMEDIATE DIY Tossing horseshoes is a great way to pass an afternoon. To play, you’ll just need to set up two sand pits in your yard. Get a handful of horseshoes, and you’re ready to go! Many DIY plans are available online, including one from HousefulOfHandmade.com/ ultimate-diy-horseshoe-pit. DIY OR BUY?
Buy: Check out the kid-friendly rubber horseshoe set from Wayfair.com, which requires no installation, can be used indoors or alongside your outdoor game, and is safe for younger children. CORNHOLE: ADVANCED DIY The humble beanbag may be the most versatile backyard game piece. It’s used in the popular game commonly known as cornhole. To build your own cornhole set, you’ll need a couple of sheets of 1/2-inch-thick plywood along with two-by-fours, some hardware, and a variety of tools including a drill, jigsaw, and sander. Visit DIYPete.com/cornhole-board-plans to get both written and video instructions. Buy: Ready to play ASAP? Cornhole sets are available from many large retailers around summertime, or you can order a customized set featuring your favorite team, family name, or characters from your favorite movies by looking at Etsy.com. Whether you buy or DIY, remember to have fun and always supervise your children while playing outdoors, especially when it comes to yard games!
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