Friday, December 2, 2016


It’s that time of year again!
As it has been doing since 1984, PNC announced its annual Christmas Price Index, which shows the current cost for one set of each of the gifts given in the song “The Twelve Days of Christmas”. 
The price tag for the 2016 PNC Christmas Price Index totals $34,363.49, only $232.50 or .7%, more than the 2015 CPI.  The increase is less than the 1.6% increase in the government’s Consumer Price Index. 
Eight of the twelve items show no change for 2016.  Only the Turtle Doves (up $85 or 29.3%), the Pipers Piping (up $73.20 or 2.8%), and the Drummers Drumming (up 79.30 or also 2.8%) cost more in 2016 than 2015.  The cost of a Partridge in a Pear Tree actually dropped (down $5.00 or 2.3%).  The cost of the tree remained the same; the drop is in the price of the Partridge, from $25.00 to $20.00.   
The increase in the Turtle Dove is due to a shortage of the birds.  PNC tells us “A turtle dove only lays two to three clutches a year, with only two eggs per clutch, making these lovebirds a hard gift to find.”  There has, however, been an increase in the supply of Partridges, resulting in the price reduction. 
Apparently the musicians had the only effective union this year.  Each musician received an average raise of $6.63. 
The performers in the group, Leapers and Dancers, earn much more than the musicians, Pipers and Drummers, the average performer earning $687.45 each while the average musician earned only $245.33.  The Dancing Lady is the highest paid of the group, earning $288.33 more than a Leaping Lord (I know from firsthand knowledge that dancing ladies are expensive).  The poor Milking Maids get the minimum wage of only $7.25, which did not go up in 2016
PNC also calculates the total cost of the items gifted by the True Love in all of the song’s verses, aka the “True Cost of Christmas”.  The total cost for all 364 gifts for 2016 is $156,507.88, $1,100.70 more than last year.
And it adds up the cost for those who prefer the convenience of online shopping.  The 2016 Internet CPI is $44,602.53, over $10,200 more than buying in person.  This is up $975.80 or 2.2% from 2015.  Convenience is expensive, mostly due to added shipping and handling costs for the specialty items.
FYI, the “cheapest” PNC Christmas Price Index was 1995, when it was just over $15,600.
For more information on the PNC Christmas Price Index click here.  


    One Partridge in a Pear Tree
$        214.99
$        209.99
$           25.00
$           20.00
    Pear Tree
$        189.99
$        189.99
    Two Turtle Doves
$        290.00
$        375.00
    Three French Hen
$        181.50
$        181.50
    Four Calling Birds
$        599.96
$        599.96
    Five Gold Rings
$        750.00
$        750.00
    Six Geese-a-Laying
$        360.00
$        360.00
    Seven  Swans-a-Swimming
$  13,125.00
$  13,125.00
    Eight Maids-a-Milking
$           58.00
$           58.00
    Nine Ladies Dancing
$     7,552.84
$     7,552.84
    Ten Lords-a-Leaping
$     5,508.70
$     5,508.70
    Eleven Pipers Piping
$     2,635.20
$     2,708.40
    Twelve Drummers Drumming
$     2,854.80
$     2,934.10
    Total Christmas Price Index
$  34,130.99
$  34,363.49


Thursday, December 1, 2016


I have just “gone to press” with the latest bi-monthly issue of ROBERT D FLACH’S THE SCHEDULE C LETTER.
In this issue I begin with a year-end tax-planning update and go on to discuss in detail the home office deduction and the new “safe harbor” alternative, the need for a separate checking account for a Schedule C business, and estimated tax payments.
A one-year subscription to this bi-monthly (published every other month) newsletter, devoted to advice, information, and resources for the sole proprietor reporting business income and expenses on Schedule C, is $11.95 delivered as a pdf email attachment.  A print edition delivered by postal mail is also available for $24.95.
As a special holiday season offer if your order is postmarked by December 24th you can get a subscription for $7.96 (pdf) or $16.63 (print) – 1/3 off the regular price!
My Schedule C Letter would make a great gift for a friend or relative with a sideline business.  Tell me that it is a gift and I will send you a special notice announcing the gift.
Click here to download a free copy of the premiere issue of ROBERT D FLACH’S THE SCHEDULE C LETTER (August 2016).
To order your subscription send your check or money order for $7.96 or $16.63, payable to TAXES AND ACCOUNTING, INC, and your name and email or postal address (if a gift send the name and email or postal address of the recipient and your name and email address so I can send you the announcement notice) to –

Tuesday, November 29, 2016


Here is another year-end tip for charitable giving, taken from my “2016 Year-End Tax Planning Guide”.
Instead of giving cash to charity at year-end you can donate stock, bonds or mutual fund shares that you have held for more than one year and which have increased in value, and save some money in the process.

You can claim a deduction for the full market price of the investment on the date you make the donation.  You don’t have to report the increase in value as a capital gain on Schedule D.

Art Center has pledged $5,000.00 to his church building fund.  He also has 100 shares of Online Profits, Inc. which he purchased in 1998 for $2,000.00 and is now worth $5,000.00.  He decides to give the stock to the church to satisfy his pledge.  Art can deduct $5,000.00 on his Schedule A.  He does not have to pay tax on the $3,000.00 appreciation in the value of the stock.

If Art were to sell the Online Profits, Inc. stock and give $5,000.00 cash to the church he would have to report the sale of the stock on Schedule D and pay $450.00 in federal tax, as well as state income tax, on the gain.  Plus, the $3,000.00 gain would increase his Adjusted Gross Income (AGI), which could reduce or altogether wipe out a multitude of deductions and credits that are affected by AGI.  As an added bonus, by donating the stock rather than selling it Art will save the broker’s commission and other expenses of sale.

Any investment you donate to charity must be long-term property - an investment you have held for more than one year.  If you donate stock that you held for one year or less your deduction is limited to the cost basis, which in the above example would be $2,000.00.

Also, do not donate an investment that has gone down in value.  It is better to sell the stock, claim the loss on Schedule D, and donate the cash to charity.


 It’s that time of the year again –
time for year-end tax planning!
Only $3.00 sent as pdf email attachment
or $4.00 in print form send via postal mail.
Click here for more information.



Monday, November 28, 2016


I trust everyone had a successful 4-day Thanksgiving holiday week-end.

* Jason Dinesen continued with his usual custom at DINESEN TAX TIMES last week – “It’s a holiday week, so I’m re-publishing popular posts from days gone by.”

The moral?  File your tax returns, no matter how old or young you are.”

This post concerns a true “urban tax myth” that I have seen many times over the past 45 years, with various ages used.  Some people have also told me that they do not have to pay Social Security tax on their wages if over age 65, 70, or 72.

One taxpayer, who thought he did not have to pay income taxes any more when he turned 65, 70 or 72 (I forget the age in his situation), was brought to consult my mentor by his daughter after the IRS filed a lien on his personal residence due to non-payment of taxes.  

I have always said that if you have taxable income you must pay tax whether you are 1 year old or 100 years old.  And you also have to pay Social Security tax if you earn wages subject to Social Security tax whether you are 1 year old or 100 years old.

* And I echo the sentiments in Jason’s post “From the Archives: Yes, Enrolled Agents Do Need More Respect”.

The initials EA (and ATA and ATP from ACAT) are the only initials that appear after one’s name that have anything to do with competence and currency in 1040 preparation.  Contrary to the popular but erroneous “urban tax myth”, and the attempts of the AICPA, having the initials CPA after one’s name does not automatically mean that the person with these initials knows his arse from a hole in the ground when it comes to 1040s.  There are many practicing CPAs who are competent and current in 1040 preparation – but it has absolutely nothing to do with the initials CPA!

Enrolled Agents do indeed deserve more respect!

* Please, please check out my new THE LIBERTY TIMES – and please share with family, friends, co-workers, and colleagues.  BTW – a new “issue” is coming on December 1st.

* The CULTURE CHEAT SHEET lists the “Top 10 States in America With the Lowest Taxes in 2016”.

Alaska tops the list.  You know damned well that New Jersey is not represented here – it probably tops the list of states with highest taxes.

* Staying on this theme, at the beginning of November Sandra Block of KIPLINGER listed the “10 Worst States for Taxes on Your Retirement Nest Egg”.

New Jersey is #8 on the list -

The Garden State's tax policies create a thicket of thorns for some retirees.
Its property taxes are the highest in the U.S.”  

Considering the recently passed NJ tax changes, which increase the “retirement income exclusion” and eventually do away with the Estate Tax, I expect NJ may not be on future “10 Worst” lists, although the property tax situation has not changed.

I was surprised to learn that Vermont topped the list –

The Green Mountain State doesn't coddle retirees. It has a steep top income tax rate, and most retirement income is taxed. Vermont treats Social Security benefits the same way the federal government does, which means as much as 85% of your benefits could be taxed.”

* Kay Bell, the yellow rose of taxes, expands on my post “A Year-End Tax Tip – Be Charitable” with “Careful documentation, including donation selfies, could convince the IRS of your charity deduction claim at DON’T MESS WITH TAXES -

A good way to do that is with digital documentation. Take a picture of the items you donate, clearly showing that they truly were in very good shape, worthy of the slightly greater amounts you've assigned them.

Even better, make them donation selfies.

Include yourself in the photos to prove that the topnotch items were yours, not just photos of well-kept articles that you downloaded from someone else's social media stream.”


Is Trump a bigot?

As an extreme narcissist Trump thinks that every single person – man, woman, white, black, brown, red, yellow, straight, or gay - is below him. 

Also as an extreme narcissist, if a “non-white” or “non-traditional” man or woman, or an “affirmative” action, will generate praise for him and feed his ego he will use that person or action to do so.

The true danger from the Trump Administration will be the appointed “ring (and other things) kissers” who have their own actual bigoted agendas.  Trump is certainly not “ideological” – he has absolutely no political philosophy, beliefs, or convictions other than “Trump is great and Trump is good”.  It is his appointments who are truly “ideological”, with personal bigoted, excessively religious right, xenophobic, chauvinistic, and hate-filled philosophies, beliefs, and agendas, that will cause the real damage to America, Americans, and the world.

Of course Trump’s inability to deal with criticism and challenge like a mature adult, another symptom of his excessive narcissism, will also do real damage to America, Americans, and the world.

This bears constant repeating. Please share and tweet -

Trump was a despicable human being and a dangerous narcissist before being elected. Being elected President does not automatically endow him with morals, ethics, or integrity where none existed before.

He has not changed, and we should not change our disgust, disrespect, denouncement, and opposition to him just because he was “elected” President.


 It’s that time of the year again –
time for year-end tax planning!
Only $3.00 sent as pdf email attachment
or $4.00 in print form send via postal mail.
Click here for more information.