Posts by damon

  • Ooops!

    Back in 1985, a group of ambitious lawmakers set out to reform the federal income tax code. House Ways & Means Chair Dan Rostenkowski introduced the legislation. (This was before he became inmate #25338-016 at the Oxford Federal Correctional Institution.) Congress held dozens of hearings, cast 29 roll call votes, and debated 111 amendments on philosophical questions like Dan Quayle’s proposal “to provide that the period during which an individual is in the United States competing in a charitable sporting event shall not be taken into account in determining whether such individual is a resident alien.” Ten months and 18 days later, President Reagan signed the Tax Reform Act of 1986 into law. Two years after that, Congress passed a “technical corrections” bill to fix hundreds of drafting errors that made it into the final text. Fast forward to 2017. Technology and the internet have made everything faster, right? That includes legislation, of course. On November 2nd, House Ways & Means Chair Kevin Brady introduced the Tax Cuts and Jobs Act. There were zero hearings, handwritten amendments in the middle of the night, and a quick “never mind” when Senators realized they had accidentally killed the Research & Development credit. On December 22…

    Read More...
  • IRS Investigates Pot of Gold at End of Rainbow

    St. Patrick’s Day is here, and every “Irish for a day” tippler in your social circle will take advantage of this convenient excuse to haul grandma out of the house for a little day-drinking. (It seems unnecessary on a Saturday, but whatever.) Faux-Irish saloons across America are tapping kegs of Guinness, pouring shots of Jameson, and covering their walls and ceilings in every Celtic cliche they can find: the shamrocks, the hats, the green beads, and of course, the leprechaun jealously guarding his pot of gold at the end of the rainbow. Now, leprechauns are usually pretty happy little fellas. Wouldn’t you be happy if you found a pot of gold in some misty bog? But this isn’t always true, as you’ll see if you look at the University of Notre Dame “Fighting Irish” mascot. Have you ever wondered why that little guy is so hostile? Maybe it’s because he just discovered the IRS wants a share of his stash! Unfortunately for our diminutive Hibernian friend, the tax code has all sorts of special rules to help the IRS dig their hands deeper into his treasure: Code Section 61 defines gross income as “all income from whatever source derived.” The…

    Read More...
  • Area Man Treats Colleague to Dinner, Drinks

    The three-martini lunch has a long and mostly honorable history as a deductible business expense. As former President Gerald Ford once said, “Where else can you get an earful, a bellyful, and snootful at the same time?” Ford’s successor, famed buzzkill Jimmy Carter, tried (and failed) to cut the deduction from 100% to 50%. The Tax Reform Act of 1986 succeeded in that goal, and today’s business diner has probably switched from martinis to white wine. But old habits die hard — check any happening lunch spot and you’ll find happy diners eating partly on Uncle Sam’s dime. The rapper-turned-mogul Jay-Z may have 99 problems, but reaching for the check isn’t one. Last month, he treated the president of his Roc Nation Sports talent agency, Juan “OG” Perez, to an epic birthday night in Manhattan. The posse started with dinner at Zuma in midtown, where he dropped $13,000. After dinner, he took them uptown to Made in Mexico for $9,000 worth of drinks. And a group of six stragglers finished off the night at Playroom, where the real fun started. Apparently, Jay-Z and his friends were very thirsty, very generous, or both. The group’s bar tab — ticket #48 —…

    Read More...
  • This Will Make You Love the Income Tax . . .

    We Americans have fought with our internal revenue code since 1913. But slicing and dicing income, deductions, and a dizzying array of business and personal credits is hardly the only way that Uncle Sam could raise the money he needs to pay for guns and butter. State and local governments also use sales taxes, payroll taxes, property taxes, excise taxes, and “gross receipts” taxes to fill their hungry coffers, too. And then there are the more exotic taxes, the kind that sometimes live only in philosophers’ heads. The nineteenth-century economist Henry George argued that a land-value tax would raise wages, improve land use, and eliminate taxes on economic activity. More recently, economists and politicians have proposed carbon taxes, consumption taxes, and European-style value-added tax alternatives. Here’s one you probably never considered. Earlier this month, a Duke University philosophy PhD candidate named Erick Sam took a microscope to the concept of an “endowment tax.” This is a vaguely Marxist tax on “a person’s potential earnings, which can provisionally be thought of as the maximum income a person could earn or could have earned over a given time period.” (Yikes!) Sam opens his paper by asking how we determine a person’s “ability”…

    Read More...
  • Free App Avoids 100% of This Tax

    Traffic apps have revolutionized how many of us get from Point A to Point B. They started with in-dash navigation systems that needed updates every time a new subdivision or interchange appeared. Then they migrated to the phone with Google Maps and real-time traffic updates. Now, apps like Waze tell you where to get off the highway to avoid traffic jams altogether — and terrorize quiet residential neighborhoods in the process. At this point, your kids probably wouldn’t recognize the vintage navigation tool known as the “folding paper map” if you used it to smack them in the face. But now there’s a way to use these exciting new apps to help reduce your tax bill, too . . . at least, if you’re thirsty in Seattle. Seattle proudly counts itself as a leader in America’s progressive movement. Seattle residents joined the rest of Washington residents to become one of the first two states to legalize recreational marijuana. And Seattle has spearheaded the growing national drive for a $15 minimum wage. Now Seattle has joined Berkeley, Philadelphia, and several other municipalities in imposing a soda tax. Wanna quench your thirst with a tasty Mountain Dew? Plan on paying an extra…

    Read More...
  • Romantic Tax Collectors Love Valentine’s Day, Too

    It’s February, and love is in the air. Restaurants are advertising intimate specials for two. Florists are rolling out the red carpet. And in the greeting card racks across the country, Hallmark’s most accomplished poets are debuting their new verse. We’re talking about Valentine’s Day, of course. 62% of Americans say they’ll celebrate the occasion. (Of course, that means the rest of us will just try to keep our heads down and pretend it’s just another blah February day.) But with all those Cupid’s arrows flying around, shouldn’t the tax man get a little love, too? The National Retail Federation estimates that Americans will spend $19.6 billion this Valentine’s Day. That includes $4.7 billion on jewelry (for the truly lucky ones), $3.7 on going out, $2 billion on flowers (including, naturally, 250 million roses), $1.7 billion on chocolate and candy, $894 million on greeting cards, and $751 million on pets. That’s all before we get to the lingerie, champagne, and candles. (Guys, we know you don’t care for scented candles. Just think of them as proof that your Valentine trusts you with fire.) Naturally, all that spending means taxes. The average sales tax rate here in the U.S. is 8.454%,…

    Read More...
  • Country Crooners Sing the Blues

    Country music embraces a long tradition of songs about sadness and ruin, heartbreak and pain. It just makes sense, then, that country sometimes runs afoul of the tax system. Most famously, Willie Nelson found himself on the wrong side of a $16.7 million tax bill. And outlaw country icon David Allen Coe, who penned Take This Job and Shove It, drew three years probation and $980,000 in restitution for failing to report his income, which he insisted on taking in cash to hide from the IRS. Joy Ford probably never expected she would become a part of that particular tradition. She got her start as a carnival dancer performing at state fairs. Her co-star Loretta Lynn inspired her to start singing, and she had several minor hits in the 1980s. She went on to operate the Bell Cove Club outside Nashville, where she showcased up-and-coming acts. But her eye for talent turned out to be far better than her eye for business. Ford met with a producer to talk about a TV show, and met with a consultant who suggested converting the club into a seafood restaurant. But the show went nowhere and the consultant’s advice went in one ear…

    Read More...
  • Two-Tired to Fight About It

    When you think of “federal crime,” you probably think of big-ticket offenses like mail fraud, identity theft, and tax evasion. But our criminal code is also full of, shall we say, lesser offenses. For example, according to the Crime a Day Twitter feed, “18 USC §1854 makes it a federal crime to cut, chip, or chop a government-owned tree to get turpentine out of it.” 7 USC §8313 “makes it a federal crime to bring an imported camel’s blanket into the United States without the permission of the port inspector.” And 8 USC §1865 “makes it a federal crime to roller skate in Alaska’s Sitka National Historical Park.” Our Internal Revenue Code similarly focuses most of its attention on core questions like brackets, rates, standard deductions, and personal credits. But the tax code’s 70,000 pages include their fair share of lesser provisions, too. And the Tax Cuts and Jobs Act that just passed includes a couple that might sound like the tax equivalent of sneaking a smelly camel’s blanket in under a port inspector’s nose. Here’s one that just seems petty and mean. Under the old law, you could exclude a whopping $20 per month of income for expenses related…

    Read More...
  • iTaxes Version 38 Billion.0

    In 2016, SyFy debuted a new show called Incorporated about a dystopian future where corporations, not governments, rule the world. If that nightmare ever comes true, we all know which real-world corporation will rule them all. It’s Apple, of course, which just took the shrink-wrap off their $5 billion ring-shaped headquarters in Cupertino, CA and is on the verge of becoming the world’s first trillion-dollar company. Odds are good that you’ve got an iDevice of some sort in your home, office, or pocket. Apple’s product design geniuses use crack-like design and technology that keeps users hooked like heroin addicts, to make Apple the most valuable corporation in the world. But what you may not know is how Apple’s financial geniuses use proactive tax planning to make their company even more valuable. And now, the Tax Cuts and Jobs Act has inspired them to act again. Apple has scattered their manufacturing operations throughout the world to take advantage of lower costs overseas. (You think your 10-year-old’s science fair project is special? Big deal — 10-year-olds in China are making iPhones!) This has prompted various entertaining debates over the ethics and politics of offshoring, which we won’t presume to touch here. Apple…

    Read More...
  • How Will I Know?

    In 2012, the singer Whitney Houston died suddenly, drowning in a hotel bathroom after years of battling drug addiction. Yet the world will always treasure her musical legacy. The Guinness Book of World Records reports that she was the most awarded female artist of all time, with two Emmys, six Grammys, 30 Billboard Music Awards, and 22 American Music Awards, among 400+ awards. Rolling Stone listed her debut album as one of the 500 greatest albums of all time. And VH1 put her number three on their “greatest women of the video age” list, behind Madonna and Janet Jackson. Houston also left a considerable financial legacy, estimated at $20 million. She saved all her estate in trust for her only child, Bobbi Kristina Brown, with instructions to release 10% when Brown reached age 21, another sixth at age 25, and the remainder at age 30. (Brown died in 2015 from her own drug overdose, leaving the ultimate fate of the estate in the hands of lawyers, who are sure to bill lots of hours.) But Houston’s estate includes far more than cash and securities. It also includes her music catalog, digital performance royalties, movie and television residuals, and “publicity rights,”…

    Read More...

Testimonials

  • We started our residential real estate business and brought Damon on as our principal adviser for all matters relating to taxes & accounting. We have doubled our business each year and Damon is a critical partner that has allowed us to successfully focus on our business.

    – Dan and Rachel Kendall
    Owners, The Rachel Kendall Team, LLC - Raleigh, NC
  • Damon Yudichak is a diligent and consistent professional. I’ve worked with Damon since 2009 and I’ve felt like a valued customer since the beginning of our relationship. His firm is consistent, courteous, and knowledgeable. He and his firm are a vital link to my business.

    – Al Sullivan, President
    Inspirus Consulting, Inc. – Cary, NC
  • Owning a small business… to me, it’s worth millions! Bringing Damon on for accounting and tax purposes… just a reasonable monthly fee! Keeping our business legal and my business partner sane… PRICELESS!

    – Tonya Baskerville, Owner
    Art on the Fridge, LLC – Raleigh, NC