Bonfiglio & Dietz - Certified Public Accountants, PLLC.

- Almost 9 years ago introduced me to her sister outside the Red Bank Starbucks. Fast forward to this weekend and now you’re my sister too and I’m celebrating your marriage to . Over these years I’ve been amazed by the incredible women you’ve grown into and all you’ve accomplished. I couldn’t be happier for you because I know that you’ve finally found your soul mate and you get to spend forever with him.

- We always joke around that we both dodged a bullet because even though you pick your wife, you don’t get to pick your brother-in-law. I can definitely say I did more than just dodge a bullet. You’re a great man and I’m honored to have you as a part of my family.

The love you both show each other is an inspiration and I cannot wait to see what the rest of forever has in store for you two. I love you both. Congratulations.

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Join us to kick off the 2020 Spring Market on March 18th! This event is in support of the There will be food, drinks and music by 🏡🍻RSVP is required and donation to AHA suggested: bit.ly/houseparty318

Merry Christmas Eve and Happy Hanukkah!

Each year when I sit down with my clients to review their taxes, I also like to take time discuss overall financial health!

One item that always comes up is consumer debt and without hesitation, a handful of clients mention they had debt forgiven or will have debt forgiven in the new year.

If you fit into this category and had debt forgiven in 2019, DO NOT FORGET that forgiveness of debt is taxable income so be sure to let your CPA know before your taxes are prepared!

PRO TIP: If you plan on having debt forgiven in 2020, let your CPA know while he or she prepares your 2019 taxes so that income can be included in your 2020 estimated payments to avoid penalties or a large tax bill!

REMEMBER: Documentation is key - especially for the creditors who forgave your debt! If you had debt forgiven in 2019 be on the lookout for a 1099C from each of your creditors who forgave debt! These are an essential part of your 2019 tax return!

After the Tax Cuts and Jobs Act was passed in 2017, the state and local tax deduction was capped at $10,000 which negatively impact taxpayers in high income states. Taxes that used to be subsidized by the federal government through tax deductions suddenly become nearly twice as expensive to the taxpayer without the discount.

If you’re a entrepreneur or independent contractor who works remotely, you can solve this problem for yourself by moving to a state that doesn’t have income tax (like Texas or Florida) !

What do you need to do to change your residency?

While each state has its own residency rules, generally each state requires you maintain a permanent domicile in the state and be present in the state for 183 days!

PRO TIP: State residency audits are at an all time high so make sure you actually maintain a permanent domicile in the state you are claiming residency! States will look at your location of employment, where your child goes to school, where you’re registered to vote, and even where your doctor is located to determine your permanent domicile!

So make sure you’re actually moving to a new state before you try to eliminate state taxes by changing residency or you’ll be subject to back taxes and penalties in the state you’re actually a resident of!

REMEMBER: Documentation is key! Changing residency is a nuanced process and is regularly audited by states! Make sure you speak with your CPA before implementing this strategy to ensure you’re actually changing residency and you have all of your documents necessary to defend an audit!

If you’re ready to live state-tax free and want to ® reach out to my friend who sold this $2.55 million beauty in South Florida! Chris knows all about the and is ready to help you save on taxes when you DM him to ®

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On of the we discussed the different ways you can deduct automobile expenses and a few of you asked amazing questions!

The most frequently asked question was whether or not deductible car payments applies if the lease is in your name!

The answer is YES!

It does not matter whether the car is under your name or the business name!

If the car is under your name, you simply make the payments out of your business as “equipment rental”, record the lease payments as “rental income” on your personal return, and deduct your lease payments as “equipment rental” as a fully deductible expense!

All of your other auto related expenses are still deductible to your business!

REMEMBER: Documentation is key! So check back to our post with and for all your documentation needs! And if you’re finally ready to take advantage of the , check out their showroom on NJ Rt. 66 in Neptune!

Today’s tip is something we probably all heard growing up - Just because it’s on sale, doesn’t mean you have to buy it!

This tip also applies to tax savings!

On multiple occasions I’ve been asked by clients “Well what else can I buy or spend money on for additional deductions?”.

Let’s use an example to quantify why this thinking doesn’t make sense.

Let’s assume your effective tax rate is 40% and you’re considering throwing a second holiday party for your staff for $1,000 just because “it’s deductible”.

At the end of the day, you spent $1,000 to save $400 - yes the party was deductible so you only “spent” $600 but what other benefits did the spending yield?

REMEMBER: Whenever you’re considering spending money to take advantage of savings, ask yourself what other benefits will you receive from the spending? If you’re only going to benefit by receiving a discount, maybe now isn’t the time to spend!

You loved and sold your primary residence capital gain free by taking advantage of the primary residence exclusion.

You thought about and decided to make this year the year you double down on charitable giving to take advantage of itemized deductions over the standard deduction.

The and trucks just left with your donated furniture, rugs, home appliances, etc. that don’t fit in your new home and you’re feeling great!

But now you’re looking out your window one last time wondering how do you deduct these charitable contributions and what exactly you get to deduct!

The IRS allows you to deduct the FAIR MARKET VALUE of the non-cash items you donate AT THE TIME YOU DONATE THEM. Unfortunately, you don’t get to deduct the entire purchase price you paid for them.

How do you know the market value?! Ask the organization you’re donating to include the thrift store value of the items on the receipt (documentation!) you ask for from them!

REMEMBER: Documentation is always key! Make sure you receive a receipt or written statement from the charity that names the organization, states the value and a description of the property contributed, includes the date of the contribution, and a statement that no goods or services were provided by the organization in exchange for the donated property!

PRO TIP: Speak with your accountant before making any big non-cash donations! Items valued over $50,000, cars, etc. have specific rules and nuances that you’ll want to follow to make sure your deduction is completely supported!

Sometimes the best solutions to problems are the simplest! This rings true even with tax planning!

As a general rule of tax savings, the best tax planning strategies accelerate deductions and defer income.

As a cash basis taxpayer, there is a super simple way to do exactly that!

If you have any bills due in January and are a cash basis taxpayer, you can take the decision in the current year by paying the bill before December 31!

PRO TIP: There are some nuances to what can and cannot be paid using this method so you should always consult with a CPA before loading up on payments in December!

REMEMBER: Documentation is key! Make sure you have proof the payment was made before year end and that you knew the payment was for a legitimate business expense! You can’t overpay an invoice in the current year for the deduction and then get a refund in the subsequent year.