In America, not getting enough sleep isn’t an issue plaguing a select segment of the population. As of 2013, 40 percent of Americans get less than the recommended amount of sleep each night, as opposed to 11 percent of the population in 1942.

The negative side effects of not getting enough sleep are well documented, but as it turns out it isn’t the duration of your snooze affecting your health. A recent study has shown a link between waking up during the middle of the night and an increase risk of developing Alzheimer’s.

The University of Illinois conducted a sleep study of 516 adults aged 71-78. The study found that the proteins associated with Alzheimer’s, known as bio-markers, were highest in the participants who suffered from respiratory sleep disorders which led to frequent sleep interruptions.

According to the Alzheimer’s Association, 20 percent of women and 30 percent of men suffer from sleep apnea, the most common respiratory sleep disorder.

This sleep interruption is much different than the average occasional jolt awake (which may be an evolutionary defense mechanism); individuals afflicted by respiratory sleep disorders have been known to wake up upwards of 60 times per night.

There are many issues that keep us at night: financial worries, family issues, work issues etc. At Bourke Accounting we can help with your financial issues, come see us. Give us a call at 502-451-8773 or stop by for a visit. See you soon!

I love to travel and subscribe to many travel magazines and news letters; I even read travel books like a restaurant menu (voraciously)! I thought it would be nice to break up some tax blogs by blogging over a few travel updates.

• United Airlines changes policy on comfort animals after peacock incident: United Airlines wants to see more paperwork before passengers fly with emotional-support animals – and don’t even try to bring a peacock on board. The airline announced last week that it will tighten rules starting March 1, 2018. United said owners will have to confirm that their animal is trained to behave in public, and they will need a vaccination form signed by a veterinarian. The vet will have to vouch that the animal isn’t a health or safety threat to other people.
• Chris Hemsworth really, really wants you to visit Australia: Chris isn’t the only successful Aussie in Hollywood (Nicole Kidman, Hugh Jackman, Margot Robbie – the list goes on). But he just might be the proudest. The start of “Thor” is the official celeb ambassador for Tourism, Australia, and he’s more than just an award-winning handsome face when it comes to repping travel to his home country. During Super Bowl LII, as the Patriots and the Eagles battled for victory, a “Crocodile Dundee”-themed commercial for Australia starring Hemsworth and American Actor Danny McBride became the first-ever tourism spot to air during the big game.
• AAA  names its newest Five Diamond Hotels: Eight hotels made it to AAA’s new list of Five Diamond Hotels. A total of 121 hotels have earned the prestigious status. As more mid-scale and even budget properties are adding amenities for comfort and convenience, hotels that aim for a Five Diamond Rating must stay far ahead of the curve to differentiate themselves through advanced design concepts, highest quality furnishings and scrupulous attention to guest’s expectations.
• TSA Expands PreCheck to Five New Airlines: The Transportation Administration (TSA) announced that five new airlines will be added to the list of approved PreCheck carriers. The new airlines are Air France, Brussels Airlines, KLM Royal Dutch Airlines, Philippine Airlines, and World Atlantic. With the additions, TSA has now approved 47 total carriers for its PreCheck program.

Before you travel onto your next vacation come on into to Bourke Accounting have get your taxes done. Refunds are usually a two week turn around at this date in time. Come in and see us, or call for an appointment at 502-451-8773. See you soon!

At Bourke Accounting we are a full service tax and accounting firm. A big part of our business is forming Corporations, LLC’s, Non Profits and over-all helping people figure out which entity is best for their business. With the new “Tax Cuts and Jobs Act” Corporations seem to be the “it” entity of the moment. I thought I’d give you a list of many of the questions I usually get when forming a Corporation.

Q: Can one individual hold all positions within the Corporation?

A: Yes, Generally, a Corporation must have a President, Treasurer, Secretary and at least one Director.

Q: Can I incorporate in more than one state?

A: No. A Corporation can only be incorporated (formed) in one state. Once legally formed, it may do business in any state in the country, but it may have to fulfill additional requirements depending on what states the Corporations wants to do business in.

Q: What is a registered agent and why does my Corporation need one?

A: A registered agent, sometimes referred to as a resident agent, is someone who resides within the state of incorporation. The registered agent is responsible for accepting official notices from the Secretary of State and service of process in the event that the Corporation is sued.

Q; What does the registered agent charge?

A: The charges varies depending on who you use. You can also be the registered agent.

Q: How often do I need to hold a shareholder’s meeting?

A: The shareholder meeting needs to be held at least annually.

Q: What do the Board of Directors Do?

A: The Board of Directors is responsible for electing the officers of the Corporations and for setting corporate policy.

Q: What do the officers of the Corporation do?

A: The officers are responsible for the day-to-day operations of the Corporation.

Q: What is my Corporations incorporation (formation) date?

A: Your corporation’s incorporation date can be found on the Corporate Charter issued by the Secretary of State or will be “date stamped” on the from page of the Articles of Incorporation.”

Q: Does my Corporation need it’s own EIN  number?

A: Yes

Q: How does my Corporation open a bank account?

A: Many banks provide their own forms that are required to open a Corporate bank account. Most banks require the Corporation formation papers and a copy of the EIN number.

These are some of the basic questions I get when we form a Corporation. One thing I always stress when forming a Corporation is that the Corporation is now a living entity that needs to be taken care of…and looked after. And the tax benefits are amazing. Let Bourke help you form your Corporation today! Give us a call at 502-451-8773 or come by for a visit to find out more. See you soon!

You might think twice before giving money to you adult child as it could ultimately trigger YOUR financial ruin. The majority of parents with adult kids – 74 percent – continue to help them financially after they reach age 18. More than 80 percent contribute to living costs, such as groceries, health insurance, phone bills, or car insurance, while 70 percent help with credit card payments, housing, or student loans. It can be a slippery slope. Experts say parents often find them selves paying for their children’s expenses without ever having a conversation about it. And that can make a serious dent in your retirement nest egg. Our advice is run the numbers to figure out whether you can afford to help and if you can’t you need to ask your kids to start pitching in.

It is possible to wind down your support without leaving your children in the lurch. Helping them cover basic living expenses makes sense only if there is a “solid reason they can’t yet fend for themselves.” Anything more is likely “hobbling them on the path to full-fledged adult-hood.” To begin closing the Bank of Mom & Dad, switch to the “no frills plan.” You should not be offering up money so they can “take classes regularly at Soul Cycle” or “Uber everywhere.: Help them set a budget to determine if they can afford what they want.  If they can’t, they should “settle for a cheaper version or go without.” This will help them become financially savvy and resilient. If you discuss an end date to your largesse a few months prior to making changes, they can dig out from credit card debt and save for emergencies. Better yet, educating your children from adolescence onward about budgeting can help avoid this scenario.

Dreading the idea of having a conversation with your child about money? You’re not alone: 69 percent of parents have “at least some reluctance” to talk with their kids about finances. For parents enduring financial hardship of their own, it can be extremely uncomfortable. But whether your own financial habits “are top-notch” or not, talking regularly about money helps “set them up for a stronger financial future.” You could begin by explaining price comparisons or collectively “calculating a tip at a restaurant.”  Experts say opening the floor to your children to ask money-related questions help ensure “it doesn’t feel like a lecture.” As they grow, “look for teachable moments,” and talk about their career goals and what sort of salaries they might expect. When they get older, be even more frank; if they don’t understand how much it will cost when they move out, they could “end up right back where the started – at home.”

We all have experienced family issues that have caused financial consequences. Let Bourke Accounting help you navigate through those “sometimes” rough waters. Give us a call at 502-451-8773 or come by for a visit. See you soon!

The Internal Revenue Service has estimated it may need nearly half a billion dollars more over the next two years…to implement the sweeping tax overhaul. IRS funding has shrunk by 20 percent since 2010, but the agency says it needs additional funds for answering phone calls, creating new tax forms, and training employees on the latest changes. Though the tax overhaul was originally touted as a way to simplify the code, in some case Congress added new complications. For instance, the law reduced the home mortgage interest deduction from $1 million to $750,000 for loans that closed after December 5, 2017, but refinancing and loans that were in the process before Dec. 15 are exempted. The problem, however, is that the IRS generally does not know when a mortgage closes, the terms of a refinancing, or the date of a purchase contract.

At Bourke Accounting we can answer your questions re any tax issue you may have. Give us a call today at 502-451-8773 or come visit us. See you soon!

 

The passage of the new tax bill is a golden opportunity for you to convert your traditional individual retirement account into a ROTH IRA. Why? The bill reduced multiple individual income tax brackets, so if you convert your traditional IRA to a ROTH and immediately pay taxes on those funds, “you will be paying at a lower rate then before.” Contributions to traditional IRAs are tax-deductible now because you will pay income tax on them later, when you withdraw the funds. But withdrawals from ROTH accounts are tax-free, because contributions are taxed upfront at current tax rates. Settle your bill when it’s the lowest it’ll ever be…there will never be a better time than now.

Let Bourke Accounting help you will all of your financial needs. Need to talk about how an IRA will effect your taxes? Come on in and see us. Give us a call at 502-451-8773, or stop in for a visit. See you soon!

The IRS is urging victims of last year’s hurricanes, especially those who lived in areas affected by Hurricanes Harvey, Irma and Maria, to see if they qualify for the Earned Income Tax Credit (EITC). According to the IRS, many people whose incomes dropped in 2017 may be eligible to choose a special option for figuring EITC, a credit for low-and moderate-income workers and families.

A special computation method, available only to people who lived in one of the hurricane disaster areas during 2017, may enable them to claim EITC or claim larger than usual credit. Under this method, taxpayers whose incomes dropped in 2017 can choose to figure the credit using their 2016 earned income rather than their 2017 earned income. Eligible taxpayers should figure the credit both ways – the regular way using 2017 earned income and this special way using 2016 earned income – to see which yield the larger EITC. 

The EITC helps working people who don’t earn a lot ($53,930 or less for 2017) and meet other eligibility requirements. Because it’s a refundable credit, those who qualify and claim it could pay less federal tax, pay no tax or even get a refund.

EITC can mean up to a $6,318 refund for working class families with qualifying children. Actual credit amounts vary based on income, family size and other factors. Workers without a qualifying child with incomes below $20,600 could also be eligible for a smaller credit of up to $510. On average, EITC adds $2,445 to refunds.

To get the credit, people must file a tax return, even if they owe no tax and even if they normally aren’t required to file. Let Bourke Accounting help prepare your tax returns. We are open year round and are ready to help. Give us a call at 502-451-8773 or come by for a visit. See you soon!

With the amount of time spent at work, co-workers sometimes develop personal relationships. These relationships can lead to concerns about favoritism, conflicts of interest, sexual harassment Complaints complaints, and related issues. Here are some factors to consider for addressing these concerns.

1. Evaluate policy options: Consider your company culture to decide what type of policy makes sense for your business. While you might have difficulty enforcing an outright ban on all workplace dating, you can discourage workers from entering when there might be a conflict of interest or an imbalance in power (such as a supervisor-employee relationship, or an HR-manager relationship). Additionally, you can expect employees to maintain a professional environment and refrain from public displays of affection when on-duty and on company premises. Keep in mind that some state prohibit employers from taking adverse action against employees for lawful off-duty conduct, which may be construed to apply to dating. Draft and enforce your policy to comply with all applicable laws.
2. Consider asking for disclosure: Some employers require that employees disclose their workplace romance to their supervisor or HR. With knowledge of the relationship, employers can take steps to help minimize the impact to the business. Pay particular attention when there is an imbalance of power, which was a common thread in the harassment complaints that received national attention in 2017.
3. Implement an anti-harassment policy: All employees should have a written policy that prohibits sexual and other forms of harassment and outlines the company’s complain process. Sexual harassment includes unwelcome verbal or physical conduct of a sexual nature that affects an individual’s employment, unreasonably interferes with work performance, or creates an intimidating, hostile, or offensive work environment.
4. Develop an effective complaint process: Encourage employees to report inappropriate conduct, without fear of retaliation, before it becomes severe or pervasive, whether they are a victim or a witness. Offer multiple avenues to file complaints, and assure employees that you take all complaints seriously and will investigate the allegations.
5. Investigate: If you learn of misconduct or a workplace relationship affecting the work environment, launch a prompt, impartial, and thorough investigation. Depending on the circumstances, consider whether an internal investigation is sufficient or if you need to have an outside third party conduct an impartial investigation. If an investigation reveals that harassment occurred, take immediate and appropriate corrective action to remedy the harassment and prevent it from recurring.
6. Train Supervisors: Train supervisors on your polices and how to report and respond to misconduct in the workplace. Supervisors should know how to identify and respond to sexual and other forms of harassment and how to handle situations in which a workplace relationship impacts morale or productivity.

Clearly communicate standards of conduct and ensure that your polices and practices effectively prevent and respond to inappropriate behavior. If you have any questions on how to form policies and procedures for your office, let Bourke Accounting help. We are versed in all areas that can move your business forward to where you want it to be….call us at 502-451-8773 or stop by for a visit. See you soon!

Paying taxes is a necessary evil, but U.S. expats and foreign citizens living in the States have a tickler tax picture than most. Cross-boarder professionals (i.e., working professionals living in a country other than their country of birth) face a far more complicated and confusing tax picture than most people. Having financial affairs outside of the U.S. invariably creates a unique tax situation. And failing to correctly pay taxes puts you at risk for major fines and penalties. The tentacles of the U.S. federal tax law reach farther than those of almost other country. Anyone with financials ties to the U.S falls under the jurisdiction of their stringent regulations. Here are five tips for making your tax life a little less taxing…

1. Report All Foreign Accounts. Failure to report foreign bank accounts and other investment holdings can result in big penalties, sometimes even as much as the entire account balance. Owners of foreign accounts with higher balances must include Form 8938, Statement of Foreign Assets, with their U.S tax declarations. Foreign Bank Account Reporting (FBAR) filings must also be done separately for accounts totaling over $10,000.
2. Report All Income To The IRS. Many people still believe that what they earn abroad is no business of the United States. Not so. The U.S. is the only major tax system employing a worldwide tax based on citizenship, regardless of where your live. This means that even if you already are paying tax to a foreign authority on your foreign income, you still need to report it to the IRS and potentially pay U.S. tax.
3. Move Any Taxable Investment Accounts To The U.S. In case you haven’t heard, the IRS does not like U.S taxpayers to own investment accounts located outside the U.S. borders. With the numerous scandals over the past decade involving foreign banks helping U.S. taxpayers to evade taxes, there is now much greater awareness about the inappropriateness of foreign investment structure for US taxpayers.
4. Report Foreign Rental Income. Many cross-border families own property abroad. Often they’ll hold onto a former home as an investment, and begin renting it out to create a passive income source. This often makes people wary about reporting property on their U.S tax return. They shouldn’t be. In most cases, these foreign rental properties are already taxed in the country where they are located, and that foreign tax becomes a credit against any potential U.S tax.
5. Keep Track Of The Capital Gain Exemption On A Former Residence. If a taxpayer owns a home that has appreciated significantly, he or she should be careful about converting that property to a rental. The U.S. federal law grants a $500k tax exemption to marrieds couples ($250k if a single filer) on gains from the sale of a primary residence. This applies to foreign residences as well, so long as the the taxpayer lived there for at least two years. However, this exemption can be lost over time and may be prorated if the property is subsequently rented out once the homes was not a primary residence for at least two of the previous five years. So, if the taxpayer moves away and sells the house more than three years after he or she no longer lives in it, any gain from the sale will be fully taxable.

Learning to navigate tricky tax situations can be painful, but it is a small price to pay for the benefits of global existence. Give Bourke Accounting a call today at 502-451-8773 or stop by for a visit so we can help you navigate your financial situation. See you soon!

 

What happens when you sell a rental property and the gains exceed current year losses and suspended losses from rental property?

Are you familiar with “suspended passive losses?” Generally, with  a passive activity (e.g., rental property), losses each year are allowed to the extent of income unless the taxpayer qualifies under 469(i) as actively participating in the activity. (A full discussion of active participation is out of the scope of this blog, but will revisit it at another time.) Any excess losses are suspended until the taxpayer has passive income to offset those losses or disposes of the property.

While this is pretty straightforward with a single property, additional complexity arises when a  taxpayer owns multiple properties. A frequent question I get deals with a scenario where a client sells a rental property and the gains exceed current year losses and suspended losses from the rental property. Will those excess gains release some of the suspended passive losses from the other rental properties the taxpayer still owns? The answer is yes. The gains from the sale of the property are classified as passive income for this purpose. As such, they are used to offset additional suspended passive losses. The gains are included in the Net Income column of the applicable worksheet, which then flows to Part I of Form 8582, Passive Activity Loss Limitations. Here is a good example:

Bob Smith owns three rental properties that he has held for several years. Current year losses are as follows:

• Whispering Pines – ($1,250)
• Silver Creek – ($750)
• Plum Falls – ($1,500)

He does not actively participate; therefor, over the years, his losses have been suspended. Prior year suspended losses from the properties are:

• Whispering Pines – ($10,000)
• Silver Creek – ($12,500)
• Plum Falls – ($15,000)

This year Bob’s tenant offered to buy Whispering Pines for $250,000. He will have a gain on the sale totaling $100,000. Due to the gain from the sale of the property, all of the prior year’s suspended losses will be used in the current year. The $100,000 in gain will be offset by the suspended losses and current year losses, therefore he will pay tax on $59,000.

If you have rental properties and you need help or have questions come see us. At Bourke Accounting we are well versed in Passive Activities, give us a call today at 502-451-8773. See you soon!