Werkheiser Tax & Accounting Office


Tax rebates
Retirement/Soc. Security
New Business Form
Loan Calculator
2019/2020 changes
Business Questions
Trusts & Valuations
Defer tax

  neillpic0515aa.jpg (40799 bytes) From the office of Neill Werkheiser  Spring, 2020.

Most tax return and payments due April 15, 2020 have been extended to July 15, 2020.  Individual stimulus payments, disaster loan payments and Payroll Protection Plan loan payments are available through IRS, SBA and banks.

Tel. 610 253-5420

Latest release -

RMD payments are suspended for 2020. If you are affected by Covid-19, you may take distributions from IRA's or company retirement plans and repay the money tax free within 3 years.  Most business websites have detailed info regarding this relief.

Major business change 2019/20 - Section 1031 treatment (like kind exchanges) which allowed the trade-in of a truck, for example, on a replacement without recognizing gain, has ended for personal property.  It continues for real property.  This is a significant change! However, most personal property can now be expensed without depreciating over many years. Be sure to see the above link "Defer tax".

If you file a partnership tax return for a multi-member LLC, you may wish to amend your Operating Agreement to allow special allocations of profit and loss if you are currently utilizing primarily guaranteed payments.

Residents of NY, NJ and DE, all high graduated tax rate states, will fare worse than PA residents under the new law because PA is a relatively low, flat rate state.

Pennsylvania is one of the friendliest states for retirees - NJ and NY are not.  PA taxes no part of social security benefits and does not tax retirement benefits in most cases. Florida has no personal income tax.  However, it is important to establish residency in FL. 

An IRA for 2019 may be opened as late as the regular filing deadline in July, 2020.  

Health Insurance legislation -. The mandate (tax) which was assessed in recent years for failure to have credible health insurance has gone away for 2019 and 2020.  Premium Tax Credit, Form 8962, must be part of your tax return if you purchased health insurance through the federal government's exchange.  In addition, you may receive a Form 1095-B or 1095-C from your employer or insurance company.  If you purchased insurance from a marketplace insurer you will receive Form 1095-A which is needed to prepare Form 8962.

A.  Under age 59 1/2?  There are multiple ways to tap your IRA without incurring the 10% excess tax penalty.

B.  Have a small business "on the side"?  Is it really a business or is it a hobby?  The distinction makes a huge difference when reporting for tax purposes.

If you have unused passive losses from rental properties you own, recover and use the losses when you sell your property.


Tips you can use, below - Click the "Business Questions" link, above for business/investment questions.

Q.  Can I claim a tax deduction for losses in my traditional IRA account

A.  Perhaps.  If the value of all your IRA's is less than your non-deductible contributions (basis), when you liquidate, you have a miscellaneous itemized deduction.  This is not likely, however.

Q. If I purchased or inherited shares of stock at $20/share and the stock increased to a high of $50/share during my ownership, can I claim a loss if I sold it in 2019 for $25/share

A.  No, this is very much misunderstood.  You would have a taxable gain of $5/share.  This example assumes no reinvested dividends.  

Q.  Will the annual Gift Tax exclusion increase in 2018? Will I owe gift tax

A.  It becomes $15,000. Very few folks ever owe gift tax.  It is more likely you will need to submit a gift tax return, however.

Q. What is the Earned Income Tax credit

A.  Sometimes referred to as "tax welfare", this credit provides a refundable payment to taxpayers with low earned income from wages and salary.  Strict rules apply.  As a result of  past abuse, taxpayers will now be required to file a "due diligence" report when claiming the credit.

Q.  Will I owe tax if I sell my home at a large gain

A.   Probably not.  If you owned and lived in the home as your primary residence for any two of the past five years, you may have a gain of $250,000 (single) or $500,000 (married) without paying tax.  If your gain exceeds these amounts, you will have taxable gain.  Also, depreciation which was deducted or deductible on the part of your home used for business cannot be part of the excluded amount.

Q. Must my child's earnings be used to contribute to his or her Educational I.R.A.

A.  No, while your child must have earnings from a summer job or babysitting, for example, you can actually provide the funds contributed to the I.R.A. for your child.   Interest, dividends & capital gains in these accounts can be withdrawn tax free to pay school expenses, including K - 12 education expenses such as private and parochial school costs.

Q.  Will I receive a tax benefit if I give appreciated shares of stock to a charitable organization

A.   Yes, you will avoid the taxable gain that would be incurred if you sold the shares and donated the proceeds and can claim a charitable itemized deduction for the fair market value.     

Q.  When is a Gift Tax return required

A.  If you made a gift with value of more than $15,000 to any one individual in 2018, you are required to file a gift tax return by April 15, 2019.  In most cases, no gift tax is due. Transferring your home to a child for less than appraised value constitutes a gift.

Q.  What is new for businesses

A.  In 2019 the Sect. 179 deduction limit remains greatly liberalized.  Some lower limits apply for vehicles.  The limit has been raised for future years and bonus depreciation will apply to equipment that is new to you - previously, you had to be the first user of the equipment.  Bonus depreciation allows for faster vehicle depreciation this year.

Q.  If I become ill and receive disability insurance benefits, must I pay tax on the benefits

A.  Maybe yes - maybe no!  Generally, if your employer paid the insurance premiums or they were paid with pre-tax dollars, the benefits are taxable.  If you paid the premiums, benefits would not be taxable.   If your employer paid half the premiums, half the benefits will be taxable.   

Located at 1430 Church Lane, near Nazareth, Easton, the Slate Belt, Stockertown & Tatamy, PA, since 1980.

Ask how we might be of service to you.

Tel. 610 253-5420

Cell 610 442-3696

Fax 1 866 577-3960




  .New business formation counseling.

Retirement plan - SEP, SIMPLE, Keogh,401-K.

Tax Return Prep. - Individual, Corporate, Partnership, Non-profit.

References upon request.