Author Archive | Robert Warwick

Social Security Wage Base for 2019

By on October 18, 2018

The Social Security Administration (SSA) has announced that the social security wage limitation for 2019 will be $132,900, up from $128,400 in 2018. Employees and employers each pay the social security portion of FICA (6.2%) on compensation up to the year’s wage limitation. In addition, the employee and employer will each pay 1.45% of their […]

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Revised Inflation Adjustments for 2018

By on March 14, 2018

The IRS has revised the inflation adjustments for 2018 to reflect changes made by the Tax Cut and Jobs Act, enacted at the end of 2017. In addition to revising the tax rate schedules, the Act also changed the index to be used to determine the inflation adjustments. The new index — Chained Consumer Price […]

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Health Savings Account Parameters for 2018

By on May 17, 2017

The Internal Revenue Service has announced 2018 cost of living adjustments for health savings accounts (HSAs) under current law. For those with HSAs, a high deductible health plan must have a deductible of at least $1,350 (up from $1,300 in 2017) and total out of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) […]

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Robert Warwick

Tax Court Holds Damages Not Attributable to Physical Injury

By on February 26, 2016

  Section 104(a)(2) of the Internal Revenue Code provides an exclusion from gross income for damages received for physical personal injury or physical sickness.  The statute further provides that emotional distress is not a physical injury or physical sickness (although damages to pay for medical care attributable to emotional distress are excludable).  However, the regulations […]

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Robert Warwick

Another Tax Trap for the Unwary – Tax Court and the Blank Receipt

By on October 23, 2014

As a general rule, the fair market value of property contributed to charity is deductible in determining taxable income. However, deduction is contingent on the donor’s substantiating the fact and value of the property contributed in accordance with statutory and regulatory rules.   Essentially, a contribution valued at $250 or more must be substantiated with an […]

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Supreme Court Holds Inherited IRAs Not Exempt from Bankruptcy Estate

By on June 20, 2014

The Bankruptcy Code permits an individual in bankruptcy to exempt from the bankrupt estate “retirement funds” in an individual retirement account (“IRA”) or certain other tax-advantaged vehicles. In a recent case, the U.S. Supreme Court considered whether the exemption extends to amounts held in an inherited IRA qualified for the exclusion and unanimously held that […]

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Robert Warwick

FICA Tax Imposed on Compensation That Will Never Be Received

By on June 5, 2014

FICA tax is normally collected through withholding at the time the underlying compensation (“wages”) is received. Under a special rule in the Internal Revenue Code, however (the “special timing rule”), FICA with respect to deferred compensation is collected (generally by withholding from the employee’s non-deferred compensation) at the later of: i) the time the services […]

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