Tag Archives: finances

Taxes Will Not Be The Death Of You

March 23, 2018 by
Photography by Bill Sitzmann

Accounting firm Lacey & Associates has been around plenty long. Not nearly as long, though, as the document that hangs on its office reception wall—a 1913 Federal Form 1040 Income Tax Return.

That’s the first return issued following passage of the 16th Amendment to the U.S. Constitution, which allowed Congress to levy an income tax without apportioning it among the states or basing it on the U.S. Census.

The return is a mere two pages long. Figuring taxable income required completion of seven lines. Seven more lines were needed to figure all deductions.

“There wasn’t much to it,” Doug Lacey says with a chuckle.

Not exactly the case more than a century later. Over the years, tax rates have risen and tax forms have grown more numerous and complicated. To the delight of many (and chagrin of many others), Congress and President Donald Trump addressed that last December with passage of the Tax Cuts and Jobs Act, one of the most far-reaching tax reform bills ever.

Doug, president of Lacey & Associates and an accountant since the 1970s, has never seen anything like it.

“It’s about as large of a change as I can remember,” he says. “There’s a lot to it, both looking at it from individual tax returns and business tax returns. Every year there would be some small changes…but nothing as big in scope as what we have starting in 2018.”

While the changes seem likely to make filing tax returns easier for the majority of individuals, they also might call for more guidance for businesses. In fact, it might cause some companies to change their very filing status.

“It gives us the opportunity to do a lot of tax planning and meet with the clients more than we probably would have,” Doug says. “To talk to them about how these changes affect them and whether to do anything different.”

With these many changes, some may worry about being audited, but accountant Scott Lacey says business owners, especially small business owners, can relax.

“There could be even fewer audits because they have simplified the tax code,” Scott says. “And typically the IRS doesn’t audit small businesses.”

Lacey’s firm has roots to the 1940s when his father, George, began providing bookkeeping and tax services part time. Doug joined him in 1977. In 1991 he began Lacey & Associates. His son, Scott, joined the firm in 2005 and is happy to be part of the family-run company.

“I realized I’m going to get more pride out of providing this service than I will staying at a large corporation,” says Scott, who previously worked in finance at First Data Corp. “The thing that I like the most about the shift is, in a smaller company, you have to have your hands in all the pots, you have to deal with the computer company, you have to pay the bills, you have to make the coffee, you have to do everything. I feel like I’m making more of an impact, but you also don’t have typical 9-5 hours, so you’re working nights and weekends quite a bit.”

Located in Ralston, the company will file 2017 returns for about 1,200 individuals and 150 businesses.

“I still get to work with some of George’s clients, or their children,” Scott says. “It’s kind of an honor.”

The Laceys have waded through multiple tax changes. They say the most important thing to know about the 2018 tax changes is that not everything is known.

The Laceys have done all they can to understand the changes, reviewing the bill, listening to online podcasts from tax experts, and reading summaries published in various industry newsletters and periodicals.

“There are certain things that even people running the webinars don’t understand or say we have to wait and see some more examples of how this works,” Doug says. “We’ll have to look at it and see the ramifications of all the different changes.”

Scott says the company will continue to keep on top of the changes.

“Sometimes the [government] adjusts the new laws throughout the year. I fully expect to see some adjustments throughout this summer and fall.”

That said, Doug expects several of the changes to have significant impact. For businesses, he points first to drops in the tax rate.

For C corporations, which pay income tax, rates drop from a high of 35 percent to a flat rate of 21 percent. “That’s why you’re seeing the stock market doing so well and seeing some corporations bring some of their different locations out of Europe, Africa, and South America back to the United States,” Doug says. “They figured out what it’s going to save them, and they’re trying to bring it back to the United States.”

For S corporations, which pass corporate income, losses, deductions, and credits through to their shareholders, the tax rate drops to a flat 20 percent.

The changes, Doug says, might lead some of his clients to switch from a C-corp. to an S-corp. “Or vice versa,” he adds.

Also of significance, Doug says, is a change to equipment write offs. Previously, that came to 50 percent of what the equipment cost. That’s been changed to 100 percent of the cost.

For individuals, Doug cites several changes as most important:

A drop in all tax brackets and new withholding tables.

A raise in the standard deduction for married couples filing a joint return from $12,700 to $24,000. That change alone, Doug says, is likely to lead most people to forgo itemizing deductions as in most cases they won’t exceed $24,000. “The IRS anticipates that people using the itemized deductions will go from 30 to 10 percent.”

The $4,150 personal exemption is being eliminated.

An increase in the child tax credit from $1,000 to $2,000 per child. The amount of the credit that is refundable increases to $1,400.

For now, the Laceys and their team are focused on handling the rush of 2017 returns. Lacey & Associates will work round the clock to make sure clients receive the best service possible.

But though definite answers won’t come until later this year, he knows the questions will come now.

“The clients are going to come in and say, ‘How does this new tax law affect my income tax?’” Doug says. “We’re going to tell them a few things, but there’s quite a few complex issues here, especially in the business area, that we can’t really say right off the top of our head how it’s going to affect them.”

From left: Scott and Doug Lacey

This article was printed in the April/May 2018 edition of B2B.

The Hidden Menace of Elder Abuse

February 20, 2018 by
Illustration by Matt Wieczorek

During Labor Day weekend in 2014, Jill Panzer and her youngest aunt set out for a seven-hour drive to Hemingford, Nebraska, to pick up Jill’s grandmother, Edna. The two were going under the guise that Edna would be staying in Omaha for a few weeks. Unbeknownst to Edna or her eldest daughter (who was also Edna’s caretaker), the two planned on keeping Edna in Omaha, because they suspected she was being exploited by her caregiver.

Panzer, the granddaughter, suspected something was amiss because her mother (Edna’s second of three daughters) said Edna—who had turned 90 a few years earlier—was appearing more and more confused during visits. Her eldest aunt moved into Edna’s home in the fall of 2011, months after Edna stumbled over her ottoman and injured her back.

Panzer says Edna’s eldest daughter began giving her mother the drug Lorazepam without a prescription to help Edna sleep at night and to help with her anxiety. Edna was later legally prescribed the drug. Then, the granddaughter says her youngest aunt visited Edna in July 2014. During that visit, she reported back to family in Omaha that the matriarch had a gash on her arm from a fall. She appeared extremely confused. Edna’s finances were also showing irregularities, such as missed rent payments that were due to Edna.

“We started looking and realizing there were a bunch of little things happening,” Panzer says.

When they arrived at Edna’s house, Panzer and her youngest aunt noticed Edna wasn’t packed for the trip. Edna’s eldest daughter told Panzer that Edna wasn’t feeling well and couldn’t make the trip to Omaha. In Edna’s home, her eldest and youngest daughter began arguing. While Edna and her daughters were talking, Panzer went to her grandmother’s room and began packing whatever clothes she could into suitcases and sacks. Panzer would later find out that many of the things she packed wouldn’t even fit her grandmother.

“I literally just packed up my entire car while those two women were going back and forth about everything,” Panzer says.

As the arguing continued, Edna began to feel ill. She went to the bathroom. Panzer tried to convince her to go back to Omaha with them. Panzer told her youngest aunt, “If I have to call the sheriff, we are leaving this house today with my grandmother.”

Panzer got her grandmother’s walker and helped her into the van. As she buckled her grandmother in, Edna’s youngest and eldest daughters were still talking. Finally, Edna’s youngest daughter got in the van with Panzer.

“I hit my power button, the sliding door in the van shut. I threw it in reverse, and we just drove,” Panzer says.

During the drive, Edna was upset. Eventually, the mood calmed enough that they ate fried chicken at a restaurant in Broken Bow on the way back to Omaha. When they finally arrived, Edna stayed at her youngest daughter’s home.

Panzer and her youngest aunt arranged medical evaluations for Edna. Doctors determined Edna didn’t show signs of physical abuse, but they did note her blood pressure medication was being administered improperly.

Along with scheduling medical evaluations, Panzer began making calls to close any financial accounts that Edna’s eldest daughter had access to, including Edna’s credit cards and bank accounts. On paper, this would appear to be a challenge, because Edna’s eldest daughter’s husband was her power of attorney. All it took was Edna’s verbal OK to close many of her accounts.

“It was that stinkin’ easy. All I had to do was put my grandmother on the phone. It’s almost criminal,” Panzer says.

As Edna’s financial and medical issues were being resolved, the matter of placing her in an assisted living center still loomed. Neither Panzer nor her youngest aunt were able to care for Edna full time. Panzer’s mother (Edna’s middle daughter) lived hours away. Panzer says her grandmother reluctantly agreed to stay in an assisted living center for rehab, but not permanently.

“She’s buried two husbands. She’s always been a fiercely independent, proud woman,” Panzer says.

Since that Labor Day trip in 2014, Edna has continued to live in the same assisted living center. Panzer was able to get a new, independent power of attorney for Edna. Her home in Hemingford was sold, and Panzer had to hire lawyers and go to court to evict Edna’s grandchild (the daughter of Edna’s eldest daughter) from Edna’s house.

“I don’t have a unique story,” Panzer says.

The Center for Disease Control and Prevention lists the forms of elder abuse as the physical, sexual, or emotional abuse of an older adult. It also lists neglect and financial exploitation as other forms of abuse. In 2016, the Nebraska Department of Health and Human Services reported that Adult Protective Services received 126 cases of elder abuse in Douglas and Sarpy counties.

Attorney Susan Spahn handles estate and trust matters at Endacott, Peetz & Timmer law firm. As people’s life expectancy continues to increase, so does the time when people are living in a “gray area,” which Spahn defines as a place where people are capable of living independently, but at the same time, are vulnerable to exploitation from family members, or telephone and internet-based scams.

“They can tell stories from the past that are accurate, but if you ask them to make a decision that requires thought, they cannot do it,” Spahn says.

When a parent becomes less and less able to make financial decisions for themselves, their children are the most likely to be called to handle the finances. It’s no coincidence that the most common perpetrators of financial abuse for elders come from immediate family members.

Spahn compares the hidden scourge of elder abuse to the rampant spousal abuse that went unreported in the middle of the 20th century. “Nobody would talk about it. And it was viewed as a civil matter,” she says.

Some of the biggest temptations for elder abuse comes when a family member may still be reliant on their parents for financial assistance. Then, when the parent becomes unable to handle their own financial matters, the dependent child suddenly has access to a parent’s bank account and starts writing checks to themselves, Spahn says.

Another issue Spahn has seen is with inheritance, and children who are expecting their inheritance to help them as they age themselves.

“If mom and dad are holding on to 95, then that means they’re approaching their retirement without their inheritance, and they don’t like that,” Spahn says.

Spahn says the best way to prevent financial elder abuse is to appoint someone they trust the most with their bills as their power of attorney.

“I tell my clients the power of attorney is more important than their will,” Spahn says. “The will isn’t pulled out until after they’re gone.”

If a person either doesn’t have children, or has children who live too far away to be an effective power of attorney, Spahn says the next best step is to appoint a corporate fiduciary to handle their financial matters. Most banks have trust departments, where people can appoint independent financial guardians.

If a parent has more than one child, Spahn says one of the best ways to alleviate family tension amongst siblings is to have the designated power of attorney provide copies of banking and financial statements, and use software like Quicken to provide online access to such information.

“If one child is not willing to do that, then that’s a red flag,” Spahn says. “If mom is still alive, and the kids are hiring lawyers, they’ve all just lost.”

To report elder abuse, people are urged to call Adult Protective Services at 800-652-1999. Callers may remain anonymous. Visit the National Center on Elder Abuse at ncea.acl.gov for more information.

This article was printed in the January/February 2018 edition of Omaha Magazine.

The Big Move-In

March 25, 2013 by
Photography by Bill Sitzmann

So you and your partner have decided to take your relationship to the next step by moving in together. Holy cow, you say, where do we start?

Before even beginning the home hunt, ask yourself if this is something you truly want. If you feel unsure or pressured, now is the time to speak up. Do not use moving in as an excuse to save an already troubled relationship. Think on it for a few weeks, or even a few months, if you can. Make sure you both legitimately enjoy each others’ company and have as many overnights as possible so he gets used to your natural beauty (i.e., sans makeup), and you get used to his cleaning rituals—or lack thereof.

As Laura Drucker for The Daily Muse puts it, “It’s okay to feel scared—big changes can potentially equal big disasters,” but if you two are in a serious, committed relationship, cohabitation may allow you two to continue your life together and get to know each other on a newer, deeper level.

Consolidating Your Inventories

Downsizing your own inventory first will help you to decide what stays and what goes. Maybe it’s time to let go of the 20 socks with no mates (even though the plaid one is super cute), or the coffee maker since you’re a tea drinker now. This could even be a lucrative decision, as lightly worn clothing or older, unmatched furniture can easily be sold on Ebay or Craigslist. Next, make a list of everything you are moving with and everything else you are putting into storage. When consolidating the big items, choose the newer, nicer pieces. Rosemary Brennan’s “5 Conversations You Must Have Before Moving In Together” in Glamour suggests, “keeping the most comfortable bed, better television, and newer living room furniture.”

The Sit-Down

The distribution of bills and chores is incredibly important. First, it helps if both of you are financially stable with steady incomes. Split bills down the middle if you make about the same, or split them based on ratio if one of you has a higher-paying position than the other. Have a sit-down before signing the lease to discuss chores, scheduling, budgeting, and even who is (and is not) allowed over when one of you is not home. Starting with a plan you can actually stick to will help soften the blow when these issues arise in the future.

Communication is Key

Know how to argue successfully with your partner without being hurtful. Make sure there is a definite end to an argument, and, most importantly, a resolution. This is when Mom’s advice on knowing when to pick your battles really starts coming into play. Be open to compromise. For example, agree to keep his shot glass collection in exchange for more room in the closet. Be diplomatic, not demanding about what stays and what goes. By making the effort, the process of you and your partner moving in together will be easier and more successful.