Adam Barr with Miller Grossbard Advisors talks taxes and what has been put in place to assist those effected by the storm.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello Texas. Welcome back to Texas Business Radio. We got a great program going today. It’s all about the hurricane Harvey and relief. What can we do? We’re going to wrap this program up here with information about tax relief. And this is one that everybody is going to want to listen to. So sit back, relax, keep in mind that anything that is said, you can go see it, hear it again on Texasbusinessradio.com. Or you can call in, we have a 24 hour call in line at 844-814-8144. Don’t even write that down. Go to Texas Business Radio, it’s there. We also monitor #TBR, if you’re into Twitter. We love to hear from you. So, my name is Jay Curry and I’m here as your host today because Mr.Matt Register had to step out. He’s down on the south side of town having trouble, here in Houston, getting back to the north side. So we’re going to have some fun here. And we have a very special guest. Mr.Adam Barr, who’s a tax supervisor for an outstanding CPA firm here in Houston called Miller Grossbard. And they are one of the top in the country. We may get a chance to talk about that but first we want to talk about tax relief. Adam thank you for coming on board.
Adam Barr: Thanks for having me.
Jay Curry: Yeah, tell us a little bit, first of all, about Miller Grossbard. What’s that all about?
Adam Barr: Sure. So we’re a local firm here in Houston, Texas and we primarily serve entrepreneurs and small business owners and their businesses. And we also work with family wealth planning, estate planning and so on and so forth.
Jay Curry: So, it’s tax, it’s accounting.
Adam Barr: Yes sir. Anything you need related to accounting, we do. We do tax compliance work, we do tax planning work, we do assurance work like audits and reviews and we also have a, a bookkeeping and financial accounting practices.
Jay Curry: Real quickly, while we’re talking about the firm though. Your, your well known nationally. You won the number one award here recently. What was that all about?
Adam Barr: Yeah. So, last year, Inside Public Accounting, which is a trade publication, recognized us as being the number one best of the best firm among the firms that they spoke with.
Jay Curry: Which is generally small to medium size. But number one in the nation.
Adam Barr: Yes sir.
Jay Curry: But that’s not new for you. Right? You’ve been up in the top 10 for, I don’t know, nine or 10 years or so.
Adam Barr: Yes sir. So, most of, I believe nine of the past 10 years. I have to checked that. But I believe most of the past 10 years we’ve been in their top best of the best lists.
Jay Curry: That’s quite an accomplishment. Congratulations. Well, we’re here to talk about, what and the heck is the federal government going to do to try to help us get a little relief. You know, so much of Texas was hit and hit hard. We feel it here, of course, in Houston but it’s not just in Houston and it’s all up and down the coast. So give us a little idea of what Uncle Sam is going to do for us. Is there any relief coming?
Adam Barr: Absolutely. So the IRS has announced disaster relief provisions and you can find that, you can just Google IRS disaster relief and click on the link that will come up for irs.gov. But basically, all of Texas that’s in the disaster area, there’s a long list of counties, was given substantial relief provisions by the IRS. Primarily this is extension of deadlines. So for any tax returns that haven’t been completed yet, if you’re on extension from earlier this year for tax year 2016, you now have until January 31st to file your return without penalties. And the IRS will apply that relief automatically based on your zip code. So it’s, it’s not anything special that you have to do. You can just file you return after the deadline and not be penalized.
Jay Curry: So, if I haven’t filed my 16’s, I get an extension automatically. It should have been filed by now. Right? But I guess the last one still coming up, the last opportunity. And then what about this year’s taxes? Is that going to be extended beyond the normal or is that.
Adam Barr: No. Tax year 2017, those returns aren’t due until March and April of the coming year. So, that, that’s not affected by this. But as far as estimated tax payments, I bet a lot of your listeners are required to make those quarterly payments. Now the payment due September 15th and also the payment due January 15th are now both due January 31st. So, we have some additional time to pay that tax.
Jay Curry: So, you got a little time to get your act together and try to get out of this mess that we’re in. Get your business back up and on its feet. Now that, that’s good. What else are they brewing up for us? So, we’re saying, first of all, on your tax return, you get a little relief there for 16. Right?
Adam Barr: Yes sir.
Jay Curry: And then on your estimated taxes and your payments, quarterly payments have been delayed. Both the third and the fourth to January. Or did you say third has been delayed to January?
Adam Barr: 3rd and 4th, they’re both delayed until January 31st.
Jay Curry: Okay. And then what, what else?
Adam Barr: I think something that’s super important that we need to talk about is the casualty loss deduction. So, a lot of taxpayers will be eligible to take a loss on their tax return as an itemized deduction for damage to their home or decrease in the value of their personal property due to flooding or storm damage. And the really cool thing about the disaster relief provision for this is that the IRS is saying you can actually take this loss on your 2016 tax return or your 2017 tax return. And so I would definitely encourage people to talk with their tax adviser and to determine which year it provides them a larger benefit. Now if they want to take it on their 2016 tax return and they’ve already filed it, they’ll have to file an amended return. But they can do that. And this is an opportunity to maybe get some of that cash back now in the form of a tax refund to help pay for these costs.
Jay Curry: So, a lot of, a lot of companies and a lot of individuals really don’t know yet. I mean there’s just an awful lot of recovery still going on. They have time, extra time to get that. You’ve already talked about that. But once they figure out what their losses are, then they can write that off.
Adam Barr: Yes.
Jay Curry: Can’t be just anything. What, what types of things are you talking about.
Adam Barr: Absolutely. So, obviously it’s subject to a lot of provisions because the IRS likes to limit losses that you get to deduct anywhere they can. But if you had damage to your home, so if your home flooded and you had to, you know, rip out your drywall or rip out your flooring and replace it. And some part of that wasn’t covered by your insurance, then basically that part that wasn’t covered by your insurance will become an itemized deduction, subject to other limitations, of course. But it definitely is something that you need to, you need to track your costs related to redoing your house or doing your repairs. And you also need to keep track of your insurance proceeds and then give that information to your tax preparer.
Jay Curry: So, that’s a very good point. As you’re going through this recovery period and you’re having to go out and tear stuff down. You’re having to hire people to come and clear things out. You’re going to have to rebuild. You want to be keeping your receipts. You want to be tracking very carefully what your expenses are for this. Because it’s going to have a potential, serious tax benefit for you. At least some relief from what you’ve gone through. You need to keep good records. I guess that’s the message.
Adam Barr: Yes sir.
Jay Curry: So what about casualties or catastrophic, what is it, losses.
Adam Barr: Yeah, that’s what we just talked about.
Jay Curry: OK. So, but, what you didn’t mention, that I thought during the break you mentioned, is that the value of your home…
Adam Barr: Oh, yeah.
Jay Curry: Is knocked down. So, if you have a $100,000 home at the time or obviously bigger and all of a sudden it’s only worth 20 or 50, you have a potential tax write off there. How do you, how do you justify that? How do you prove that’s the case?
Adam Barr: I think if you are going to go with the approach that you were taking a casualty loss for a decrease in the market value of your home. You would have to be able to show that the value decreased. Which I believe would mean an appraisal, probably.
Jay Curry: OK. Can you get appraisal of what it looked like before? You just, you come up with some logical reason. It was appraised five years ago and the average increase, that type of thing. And then you have it you have to get an appraisal…
Adam Barr: Right.
Jay Curry: Too, and of course, Shannon Register talk in an earlier segment on the program. But you’re going to have to get it appraised again. You can take the difference of those and write that off.
Adam Barr: Yeah, subject to limitations in the tax code but yeah.
Jay Curry: OK. Well, this has been very informative. Folks the federal government is trying to give you some help but you’ve got to keep the records. You’ve got to keep very good records. You need to call your tax adviser and be in close contact with them. Also, if for some reason you’re not happy or you would like to get some more detail or advice, I’m sure the people at our favorite CPA firm, Miller Grossbard, would be delighted to talk to you. So, tell us Adam, how would somebody get a hold of you or a tax expert at Miller Grossbard?
Adam Barr: Sure. Thank you for the plug Jay. Our listeners can contact me on my direct line at 713-982-7820. Or if they prefer, they can just go to our web site. Which is Millergrossbard.com and they can be put in touch with a tax expert there.
Jay Curry: That’s excellent. OK. And that address again for the IRS. You could go to IRStaxrelief.com and get more information. Did I get that right?
Adam Barr: No sir. So, they can Google “IRS disaster relief” and it’s will take them…
Jay Curry: Just Google it.
Adam Barr: Just Google it.
Jay Curry: Okay. Google “IRS tax relief” and that will point you to the right place to go. All right. We got to wrap up this segment. This has been a great show. Folks, thanks for being with us. We’ve gotten about all the information we can on short notice after a big hurricane. We hope it’s been helpful. We’re going to go out and put a dynamite program for you next week. We hope you’ll be listening in. Stay tuned next week. Texas Business Radio. Thank you.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.