Jeffrey B. Kahn, Esq. and Gary Sussman Discusses Super Bowl 50, Deals On Big Screen TV’s and Getting Ready To File our 2015 Taxes On ESPN Radio – February 5, 2016 Show

Topics Covered:

1. Super Bowl 50 – The first Super Bowl operated by the NFL as a For-Profit Organization!

2. Household Economics: Finding a deal on that big screen for the big game.

3. Getting ready for your 2015 taxes: Choosing the Correct Filing Status and the Facts on Exemptions and Dependents

4. Questions from our listeners:

a. I’ve heard you can invest HSA funds, is that something that I should look into? At which point, when should I be looking into doing that?

b. Which tax form is best for me to use?

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Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show.

This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

Gary states:

And this is Licensed Financial Planner, Gary Sussman at Trilogy Financial Services.

You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.

Jeff states:

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

Gary states:

And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.

Jeff states:
Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states:

For today’s show we have coming up:

Segment 2 material: We’ll focus on Household Economics: finding a deal on that big screen for the big game.

Gary states:

Also coming up is:

Segment 3 material: Getting ready for your 2015 taxes: Choosing the Correct Filing Status and the Facts on Exemptions and Dependents.

And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Gary.

Jeff states: So for today’s top story:

Super Bowl 50 – The first Super Bowl operated by the NFL as a For-Profit Organization!

Jeff states: You know that with this weekend being the Super Bowl game it seems everywhere I go somebody is talking about this big event.

Gary states: Besides the match-up of the Broncos and the Panthers, people are excited over the entertainment and half-time show, what celebrities will be attending the game and of course – the commercials.

Jeff states: Sponsors present their best commercials during the Super Bowl, and the big game wouldn’t be the same without them. For the advertising community, the Super Bowl is their Super Bowl, and often creates commercials specifically for the enormous viewership that the game provides. For many, watching the commercials is the most entertaining part of the Super Bowl. Advertisers try to get their money’s worth by unveiling their most creative and innovative spots.

Jeff states: So Who’s Buying Commercials in the Big Game?

Gary states: Automakers, who have dominated the ad roster of the game for the last few years, are being more dominant for the 2016 event. Automakers that we have not seen in a while include Acura and Buick. Automakers returning to the line-up: Audi, Honda, Kia, Mini (BMW) and Toyota. But the automaker making the priciest impact with two commercials during Super Bowl 50 (plus a 60-second ad in the commercial pod immediately before kickoff and another earlier in CBS’s pre-game) is Hyundai. Hyundai better be selling a lot of cars in 2016 to pay for this!

Jeff states: In addition to the auto advertisers you know we will be seeing ads from the food & beverage producers, consumer electronics and telecom, personal hygiene, entertainment & gaming, and financial & insurance. Super Bowl 49 had a strong showing of digital businesses which this year is limited to a couple of showings.

Gary states: Somewhat surprising since Silicon Valley is hosting the Super Bowl.

Jeff asks: And so with the Super Bowl 50 coming up, what does taxes have to do with football?

Gary replies: Well as we said one of the things we look forward to are the commercials. The cost to air a 30-second commercial during the 2016 Super Bowl is $5M. That is $500,000 more than Super Bowl 49! Over the last five seasons, the approximate asking price for a 30-second Super Bowl ad has increased by an average of 11.1% each year. The Super Bowl itself has drawn $5.9 billion in inflation-adjusted ad spending since 1967.

Gary asks: How about the cost of a ticket to attend the Super Bowl?

Jeff replies: Well the cheapest seat – and this is face value – is $850.00. The more expensive seats (and I am not even talking about suites) go up to $1,800.00 and up to $3,000 for club seats. The last and only other time the game was in the Bay Area, at Stanford Stadium in 1985, tickets sold for $60. Even factoring for inflation, the cheapest Super Bowl face value ticket is now more than six times more costly than back then, and fans who have to go through the secondary market are paying about 35 to 40 times as much money.

Gary states: For that price I will pass and instead buy one of those 80 inch screen TV’s which I can enjoy every day! I just can’t justify paying that much to go to a game when I can sit in the comfort of my own home and not have to worry about beer sales closing at the end of the third quarter.

Jeff states: Now here is a fact that is not so widely known – the National Football League which you figure makes a ton of money was recognized by the IRS as a tax-exempt entity until last year. You heard me right – for the last 49 years the National Football League did not pay income taxes as any for-profit-company would.

Jeff asks: You may ask, how did this happen?

Section 501(c)(6) of the Internal Revenue Code provides for the exemption from  tax entities which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

Those entities are specifically:
1. business leagues,
2. chambers of commerce,
3. real estate boards,
4. boards of trade and
5. professional football leagues.

Jeff states: It’s obviously notable that only professional football leagues are included here, as opposed to all sporting leagues.

Gary states: It seems inconceivable that the NFL is not “engaging in a regular business of a kind ordinarily carried on for profit”.  How are their efforts to maximize profits any different than those of Major League Baseball, the National Basketball Association or the National Hockey League?

Jeff states: Well professional football leagues were not always included in this list.  This change dates back to 1966, when the tax code was amended to give a professional football league tax-exempt status in order to facilitate the merger of the NFL and the old American Football League. Now keep in mind that even though the NFL has been granted tax-exempt 501(c)(6) status, the 32 teams inside the league are subject to taxes as for-profit businesses.

Let’s Look At The Stats!

Jeff continues: In order to have a tax-exempt status, the NFL must be run as a charitable foundation. In 2012, they gave away a meager $2.3 million. Almost all of it–$2.1 million– went to the NFL Hall of Fame. Oh by the way, last time I checked the price of Adult admission to the Hall of Fame was $24.00 ($17.00 for a child). The average admission price (including free admission museums) for all museums in the United States is $8.00.

Gary states: In 2012, NFL commissioner Roger Goodell was paid $29.5 million to run the organization. More crazy: Goodell’s salary is 1/10th of what the NFL claimed in total assets for 2012– $255 million. Even crazier: Goodell made 15 times what the NFL donated to other charities. Extremely crazier: the NFL only made charitable donations equaling one-one hundredth of their annual income.

Jeff states: The NFL’s most recent Form 990 filed with the IRS ended on March 31, 2012. They claimed revenue of $255 million, up from $240 million in 2011. So, if you were concerned, things are good. The NFL has assets of over $822 million.

Gary states: Under “grants”– meaning donations to other non profit organizations, the NFL did increase the number from just over $900,000 to $2.3 million. Generous right? However: their total salaries increased by $27 million to a total of over $107 million.

Jeff states: Here’s the best part: after all that, thanks to creative thinking, the NFL claims it finished the year in the red with negative $316 million.

Jeff continues: What else did they spend money on? Well, for one thing, new office construction cost $36 million.

Gary states: Just to put all this in perspective: going by numbers in Forbes, Goodell would come in at around number 28 of the highest paid CEOs in 2012. He made more than the heads of FedEx, AT&T, Heinz, Ford Motors, Goldman Sachs, as well as Rupert Murdoch.

Jeff states: So now that the NFL has terminated its tax exempt status, it will have to pay taxes just like every other for-profit corporation does and no longer will it have to disclose its finances and the amounts its executives earn like not-for-profit organizations are required to do.

Jeff states: Well it’s time for a break but stay tuned because we are going to tell you how Super Bowl 50 may be your ticket to that super-sized television.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman on Inside Advantage on ESPN.

BREAK

Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman.

Jeff states: Gary is sitting in for Windus and since you both work in the same firm, Gary please tell our listeners of your firm’s offer.

Gary states PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Gary Sussman. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

Jeff states: So let’s continue with the business of Super Bowl 50.

Household Economics: Finding a deal on that big screen for the big game.

http://www.wsj.com/articles/SB10001424127887323628804578344120211713226; http://www.wsj.com/articles/buy-a-tv-like-a-champ-1453921987

Gary states: I agree, let’s consider what you would be looking at spending for a new flat screen for the sporting event of the season. After all, we all know nothing makes up for a lousy TV at your Super Bowl party.

Jeff continues: Good news is, Super Bowl 50 just so happens to coincide with the best time in years to invest in a new television. Considering March the time that most of the TV industry introduces its new product line, the old models are being benched on the clearance rack.

Gary replies: That’s right Jeff. In the next couple of weeks you could score some really great discounts on the previous years’ models. You may be thinking that this doesn’t exactly provide you with the latest and greatest technology, that with new advances models are rendered obsolete after just a year, right? Wrong!

Jeff continues: In fact buying a previous years’ model isn’t going to be all too much of a sacrifice considering television technology has hit a plateau. You may see improvements in the extremely high end later this year, but all together the majority of fundamental technologies like streaming and 4K were surmounted in the 2015 models, according research at the Wall Street Journal.

Gary states: Which brings us back to Super Bowl 50. Sunday’s game would be the ideal test of a TVs capabilities. The live action, nationally viewed program would help you determine if there is clear viewing from anywhere in an occasionally packed room. In addition to whether a 120 clear motion rate can hold a candle to a traditional 120Hz refresh rate.

Jeff replies: In a sea of high definition, how do you know which one to go with? Well, HDGuru.com editor in chief Gary Merson and TV calibration pro Robert Heron have a few suggestions that whittles down the sales to bring you top picks.

Gary states: You don’t have to spend all that much to still get a pretty impressive box. TCL Roku TV is Heron’s inexpensive favorite. Loaded with software and a remote designed entertainment streaming, Amazon.com is advertising the 48-inch model on sale for $350.

Jeff continues: You could also find a good quality 55-inch HDTV for under $700. Not to mention, with the ever slimming frames of newer model flat screens, you could easily fit that new 55-inch TV in the same alcove that’s been dedicated to you old 47-inch from a few years ago.

Gary continues: If we’re looking to spend a little more, you could find an Ultra-HD TV for under $1,700 that has included the “future-proofing” peace of mind for the next generation of TV shows and movies.

Jeff states: Want more? For a $3,000 price tag, you could ruin your friend’s experiences with their own TVs and invest in a high-performance OLED-screen. Then again, your guests may never leave your house.

Gary states: However, if you really what to impress, Robert Heron lends the suggestion of a projector. The LG PF1500 should do the trick! This $950 device will display the big game onto the wall in your living room, or better yet, the side of your house.

Jeff continues: One of the more recent technologies 4K, or Ultra-HD TVs, showcase more than 8 million pixels with four times the resolution rate than ordinary HDs. But where do you have to sit in relation to the set in order to really benefit from this technology?

Gary states: I’m glad you asked that, Jeff. In order for your eyes to appreciate the 4K Ultra-High Definition TV you would have to sit 5 feet and 3 inches away from a 40” screen, 6 feet and 5 inches from a 50” screen, 7 feet 8 inches from a 60” screen and just over 9 feet away from a 70 inch screen. I can tell everyone is visually measuring the distance to see if their viewing is currently being optimized.

Jeff continues: In fact Gary, the analysis by Merson you’re talking about pertains to how much detail the human eye can actually take in. But, if you’re running out to pick up an Ultra- HD flat screen, keep in mind that Super Bowl 50 will not be broadcasting in 4K, nor any other live TV.

Gary states: In which case, if you want that pristine picture quality, you may want to focus on the high dynamic range, or HDR. This is the most visible improvement in technology when it comes to televisions. One of the best on the market for your dollar would be the 55-inch Samsung SUHD J8500 on sale for $1,700, according to Geoffrey Fowler over at the Wall Street Journal.

Jeff continues: Don’t forget the refresh rate! Cheaper sets skimp on motion resolution then fluff by advertising “MotionFlow”, “TruMotion” or even “Clear Motion”. All this means is that to compensate for decreased horsepower. Keep an eye out and make sure when you buy a unit with a refresh rate of 120, its 120Hz.

Gary states: Now you may ask, what’s the deal with those curved models we’ve all seen in stores? Well, the verdict is in. The curved TVs are a gimmick much like their 3D predecessors. While Samsung only sells their top models in the curved style, this is all an up sell and sales tactic.

Jeff replies: You may be thinking to yourself, what if I hold of and wait a year? Black Friday shopping has some pretty good sales, you’re thinking to yourself. Well, on the high end like LG with its new OLED 4K TV, there will be more HDRs. On the lower end, you could find yourself looking at a 55-inch 4K TV with limited HDR content support from up and coming Chinese manufacturer Hisense. Their H8 model will sell for $700.

Gary continues: The most important tip to remember though, whichever you choose to go with, be Smart. Now days, software and apps matter. If you buy a TV that has access to streaming apps you’ve subscribed to, it saves you the hassle of external boxes and extra remotes.

Jeff states: Now, let’s get down to finances. Say you’ve got a nice chunk of change headed your way in the form of a tax refund and you’re already “ghost spending” the funds. However, that little voice in the back of your head starts butting in with a, “To splurge or not to splurge, that is the question”.

Gary replies: That is quite the predicament, Jeff. Let’s face it, for many of us, the mere mention of extra cash becoming available to us would spur thoughts of spending sprees. Perhaps we should rethink this, though. Considering what you’re actually getting back from the government is the money you overpaid all year out of your paycheck, then it’s not the free money you think you’re spending.

Jeff continues: Another way of looking at it, you just got paid back the money you’ve loaned the government “fee-free” all year. Maybe you should put it towards the bills you would have been using it to pay or even boost your financial savings.

Gary states: As Alexa von Tobel, founder of financial-planning site LearnVest.com puts it, “if you have debt, pay down debt; if you don’t have it, fund your emergency savings.” Pay close attention to the order of events, too. If you decide to save the funds, and put them in a high-yield mutual fund for example, while letting you debt collect interest, you’ll be using all those dividends to pay off the interest….and paying tax on the dividends, might I add.

Jeff continues: Now it’s not necessarily a bad idea to put your return toward something fun, just don’t do so if you have to save more money to pay off more debt. Good options for those funds you hadn’t accounted for could be a gym membership, or continuing your education, maybe by taking classes to further your career like learning a new language. When looking back, you don’t want to not be able to remember what you spent it on, so make it count.

Gary finishes: Once the excitement of receiving a tax refund subsides, you should take a moment to figure out what you can do for next year to avoid the government withholding too much from your pay. Wouldn’t it be better to have that money all year? You can find that out and adjust your withholdings accordingly by using the Internal Revenue Service’s “withholding calculator” at www.irs.gov. Need help with further financial planning? You can contact me….

Gary states PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Gary Sussman. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

Jeff states: Stay tuned because after the break we will help you get ready for your 2015 taxes and discuss your correct filing status and the facts on exemptions and dependents

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Jeff states: PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: Getting ready for your 2015 taxes: Choosing the Correct Filing Status and the Facts on Exemptions and Dependents

Amy states: It’s important to use the right filing status when you file your tax return. The status you choose can affect the amount of tax you owe for the year. It may even determine if you must file a tax return. Keep in mind that your marital status on December 31st is your status for the whole year. Sometimes more than one filing status may apply to you. If that happens, choose the one that allows you to pay the least amount of tax.

Gary states: There are five filing statuses [Gary to read off each one, Amy to describe, Jeff to comment]

1. Single. This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.

2. Married Filing Jointly. If you’re married, you and your spouse can file a joint tax return. If your spouse died in 2015, you can often file a joint return for that year.

3.  Married Filing Separately. A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax owed than if you file a joint tax return. You may want to prepare your taxes both ways before you choose. You can also use it if you want to be responsible only for your own tax.

4.  Head of Household. In most cases, this status applies if you are not married, but there are some special rules. For example, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules.

5.  Qualifying Widow(er) with Dependent Child. This status may apply to you if your spouse died during 2013 or 2014 and you have a dependent child. Other conditions also apply.

Jeff states: So now that we covered filing status, let’s discuss exemptions and dependents.

Amy states: Most people can claim an exemption on their tax return. It can lower your taxable income. In most cases, that reduces the amount of tax you owe for the year. Here are the facts about exemptions to help you file your tax return.

[Gary to read each fact, followed by Amy explanation and Jeff comment]

1. Exemptions Cut Income.  There are two types of exemptions. The first type is a personal exemption. The second type is an exemption for a dependent. You can usually deduct $4,000 for each exemption you claim on your 2015 tax return.

2. Personal Exemptions.  You can usually claim an exemption for yourself. If you’re married and file a joint return, you can claim one for your spouse, too. If you file a separate return, you can claim an exemption for your spouse only if your spouse:

• Had no gross income,
• Is not filing a tax return, and
• Was not the dependent of another taxpayer.

3. Exemptions for Dependents.  You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative who meets a set of tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim on your tax return.

4. Report Health Care Coverage. The health care law requires you to report certain health insurance information for you and your family. The individual shared responsibility provision requires you and each member of your family to either:

• Have qualifying health insurance, called minimum essential coverage, or
• Have an exemption from this coverage requirement, or
• Make a shared responsibility payment when you file your 2015 tax return.

5. Some People Don’t Qualify. You normally may not claim married persons as dependents if they file a joint return with their spouse.

6. Dependents May Have to File.  A person who you can claim as your dependent may have to file their own tax return. This depends on certain factors, like total income, whether they are married and if they owe certain taxes.

7. No Exemption on Dependent’s Return.  If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person on your tax return. This rule applies because you can claim that person as your dependent.

8. Exemption Phase-Out.  The $4,000 per exemption is subject to income limits. This rule may reduce or eliminate the amount you can claim based on the amount of your income.

Jeff states: PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff continues: Thanks Amy for calling into the show. Amy says Thanks for having me.

Jeff states: Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman.

And Gary and I always pleased to make our offers to our listeners where… PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Gary states: Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Gary Sussman. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

You should also know that the securities and advisory services are offered through National Planning Corporation (NPC) Member FINRA, SIPC, and a Registered Investment Advisor.  Trilogy Financial Services and NPC are separate and unrelated Entities.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Gary, what questions have you pulled for us to answer?

Question from Sara of Irvine: I’ve heard you can invest HSA funds, is that something that I should look into? At which point, when should I be looking into doing that?

[Gary answers]

Question from Eric of Escondido: Which tax form is best for me to use?

Answer: Well it depends on what you have to report. The simpler return choice you use, the easier it is to complete your return and probably provides you with a lower risk for audit.

Here are some tips to help you choose the right forms going from the simplest to the most comprehensive:

You can generally use Form 1040EZ if:

• Your taxable income is below $100,000;
• Your filing status is single or married filing jointly;
• You don’t claim dependents; and
• Your interest income is $1,500 or less.

Note: You can’t use Form 1040EZ to claim the Premium Tax Credit. Nor can you use this form if you received advance payments of the premium tax credit in 2015.

Form 1040A may be best for you if:

• Your taxable income is below $100,000;
• You have capital gain distributions;
• You claim certain tax credits; and
• You claim adjustments to income for IRA contributions and student loan interest.

You must use the Form 1040 if:

• Your taxable income is $100,000 or more;
• You claim itemized deductions;
• You report self-employment income; or
• You report income from sale of a property.

Jeff states: Well we are reaching the end of our show.

Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Gary states: Have a great day everyone! Go Broncos!